0001193125-18-096031.txt : 20180326 0001193125-18-096031.hdr.sgml : 20180326 20180326164446 ACCESSION NUMBER: 0001193125-18-096031 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 50 CONFORMED PERIOD OF REPORT: 20170930 FILED AS OF DATE: 20180326 DATE AS OF CHANGE: 20180326 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RXi Pharmaceuticals Corp CENTRAL INDEX KEY: 0001533040 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-36304 FILM NUMBER: 18713239 BUSINESS ADDRESS: STREET 1: 257 SIMARANO DRIVE STREET 2: SUITE 101 CITY: MARLBOROUGH STATE: MA ZIP: 01752 BUSINESS PHONE: (508) 767-3861 MAIL ADDRESS: STREET 1: 257 SIMARANO DRIVE STREET 2: SUITE 101 CITY: MARLBOROUGH STATE: MA ZIP: 01752 10-Q/A 1 d553905d10qa.htm 10-Q/A 10-Q/A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q/A

Amendment No. 1

 

 

(Mark One)

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

For the quarterly period ended September 30, 2017

OR

 

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

For the transition period from                      to                     

Commission File Number: 001-36304

 

 

RXi Pharmaceuticals Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   45-3215903
(State of incorporation)  

(I.R.S. Employer

Identification No.)

257 Simarano Drive, Suite 101, Marlborough, MA 01752

(Address of principal executive office) (Zip code)

Registrant’s telephone number: (508) 767-3861

 

 

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  ☒    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 time that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

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

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer   ☐ (Do not check if a smaller reporting company)    Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of March 15, 2018, RXi Pharmaceuticals Corporation had 2,594,962 shares of common stock, $0.0001 par value, outstanding.

 

 

 


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EXPLANATORY NOTE

RXi Pharmaceuticals Corporation (“we,” “our,” “us” and the “Company”) is filing this Amendment No. 1 on Form 10-Q/A to amend and restate in their entirety the following items of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, as originally filed with the Securities and Exchange Commission on November 8, 2017. (the “Original Form 10-Q”):

 

    Part I – Item 1. Financial Statements (unaudited)

 

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

 

    Part I – Item 4. Controls and Procedures

 

    Part II – Item 6. Exhibits

 

    Exhibit 31.1 – Certification of Chief Executive Officer

 

    Exhibit 31.2 – Certification of Chief Financial Officer

 

    Exhibits 101 – Extensible Business Reporting Language (XBRL)

This amendment does not modify any disclosures contained in our original Form 10-Q, except for the foregoing Items and Exhibits, and all share and per share amounts for the periods presented to give effect to the 1-for-10 reverse stock split of the Company’s common stock, which was effected on January 8, 2018. This report on Form 10-Q/A is presented as of the filing date of the Original Form 10-Q and does not reflect events occurring after that date, or modify or update disclosures in any way other than as required to reflect the restatement described below. Accordingly, this Quarterly Report on Form 10-Q/A should be read in conjunction with the Original Form 10-Q, and the Company’s other filings with the Securities and Exchange Commission (“SEC”) subsequent to the filing of the Original Form 10-Q, including any amendments thereto.

The purpose of this amendment is to restate our previously reported results for the quarter ended September 30, 2017 to include the accounting for the tax-related impact of the Company’s acquisition of MirImmune Inc. (“MirImmune”) on January 6, 2017. Our results did not include the contemplation of deferred taxes based on the different book basis and tax basis for the acquisition of MirImmune. The acquisition resulted in an increase of $1.6 million to acquired in-process research and development expense and a corresponding $1.6 million income tax benefit resulting from the reduction in the Company’s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference, which were not accounted for properly. The condensed consolidated financial statements for the quarter ended September 30, 2017 included in this Form 10-Q/A have been restated to include this adjustment to reflect the tax-related impact of the acquisition of MirImmune. This adjustment does not affect previously reported net loss or operating cash flows, although certain adjustments have been made in our condensed consolidated statement of cash flows to correspond to the income statement adjustment as described in Note 2 of the notes to our condensed consolidated financial statements included in this filing, and has no impact on the Company’s balance sheet. We have made necessary conforming changes in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” resulting from the correction of this error.


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RXi PHARMACEUTICALS CORPORATION

FORM 10-Q — QUARTER ENDED SEPTEMBER 30, 2017

INDEX

 

Part No.

   Item No.     

Description

   Page
No.
 
I       FINANCIAL INFORMATION   
     1    Financial Statements (Unaudited)      4  
      Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016      4  
      Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016      5  
      Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016      6  
      Notes to Condensed Consolidated Financial Statements      7  
     2    Management’s Discussion and Analysis of Financial Condition and Results of Operations      13  
     3    Quantitative and Qualitative Disclosures about Market Risk      19  
     4    Controls and Procedures      19  
II       OTHER INFORMATION      19  
     1    Legal Proceedings      19  
     1A      Risk Factors      19  
     2    Unregistered Sales of Equity Securities and Use of Proceeds      20  
     3    Defaults Upon Senior Securities      20  
     4    Mine Safety Disclosures      20  
     5    Other Information      20  
     6    Exhibits      21  

Signatures

     22  


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PART I — FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

RXi PHARMACEUTICALS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share data)

(Unaudited)

 

     September 30,
2017
    December 31,
2016
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 5,416     $ 12,906  

Restricted cash

     50       50  

Prepaid expenses

     271       150  
  

 

 

   

 

 

 

Total current assets

     5,737       13,106  

Property and equipment, net

     269       114  

Notes receivable

     —         150  

Other assets

     27       27  
  

 

 

   

 

 

 

Total assets

   $ 6,033     $ 13,397  
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 702     $ 917  

Accrued expenses

     1,901       1,625  
  

 

 

   

 

 

 

Total current liabilities

     2,603       2,542  

Commitments and contingencies

    

Stockholders’ equity:

    

Preferred stock, $0.0001 par value; 10,000,000 authorized

    

Series B convertible preferred stock, par value; 8,100 shares authorized; 5,737 shares issued and outstanding at December 31, 2016

     —         3,525  

Series C convertible preferred stock, par value; 1,800,000 shares authorized; no shares issued or outstanding

     —         —    

Common stock, $0.0001 par value, 100,000,000 shares authorized; 2,369,733 and 1,300,318 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively

     —         —    

Additional paid-in capital

     79,979       73,429  

Accumulated deficit

     (76,549     (66,099
  

 

 

   

 

 

 

Total stockholders’ equity

     3,430       10,855  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 6,033     $ 13,397  
  

 

 

   

 

 

 

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

 

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RXi PHARMACEUTICALS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)

(Unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2017     2016     2017     2016  

Net revenues

   $ —       $ —       $ —       $ 19  

Operating expenses:

        

Research and development

     1,490       1,464       4,166       4,108  

Acquired in-process research and development

     —         —         4,696       —    

General and administrative

     986       752       3,209       2,587  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     2,476       2,216       12,071       6,695  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (2,476     (2,216     (12,071     (6,676
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense):

        

Interest income, net

     —         4       —         15  

Other income (expense), net

     —         —         —         6  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     —         4       —         21  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (2,476     (2,212     (12,071     (6,655

Income tax benefit

     —         —         1,621       —    

Net loss

   $ (2,476   $ (2,212   $ (10,450   $ (6,655
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per common share:

        

Basic and diluted

   $ (1.05   $ (3.36   $ (4.71   $ (10.16
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares: basic and diluted

     2,351,144       657,609       2,216,775       654,869  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

 

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RXi PHARMACEUTICALS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

     Nine Months Ended
September 30,
 
     2017     2016  

Cash flows from operating activities:

    

Net loss

   $ (10,450   $ (6,655

Adjustments to reconcile net loss to net cash used in operating activities:

    

Depreciation and amortization

     48       41  

Non-cash stock-based compensation

     276       649  

Acquired in-process research and development

     4,696       —    

Deferred taxes

     (1,621     —    

Value of non-marketable equity securities recognized as revenue

     —         (9

Changes in operating assets and liabilities:

    

Prepaid expenses and other assets

     (121     (10

Accounts payable

     (417     (706

Accrued expenses

     276       302  
  

 

 

   

 

 

 

Net cash used in operating activities

     (7,313     (6,388

Cash flows from investing activities:

    

Purchase of short-term investments

     —         (2,000

Maturities of short-term investments

     —         5,500  

Cash acquired in MirImmune Inc. acquisition

     100       —    

Cash paid for purchase of property and equipment

     (203     (2
  

 

 

   

 

 

 

Net cash (used in) provided by investing activities

     (103     3,498  

Cash flows from financing activities:

    

Proceeds from the issuance of common stock, net of offering costs

     (74     152  
  

 

 

   

 

 

 

Net cash (used in) provided by financing activities

     (74     152  

Net decrease in cash, cash equivalents and restricted cash

     (7,490     (2,738

Cash, cash equivalents and restricted cash at the beginning of period

     12,956       5,167  
  

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at the end of period

   $ 5,466     $ 2,429  
  

 

 

   

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

    

Conversions of Series B convertible preferred stock into common stock

   $ 3,525     $ —    
  

 

 

   

 

 

 

Conversion of Series C convertible preferred stock into common stock

   $ 816     $ —    
  

 

 

   

 

 

 

MirImmune Inc. Acquisition:

    

Cancellation of notes receivable

   $ 150     $ —    
  

 

 

   

 

 

 

Accounts payable assumed

   $ 5     $ —    
  

 

 

   

 

 

 

Fair value of securities issued

   $ 2,824     $ —    
  

 

 

   

 

 

 

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

 

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RXi PHARMACEUTICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Operations

RXi Pharmaceuticals Corporation (“RXi,” “we,” “our” or the “Company”) is a clinical-stage company developing innovative therapeutics based on our proprietary self-delivering RNAi (sd-rxRNA®) platform and Samcyprone™ which address significant unmet medical needs. We have a pipeline of discovery, preclinical and clinical product candidates in the areas of dermatology, ophthalmology and cell-based cancer immunotherapy. The Company’s clinical development programs include RXI-109, an sd-rxRNA for the treatment of dermal and ocular scarring, and Samcyprone™, a topical immunomodulator, for the treatment of warts. The Company’s pipeline, coupled with our extensive patent portfolio, provides for product development and business development opportunities across a broad spectrum of therapeutic areas.

On January 3, 2018, the Board of Directors of the Company approved a 1-for-10 reverse stock split of the Company’s outstanding common stock, which was effected on January 8, 2018. All share and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock split, including reclassifying an amount equal to the reduction in par value to additional paid-in capital.

2. Liquidity and Going Concern

The Company has limited cash resources, certain limitations under the purchase agreement with Lincoln Park Capital Fund, LLC (“LPC”) and has expended substantial funds on the research and development of our product candidates and funding general operations. As a result, we have reported recurring losses from operations since inception and expect that we will continue to have negative cash flows from our operations for the foreseeable future. Historically, the Company’s primary source of financing has been the sale of its securities. Our ability to continue to fund our operations is dependent on the amount of cash on hand and our ability to raise additional capital through, but not limited to, equity or debt offerings or strategic opportunities. This is dependent on a number of factors, including the market demand or liquidity of our common stock. There can be no assurance that the Company will be successful in accomplishing these plans. As a result, we have concluded that there is substantial doubt regarding our ability to continue as a going concern for at least one year. If we fail to obtain additional funding when needed, we would be forced to scale back or terminate our operations or to seek to merge with or to be acquired by another company. These financial statements do not include any adjustments to, or classification of, recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

3. Significant Accounting Policies

Restatement of Consolidated Financial Statements

Our condensed consolidated statement of operations and our condensed consolidated statement of cash flows for the quarter ended September, 2017 have been restated to include the tax-related impact of the Company’s acquisition of MirImmune Inc. (“MirImmune”) on January 6, 2017. Our results did not include the contemplation of deferred taxes based on the different book basis and tax basis for the acquisition of MirImmune. The acquisition resulted in an increase to acquired in-process research and development expense and a corresponding income tax benefit resulting from the reduction in the Company’s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference. This adjustment does not affect previously reported net loss or operating cash flows, although certain adjustments have been made in our condensed consolidated statement of cash flows to correspond to the income statement adjustment as noted below. The restatement did not impact our condensed consolidated statement of operations for the three months ended September 30, 2017. The following table summarizes the effects of our restatement on the nine months ended September 30, 2017 resulting from the correction of this error.

 

    Nine Months Ended
September 30, 2017
 
    Previously
Reported
    Adjustment     Restated  
    ($ in thousands, except per share data)  

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS:

     

Operating Expenses:

     

Research and development

  $ 4,166     $ —       $ 4,166  

Acquired in-process research and development

    3,075       1,621       4,696  

General and administrative

    3,209       —         3,209  
 

 

 

   

 

 

   

 

 

 

Total operating expenses

    10,450       1,621       12,071  
 

 

 

   

 

 

   

 

 

 

Operating loss

    (10,450     (1,621     (12,071
 

 

 

   

 

 

   

 

 

 

Loss before income taxes

    (10,450     (1,621     (12,071

Income tax benefit

    —         1,621       1,621  
 

 

 

   

 

 

   

 

 

 

Net loss

  $ (10,450 )   $ —       $ (10,450
 

 

 

   

 

 

   

 

 

 

Net loss per common share: basic and diluted

  $ (4.71   $ —       $ (4.71

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS:

     

Cash flows from operating activities:

     

Net loss

  $ (10,450   $ —       $ (10,450

Adjustments to reconcile net loss to net cash used in operating activities

     

Depreciation and amortization

    48       —         48  

Non-cash stock-based compensation

    276       —         276  

Acquired in-process research and development

    3,075       1,621       4,696  

Deferred tax

    —         (1,621     (1,621

Changes in operating assets and liabilities:

     

Prepaid expenses and other assets

    (121     —         (121

Accounts payable

    (417     —         (417

Accrued expenses

    276       —         276  
 

 

 

   

 

 

   

 

 

 

Net cash used in operating expenses

  $ (7,313   $ —       $ (7,313
 

 

 

   

 

 

   

 

 

 

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain information and footnote disclosures included in the Company’s annual financial statements have been condensed or omitted. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Interim results are not necessarily indicative of results for a full year.

Uses of Estimates in Preparation of Financial Statements

The preparation of financial statements in accordance with GAAP requires management 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of amounts invested in certificates of deposit.

Restricted cash consists of certificates of deposit held by financial institutions as collateral for the Company’s corporate credit cards.

 

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The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):

 

     September 30,      December 31,  
     2017      2016  

Cash and cash equivalents

     5,416        12,906  

Restricted cash

     50        50  
  

 

 

    

 

 

 

Cash, cash equivalents and restricted cash shown in the statement of cash flows

     5,466        12,956  
  

 

 

    

 

 

 

Research and Development Expenses

Research and development costs are charged to expense as incurred and relate to salaries, employee benefits, facility-related expenses, supplies, stock-based compensation related to employees and non-employees involved in the Company’s research and development, external services, other operating costs and overhead related to our research and development departments, costs to acquire technology licenses and expenses associated with preclinical activities and our clinical trials. Payments made by the Company in advance for research and development services not yet provided and/or for materials not yet received are recorded as prepaid expenses. Accrued liabilities are recorded related to those expenses for which vendors have not yet billed us with respect to services provided and/or materials that we have received.

Preclinical and clinical trial expenses relate to third-party services, subject-related fees at the sites where our clinical trials are being conducted, laboratory costs, analysis costs, toxicology studies and investigator fees. Costs associated with these expenses are generally payable on the passage of time or when certain milestones are achieved. Expense is recorded during the period incurred or in the period in which a milestone is achieved. In order to ensure that we have adequately provided for preclinical and clinical expenses during the proper period, we maintain an accrual to cover these expenses. These accruals are assessed on a quarterly basis and are based on such assumptions as expected total cost, the number of subjects and clinical trial sites and length of the study. Actual results may differ from these estimates and could have a material impact on our reported results. Our historical accrual estimates have not been materially different from our actual costs.

Stock-based Compensation

The Company follows the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation — Stock Compensation” (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees, officers and non-employee directors, including stock options. Stock compensation expense based on the grant date fair value estimated in accordance with the provisions of ASC 718 is recognized as an expense over the requisite service period.

For stock options granted as consideration for services rendered by non-employees, the Company recognizes compensation expense in accordance with the requirements of FASB ASC Topic 505-50,Equity Based Payments to Non-Employees.” Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the requisite service period of the underlying stock options. At the end of each financial reporting period prior to vesting, the value of these options, as calculated using the Black-Scholes option-pricing model, will be re-measured using the fair value of the Company’s common stock and the non-cash compensation recognized during the period will be adjusted accordingly. Since the fair market value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense will include fair value re-measurements until the stock options are fully vested.

Comprehensive Loss

The Company’s comprehensive loss is equal to its net loss for all periods presented.

Net Loss per Share

The Company accounts for and discloses net loss per share in accordance with FASB ASC Topic 260, “Earnings per Share.” Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing the Company’s net earnings by the weighted average number of common shares outstanding and the impact of all dilutive potential common shares.

 

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4. Recent Accounting Pronouncements

In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments,” which clarifies how certain cash receipts and payments are presented and classified in the statement of cash flows. This standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. The amendments in ASU 2016-15 should be applied using a retrospective transition method to each period presented. The Company adopted ASU 2016-15 in the first quarter of 2017 and the implementation of this standard had no impact on the Company’s financial statements.

In November 2016, the FASB issued ASU 2016-18,Statement of Cash Flows (Topic 230) — Restricted Cash,” which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. With this standard, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. This standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. The Company adopted ASU 2016-18 in the first quarter of 2017, and the guidance has been retrospectively applied to all periods presented. The total of cash, cash equivalents and restricted cash is described in Note 3. The adoption of the guidance did not have an impact on the Company’s balance sheet or statement of operations.

In January 2017, the FASB issued ASU 2017-01,Business Combinations (Topic 805) — Clarifying the Definition of a Business,” which provides a screen to determine when an integrated set of assets and activities are not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. This standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company adopted ASU 2017-01 effective January 1, 2017. The implementation of this standard did not have an impact on the Company’s financial statements as the acquisition of MirImmune Inc., (“MirImmune”), the Company’s transaction that this ASU would have affected, did not meet the definition of a business under either the prior guidance or the new guidance.

In May 2017, the FASB issued ASU 2017-09,Compensation — Stock Compensation (Topic 718) — Scope of Modification Accounting,” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. The Company adopted ASU 2017-09 in the second quarter of 2017, and the implementation of this standard had no impact on the Company’s financial statements.

5. MirImmune Inc. Acquisition

On January 6, 2017, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) and completed its acquisition of MirImmune. Subject to the terms of the Stock Purchase Agreement, RXi Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“RXi Merger Sub”), was merged with and into MirImmune, with RXi Merger Sub continuing as the surviving entity and changing its name to “MirImmune, LLC”. As a result of the merger, MirImmune, LLC remains and operates as a wholly-owned subsidiary of the Company. Pursuant to the Stock Purchase Agreement, the Company acquired all of the issued and outstanding shares of capital stock of MirImmune for an aggregate of 275,036 shares of common stock of the Company and an aggregate of 1,118,224 shares of Series C Convertible Preferred Stock of the Company (the “Series C Convertible Preferred Stock”). The shares of common stock and Series C Convertible Preferred Stock were subject to a holdback of 3% of the aggregate closing consideration for any purchase price adjustments. The shares subject to the holdback, adjusted for post-closing items, were released and issued on April 12, 2017.

Upon the closing of the acquisition, the notes receivable outstanding on the Company’s balance sheet as of December 31, 2016 were cancelled.

The Company assessed the acquisition of MirImmune under FASB ASC Topic 805, “Business Combinations” (“ASC 805”). Under ASC 805, the Company determined that the acquired assets did not constitute a business and that the transaction would be accounted for as an asset acquisition. The assets and development programs acquired from MirImmune are at an early stage of development and will require a significant investment of time and capital if we are to be successful in developing them. There is no assurance that we will be successful in developing such assets, and a failure to successfully develop such assets could diminish our prospects. Under ASC 805, the assets acquired are considered to have no alternative future uses, as determining the future economic benefit of the acquired assets at the date of acquisition is highly uncertain. The fair value of the assets was determined using the quoted market price of the Company’s common stock on January 6, 2017, the date of the acquisition, and fully expensed as in-process research and development.

Additionally, the Company assessed the MirImmune acquisition under ASC Topic 740, “Income Taxes (“ASC 740”). The acquisition resulted in an income tax benefit of $1,621,000 and a corresponding increase to acquired in-process research and development expense resulting from the reduction in the Company’s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference.

During the nine months ended September 30, 2017, the Company recorded $4,696,000 in in-process research and development expense related to the fair value of consideration given, which includes transaction costs, liabilities assumed and cancellation of notes receivable, and the deferred tax impact of the MirImmune acquisition.

 

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The Company was restricted from converting any of the Series C Convertible Preferred Stock into common stock to the extent that such conversion was not approved by the Company’s stockholders in accordance with the stockholder approval requirements of NASDAQ Marketplace Rule 5635. On June 9, 2017, with the approval of the Company’s stockholders in accordance with the NASDAQ stockholder approval requirements, every ten shares of the Series C Convertible Preferred Stock outstanding were automatically converted into one share of common stock, such that there were no shares of Series C Convertible Preferred Stock issued or outstanding at September 30, 2017. On November 7, 2017, the Company filed a Certificate Eliminating the Series C Convertible Preferred Stock from the Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware. Please refer to Note 10 for further discussion of the filing.

Under the terms of the Stock Purchase Agreement, if certain development or commercial milestones are achieved within two years, the Company will be required to either (i) issue a number of shares of common stock (the “Milestone Shares”) equal to the sum of 251,909 shares of common stock, plus an additional number of shares of common stock equal to 13% of the common stock issued upon exercise of any warrants issued under the Company’s underwritten public offering in December 2016, but only to the extent that such warrants have been exercised prior to the milestone being achieved or (ii) pay the equivalent value of the Milestone Shares in cash. The Company received shareholder approval in accordance with Rule 5635 of the NASDAQ Marketplace Rules at its 2017 Annual Meeting of Stockholders to issue any shares in satisfaction of the achievement of the milestones.

The Company assessed the Milestone Shares under FASB ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). The Company determined that liability accounting would be required for the Milestone Shares under ASC 480. The Company will record a liability related to the Milestone Shares if and when the milestones are achieved and the consideration becomes payable. At that time, the Company will record the cost of the Milestone Shares as in-process research and development expense. No milestones have been met as of September 30, 2017.

6. Fair Value Measurements

The Company follows the provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” for the Company’s financial assets and liabilities that are re-measured and reported at fair value at each reporting period and are re-measured and reported at fair value at least annually using a fair value hierarchy that is broken down into three levels. Level inputs are defined as follows:

Level 1 — quoted prices in active markets for identical assets or liabilities.

Level 2 — other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 — significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

The warrant issued to the Company by Thera Neuropharma, Inc. (“Thera”) is categorized as Level 3 hierarchy. The estimated fair value inputs utilizing the asset-based approach for the warrant issued to the Company by Thera include the stage of enterprise development, terms of existing contractual arrangements of the entity’s equity securities, the achievement of milestones and other unobservable inputs.

Financial assets measured at fair value on a recurring basis are summarized as follows, in thousands:

 

Description

   At
September 30,

2017
     Quoted Prices in
Active Markets
(Level 1)
     Other Significant
Observable Inputs
(Level 2)
     Significant
Unobservable Inputs
(Level 3)
 

Assets:

           

Warrant in Thera

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Description

   At
December 31,

2016
     Quoted Prices in
Active Markets
(Level 1)
     Other Significant
Observable Inputs
(Level 2)
     Significant
Unobservable Inputs
(Level 3)
 

Assets:

           

Warrant in Thera

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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A reconciliation of the beginning and ending Level 3 assets for the nine months ended September 30, 2017 is as follows (in thousands):

 

     Fair Value
Measurements
Using Significant
Unobservable Inputs
(Level 3)
 

Balance, beginning of period

   $ 5  

Change in value of the warrant in Thera

     —    
  

 

 

 

Balance, end of period

   $ 5  
  

 

 

 

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheet for cash equivalents, restricted cash and accounts payable approximate their fair values due to their short-term nature.

7. Stockholders’ Equity

Series B Convertible Preferred Stock The Company’s remaining shares of Series B Convertible Preferred Stock (“Series B Convertible Preferred Stock”) outstanding at December 31, 2016 were fully converted into 637,445 shares of common stock of the Company during the first quarter of 2017, such that there are no shares of Series B Convertible Preferred Stock issued or outstanding at September 30, 2017. On November 7, 2017, the Company filed a Certificate Eliminating the Series B Convertible Preferred Stock from the Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware. Please refer to Note 10 for further discussion of the filing.

Series C Convertible Preferred Stock In connection with the Stock Purchase Agreement, on January 5, 2017, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (the “Series C Convertible Preferred Stock Certificate of Designation”) with the Secretary of State of the State of Delaware. The Series C Convertible Preferred Stock Certificate of Designation provides for the issuance of up to 1,800,000 shares of Series C Convertible Preferred Stock. The Series C Convertible Preferred Stock have no voting rights, with certain exceptions as described in the Series C Convertible Preferred Stock Certificate of Designations, and shall receive dividends on an as-converted basis at the same time and in the same form as any dividends paid out on shares of the Company’s common stock. Other than as set forth in the previous sentence, no other dividends shall be paid on the Series C Convertible Preferred Stock. The Company has never paid dividends on its common stock and presently has no intention of paying dividends.

Upon its issuance, the Series C Convertible Preferred Stock was assessed under ASC 480. The Company determined that the Series C Convertible Preferred Stock was not within the scope of ASC 480 and therefore, the Series C Convertible Preferred Stock was not considered a liability. The Series C Convertible Preferred Stock was recorded in permanent equity on the Company’s balance sheet.

The Series C Convertible Preferred Stock was then assessed under FASB ASC 815, “Derivatives and Hedging” (“ASC 815”). The Company believes that the Series C Convertible Preferred Stock is an equity host for the purposes of assessing the embedded conversion option for potential bifurcation. The Company concluded that the conversion option feature is clearly and closely related to the preferred stock host. As such, the conversion feature did not require bifurcation under ASC 815.

Pursuant to the Stock Purchase Agreement, the Company acquired all of the issued and outstanding shares of capital stock of MirImmune for an aggregate of 275,036 shares of common stock of the Company and an aggregate of 1,118,224 shares of Series C Convertible Preferred Stock. The Company was restricted from converting any of the Series C Convertible Preferred Stock into common stock to the extent that such conversion was not approved by the Company’s stockholders in accordance with the stockholder approval requirements of NASDAQ Marketplace Rule 5635. On June 9, 2017, with the approval of the Company’s stockholders in accordance with the NASDAQ stockholder approval requirements, every ten shares of the Series C Convertible Preferred Stock outstanding were automatically converted into one share of common stock, such that there were no shares of Series C Convertible Preferred Stock issued or outstanding at September 30, 2017. Please refer to Notes 5 and 10 for further details on the shares issued in connection with the acquisition of MirImmune.

Lincoln Park Capital Fund, LLC On August 8, 2017, the Company entered into a purchase agreement (the “2017 Purchase Agreement”) and a registration rights agreement with LPC, pursuant to which the Company

 

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has the right to sell to LPC up to $15,000,000 in shares of the Company’s common stock, subject to certain limitations and conditions set forth in the 2017 Purchase Agreement. As a commitment fee for entering into the 2017 Purchase Agreement, the Company issued to LPC 45,000 shares of Company common stock (the “Commitment Shares”). The Commitment Shares had a value per share of $5.80 and were recorded as a cost of capital. The Company intends to use the net proceeds from the 2017 Purchase Agreement for working capital and general corporate purposes. There have been no purchases under the 2017 Purchase Agreement as of September 30, 2017.

Warrants — The following table summarizes the Company’s outstanding warrants at September 30, 2017:

 

Exercise prices

   Number of Shares
Underlying Warrants
     Expiration  

$52.00

     130,007        June 2, 2020  

$9.00

     1,277,993        December 21, 2021  
  

 

 

    

Total warrants outstanding

     1,408,000     
  

 

 

    

During the second quarter of 2017, outstanding warrants for the purchase of 46 shares of the Company’s common stock with an exercise price of $390.00 expired.

No warrants were exercised during the nine months ended September 30, 2017 or 2016.

8. Stock-based Compensation

The Company uses the Black-Scholes option-pricing model to determine the fair value of all its option grants. For valuing options granted during the three and nine months ended September 30, 2017 and 2016, the following assumptions were used:

 

     For the Three Months Ended
September 30,
    For the Nine Months Ended
September 30,
 
     2017     2016     2017     2016  

Risk-free interest rate

     1.94 – 2.35     1.46     1.73 – 2.49     1.18 – 2.02

Expected volatility

     83.87 – 91.99     116.88     82.99 – 123.01     79.42 – 116.88

Weighted average expected volatility

     87.93     116.88     84.65     89.12

Expected lives (in years)

     6.25 – 10.00       10.00       5.20 – 10.00       5.20 – 10.00  

Expected dividend yield

     0.00     0.00     0.00     0.00

The weighted average fair value of options granted during the three months ended September 30, 2017 and 2016 was $4.90 and $22.70, respectively. The weighted average fair value of options granted during the nine months ended September 30, 2017 and 2016 was $4.90 and $21.50, respectively.

The risk-free interest rate used for each grant was based upon the yield on zero-coupon U.S. Treasury securities with a term similar to the expected life of the related option. The Company’s expected stock price volatility assumption is based upon the volatility of a composition of comparable companies. The expected life assumption for employee grants was based upon the simplified method provided for under ASC 718, and the expected life assumption for non-employees was based upon the contractual term of the option. The dividend yield assumption of zero is based upon the fact that the Company has never paid cash dividends and presently has no intention of paying cash dividends.

The following table summarizes the activity of Company’s stock option plan for the nine months ended September 30, 2017:

 

     Total Number
of Shares
     Weighted-Average
Exercise Price
Per Share
     Aggregate
Intrinsic
Value
 

Balance at December 31, 2016

     37,444      $ 272.90     

Granted

     33,038        6.90     

Exercised

     —          —       

Cancelled

     (17,382      44.80     
  

 

 

    

 

 

    

 

 

 

Balance at September 30, 2017

     53,100      $ 182.00      $ —    
  

 

 

    

 

 

    

 

 

 

Exercisable at September 30, 2017

     35,495      $ 262.10      $ —    
  

 

 

    

 

 

    

 

 

 

 

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The Company recorded stock-based compensation expense for the three and nine months ended September 30, 2017 and 2016 as follows, in thousands:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2017      2016      2017      2016  

Research and development

   $ 7      $ 52      $ 80      $ 212  

General and administrative

     36        76        196        437  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation

   $ 43      $ 128      $ 276      $ 649  
  

 

 

    

 

 

    

 

 

    

 

 

 

Stock-based compensation expense for the nine months ended September 30, 2017 includes $22,000, recorded in research and development expense, related to stock option modifications in connection with the retirement of the Company’s former Chief Development Officer.

9. Net Loss per Share

The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:

 

     September 30,  
     2017      2016  

Options to purchase common stock

     53,100        39,096  

Warrants to purchase common stock

     1,408,000        130,046  
  

 

 

    

 

 

 

Total

     1,461,100        169,142  
  

 

 

    

 

 

 

10. Subsequent Events

On November 7, 2017, the Company filed a Certificate Eliminating the Series B Convertible Preferred Stock from the Certificate of Incorporation of the Company and a Certificate Eliminating the Series C Convertible Preferred Stock from the Certificate of Incorporation of the Company (together, the “Certificates of Elimination”) with the Secretary of State of the State of Delaware, in order to eliminate from the Certificate of Incorporation all matters set forth in the Certificate of Incorporation, including the related certificates of designation, relating to the previously issued Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. As a result, the 8,100 shares of unissued Series B Convertible Preferred Stock and 1,800,000 shares of unissued Series C Convertible Preferred Stock were returned to the status of authorized but unissued shares of preferred stock of the Company, without designation as to series or preferences or rights. The foregoing summary of the Certificates of Elimination is qualified in its entirety by reference to the full text of the Certificates of Elimination, which are attached hereto as Exhibits 3.1 and 3.2 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this document, “we,” “our,” “ours,” “us,” “RXi” and the “Company” refers to RXi Pharmaceuticals Corporation and our subsidiary, MirImmune, LLC and the ongoing business operations of RXi Pharmaceuticals Corporation and MirImmune, LLC, whether conducted through RXi Pharmaceuticals Corporation or MirImmune, LLC.

This management’s discussion and analysis of financial condition as of September 30, 2017 and results of operations for the three and nine months ended September 30, 2017 and 2016 should be read in conjunction with the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 which was filed with the SEC on March 30, 2017.

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “intends,” “believes,” “anticipates,” “indicates,” “plans,” “expects,” “suggests,” “may,” “should,” “potential,” “designed to,” “will” and similar references. Such statements include, but are not limited to, statements about: our ability to successfully develop RXI-109, Samcyprone™ and our other product candidates (collectively, “our

 

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product candidates”); the future success of our clinical trials with our product candidates; the timing for the commencement and completion of clinical trials; the future success of our strategic partnerships; and our ability to implement cost-saving measures. Forward-looking statements are neither historical facts nor assurances of future performance. These statements are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others: the risk that our clinical trials with our product candidates may not be successful in evaluating the safety and tolerability of these candidates or providing evidence of increased surgical scar reduction compared to placebo or clearance of common warts; the successful and timely completion of clinical trials; uncertainties regarding the regulatory process; the availability of funds and resources to pursue our research and development projects, including our clinical trials with our product candidates; general economic conditions; and those identified in our Annual Report on Form 10-K for the year ended December 31, 2016 under the heading “Risk Factors” and in other filings the Company periodically makes with the Securities and Exchange Commission. Forward-looking statements contained in this Quarterly Report on Form 10-Q speak as of the date hereof and the Company does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this report.

Overview

RXi Pharmaceuticals Corporation (“RXi,” “we,” “our” or the “Company”) is a clinical-stage company developing innovative therapeutics based on our proprietary self-delivering RNAi (sd-rxRNA®) platform and Samcyprone™ which address significant unmet medical needs. We have a pipeline of discovery, preclinical and clinical product candidates in the areas of dermatology, ophthalmology and cell-based cancer immunotherapy. The Company’s clinical development programs include RXI-109, an sd-rxRNA for the treatment of dermal and ocular scarring, and Samcyprone™, a topical immunomodulator, for the treatment of warts. The Company’s pipeline, coupled with our extensive patent portfolio, provides for product development and business development opportunities across a broad spectrum of therapeutic areas.

RNAi therapies are designed to “silence,” or down-regulate, the expression of a specific gene that may be over-expressed in a disease condition. The Company’s first RNAi clinical product candidate, RXI-109, is a self-delivering RNAi compound (sd-rxRNA) that commenced human clinical trials in 2012. RXI-109 is designed to reduce the expression of connective tissue growth factor (“CTGF”), a critical regulator of several biological pathways involved in fibrosis, including scar formation in the skin and eye. RXI-109 is currently being evaluated in a Phase 2 clinical trial, Study 1402, to prevent or reduce dermal scarring following scar revision surgery of an existing hypertrophic scar and a Phase 1/2 clinical trial, Study 1501, to evaluate the safety and clinical activity of RXI-109 to prevent the progression of retinal scarring in subjects with wet age-related macular degeneration (“AMD”).

Study 1402, the Company’s Phase 2 clinical trial in hypertrophic scars, commenced in July 2014. In October 2015, we reported that preliminary data from Study 1402 demonstrated that scars at revision sites were judged to be better at three months after a treatment regimen with five mg/cm intradermal administration of RXI-109 than scars at untreated revision sites in those same subjects. Based in part on this new information, two more cohorts (Cohorts 3 and 4) were added to Study 1402 in November 2015. For these two cohorts, the number of doses was increased to either eight or nine doses of RXI-109 over a six-month period to better cover the extended wound healing/scarring profile of hypertrophic scars. Enrollment of subjects into these two new cohorts completed ahead of schedule during the third quarter of 2016.

In December 2016, the Company announced that preliminary data from the first two cohorts from Study 1402 at nine months confirmed the positive differentiation by a blinded panel of observers from untreated surgery incisions in hypertrophic scars from the previously presented data for a subset of subjects treated with five mg/cm of RXI-109 at three months. In addition, this data extends this observation to all time points, including the post-treatment follow-up period through nine months post-surgery. RXI-109 was safe and well tolerated. Additionally, as expected, the limited three-month data available from Cohort 3 appeared to align with that of the first two cohorts as these subjects all had the same dosing schedule through the third month. A complete read-out of the whole study, including all four cohorts with follow-up until nine months post-surgery, is expected by the end of 2017.

Study 1501, the Company’s Phase 1/2 clinical trial in retinal scars, commenced in November 2015, and is a multi-dose, dose escalation study conducted in subjects with AMD with evidence of subretinal fibrosis. Each subject receives four doses of RXI-109 by intraocular injection at one month intervals for a total dosing period of three months. The safety and tolerability of RXI-109, as well as the potential for clinical activity, is evaluated over the course of the study using numerous assessments to monitor the health of the retina and to assess visual acuity. To date, there have been no safety issues that have precluded continuation of dosing. Study 1501 has been completely enrolled, dosing in the third cohort at the highest planned dose level is completed and patient follow-up is ongoing. The Company expects to complete subject participation in the study by the end of 2017 and to share top-line data in early 2018.

 

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Samcyprone™, the Company’s second clinical candidate, is a proprietary topical formulation of the small molecule diphenylcyclopropenone (“DPCP”), an immunomodulator that works by initiating a T-cell response. The use of Samcyprone™ allows sensitization using much lower concentrations of DPCP than are used with existing compounded DPCP solutions, avoiding hyper-sensitization to subsequent challenge doses. Samcyprone™ is currently being evaluated in a Phase 2a clinical trial, Study 1502, for the clearance of common warts.

Study 1502 was initiated in December 2015. Study 1502 includes a sensitization phase in which a spot on the subject’s upper arm and one or more warts are treated with Samcyprone™. After being sensitized in this way, the subjects enter into the treatment phase where up to four warts are treated on a once weekly basis for ten weeks with a ten-fold lower concentration of Samcyprone™ than in the sensitization phase. During the trial, the warts are scored, photographed and measured to monitor the level of clearance.

In December 2016, the Company announced the results from a preliminary review of sensitization and wart clearance data from a subset of subjects that have completed the ten-week treatment phase of Study 1502. Results showed that greater than 90% of the subjects demonstrated a sensitization response, a prerequisite to be able to develop a therapeutic response. Additionally, more than 60% of the subjects responded to the treatment by exhibiting either complete or greater than 50% clearance of all treated warts with up to ten weekly treatments. Samcyprone treatment has been generally safe and well tolerated and has had drug-related adverse events relating to local reactions, which are typically expected for this type of treatment due to the sensitization and challenge responses in the skin. The Company added a second cohort, which was fully enrolled in September 2017, to Study 1502 to explore the opportunity to reduce the sensitization dose level, which will be more convenient to physicians and subjects. Early read-outs of the study are anticipated by the end of 2017.

In addition to our clinical programs, we continue to advance our preclinical and discovery programs with our sd-rxRNA technology. RXI-231, our lead sd-rxRNA compound targeting tyrosinase (“TYR”), is in cosmetic development as a cosmetic ingredient that may improve the appearance of uneven skin tone and pigmentation. Cosmetics are compounds that affect the appearance of the skin and make no preventative or therapeutic claims. These compounds may be developed more rapidly than therapeutics, therefore the path to market may be much shorter and less expensive. Efficacy and toxicity testing in cell culture and skin equivalents for RXI-231 has been successfully completed and human testing of RXI-231 commenced in June 2017 with a U.S. clinical testing site. The Company has completed irritation and sensitization studies with RXI-231, the first two of three studies planned. Early results from the irritation and sensitization studies demonstrated that RXI-231 is not a skin irritant, and it does not cause allergic contact dermatitis. The third study investigates the potential of RXI-231 to improve the appearance of skin pigmentation induced by UV exposure and is ongoing. Full reports from these studies are expected before the end of 2017.

On January 6, 2017, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) by and among the Company, RXi Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“RXi Merger Sub”), MirImmune Inc. (“MirImmune”), the stockholders of MirImmune set forth on the signature pages thereto (each a “Seller” and collectively, the “Sellers”), and Alexey Wolfson, Ph.D., in his capacity as the Sellers’ Representative. Pursuant to the Stock Purchase Agreement, the Company acquired from the Sellers all of the issued and outstanding shares of capital stock of MirImmune for an aggregate of 275,036 shares of common stock of the Company and an aggregate of 1,118,224 shares of Series C Convertible Preferred Stock of the Company (the “Series C Convertible Preferred Stock”). On June 9, 2017, with the approval of the Company’s stockholders in accordance with the stockholder approval requirements of Nasdaq Marketplace Rule 5635, every ten shares of Series C Convertible Preferred Stock outstanding were automatically converted into one share of common stock, such that no shares of Series C Convertible Preferred Stock remained issued or outstanding. On November 7, 2017, the Company filed a Certificate Eliminating the Series C Convertible Preferred Stock from the Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware. Please refer to Part II, Item 5 of this quarterly report on Form 10-Q for further discussion of the filing.

In connection with and promptly following the closing of the Stock Purchase Agreement, MirImmune was merged with and into RXi Merger Sub (the “Merger”), with RXi Merger Sub continuing as the surviving entity and changing its name to “MirImmune, LLC”. As a result of the Merger, MirImmune, LLC remains and operates as a wholly-owned subsidiary of the Company.

Building on the work completed by MirImmune prior to its acquisition by the Company, our cell-based cancer immunotherapy program with sd-rxRNA includes lead compounds for a number of immune checkpoint targets that provide long lasting immune checkpoint silencing, individually and in combination, in adoptively transferred cells. An improved efficacy upon the silencing of checkpoints has been demonstrated in various types of adoptively transferred cells relevant in cancer immunotherapy, such as CAR T-cells and tumor infiltrating lymphocytes (TILs). The Company’s ongoing discovery programs include, but are not limited to, the evaluation of sd-rxRNA compounds to impact the differentiation of various immune effector cells. The Company has also initiated in vivo evaluations of multiple checkpoint inhibiting sd-rxRNA compounds co-transfected in CAR T-cells in mouse models for solid tumors, with data from these studies expected by the end of 2017.

 

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Additionally, the Company recently selected two sd-rxRNA compounds from its immunotherapy pipeline for preclinical development. For oncology treatments based on adoptive cell transfer (ACT), compounds RXI-762 and RXI-804 suppress the expression of immune checkpoint proteins PD-1 and TIGIT, respectively, which can result in an improved efficacy to the targeted tumors. This decision triggered the selection of a manufacturing facility to initiate production of cGMP grade material, initially for RXI-762. This also supports moving RXI-762 into clinical development as early as 2018 as part of an ACT therapy.

On August 8, 2017, the Company entered into a purchase agreement (the “2017 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which the Company has the right to sell to LPC up to $15,000,000 in shares of the Company’s common stock, subject to certain limitations and conditions set forth therein, over the 30-month term of the 2017 Purchase Agreement.

Since inception, we have incurred significant losses. Substantially all of our losses to date have resulted from research and development expenses in connection with our clinical and research programs and from general and administrative costs. At September 30, 2017, we had an accumulated deficit of $76.5 million. We expect to continue to incur significant losses for the foreseeable future, particularly as we advance our development programs for RXI-109 and Samcyprone™ and expand our program in cell-based cancer immunotherapy.

On January 3, 2018, the Board of Directors of the Company approved a 1-for-10 reverse stock split of the Company’s outstanding common stock, which was effected on January 8, 2018. All share and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock split, including reclassifying an amount equal to the reduction in par value to additional paid-in capital.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies since the beginning of this fiscal year. Our critical accounting policies are described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended December 31, 2016, which we filed with the SEC on March 30, 2017.

Results of Operations

The following data summarizes the results of our operations for the periods indicated, in thousands:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2017      2016      2017      2016  

Net revenues

   $ —        $ —        $ —        $ 19  

Operating expenses

     (2,476      (2,216      (12,071      (6,695

Operating loss

     (2,476      (2,216      (12,071      (6,676

Income tax benefit

     —          —          1,621        —    

Net loss

     (2,476      (2,212      (10,450      (6,655

Comparison of the Three and Nine Months Ended September 30, 2017 and 2016

Net Revenues

To date, we have primarily generated revenues through government grants. The following table summarizes our total net revenues, for the periods indicated, in thousands:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2017      2016      2017      2016  

Net revenues

   $ —        $ —        $ —        $ 19  
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company did not have net revenues for the three and nine months ended September 30, 2017 and the three months ended September 30, 2016.

Net revenues were approximately $19,000 for the nine months ended September 30, 2016, which related to the Company’s exclusive license agreements with Thera Neuropharma, Inc. and MirImmune, prior to its acquisition by the Company.

 

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Operating Expenses

The following table summarizes our total operating expenses, for the periods indicated, in thousands:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2017      2016      2017      2016  

Research and development

   $ 1,490      $ 1,464      $ 4,166      $ 4,108  

Acquired in-process research and development

     —          —          4,696        —    

General and administrative

     986        752        3,209        2,587  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

   $ 2,476      $ 2,216      $ 12,071      $ 6,695  
  

 

 

    

 

 

    

 

 

    

 

 

 

Research and Development Expenses

Research and development expenses consist of compensation-related costs for our employees dedicated to research and development activities, fees related to our Scientific Advisory Board members, expenses related to our ongoing research and development efforts primarily related to our clinical trials, drug manufacturing, outside contract services, licensing and patent fees and laboratory supplies and services for our research programs.

Research and development expenses were $1,490,000 for the three months ended September 30, 2017, compared with $1,464,000 for the three months ended September 30, 2016. The increase of $26,000, or 2%, was due to an increase of $71,000 in research and development expenses primarily driven by subject fees for the second cohort in the Samcyprone™ Phase 2 clinical trial and preclinical work in the Company’s new immunotherapy program that was integrated into the Company with the acquisition of MirImmune in the first quarter of 2017, offset by a decrease of $45,000 in stock-based compensation expense.

Research and development expenses were $4,166,000 for the nine months ended September 30, 2017, compared with $4,108,000 for the nine months ended September 30, 2016. The increase of $58,000, or 1%, was due to an increase of $190,000 in research and development expenses primarily driven by work in the Company’s new immunotherapy program that commenced in the first quarter of 2017, offset by a decrease of $132,000 in stock-based compensation expense.

Acquired In-process Research and Development Expense

In January 2017, the Company acquired all of the issued and outstanding capital stock of MirImmune, a privately-held biotechnology company that was engaged in the development of cancer immunotherapies, in exchange for securities of the Company. During the nine months ended September 30, 2017, the Company recorded $4,696,000 in in-process research and development expense related to the fair value of consideration given, which includes transaction costs, liabilities assumed and cancellation of notes receivable, and the deferred tax impact of the MirImmune acquisition. The Company did not have acquired in-process research and development expense for the three and nine months ended September 30, 2016 and the three months ended September 30, 2017.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation-related costs for our employees dedicated to general and administrative activities, legal fees, audit and tax fees, consulting fees, professional service fees and general corporate expenses.

General and administrative expenses were $986,000 for the three months ended September 30, 2017, compared with $752,000 for the three months ended September 30, 2016. The increase of $234,000, or 31%, was due to an increase of $274,000 in general and administrative expenses primarily due to payroll-related expenses, including severance benefits, with the hire of the Company’s former chief business officer in connection with the acquisition of MirImmune, resulting in a higher employee headcount as compared to the same period of the prior year, offset by a decrease of $40,000 in stock-based compensation expense.

General and administrative expenses were $3,209,000 for the nine months ended September 30, 2017, compared with $2,587,000 for the nine months ended September 30, 2016. The increase of $622,000, or 24%, was due to an increase of $863,000 in general and administrative expenses primarily due to payroll-related expenses, including severance benefits, with the hire of the Company’s former chief business officer in connection with the acquisition of MirImmune, resulting in a higher employee headcount as compared to the same period of the prior year, and legal fees and accounting-related expenses. These increases were offset by a decrease of $241,000 in stock-based compensation expense.

Income Tax

The following table summarizes the Company’s income tax for the periods indicated, in thousands:

 

    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2017     2016     2017      2016  

Income tax benefit

  $ —       $ —       $ 1,621      $ —    
 

 

 

   

 

 

   

 

 

    

 

 

 

For the nine months ended September 30, 2017, we recognized an income tax benefit of $1,621,000 for the tax-related impact of the Company’s acquisition of MirImmune Inc. on January 6, 2017. There was no income tax expense or benefit during the three months ended September 30, 2017 and the three months and nine months ended September 30, 2016.

 

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Table of Contents

Liquidity and Capital Resources

On December 18, 2014, the Company entered into a purchase agreement (the “2014 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which the Company had the right to sell to LPC up to $10.8 million in shares of the Company’s common stock, subject to certain limitations and conditions set forth in the 2014 Purchase Agreement. The 2014 Purchase Agreement expired on April 17, 2017. Under the 2014 Purchase Agreement, the Company sold a total of 7,000 shares of common stock to LPC for net proceeds of approximately $216,000.

On December 21, 2016, the Company closed an underwritten public offering (the “Offering”) of (i) 379,777 Class A Units, at a public offering price of $9.00 per unit, consisting of one share of the Company’s common stock and a five-year warrant to purchase one share of common stock at an exercise price of $9.00 per share (the “Warrants”) and (ii) 8,082 Class B Units, at a public offering price of $1,000 per unit, consisting of one share of Series B Convertible Preferred Stock (the “Series B Convertible Preferred Stock”), which was convertible into 111.11 shares of common stock, and 111.11 Warrants. The Class A Units include an additional 166,667 Class A Units pursuant to the exercise by the underwriters of their over-allotment option. The total net proceeds of the Offering, including the exercise of the over-allotment option, were $10,051,000 after deducting underwriting discounts and commissions and offering expenses paid by the Company.

On August 8, 2017, the Company entered into the 2017 Purchase Agreement with LPC, pursuant to which the Company has the right to sell to LPC up to $15,000,000 in shares of the Company’s common stock, subject to certain limitations and conditions set forth therein, over the 30-month term of the 2017 Purchase Agreement. As a commitment fee for entering into the 2017 Purchase Agreement, the Company issued to LPC 45,000 shares of Company common stock at a value per share of $5.80. As of September 30, 2017, there have been no purchases under the 2017 Purchase Agreement.

We had cash of $5.4 million as of September 30, 2017, compared with cash of $12.9 million as of December 31, 2016. Based on the Company’s cash, operational spending rate, and limitations under the 2017 Purchase Agreement, the Company has concluded that there is substantial doubt regarding our ability to fund the Company’s operations for at least the next twelve months. We have generated significant losses to date, have not generated any product revenue to date and may not generate product revenue in the foreseeable future, or ever. We expect to incur significant operating losses as we advance our product candidates through drug development and the regulatory process. In the future, we will be dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity, funded research and development programs and payments under partnership and collaborative research and business development agreements, in order to maintain our operations and meet our obligations to licensors. There is no guarantee that debt, additional equity or other funding will be available to us on acceptable terms, or at all. If we fail to obtain additional funding when needed, we would be forced to scale back or terminate our operations or to seek to merge with or to be acquired by another company.

The following table summarizes our cash flows for the periods indicated, in thousands:

 

     Nine Months Ended
September 30,
 
     2017      2016  

Net cash used in operating activities

   $ (7,313    $ (6,388

Net cash (used in) provided by investing activities

     (103      3,498  

Net cash (used in) provided by financing activities

     (74      152  
  

 

 

    

 

 

 

Net decrease in cash, cash equivalents and restricted cash

   $ (7,490    $ (2,738

Net Cash Flow from Operating Activities

Net cash used in operating activities was $7,313,000 for the nine months ended September 30, 2017, compared with $6,388,000 for the nine months ended September 30, 2016. The increase in cash used in operating activities was primarily due to an increase in net loss of $3,795,000, offset by changes in non-cash expenses of $2,718,000 mainly driven by in-process research and development expense related to the fair value of consideration given and the tax-related impact resulting from the acquisition of MirImmune in January 2017.

Net Cash Flow from Investing Activities

Net cash used in investing activities was $103,000 for the nine months ended September 30, 2017, compared with net cash provided by investing activities of $3,498,000 for the nine months ended September 30, 2016. The decrease in net cash flow from investing activities was primarily related to the purchase of laboratory equipment in the current year as compared with maturities of short-term investments in the prior year.

 

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Table of Contents

Net Cash Flow from Financing Activities

Net cash used in financing activities was $74,000 for the nine months ended September 30, 2017, compared with net cash provided by financing activities of $152,000 for the nine months ended September 30, 2016. The decrease in net cash flow from financing activities was due to net proceeds received from the issuance of common stock as compared with the same period in the prior year.

Off-Balance Sheet Arrangements

In connection with certain license agreements, we are required to indemnify the licensor for certain damages arising in connection with the intellectual property rights licensed under the agreement. In addition, we are a party to a number of agreements entered into in the ordinary course of business that contain typical provisions that obligate us to indemnify the other parties to such agreements upon the occurrence of certain events. These indemnification obligations are considered off-balance sheet arrangements in accordance with ASC Topic 460, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” To date, we have not encountered material costs as a result of such obligations and have not accrued any liabilities related to such obligations in our financial statements. See Note 8 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the SEC on March 30, 2017, for further discussion of these indemnification agreements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and acting Chief Financial Officer, evaluated the effectiveness of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2017, the end of the period covered by our Original Form 10-Q. Based on that evaluation, our Chief Executive Officer and acting Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Subsequently, in connection with the preparation of our Annual Report on Form 10-K, our management, with the participation of our Chief Executive Officer and acting Chief Financial Officer, reassessed the effectiveness of the Company’s internal control over financial reporting. In connection with this assessment, we identified a material weakness, as described below, in our internal control over financial reporting as of September 30, 2017. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Because of the material weakness, identified below, management concluded that, as of September 30, 2017, our disclosure controls and procedures were not effective.

Inadequate and ineffective controls over accounting for income taxes

We did not have adequate design or operation of controls that provide reasonable assurance on a timely basis that the accounting for income taxes, including the related financial statement disclosures, were in accordance with U.S. generally accepted accounting principles. On an annual basis, we engage and rely upon third-party tax accountants to provide technical expertise with respect to complex tax accounting matters to assist us in maintaining adequate controls that provide reasonable assurance as to the complete and accurate recording and disclosure of deferred taxes due to differences in accounting treatment for book and tax purposes and other tax-related matters in our financial statements.

Our previously reported results prior to this amendment did not include the contemplation of deferred taxes based on the different book basis and tax basis for the acquisition of MirImmune. The acquisition resulted in an increase of $1.6 million to acquired in-process research and development expense and a corresponding $1.6 million income tax benefit resulting from the reduction in the Company’s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference, which were not accounted for properly. Our condensed consolidated financial statements for the quarter ended September 30, 2017 included in this Form 10-Q/A have been restated to include this adjustment to reflect the tax-related impact of the acquisition of MirImmune. This adjustment did not affect previously reported net loss or operating cash flows and had no impact on the Company’s balance sheet.

Remediation Plans

Management is committed to remediating the material weakness in a timely fashion. We have begun the process of executing remediation plans that address the material weakness in internal control over financial reporting relating to accounting for income taxes. Management’s planned actions to address the material weakness include:

 

    Increased involvement on a quarterly basis of our third-party tax accountants dedicated to determining the appropriate accounting for material and complex tax transactions in a timely manner;

 

    Review of tax accounting process to identify and implement enhanced tax accounting processes and related internal control procedures; and

 

    Establishing additional training and education programs for financial personnel responsible for income tax accounting.

Under the direction of the Audit Committee, management will continue to review and make necessary changes to the overall design of the Company’s internal control environment, as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting.

Management believes the measures described above that will be implemented will remediate the control deficiencies identified and will strengthen our internal control over financial reporting. We continuously seek to improve and strengthen our control processes to ensure that all of our controls and procedures are adequate and effective. As management continues to evaluate and work to improve internal control over financial reporting, we may take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures described above.

Changes in Internal Control over Financial Reporting

There has not been any change in our internal control over financial reporting that occurred during the quarterly period ended September 30, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

None.

 

ITEM 1A. RISK FACTORS

You should consider the “Risk Factors” included under Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 30, 2017.

 

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Table of Contents

We may not be able to regain compliance with the continued listing requirements of The Nasdaq Capital Market.

On February 2, 2017, we received written notice (the “Notification Letter”) from the Nasdaq Stock Market (“Nasdaq”) notifying us that we are not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of our common stock for the 30 consecutive business days prior to the date of the Notification Letter, we no longer meet the minimum bid price requirement. The Notification Letter provided an initial 180-day period to regain compliance, which was extended for a second 180-day period on August 2, 2017. As a result of the extension, we have until January 29, 2018 to regain compliance by maintaining a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. In the event that we do not regain compliance by that date, Nasdaq may commence delisting proceedings and our common stock will trade, if at all, on the over-the counter market, such as the OTC Bulletin Board or OTCQX market, which could adversely impact us by, among other things, reducing the liquidity and market price of our common stock; reducing the number of investors willing to hold or acquire our common stock; limiting our ability to issue additional securities in the future; and limiting our ability to fund our operations.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

 

ITEM 5. OTHER INFORMATION

On November 7, 2017, the Company filed a Certificate Eliminating the Series B Convertible Preferred Stock from the Certificate of Incorporation of the Company and a Certificate Eliminating the Series C Convertible Preferred Stock from the Certificate of Incorporation of the Company (together, the “Certificates of Elimination”) with the Secretary of State of the State of Delaware, in order to eliminate from the Certificate of Incorporation all matters set forth in the Certificate of Incorporation, including the related certificates of designation, relating to the previously issued Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. As a result, the 8,100 shares of unissued Series B Convertible Preferred Stock and 1,800,000 shares of unissued Series C Convertible Preferred Stock were returned to the status of authorized but unissued shares of preferred stock of the Company, without designation as to series or preferences or rights. The foregoing summary of the Certificates of Elimination is qualified in its entirety by reference to the full text of the Certificates of Elimination, which are attached hereto as Exhibits 3.1 and 3.2 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

 

20


Table of Contents
ITEM 6. EXHIBITS

EXHIBIT INDEX

 

Exhibit
Number

        Incorporated by Reference Herein  
  

Description

   Form     Date  
  3.1    Certificate Eliminating the Series B Convertible Preferred Stock from the Certificate of Incorporation of RXi Pharmaceuticals Corporation*     

Quarterly Report
on Form 10-Q
(File No. 001-36304)
 
 
 
    November 8, 2017  
  3.2    Certificate Eliminating the Series C Convertible Preferred Stock from the Certificate of Incorporation of RXi Pharmaceuticals Corporation*     

Quarterly Report
on Form 10-Q
(File No. 001-36304)
 
 
 
    November 8, 2017  
10.1    Purchase Agreement, dated August 8, 2017, between RXi Pharmaceuticals Corporation and Lincoln Park Capital Fund, LLC     


Registration
Statement on
Form S-1 (File
No. 333-220062)
 
 
 
 
    August 18, 2017  
31.1    Sarbanes-Oxley Act Section 302 Certification of Chief Executive Officer and Chief Financial Officer.*     
32.1    Sarbanes-Oxley Act Section 906 Certification of Chief Executive Officer and Chief Financial Officer.*     
101    The following financial information from the Quarterly Report on Form 10-Q of RXi Pharmaceuticals Corporation for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (1) Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016; (2) Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016; (3) Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016; and (4) Notes to Condensed Consolidated Financial Statements (Unaudited).*     

 

* Filed herewith.

 

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Table of Contents

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.

 

RXi Pharmaceuticals Corporation
By:  

/s/ Geert Cauwenbergh

  Geert Cauwenbergh, Dr. Med. Sc.
  President, Chief Executive Officer and acting Chief Financial Officer
  Date: March 26, 2018

 

22

EX-31.1 2 d553905dex311.htm EX-31.1 EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Geert Cauwenbergh, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of RXi Pharmaceuticals Corporation;

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)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us 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 our 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 my 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 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 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 controls over financial reporting.

Dated: March 26, 2018

 

/s/ Geert Cauwenbergh

Geert Cauwenbergh, Dr. Med. Sc.
President, Chief Executive Officer and acting Chief Financial Officer
(as Principal Executive and Financial Officer)
EX-32.1 3 d553905dex321.htm EX-32.1 EX-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 RXi Pharmaceuticals Corporation (the “Company”) on Form 10-Q/A for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

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 Company’s financial condition and result of operations.

 

/s/ Geert Cauwenbergh

Geert Cauwenbergh, Dr. Med. Sc.
President, Chief Executive Officer and acting Chief
Financial Officer
(as Principal Executive and Financial Officer)

March 26, 2018

EX-101.INS 4 rxii-20170930.xml XBRL INSTANCE DOCUMENT 15000000 5.80 8100 1800000 2594962 1 2429000 390.00 46 1901000 5737000 79979000 702000 6033000 5416000 100000000 2369733 1408000 0.0001 2369733 0 6033000 2603000 27000 0.0001 10000000 271000 269000 50000 50000 -76549000 0 0 35495 262.10 53100 182.00 3430000 5466000 5000 5000 5000 5000 5000 8100 0 0 1 1800000 0 0 0 9.00 1277993 52.00 130007 5167000 1625000 13106000 73429000 917000 13397000 12906000 100000000 1300318 0.0001 1300318 0 13397000 2542000 150000 27000 0.0001 10000000 150000 114000 50000 50000 -66099000 37444 272.90 10855000 12956000 5000 5000 5000 5000 5000 8100 3525000 5737 5737 0 0 1800000 45000 0 275036 0.03 1118224 0.13 251909 0.001 Company approved a 1-for-10 reverse stock split of the Company's outstanding common stock, which was effected on January 8, 2018. true RXi Pharmaceuticals Corporation (“we,” “our,” “us” and the “Company”) is filing this Amendment No. 1 on Form 10-Q/A to amend and restate in their entirety the following items of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, as originally filed with the Securities and Exchange Commission on November 8, 2017. (the “Original Form 10-Q”):•Part I - Item 1. Financial Statements (unaudited)•Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations•Part I - Item 4. Controls and Procedures• Part II - Item 6. Exhibits • Exhibit 31.1 - Certification of Chief Executive Officer• Exhibit 31.2 - Certification of Chief Financial Officer • Exhibits 101 - Extensible Business Reporting Language (XBRL) This amendment does not modify any disclosures contained in our original Form 10-Q, except for the foregoing Items and Exhibits, and all share and per share amounts for the periods presented to give effect to the 1-for-10 reverse stock split of the Company’s common stock, which was effected on January 8, 2018. This report on Form 10-Q/A is presented as of the filing date of the Original Form 10-Q and does not reflect events occurring after that date, or modify or update disclosures in any way other than as required to reflect the restatement described below. Accordingly, this Quarterly Report on Form 10-Q/A should be read in conjunction with the Original Form 10-Q, and the Company’s other filings with the Securities and Exchange Commission (“SEC”) subsequent to the filing of the Original Form 10-Q, including any amendments thereto.The purpose of this amendment is to restate our previously reported results for the quarter ended September 30, 2017 to include the accounting for the tax-related impact of the Company’s acquisition of MirImmune Inc. (“MirImmune”) on January 6, 2017. Our results did not include the contemplation of deferred taxes based on the different book basis and tax basis for the acquisition of MirImmune. The acquisition resulted in an increase of $1.6 million to acquired in-process research and development expense and a corresponding $1.6 million income tax benefit resulting from the reduction in the company's vluation allowance due to the deferred tax liability created as a result of the book and tax basis difference, which were not accounted for properly. The condensed consolidated financial statements for the quarter ended September 30, 2017 included in this Form 10-Q/A have been restated to include this adjustment to reflect the tax-related impact of the acquisition of MirImmune. This adjustment does not affect previously reported net loss or operating cash flows, although certain adjustments have been made in our condensed consolidated statement of cash flows to correspond to the income statement adjustment as described in Note 2 of the notes to our condensed consolidated financial statements included in this filing, and has no impact on the company's balance sheet. We have made necessary conforming changes in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” resulting from the correction of this error. 1461100 <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <i>Basis of Presentation</i></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201C;<b>GAAP</b>&#x201D;). Certain information and footnote disclosures included in the Company&#x2019;s annual financial statements have been condensed or omitted. The <font style="white-space:nowrap">year-end</font> condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Interim results are not necessarily indicative of results for a full year.</p> </div> <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <i>Cash, Cash Equivalents and Restricted Cash</i></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of amounts invested in certificates of deposit.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Restricted cash consists of certificates of deposit held by financial institutions as collateral for the Company&#x2019;s corporate credit cards.</p> <p style="font-size:1px;margin-top:12px;margin-bottom:0px"> &#xA0;</p> <p style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="76%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="73%"></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>December&#xA0;31,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Cash and cash equivalents</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,416</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,906</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Restricted cash</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">50</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">50</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Cash, cash equivalents and restricted cash shown in the statement of cash flows</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,466</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,956</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> 100000 <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <i>Comprehensive Loss</i></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company&#x2019;s comprehensive loss is equal to its net loss for all periods presented.</p> </div> --12-31 -1621000 48000 -4.71 <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>9. Net Loss per Share</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="76%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="78%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"><b>September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Options to purchase common stock</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">53,100</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">39,096</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Warrants to purchase common stock</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,408,000</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">130,046</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Total</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,461,100</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">169,142</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>8. Stock-based Compensation</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company uses the Black-Scholes option-pricing model to determine the fair value of all its option grants. For valuing options granted during the three and nine months ended September&#xA0;30, 2017 and 2016, the following assumptions were used:</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="52%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>For&#xA0;the&#xA0;Three&#xA0;Months&#xA0;Ended<br /> September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>For&#xA0;the&#xA0;Nine&#xA0;Months&#xA0;Ended<br /> September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Risk-free interest rate</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1.94&#xA0;&#x2013;&#xA0;2.35</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1.46</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1.73&#xA0;&#x2013;&#xA0;2.49</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1.18&#xA0;&#x2013;&#xA0;2.02</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Expected volatility</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right"> 83.87&#xA0;&#x2013;&#xA0;91.99</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">116.88</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right"> 82.99&#xA0;&#x2013;&#xA0;123.01</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right"> 79.42&#xA0;&#x2013;&#xA0;116.88</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Weighted average expected volatility</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">87.93</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">116.88</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">84.65</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">89.12</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Expected lives (in years)</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6.25&#xA0;&#x2013;&#xA0;10.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">10.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5.20&#xA0;&#x2013;&#xA0;10.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5.20&#xA0;&#x2013;&#xA0;10.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Expected dividend yield</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">0.00</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">0.00</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">0.00</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">0.00</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> </tr> </table> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The weighted average fair value of options granted during the three months ended September&#xA0;30, 2017 and 2016 was $4.90 and $22.70, respectively. The weighted average fair value of options granted during the nine months ended September&#xA0;30, 2017 and 2016 was $4.90 and $21.50, respectively.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The risk-free interest rate used for each grant was based upon the yield on <font style="white-space:nowrap">zero-coupon</font> U.S. Treasury securities with a term similar to the expected life of the related option. The Company&#x2019;s expected stock price volatility assumption is based upon the volatility of a composition of comparable companies. The expected life assumption for employee grants was based upon the simplified method provided for under ASC 718, and the expected life assumption for <font style="white-space:nowrap">non-employees</font> was based upon the contractual term of the option. The dividend yield assumption of zero is based upon the fact that the Company has never paid cash dividends and presently has no intention of paying cash dividends.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The following table summarizes the activity of Company&#x2019;s stock option plan for the nine months ended September&#xA0;30, 2017:</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="84%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="62%"></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Total&#xA0;Number<br /> of Shares</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b><font style="white-space:nowrap">Weighted-Average</font><br /> Exercise Price<br /> Per&#xA0;Share</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Aggregate<br /> Intrinsic<br /> Value</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Balance at December&#xA0;31, 2016</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">37,444</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">272.90</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Granted</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">33,038</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6.90</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Exercised</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td nowrap="nowrap" valign="bottom" align="right"> &#x2014;&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td nowrap="nowrap" valign="bottom" align="right"> &#x2014;&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Cancelled</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(17,382</td> <td nowrap="nowrap" valign="bottom">)&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">44.80</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Balance at September&#xA0;30, 2017</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">53,100</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">182.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">$</td> <td nowrap="nowrap" valign="bottom" align="right"> &#x2014;&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Exercisable at September&#xA0;30, 2017</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">35,495</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">262.10</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">$</td> <td nowrap="nowrap" valign="bottom" align="right"> &#x2014;&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="font-size:1px;margin-top:12px;margin-bottom:0px"> &#xA0;</p> <p style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company recorded stock-based compensation expense for the three and nine months ended September&#xA0;30, 2017 and 2016 as follows, in thousands:</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="73%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>Three&#xA0;Months&#xA0;Ended<br /> September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>Nine&#xA0;Months&#xA0;Ended<br /> September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Research and development</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">7</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">52</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">80</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">212</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> General and administrative</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">36</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">76</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">196</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">437</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Total stock-based compensation</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">43</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">128</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">276</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">649</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Stock-based compensation expense for the nine months ended September&#xA0;30, 2017 includes $22,000, recorded in research and development expense, related to stock option modifications in connection with the retirement of the Company&#x2019;s former Chief Development Officer.</p> </div> Q3 2017 10-Q/A <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <i>Net Loss per Share</i></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company accounts for and discloses net loss per share in accordance with FASB ASC Topic 260, &#x201C;<i>Earnings per Share.&#x201D;</i> Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing the Company&#x2019;s net earnings by the weighted average number of common shares outstanding and the impact of all dilutive potential common shares.</p> </div> 2017-09-30 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Financial assets measured at fair value on a recurring basis are summarized as follows, in thousands:</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="44%"></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom" nowrap="nowrap"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 39.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline"> <b>Description</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>At<br /> September&#xA0;30,</b><br /> <b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Quoted&#xA0;Prices&#xA0;in<br /> Active Markets<br /> (Level&#xA0;1)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Other&#xA0;Significant<br /> Observable&#xA0;Inputs<br /> (Level&#xA0;2)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Significant<br /> Unobservable&#xA0;Inputs<br /> (Level&#xA0;3)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Assets:</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Warrant in Thera</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Total</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="16"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom" nowrap="nowrap"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 39.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline"> <b>Description</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>At<br /> December&#xA0;31,</b><br /> <b>2016</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Quoted Prices&#xA0;in<br /> Active Markets<br /> (Level&#xA0;1)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Other Significant<br /> Observable Inputs<br /> (Level&#xA0;2)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Significant<br /> Unobservable Inputs<br /> (Level&#xA0;3)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Assets:</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Warrant in Thera</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Total</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> RXi Pharmaceuticals Corp <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%"> A reconciliation of the beginning and ending Level&#xA0;3 assets for the nine months ended September&#xA0;30, 2017 is as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="68%" align="center" border="0"> <tr> <td width="78%"></td> <td valign="bottom" width="21%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair Value<br /> Measurements<br /> Using&#xA0;Significant<br /> Unobservable&#xA0;Inputs<br /> (Level 3)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Balance, beginning of period</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Change in value of the warrant in Thera</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Balance, end of period</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <b>6. Fair Value Measurements</b></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The Company follows the provisions of FASB ASC Topic 820, &#x201C;<i>Fair Value Measurements and Disclosures,&#x201D;</i> for the Company&#x2019;s financial assets and liabilities that are <font style="WHITE-SPACE: nowrap">re-measured</font> and reported at fair value at each reporting period and are <font style="WHITE-SPACE: nowrap">re-measured</font> and reported at fair value at least annually using a fair value hierarchy that is broken down into three levels. Level inputs are defined as follows:</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"> Level&#xA0;1 &#x2014; quoted prices in active markets for identical assets or liabilities.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"> Level&#xA0;2 &#x2014; other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"> Level&#xA0;3 &#x2014; significant unobservable inputs that reflect management&#x2019;s best estimate of what market participants would use to price the assets or liabilities at the measurement date.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> The warrant issued to the Company by Thera Neuropharma, Inc. (&#x201C;<b>Thera</b>&#x201D;) is categorized as Level&#xA0;3 hierarchy. The estimated fair value inputs utilizing the asset-based approach for the warrant issued to the Company by Thera include the stage of enterprise development, terms of existing contractual arrangements of the entity&#x2019;s equity securities, the achievement of milestones and other unobservable inputs.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Financial assets measured at fair value on a recurring basis are summarized as follows, in thousands:</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="44%"></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom" nowrap="nowrap"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 39.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline"> <b>Description</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>At<br /> September&#xA0;30,</b><br /> <b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Quoted&#xA0;Prices&#xA0;in<br /> Active Markets<br /> (Level&#xA0;1)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Other&#xA0;Significant<br /> Observable&#xA0;Inputs<br /> (Level&#xA0;2)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Significant<br /> Unobservable&#xA0;Inputs<br /> (Level&#xA0;3)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Assets:</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Warrant in Thera</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Total</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 1pt"> <td height="16"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom" nowrap="nowrap"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 39.5pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline"> <b>Description</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>At<br /> December&#xA0;31,</b><br /> <b>2016</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Quoted Prices&#xA0;in<br /> Active Markets<br /> (Level&#xA0;1)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Other Significant<br /> Observable Inputs<br /> (Level&#xA0;2)</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Significant<br /> Unobservable Inputs<br /> (Level&#xA0;3)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Assets:</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Warrant in Thera</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Total</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%"> A reconciliation of the beginning and ending Level&#xA0;3 assets for the nine months ended September&#xA0;30, 2017 is as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="68%" align="center" border="0"> <tr> <td width="78%"></td> <td valign="bottom" width="21%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair Value<br /> Measurements<br /> Using&#xA0;Significant<br /> Unobservable&#xA0;Inputs<br /> (Level 3)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Balance, beginning of period</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Change in value of the warrant in Thera</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Balance, end of period</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">5</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <i>Fair Value of Financial Instruments</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The carrying amounts reported in the balance sheet for cash equivalents, restricted cash and accounts payable approximate their fair values due to their short-term nature.</p> </div> 0001533040 Smaller Reporting Company 2824000 3209000 -12071000 276000 -1621000 -417000 121000 Three months or less <div> <p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>1. Nature of Operations</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> RXi Pharmaceuticals Corporation (&#x201C;<b>RXi</b>,&#x201D; &#x201C;<b>we</b>,&#x201D; &#x201C;<b>our</b>&#x201D; or the &#x201C;<b>Company</b>&#x201D;) is a clinical-stage company developing innovative therapeutics based on our proprietary self-delivering RNAi <font style="white-space:nowrap">(sd-rxRNA</font><sup style="font-size:85%; vertical-align:top">&#xAE;</sup>) platform and Samcyprone&#x2122; which address significant unmet medical needs. We have a pipeline of discovery, preclinical and clinical product candidates in the areas of dermatology, ophthalmology and cell-based cancer immunotherapy. The Company&#x2019;s clinical development programs include <font style="white-space:nowrap">RXI-109,</font> an <font style="white-space:nowrap">sd-rxRNA</font> for the treatment of dermal and ocular scarring, and Samcyprone&#x2122;, a topical immunomodulator, for the treatment of warts. The Company&#x2019;s pipeline, coupled with our extensive patent portfolio, provides for product development and business development opportunities across a broad spectrum of therapeutic areas.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> On January 3, 2018, the Board of Directors of the Company approved a 1-for-10 reverse stock split of the Company&#x2019;s outstanding common stock, which was effected on January 8, 2018. All share and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock split, including reclassifying an amount equal to the reduction in par value to additional paid-in capital.</p> </div> -103000 -7313000 <div> <p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>4. Recent Accounting Pronouncements</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In August 2016, the FASB issued Accounting Standards Update (&#x201C;<b>ASU</b>&#x201D;) 2016-15, &#x201C;<i>Statement of Cash Flows (Topic 230) &#x2014; Classification of Certain Cash Receipts and Cash Payments</i>,&#x201D; which clarifies how certain cash receipts and payments are presented and classified in the statement of cash flows. This standard will be effective for annual reporting periods beginning after December&#xA0;15, 2017, including interim periods within that reporting period. Early adoption is permitted. The amendments in ASU <font style="white-space:nowrap">2016-15</font> should be applied using a retrospective transition method to each period presented. The Company adopted ASU <font style="white-space:nowrap">2016-15</font> in the first quarter of 2017 and the implementation of this standard had no impact on the Company&#x2019;s financial statements.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In November 2016, the FASB issued ASU <font style="white-space:nowrap">2016-18,</font> &#x201C;<i>Statement of Cash Flows (Topic 230) &#x2014; Restricted Cash,&#x201D;</i> which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. With this standard, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. This standard will be effective for annual reporting periods beginning after December&#xA0;15, 2017, including interim periods within that reporting period. Early adoption is permitted. The Company adopted ASU <font style="white-space:nowrap">2016-18</font> in the first quarter of 2017, and the guidance has been retrospectively applied to all periods presented. The total of cash, cash equivalents and restricted cash is described in Note&#xA0;3. The adoption of the guidance did not have an impact on the Company&#x2019;s balance sheet or statement of operations.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In January 2017, the FASB issued ASU <font style="white-space:nowrap">2017-01,</font> &#x201C;<i>Business Combinations (Topic 805) &#x2014; Clarifying the Definition of a Business</i>,&#x201D; which provides a screen to determine when an integrated set of assets and activities are not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. This standard will be effective for annual reporting periods beginning after December&#xA0;15, 2017, including interim periods within that reporting period. The Company adopted ASU <font style="white-space:nowrap">2017-01</font> effective January&#xA0;1, 2017. The implementation of this standard did not have an impact on the Company&#x2019;s financial statements as the acquisition of MirImmune Inc., (&#x201C;<b>MirImmune</b>&#x201D;), the Company&#x2019;s transaction that this ASU would have affected, did not meet the definition of a business under either the prior guidance or the new guidance.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In May 2017, the FASB issued ASU <font style="white-space:nowrap">2017-09,</font> &#x201C;<i>Compensation &#x2014; Stock Compensation (Topic 718) &#x2014; Scope of Modification Accounting</i>,&#x201D; which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This standard will be effective for annual reporting periods beginning after December&#xA0;15, 2017, including interim periods within that reporting period. Early adoption is permitted. The Company adopted ASU <font style="white-space:nowrap">2017-09</font> in the second quarter of 2017, and the implementation of this standard had no impact on the Company&#x2019;s financial statements.</p> </div> 12071000 -74000 -10450000 5000 -12071000 150000 203000 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"> <i>Restatement of Consolidated Financial Statements</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Our condensed consolidated statement of operations and our condensed consolidated statement of cash flows for the quarter ended September, 2017 have been restated to include the tax-related impact of the Company&#x2019;s acquisition of MirImmune Inc. (&#x201C;<b>MirImmune</b>&#x201D;) on January 6, 2017. Our results did not include the contemplation of deferred taxes based on the different book basis and tax basis for the acquisition of MirImmune. The acquisition resulted in an increase to acquired in-process research and development expense and a corresponding income tax benefit resulting from the reduction in the Company&#x2019;s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference. This adjustment does not affect previously reported net loss or operating cash flows, although certain adjustments have been made in our condensed consolidated statement of cash flows to correspond to the income statement adjustment as noted below. The restatement did not impact our condensed consolidated statement of operations for the three months ended September 30, 2017. The following table summarizes the effects of our restatement on the nine months ended September 30, 2017 resulting from the correction of this error.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="84%" align="center" border="0"> <tr> <td width="76%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>Nine Months Ended</b><br /> <b>September 30, 2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Previously</b><br /> <b>Reported</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Adjustment</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Restated</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="10" align="center"> <b>($&#xA0;in&#xA0;thousands,&#xA0;except&#xA0;per&#xA0;share&#xA0;data)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <b>CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Operating Expenses:</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Research and development</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,166</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,166</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Acquired in-process research and development</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,075</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,696</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> General and administrative</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,209</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,209</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Total operating expenses</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">10,450</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,071</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Operating loss</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(12,071</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Loss before income taxes</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(12,071</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Income tax benefit</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net loss</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net loss per common share: basic and diluted</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(4.71</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(4.71</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <b>CONDENSED CONSOLIDATED STATEMENT OF</b> <b>CASH FLOWS</b><b>:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Cash flows from operating activities:</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net loss</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Adjustments to reconcile net loss to net cash used in operating activities</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Depreciation and amortization</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">48</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">48</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Non-cash stock-based compensation</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Acquired in-process research and development</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,075</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,696</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Deferred tax</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Changes in operating assets and liabilities:</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 7em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Prepaid expenses and other assets</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(121</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(121</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 7em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Accounts payable</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(417</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(417</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 7em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Accrued expenses</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <b>Net cash used in operating expenses</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(7,313</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(7,313</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> -74000 4696000 4166000 <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <i>Research and Development Expenses</i></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Research and development costs are charged to expense as incurred and relate to salaries, employee benefits, facility-related expenses, supplies, stock-based compensation related to employees and <font style="white-space:nowrap">non-employees</font> involved in the Company&#x2019;s research and development, external services, other operating costs and overhead related to our research and development departments, costs to acquire technology licenses and expenses associated with preclinical activities and our clinical trials. Payments made by the Company in advance for research and development services not yet provided and/or for materials not yet received are recorded as prepaid expenses. Accrued liabilities are recorded related to those expenses for which vendors have not yet billed us with respect to services provided and/or materials that we have received.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Preclinical and clinical trial expenses relate to third-party services, subject-related fees at the sites where our clinical trials are being conducted, laboratory costs, analysis costs, toxicology studies and investigator fees. Costs associated with these expenses are generally payable on the passage of time or when certain milestones are achieved. Expense is recorded during the period incurred or in the period in which a milestone is achieved. In order to ensure that we have adequately provided for preclinical and clinical expenses during the proper period, we maintain an accrual to cover these expenses. These accruals are assessed on a quarterly basis and are based on such assumptions as expected total cost, the number of subjects and clinical trial sites and length of the study. Actual results may differ from these estimates and could have a material impact on our reported results. Our historical accrual estimates have not been materially different from our actual costs.</p> </div> <div> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="76%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="78%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"><b>September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Options to purchase common stock</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">53,100</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">39,096</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Warrants to purchase common stock</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,408,000</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">130,046</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Total</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,461,100</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">169,142</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company recorded stock-based compensation expense for the three and nine months ended September&#xA0;30, 2017 and 2016 as follows, in thousands:</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="73%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>Three&#xA0;Months&#xA0;Ended<br /> September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>Nine&#xA0;Months&#xA0;Ended<br /> September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Research and development</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">7</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">52</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">80</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">212</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> General and administrative</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">36</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">76</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">196</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">437</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Total stock-based compensation</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">43</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">128</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">276</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">649</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The following table summarizes the effects of our restatement on the nine months ended September 30, 2017 resulting from the correction of this error.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="84%" align="center" border="0"> <tr> <td width="76%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>Nine Months Ended</b><br /> <b>September 30, 2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Previously</b><br /> <b>Reported</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Adjustment</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Restated</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="10" align="center"> <b>($&#xA0;in&#xA0;thousands,&#xA0;except&#xA0;per&#xA0;share&#xA0;data)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <b>CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Operating Expenses:</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Research and development</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,166</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,166</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Acquired in-process research and development</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,075</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,696</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> General and administrative</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,209</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,209</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Total operating expenses</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">10,450</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,071</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Operating loss</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(12,071</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Loss before income taxes</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(12,071</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Income tax benefit</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net loss</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net loss per common share: basic and diluted</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(4.71</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(4.71</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <b>CONDENSED CONSOLIDATED STATEMENT OF</b> <b>CASH FLOWS</b><b>:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Cash flows from operating activities:</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net loss</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Adjustments to reconcile net loss to net cash used in operating activities</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Depreciation and amortization</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">48</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">48</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Non-cash stock-based compensation</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Acquired in-process research and development</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,075</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,696</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Deferred tax</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Changes in operating assets and liabilities:</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 7em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Prepaid expenses and other assets</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(121</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(121</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 7em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Accounts payable</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(417</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(417</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 7em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Accrued expenses</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <b>Net cash used in operating expenses</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(7,313</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(7,313</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The following table summarizes the activity of Company&#x2019;s stock option plan for the nine months ended September&#xA0;30, 2017:</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="84%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="62%"></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Total&#xA0;Number<br /> of Shares</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b><font style="white-space:nowrap">Weighted-Average</font><br /> Exercise Price<br /> Per&#xA0;Share</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Aggregate<br /> Intrinsic<br /> Value</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Balance at December&#xA0;31, 2016</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">37,444</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">272.90</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Granted</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">33,038</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6.90</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Exercised</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td nowrap="nowrap" valign="bottom" align="right"> &#x2014;&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td nowrap="nowrap" valign="bottom" align="right"> &#x2014;&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Cancelled</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(17,382</td> <td nowrap="nowrap" valign="bottom">)&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">44.80</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Balance at September&#xA0;30, 2017</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">53,100</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">182.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">$</td> <td nowrap="nowrap" valign="bottom" align="right"> &#x2014;&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Exercisable at September&#xA0;30, 2017</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">35,495</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">262.10</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">$</td> <td nowrap="nowrap" valign="bottom" align="right"> &#x2014;&#xA0;&#xA0;</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company uses the Black-Scholes option-pricing model to determine the fair value of all its option grants. For valuing options granted during the three and nine months ended September&#xA0;30, 2017 and 2016, the following assumptions were used:</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="52%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>For&#xA0;the&#xA0;Three&#xA0;Months&#xA0;Ended<br /> September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>For&#xA0;the&#xA0;Nine&#xA0;Months&#xA0;Ended<br /> September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Risk-free interest rate</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1.94&#xA0;&#x2013;&#xA0;2.35</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1.46</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1.73&#xA0;&#x2013;&#xA0;2.49</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1.18&#xA0;&#x2013;&#xA0;2.02</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Expected volatility</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right"> 83.87&#xA0;&#x2013;&#xA0;91.99</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">116.88</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right"> 82.99&#xA0;&#x2013;&#xA0;123.01</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right"> 79.42&#xA0;&#x2013;&#xA0;116.88</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Weighted average expected volatility</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">87.93</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">116.88</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">84.65</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">89.12</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Expected lives (in years)</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6.25&#xA0;&#x2013;&#xA0;10.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">10.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5.20&#xA0;&#x2013;&#xA0;10.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5.20&#xA0;&#x2013;&#xA0;10.00</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Expected dividend yield</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">0.00</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">0.00</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">0.00</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">0.00</td> <td nowrap="nowrap" valign="bottom">%&#xA0;</td> </tr> </table> </div> <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> &#xA0;The following table summarizes the Company&#x2019;s outstanding warrants at September&#xA0;30, 2017:</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"> <tr> <td width="59%"></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom" nowrap="nowrap"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 51.25pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline"> <b>Exercise&#xA0;prices</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Number&#xA0;of&#xA0;Shares<br /> Underlying&#xA0;Warrants</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Expiration</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> $52.00</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">130,007</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">June&#xA0;2, 2020</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> $9.00</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,277,993</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">December&#xA0;21,&#xA0;2021</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Total warrants outstanding</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,408,000</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> </table> </div> 276000 1.2301 17382 0 44.80 0.0000 0.8299 0.0173 4.90 6.90 <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <i>Stock-based Compensation</i></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company follows the provisions of the Financial Accounting Standards Board (&#x201C;<b>FASB</b>&#x201D;) Accounting Standards Codification (&#x201C;<b>ASC</b>&#x201D;) Topic 718, &#x201C;<i>Compensation</i> <i>&#x2014; Stock Compensation</i>&#x201D; (&#x201C;<b>ASC 718</b>&#x201D;), which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees, officers and <font style="white-space:nowrap">non-employee</font> directors, including stock options. Stock compensation expense based on the grant date fair value estimated in accordance with the provisions of ASC 718 is recognized as an expense over the requisite service period.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> For stock options granted as consideration for services rendered by <font style="white-space:nowrap">non-employees,</font> the Company recognizes compensation expense in accordance with the requirements of FASB ASC Topic <font style="white-space:nowrap">505-50,</font> &#x201C;<i>Equity Based Payments to <font style="white-space:nowrap">Non-Employees</font></i>.&#x201D; <font style="white-space:nowrap">Non-employee</font> option grants that do not vest immediately upon grant are recorded as an expense over the requisite service period of the underlying stock options. At the end of each financial reporting period prior to vesting, the value of these options, as calculated using the Black-Scholes option-pricing model, will be <font style="white-space:nowrap">re-measured</font> using the fair value of the Company&#x2019;s common stock and the <font style="white-space:nowrap">non-cash</font> compensation recognized during the period will be adjusted accordingly. Since the fair market value of options granted to <font style="white-space:nowrap">non-employees</font> is subject to change in the future, the amount of the future compensation expense will include fair value <font style="white-space:nowrap">re-measurements</font> until the stock options are fully vested.</p> </div> 0 0.8465 22000 0.0249 33038 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <b>7. Stockholders&#x2019; Equity</b></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> <i>Series B Convertible Preferred Stock</i> <i>&#x2014;</i> The Company&#x2019;s remaining shares of Series B Convertible Preferred Stock (&#x201C;<b>Series B Convertible Preferred Stock</b>&#x201D;) outstanding at December&#xA0;31, 2016 were fully converted into 637,445 shares of common stock of the Company during the first quarter of 2017, such that there are no shares of Series B Convertible Preferred Stock issued or outstanding at September&#xA0;30, 2017. On November 7, 2017, the Company filed a Certificate Eliminating the Series B Convertible Preferred Stock from the Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware. Please refer to Note 10 for further discussion of the filing.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> <i>Series C Convertible Preferred Stock</i> <i>&#x2014;</i> In connection with the Stock Purchase Agreement, on January&#xA0;5, 2017, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (the &#x201C;<b>Series C Convertible Preferred Stock Certificate of Designation</b>&#x201D;) with the Secretary of State of the State of Delaware. The Series C Convertible Preferred Stock Certificate of Designation provides for the issuance of up to 1,800,000 shares of Series C Convertible Preferred Stock. The Series C Convertible Preferred Stock have no voting rights, with certain exceptions as described in the Series C Convertible Preferred Stock Certificate of Designations, and shall receive dividends on an <font style="WHITE-SPACE: nowrap">as-converted</font> basis at the same time and in the same form as any dividends paid out on shares of the Company&#x2019;s common stock. Other than as set forth in the previous sentence, no other dividends shall be paid on the Series C Convertible Preferred Stock. The Company has never paid dividends on its common stock and presently has no intention of paying dividends.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Upon its issuance, the Series C Convertible Preferred Stock was assessed under ASC 480. The Company determined that the Series C Convertible Preferred Stock was not within the scope of ASC 480 and therefore, the Series C Convertible Preferred Stock was not considered a liability. The Series C Convertible Preferred Stock was recorded in permanent equity on the Company&#x2019;s balance sheet.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> The Series C Convertible Preferred Stock was then assessed under FASB ASC 815, &#x201C;<i>Derivatives and Hedging</i>&#x201D; (&#x201C;<b>ASC 815</b>&#x201D;). The Company believes that the Series C Convertible Preferred Stock is an equity host for the purposes of assessing the embedded conversion option for potential bifurcation. The Company concluded that the conversion option feature is clearly and closely related to the preferred stock host. As such, the conversion feature did not require bifurcation under ASC 815.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Pursuant to the Stock Purchase Agreement, the Company acquired all of the issued and outstanding shares of capital stock of MirImmune for an aggregate of 275,036 shares of common stock of the Company and an aggregate of 1,118,224 shares of Series C Convertible Preferred Stock. The Company was restricted from converting any of the Series C Convertible Preferred Stock into common stock to the extent that such conversion was not approved by the Company&#x2019;s stockholders in accordance with the stockholder approval requirements of NASDAQ Marketplace Rule 5635. On June&#xA0;9, 2017, with the approval of the Company&#x2019;s stockholders in accordance with the NASDAQ stockholder approval requirements, every ten shares of the Series C Convertible Preferred Stock outstanding were automatically converted into one share of common stock, such that there were no shares of Series C Convertible Preferred Stock issued or outstanding at September&#xA0;30, 2017. Please refer to Notes 5 and 10 for further details on the shares issued in connection with the acquisition of MirImmune.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> <i>Lincoln Park Capital Fund, LLC</i> <i>&#x2014;</i> On August&#xA0;8, 2017, the Company entered into a purchase agreement (the &#x201C;<b>2017 Purchase Agreement</b>&#x201D;) and a registration rights agreement with LPC, pursuant to which the Company has the right to sell to LPC up to $15,000,000 in shares of the Company&#x2019;s common stock, subject to certain limitations and conditions set forth in the 2017 Purchase Agreement. As a commitment fee for entering into the 2017 Purchase Agreement, the Company issued to LPC 45,000 shares of Company common stock (the &#x201C;<b>Commitment Shares</b>&#x201D;). The Commitment Shares had a value per share of $5.80 and were recorded as a cost of capital. The Company intends to use the net proceeds from the 2017 Purchase Agreement for working capital and general corporate purposes. There have been no purchases under the 2017 Purchase Agreement as of September&#xA0;30, 2017.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> <i>Warrants &#x2014;</i> The following table summarizes the Company&#x2019;s outstanding warrants at September&#xA0;30, 2017:</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"> <tr> <td width="59%"></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom" nowrap="nowrap"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 51.25pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt; DISPLAY: inline"> <b>Exercise&#xA0;prices</b></p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Number&#xA0;of&#xA0;Shares<br /> Underlying&#xA0;Warrants</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Expiration</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> $52.00</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">130,007</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">June&#xA0;2, 2020</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> $9.00</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,277,993</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">December&#xA0;21,&#xA0;2021</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Total warrants outstanding</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,408,000</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> During the second quarter of 2017, outstanding warrants for the purchase of 46 shares of the Company&#x2019;s common stock with an exercise price of $390.00 expired.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> No warrants were exercised during the nine months ended September&#xA0;30, 2017 or 2016.</p> </div> 0 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <b>3. Significant Accounting Policies</b></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"> <i>Restatement of Consolidated Financial Statements</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Our condensed consolidated statement of operations and our condensed consolidated statement of cash flows for the quarter ended September, 2017 have been restated to include the tax-related impact of the Company&#x2019;s acquisition of MirImmune Inc. (&#x201C;<b>MirImmune</b>&#x201D;) on January 6, 2017. Our results did not include the contemplation of deferred taxes based on the different book basis and tax basis for the acquisition of MirImmune. The acquisition resulted in an increase to acquired in-process research and development expense and a corresponding income tax benefit resulting from the reduction in the Company&#x2019;s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference. This adjustment does not affect previously reported net loss or operating cash flows, although certain adjustments have been made in our condensed consolidated statement of cash flows to correspond to the income statement adjustment as noted below. The restatement did not impact our condensed consolidated statement of operations for the three months ended September 30, 2017. The following table summarizes the effects of our restatement on the nine months ended September 30, 2017 resulting from the correction of this error.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="84%" align="center" border="0"> <tr> <td width="76%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>Nine Months Ended</b><br /> <b>September 30, 2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Previously</b><br /> <b>Reported</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Adjustment</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Restated</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" colspan="10" align="center"> <b>($&#xA0;in&#xA0;thousands,&#xA0;except&#xA0;per&#xA0;share&#xA0;data)</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <b>CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Operating Expenses:</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Research and development</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,166</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,166</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Acquired in-process research and development</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,075</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,696</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> General and administrative</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,209</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,209</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Total operating expenses</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">10,450</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,071</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Operating loss</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(12,071</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Loss before income taxes</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(12,071</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Income tax benefit</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net loss</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net loss per common share: basic and diluted</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(4.71</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(4.71</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <b>CONDENSED CONSOLIDATED STATEMENT OF</b> <b>CASH FLOWS</b><b>:</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Cash flows from operating activities:</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net loss</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(10,450</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Adjustments to reconcile net loss to net cash used in operating activities</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Depreciation and amortization</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">48</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">48</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Non-cash stock-based compensation</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Acquired in-process research and development</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">3,075</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,621</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,696</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Deferred tax</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,621</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 5em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Changes in operating assets and liabilities:</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 7em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Prepaid expenses and other assets</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(121</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(121</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 7em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Accounts payable</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(417</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(417</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 7em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Accrued expenses</p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <b>Net cash used in operating expenses</b></p> </td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(7,313</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" nowrap="nowrap">$</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">(7,313</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <i>Basis of Presentation</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201C;<b>GAAP</b>&#x201D;). Certain information and footnote disclosures included in the Company&#x2019;s annual financial statements have been condensed or omitted. The <font style="WHITE-SPACE: nowrap">year-end</font> condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Interim results are not necessarily indicative of results for a full year.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <i>Uses of Estimates in Preparation of Financial Statements</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The preparation of financial statements in accordance with GAAP requires management 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <i>Cash, Cash Equivalents and Restricted Cash</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of amounts invested in certificates of deposit.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Restricted cash consists of certificates of deposit held by financial institutions as collateral for the Company&#x2019;s corporate credit cards.</p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%"> The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"> <tr> <td width="73%"></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December&#xA0;31,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2016</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Cash and cash equivalents</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,416</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,906</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Restricted cash</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">50</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">50</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Cash, cash equivalents and restricted cash shown in the statement of cash flows</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,466</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,956</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <i>Research and Development Expenses</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Research and development costs are charged to expense as incurred and relate to salaries, employee benefits, facility-related expenses, supplies, stock-based compensation related to employees and <font style="WHITE-SPACE: nowrap">non-employees</font> involved in the Company&#x2019;s research and development, external services, other operating costs and overhead related to our research and development departments, costs to acquire technology licenses and expenses associated with preclinical activities and our clinical trials. Payments made by the Company in advance for research and development services not yet provided and/or for materials not yet received are recorded as prepaid expenses. Accrued liabilities are recorded related to those expenses for which vendors have not yet billed us with respect to services provided and/or materials that we have received.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Preclinical and clinical trial expenses relate to third-party services, subject-related fees at the sites where our clinical trials are being conducted, laboratory costs, analysis costs, toxicology studies and investigator fees. Costs associated with these expenses are generally payable on the passage of time or when certain milestones are achieved. Expense is recorded during the period incurred or in the period in which a milestone is achieved. In order to ensure that we have adequately provided for preclinical and clinical expenses during the proper period, we maintain an accrual to cover these expenses. These accruals are assessed on a quarterly basis and are based on such assumptions as expected total cost, the number of subjects and clinical trial sites and length of the study. Actual results may differ from these estimates and could have a material impact on our reported results. Our historical accrual estimates have not been materially different from our actual costs.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <i>Stock-based Compensation</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The Company follows the provisions of the Financial Accounting Standards Board (&#x201C;<b>FASB</b>&#x201D;) Accounting Standards Codification (&#x201C;<b>ASC</b>&#x201D;) Topic 718, &#x201C;<i>Compensation</i> <i>&#x2014; Stock Compensation</i>&#x201D; (&#x201C;<b>ASC 718</b>&#x201D;), which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees, officers and <font style="WHITE-SPACE: nowrap">non-employee</font> directors, including stock options. Stock compensation expense based on the grant date fair value estimated in accordance with the provisions of ASC 718 is recognized as an expense over the requisite service period.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> For stock options granted as consideration for services rendered by <font style="WHITE-SPACE: nowrap">non-employees,</font> the Company recognizes compensation expense in accordance with the requirements of FASB ASC Topic <font style="WHITE-SPACE: nowrap">505-50,</font> &#x201C;<i>Equity Based Payments to <font style="WHITE-SPACE: nowrap">Non-Employees</font></i>.&#x201D; <font style="WHITE-SPACE: nowrap">Non-employee</font> option grants that do not vest immediately upon grant are recorded as an expense over the requisite service period of the underlying stock options. At the end of each financial reporting period prior to vesting, the value of these options, as calculated using the Black-Scholes option-pricing model, will be <font style="WHITE-SPACE: nowrap">re-measured</font> using the fair value of the Company&#x2019;s common stock and the <font style="WHITE-SPACE: nowrap">non-cash</font> compensation recognized during the period will be adjusted accordingly. Since the fair market value of options granted to <font style="WHITE-SPACE: nowrap">non-employees</font> is subject to change in the future, the amount of the future compensation expense will include fair value <font style="WHITE-SPACE: nowrap">re-measurements</font> until the stock options are fully vested.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <i>Comprehensive Loss</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The Company&#x2019;s comprehensive loss is equal to its net loss for all periods presented.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <i>Net Loss per Share</i></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The Company accounts for and discloses net loss per share in accordance with FASB ASC Topic 260, &#x201C;<i>Earnings per Share.&#x201D;</i> Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing the Company&#x2019;s net earnings by the weighted average number of common shares outstanding and the impact of all dilutive potential common shares.</p> </div> 275036 <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>2. Liquidity and Going Concern</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company has limited cash resources, certain limitations under the purchase agreement with Lincoln Park Capital Fund, LLC (&#x201C;<b>LPC</b>&#x201D;) and has expended substantial funds on the research and development of our product candidates and funding general operations. As a result, we have reported recurring losses from operations since inception and expect that we will continue to have negative cash flows from our operations for the foreseeable future. Historically, the Company&#x2019;s primary source of financing has been the sale of its securities. Our ability to continue to fund our operations is dependent on the amount of cash on hand and our ability to raise additional capital through, but not limited to, equity or debt offerings or strategic opportunities. This is dependent on a number of factors, including the market demand or liquidity of our common stock. There can be no assurance that the Company will be successful in accomplishing these plans. As a result, we have concluded that there is substantial doubt regarding our ability to continue as a going concern for at least one year. If we fail to obtain additional funding when needed, we would be forced to scale back or terminate our operations or to seek to merge with or to be acquired by another company. These financial statements do not include any adjustments to, or classification of, recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.</p> </div> <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>10. Subsequent Events</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> On November&#xA0;7, 2017, the Company filed a Certificate Eliminating the Series B Convertible Preferred Stock from the Certificate of Incorporation of the Company and a Certificate Eliminating the Series C Convertible Preferred Stock from the Certificate of Incorporation of the Company (together, the &#x201C;<b>Certificates of Elimination</b>&#x201D;) with the Secretary of State of the State of Delaware, in order to eliminate from the Certificate of Incorporation all matters set forth in the Certificate of Incorporation, including the related certificates of designation, relating to the previously issued Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. As a result, the 8,100 shares of unissued Series B Convertible Preferred Stock and 1,800,000 shares of unissued Series C Convertible Preferred Stock were returned to the status of authorized but unissued shares of preferred stock of the Company, without designation as to series or preferences or rights. The foregoing summary of the Certificates of Elimination is qualified in its entirety by reference to the full text of the Certificates of Elimination, which are attached hereto as Exhibits 3.1 and 3.2 to this Quarterly Report on Form <font style="white-space:nowrap">10-Q</font> and incorporated herein by reference.</p> </div> RXII 2216775 <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <i>Uses of Estimates in Preparation of Financial Statements</i></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The preparation of financial statements in accordance with GAAP requires management 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.</p> </div> -7490000 <div> <p style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="76%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="73%"></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>September&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>December&#xA0;31,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Cash and cash equivalents</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,416</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,906</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Restricted cash</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">50</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">50</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Cash, cash equivalents and restricted cash shown in the statement of cash flows</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,466</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">12,956</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>5. MirImmune Inc. Acquisition</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> On January&#xA0;6, 2017, the Company entered into a Stock Purchase Agreement (the &#x201C;<b>Stock Purchase Agreement</b>&#x201D;) and completed its acquisition of MirImmune. Subject to the terms of the Stock Purchase Agreement, RXi Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (&#x201C;<b>RXi Merger Sub</b>&#x201D;), was merged with and into MirImmune, with RXi Merger Sub continuing as the surviving entity and changing its name to &#x201C;MirImmune, LLC&#x201D;. As a result of the merger, MirImmune, LLC remains and operates as a wholly-owned subsidiary of the Company. Pursuant to the Stock Purchase Agreement, the Company acquired all of the issued and outstanding shares of capital stock of MirImmune for an aggregate of 275,036 shares of common stock of the Company and an aggregate of 1,118,224 shares of Series C Convertible Preferred Stock of the Company (the &#x201C;<b>Series C Convertible Preferred Stock</b>&#x201D;). The shares of common stock and Series C Convertible Preferred Stock were subject to a holdback of 3% of the aggregate closing consideration for any purchase price adjustments. The shares subject to the holdback, adjusted for post-closing items, were released and issued on April&#xA0;12, 2017.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Upon the closing of the acquisition, the notes receivable outstanding on the Company&#x2019;s balance sheet as of December&#xA0;31, 2016 were cancelled.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company assessed the acquisition of MirImmune under FASB ASC Topic 805, &#x201C;<i>Business Combinations</i>&#x201D; (&#x201C;<b>ASC 805</b>&#x201D;). Under ASC 805, the Company determined that the acquired assets did not constitute a business and that the transaction would be accounted for as an asset acquisition. The assets and development programs acquired from MirImmune are at an early stage of development and will require a significant investment of time and capital if we are to be successful in developing them. There is no assurance that we will be successful in developing such assets, and a failure to successfully develop such assets could diminish our prospects. Under ASC 805, the assets acquired are considered to have no alternative future uses, as determining the future economic benefit of the acquired assets at the date of acquisition is highly uncertain. The fair value of the assets was determined using the quoted market price of the Company&#x2019;s common stock on January&#xA0;6, 2017, the date of the acquisition, and fully expensed as <font style="white-space:nowrap">in-process</font> research and development.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Additionally, the Company assessed the MirImmune acquisition under ASC Topic 740, &#x201C;<i>Income Taxes</i><i>&#x201D;</i> (&#x201C;<b>ASC 740</b>&#x201D;). The acquisition resulted in an income tax benefit of $1,621,000 and a corresponding increase to acquired in-process research and development expense resulting from the reduction in the Company&#x2019;s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> During the nine months ended September 30, 2017, the Company recorded $4,696,000 in in-process research and development expense related to the fair value of consideration given, which includes transaction costs, liabilities assumed and cancellation of notes receivable, and the deferred tax impact of the MirImmune acquisition.</p> <p style="font-size:1px;margin-top:12px;margin-bottom:0px"> &#xA0;</p> <p style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company was restricted from converting any of the Series C Convertible Preferred Stock into common stock to the extent that such conversion was not approved by the Company&#x2019;s stockholders in accordance with the stockholder approval requirements of NASDAQ Marketplace Rule 5635. On June&#xA0;9, 2017, with the approval of the Company&#x2019;s stockholders in accordance with the NASDAQ stockholder approval requirements, every ten shares of the Series C Convertible Preferred Stock outstanding were automatically converted into one share of common stock, such that there were no shares of Series C Convertible Preferred Stock issued or outstanding at September&#xA0;30, 2017. On November 7, 2017, the Company filed a Certificate Eliminating the Series C Convertible Preferred Stock from the Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware. Please refer to Note 10 for further discussion of the filing.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Under the terms of the Stock Purchase Agreement, if certain development or commercial milestones are achieved within two years, the Company will be required to either (i)&#xA0;issue a number of shares of common stock (the &#x201C;<b>Milestone Shares</b>&#x201D;) equal to the sum of 251,909 shares of common stock, plus an additional number of shares of common stock equal to 13% of the common stock issued upon exercise of any warrants issued under the Company&#x2019;s underwritten public offering in December 2016, but only to the extent that such warrants have been exercised prior to the milestone being achieved or (ii)&#xA0;pay the equivalent value of the Milestone Shares in cash. The Company received shareholder approval in accordance with Rule 5635 of the NASDAQ Marketplace Rules at its 2017 Annual Meeting of Stockholders to issue any shares in satisfaction of the achievement of the milestones.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company assessed the Milestone Shares under FASB ASC Topic 480, &#x201C;<i>Distinguishing Liabilities from Equity</i>&#x201D; (&#x201C;<b>ASC 480</b>&#x201D;). The Company determined that liability accounting would be required for the Milestone Shares under ASC 480. The Company will record a liability related to the Milestone Shares if and when the milestones are achieved and the consideration becomes payable. At that time, the Company will record the cost of the Milestone Shares as <font style="white-space:nowrap">in-process</font> research and development expense. 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Document and Entity Information - shares
9 Months Ended
Sep. 30, 2017
Mar. 15, 2018
Document And Entity Information [Abstract]    
Document Type 10-Q/A  
Amendment Flag true  
Amendment Description RXi Pharmaceuticals Corporation (“we,” “our,” “us” and the “Company”) is filing this Amendment No. 1 on Form 10-Q/A to amend and restate in their entirety the following items of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, as originally filed with the Securities and Exchange Commission on November 8, 2017. (the “Original Form 10-Q”):•Part I - Item 1. Financial Statements (unaudited)•Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations•Part I - Item 4. Controls and Procedures• Part II - Item 6. Exhibits • Exhibit 31.1 - Certification of Chief Executive Officer• Exhibit 31.2 - Certification of Chief Financial Officer • Exhibits 101 - Extensible Business Reporting Language (XBRL) This amendment does not modify any disclosures contained in our original Form 10-Q, except for the foregoing Items and Exhibits, and all share and per share amounts for the periods presented to give effect to the 1-for-10 reverse stock split of the Company’s common stock, which was effected on January 8, 2018. This report on Form 10-Q/A is presented as of the filing date of the Original Form 10-Q and does not reflect events occurring after that date, or modify or update disclosures in any way other than as required to reflect the restatement described below. Accordingly, this Quarterly Report on Form 10-Q/A should be read in conjunction with the Original Form 10-Q, and the Company’s other filings with the Securities and Exchange Commission (“SEC”) subsequent to the filing of the Original Form 10-Q, including any amendments thereto.The purpose of this amendment is to restate our previously reported results for the quarter ended September 30, 2017 to include the accounting for the tax-related impact of the Company’s acquisition of MirImmune Inc. (“MirImmune”) on January 6, 2017. Our results did not include the contemplation of deferred taxes based on the different book basis and tax basis for the acquisition of MirImmune. The acquisition resulted in an increase of $1.6 million to acquired in-process research and development expense and a corresponding $1.6 million income tax benefit resulting from the reduction in the company's vluation allowance due to the deferred tax liability created as a result of the book and tax basis difference, which were not accounted for properly. The condensed consolidated financial statements for the quarter ended September 30, 2017 included in this Form 10-Q/A have been restated to include this adjustment to reflect the tax-related impact of the acquisition of MirImmune. This adjustment does not affect previously reported net loss or operating cash flows, although certain adjustments have been made in our condensed consolidated statement of cash flows to correspond to the income statement adjustment as described in Note 2 of the notes to our condensed consolidated financial statements included in this filing, and has no impact on the company's balance sheet. We have made necessary conforming changes in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” resulting from the correction of this error.  
Document Period End Date Sep. 30, 2017  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q3  
Trading Symbol RXII  
Entity Registrant Name RXi Pharmaceuticals Corp  
Entity Central Index Key 0001533040  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   2,594,962
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Consolidated Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2017
Dec. 31, 2016
Current assets:    
Cash and cash equivalents $ 5,416 $ 12,906
Restricted cash 50 50
Prepaid expenses 271 150
Total current assets 5,737 13,106
Property and equipment, net 269 114
Notes receivable   150
Other assets 27 27
Total assets 6,033 13,397
Current liabilities:    
Accounts payable 702 917
Accrued expenses 1,901 1,625
Total current liabilities 2,603 2,542
Commitments and contingencies
Stockholders' equity:    
Preferred stock, par value
Common stock, $0.0001 par value, 100,000,000 shares authorized; 2,369,733 and 1,300,318 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively 0 0
Additional paid-in capital 79,979 73,429
Accumulated deficit (76,549) (66,099)
Total stockholders' equity 3,430 10,855
Total liabilities and stockholders' equity 6,033 13,397
Series B Convertible Preferred Stock [Member]    
Stockholders' equity:    
Preferred stock, par value   $ 3,525
Series C Convertible Preferred Stock [Member]    
Stockholders' equity:    
Preferred stock, par value $ 0  
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Consolidated Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2017
Dec. 31, 2016
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 2,369,733 1,300,318
Common stock, shares outstanding 2,369,733 1,300,318
Series B Convertible Preferred Stock [Member]    
Preferred stock, shares authorized 8,100 8,100
Preferred Stock, shares issued 0 5,737
Preferred Stock, shares outstanding 0 5,737
Series C Convertible Preferred Stock [Member]    
Preferred stock, shares authorized 1,800,000  
Preferred Stock, shares issued 0 0
Preferred Stock, shares outstanding 0 0
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Consolidated Statements of Operations - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Statement [Abstract]        
Net revenues       $ 19
Operating expenses:        
Research and development $ 1,490 $ 1,464 $ 4,166 4,108
Acquired in-process research and development     4,696  
General and administrative 986 752 3,209 2,587
Total operating expenses 2,476 2,216 12,071 6,695
Operating loss (2,476) (2,216) (12,071) (6,676)
Other income (expense):        
Interest income, net   4   15
Other income (expense), net       6
Total other income   4   21
Loss before income taxes (2,476) (2,212) (12,071) (6,655)
Income tax benefit     1,621  
Net loss $ (2,476) $ (2,212) $ (10,450) $ (6,655)
Net loss per common share:        
Basic and diluted $ (1.05) $ (3.36) $ (4.71) $ (10.16)
Weighted average common shares: basic and diluted 2,351,144 657,609 2,216,775 654,869
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Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Cash flows from operating activities:    
Net loss $ (10,450) $ (6,655)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 48 41
Non-cash stock-based compensation 276 649
Acquired in-process research and development 4,696  
Deferred taxes (1,621)  
Value of non-marketable equity securities recognized as revenue   (9)
Changes in operating assets and liabilities:    
Prepaid expenses and other assets (121) (10)
Accounts payable (417) (706)
Accrued expenses 276 302
Net cash used in operating activities (7,313) (6,388)
Cash flows from investing activities:    
Purchase of short-term investments   (2,000)
Maturities of short-term investments   5,500
Cash acquired in MirImmune Inc. acquisition 100  
Cash paid for purchase of property and equipment (203) (2)
Net cash (used in) provided by investing activities (103) 3,498
Cash flows from financing activities:    
Proceeds from the issuance of common stock, net of offering costs (74) 152
Net cash (used in) provided by financing activities (74) 152
Net decrease in cash, cash equivalents and restricted cash (7,490) (2,738)
Cash, cash equivalents and restricted cash at the beginning of period 12,956 5,167
Cash, cash equivalents and restricted cash at the end of period 5,466 $ 2,429
Supplemental disclosure of non-cash investing and financing activities:    
Cancellation of notes receivable 150  
Accounts payable assumed 5  
Fair value of securities issued 2,824  
Series B Convertible Preferred Stock [Member]    
Supplemental disclosure of non-cash investing and financing activities:    
Conversions of convertible preferred stock into common stock 3,525  
Series C Convertible Preferred Stock [Member]    
Supplemental disclosure of non-cash investing and financing activities:    
Conversions of convertible preferred stock into common stock $ 816  
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Nature of Operations
9 Months Ended
Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Operations

1. Nature of Operations

RXi Pharmaceuticals Corporation (“RXi,” “we,” “our” or the “Company”) is a clinical-stage company developing innovative therapeutics based on our proprietary self-delivering RNAi (sd-rxRNA®) platform and Samcyprone™ which address significant unmet medical needs. We have a pipeline of discovery, preclinical and clinical product candidates in the areas of dermatology, ophthalmology and cell-based cancer immunotherapy. The Company’s clinical development programs include RXI-109, an sd-rxRNA for the treatment of dermal and ocular scarring, and Samcyprone™, a topical immunomodulator, for the treatment of warts. The Company’s pipeline, coupled with our extensive patent portfolio, provides for product development and business development opportunities across a broad spectrum of therapeutic areas.

On January 3, 2018, the Board of Directors of the Company approved a 1-for-10 reverse stock split of the Company’s outstanding common stock, which was effected on January 8, 2018. All share and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock split, including reclassifying an amount equal to the reduction in par value to additional paid-in capital.

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Liquidity and Going Concern
9 Months Ended
Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Liquidity and Going Concern

2. Liquidity and Going Concern

The Company has limited cash resources, certain limitations under the purchase agreement with Lincoln Park Capital Fund, LLC (“LPC”) and has expended substantial funds on the research and development of our product candidates and funding general operations. As a result, we have reported recurring losses from operations since inception and expect that we will continue to have negative cash flows from our operations for the foreseeable future. Historically, the Company’s primary source of financing has been the sale of its securities. Our ability to continue to fund our operations is dependent on the amount of cash on hand and our ability to raise additional capital through, but not limited to, equity or debt offerings or strategic opportunities. This is dependent on a number of factors, including the market demand or liquidity of our common stock. There can be no assurance that the Company will be successful in accomplishing these plans. As a result, we have concluded that there is substantial doubt regarding our ability to continue as a going concern for at least one year. If we fail to obtain additional funding when needed, we would be forced to scale back or terminate our operations or to seek to merge with or to be acquired by another company. These financial statements do not include any adjustments to, or classification of, recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

XML 17 R8.htm IDEA: XBRL DOCUMENT v3.8.0.1
Significant Accounting Policies
9 Months Ended
Sep. 30, 2017
Accounting Policies [Abstract]  
Significant Accounting Policies

3. Significant Accounting Policies

Restatement of Consolidated Financial Statements

Our condensed consolidated statement of operations and our condensed consolidated statement of cash flows for the quarter ended September, 2017 have been restated to include the tax-related impact of the Company’s acquisition of MirImmune Inc. (“MirImmune”) on January 6, 2017. Our results did not include the contemplation of deferred taxes based on the different book basis and tax basis for the acquisition of MirImmune. The acquisition resulted in an increase to acquired in-process research and development expense and a corresponding income tax benefit resulting from the reduction in the Company’s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference. This adjustment does not affect previously reported net loss or operating cash flows, although certain adjustments have been made in our condensed consolidated statement of cash flows to correspond to the income statement adjustment as noted below. The restatement did not impact our condensed consolidated statement of operations for the three months ended September 30, 2017. The following table summarizes the effects of our restatement on the nine months ended September 30, 2017 resulting from the correction of this error.

 

    Nine Months Ended
September 30, 2017
 
    Previously
Reported
    Adjustment     Restated  
    ($ in thousands, except per share data)  

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS:

     

Operating Expenses:

     

Research and development

  $ 4,166     $ —       $ 4,166  

Acquired in-process research and development

    3,075       1,621       4,696  

General and administrative

    3,209       —         3,209  
 

 

 

   

 

 

   

 

 

 

Total operating expenses

    10,450       1,621       12,071  
 

 

 

   

 

 

   

 

 

 

Operating loss

    (10,450     (1,621     (12,071
 

 

 

   

 

 

   

 

 

 

Loss before income taxes

    (10,450     (1,621     (12,071

Income tax benefit

    —         1,621       1,621  
 

 

 

   

 

 

   

 

 

 

Net loss

  $ (10,450 )   $ —       $ (10,450
 

 

 

   

 

 

   

 

 

 

Net loss per common share: basic and diluted

  $ (4.71   $ —       $ (4.71

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS:

     

Cash flows from operating activities:

     

Net loss

  $ (10,450   $ —       $ (10,450

Adjustments to reconcile net loss to net cash used in operating activities

     

Depreciation and amortization

    48       —         48  

Non-cash stock-based compensation

    276       —         276  

Acquired in-process research and development

    3,075       1,621       4,696  

Deferred tax

    —         (1,621     (1,621

Changes in operating assets and liabilities:

     

Prepaid expenses and other assets

    (121     —         (121

Accounts payable

    (417     —         (417

Accrued expenses

    276       —         276  
 

 

 

   

 

 

   

 

 

 

Net cash used in operating expenses

  $ (7,313   $ —       $ (7,313
 

 

 

   

 

 

   

 

 

 

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain information and footnote disclosures included in the Company’s annual financial statements have been condensed or omitted. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Interim results are not necessarily indicative of results for a full year.

Uses of Estimates in Preparation of Financial Statements

The preparation of financial statements in accordance with GAAP requires management 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of amounts invested in certificates of deposit.

Restricted cash consists of certificates of deposit held by financial institutions as collateral for the Company’s corporate credit cards.

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):

 

     September 30,      December 31,  
     2017      2016  

Cash and cash equivalents

     5,416        12,906  

Restricted cash

     50        50  
  

 

 

    

 

 

 

Cash, cash equivalents and restricted cash shown in the statement of cash flows

     5,466        12,956  
  

 

 

    

 

 

 

Research and Development Expenses

Research and development costs are charged to expense as incurred and relate to salaries, employee benefits, facility-related expenses, supplies, stock-based compensation related to employees and non-employees involved in the Company’s research and development, external services, other operating costs and overhead related to our research and development departments, costs to acquire technology licenses and expenses associated with preclinical activities and our clinical trials. Payments made by the Company in advance for research and development services not yet provided and/or for materials not yet received are recorded as prepaid expenses. Accrued liabilities are recorded related to those expenses for which vendors have not yet billed us with respect to services provided and/or materials that we have received.

Preclinical and clinical trial expenses relate to third-party services, subject-related fees at the sites where our clinical trials are being conducted, laboratory costs, analysis costs, toxicology studies and investigator fees. Costs associated with these expenses are generally payable on the passage of time or when certain milestones are achieved. Expense is recorded during the period incurred or in the period in which a milestone is achieved. In order to ensure that we have adequately provided for preclinical and clinical expenses during the proper period, we maintain an accrual to cover these expenses. These accruals are assessed on a quarterly basis and are based on such assumptions as expected total cost, the number of subjects and clinical trial sites and length of the study. Actual results may differ from these estimates and could have a material impact on our reported results. Our historical accrual estimates have not been materially different from our actual costs.

Stock-based Compensation

The Company follows the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation — Stock Compensation” (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees, officers and non-employee directors, including stock options. Stock compensation expense based on the grant date fair value estimated in accordance with the provisions of ASC 718 is recognized as an expense over the requisite service period.

For stock options granted as consideration for services rendered by non-employees, the Company recognizes compensation expense in accordance with the requirements of FASB ASC Topic 505-50,Equity Based Payments to Non-Employees.” Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the requisite service period of the underlying stock options. At the end of each financial reporting period prior to vesting, the value of these options, as calculated using the Black-Scholes option-pricing model, will be re-measured using the fair value of the Company’s common stock and the non-cash compensation recognized during the period will be adjusted accordingly. Since the fair market value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense will include fair value re-measurements until the stock options are fully vested.

Comprehensive Loss

The Company’s comprehensive loss is equal to its net loss for all periods presented.

Net Loss per Share

The Company accounts for and discloses net loss per share in accordance with FASB ASC Topic 260, “Earnings per Share.” Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing the Company’s net earnings by the weighted average number of common shares outstanding and the impact of all dilutive potential common shares.

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.8.0.1
Recent Accounting Pronouncements
9 Months Ended
Sep. 30, 2017
Accounting Changes and Error Corrections [Abstract]  
Recent Accounting Pronouncements

4. Recent Accounting Pronouncements

In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments,” which clarifies how certain cash receipts and payments are presented and classified in the statement of cash flows. This standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. The amendments in ASU 2016-15 should be applied using a retrospective transition method to each period presented. The Company adopted ASU 2016-15 in the first quarter of 2017 and the implementation of this standard had no impact on the Company’s financial statements.

In November 2016, the FASB issued ASU 2016-18,Statement of Cash Flows (Topic 230) — Restricted Cash,” which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. With this standard, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. This standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. The Company adopted ASU 2016-18 in the first quarter of 2017, and the guidance has been retrospectively applied to all periods presented. The total of cash, cash equivalents and restricted cash is described in Note 3. The adoption of the guidance did not have an impact on the Company’s balance sheet or statement of operations.

In January 2017, the FASB issued ASU 2017-01,Business Combinations (Topic 805) — Clarifying the Definition of a Business,” which provides a screen to determine when an integrated set of assets and activities are not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. This standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company adopted ASU 2017-01 effective January 1, 2017. The implementation of this standard did not have an impact on the Company’s financial statements as the acquisition of MirImmune Inc., (“MirImmune”), the Company’s transaction that this ASU would have affected, did not meet the definition of a business under either the prior guidance or the new guidance.

In May 2017, the FASB issued ASU 2017-09,Compensation — Stock Compensation (Topic 718) — Scope of Modification Accounting,” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. The Company adopted ASU 2017-09 in the second quarter of 2017, and the implementation of this standard had no impact on the Company’s financial statements.

XML 19 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
MirImmune Inc. Acquisition
9 Months Ended
Sep. 30, 2017
Research and Development [Abstract]  
MirImmune Inc. Acquisition

5. MirImmune Inc. Acquisition

On January 6, 2017, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) and completed its acquisition of MirImmune. Subject to the terms of the Stock Purchase Agreement, RXi Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“RXi Merger Sub”), was merged with and into MirImmune, with RXi Merger Sub continuing as the surviving entity and changing its name to “MirImmune, LLC”. As a result of the merger, MirImmune, LLC remains and operates as a wholly-owned subsidiary of the Company. Pursuant to the Stock Purchase Agreement, the Company acquired all of the issued and outstanding shares of capital stock of MirImmune for an aggregate of 275,036 shares of common stock of the Company and an aggregate of 1,118,224 shares of Series C Convertible Preferred Stock of the Company (the “Series C Convertible Preferred Stock”). The shares of common stock and Series C Convertible Preferred Stock were subject to a holdback of 3% of the aggregate closing consideration for any purchase price adjustments. The shares subject to the holdback, adjusted for post-closing items, were released and issued on April 12, 2017.

Upon the closing of the acquisition, the notes receivable outstanding on the Company’s balance sheet as of December 31, 2016 were cancelled.

The Company assessed the acquisition of MirImmune under FASB ASC Topic 805, “Business Combinations” (“ASC 805”). Under ASC 805, the Company determined that the acquired assets did not constitute a business and that the transaction would be accounted for as an asset acquisition. The assets and development programs acquired from MirImmune are at an early stage of development and will require a significant investment of time and capital if we are to be successful in developing them. There is no assurance that we will be successful in developing such assets, and a failure to successfully develop such assets could diminish our prospects. Under ASC 805, the assets acquired are considered to have no alternative future uses, as determining the future economic benefit of the acquired assets at the date of acquisition is highly uncertain. The fair value of the assets was determined using the quoted market price of the Company’s common stock on January 6, 2017, the date of the acquisition, and fully expensed as in-process research and development.

Additionally, the Company assessed the MirImmune acquisition under ASC Topic 740, “Income Taxes (“ASC 740”). The acquisition resulted in an income tax benefit of $1,621,000 and a corresponding increase to acquired in-process research and development expense resulting from the reduction in the Company’s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference.

During the nine months ended September 30, 2017, the Company recorded $4,696,000 in in-process research and development expense related to the fair value of consideration given, which includes transaction costs, liabilities assumed and cancellation of notes receivable, and the deferred tax impact of the MirImmune acquisition.

 

The Company was restricted from converting any of the Series C Convertible Preferred Stock into common stock to the extent that such conversion was not approved by the Company’s stockholders in accordance with the stockholder approval requirements of NASDAQ Marketplace Rule 5635. On June 9, 2017, with the approval of the Company’s stockholders in accordance with the NASDAQ stockholder approval requirements, every ten shares of the Series C Convertible Preferred Stock outstanding were automatically converted into one share of common stock, such that there were no shares of Series C Convertible Preferred Stock issued or outstanding at September 30, 2017. On November 7, 2017, the Company filed a Certificate Eliminating the Series C Convertible Preferred Stock from the Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware. Please refer to Note 10 for further discussion of the filing.

Under the terms of the Stock Purchase Agreement, if certain development or commercial milestones are achieved within two years, the Company will be required to either (i) issue a number of shares of common stock (the “Milestone Shares”) equal to the sum of 251,909 shares of common stock, plus an additional number of shares of common stock equal to 13% of the common stock issued upon exercise of any warrants issued under the Company’s underwritten public offering in December 2016, but only to the extent that such warrants have been exercised prior to the milestone being achieved or (ii) pay the equivalent value of the Milestone Shares in cash. The Company received shareholder approval in accordance with Rule 5635 of the NASDAQ Marketplace Rules at its 2017 Annual Meeting of Stockholders to issue any shares in satisfaction of the achievement of the milestones.

The Company assessed the Milestone Shares under FASB ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). The Company determined that liability accounting would be required for the Milestone Shares under ASC 480. The Company will record a liability related to the Milestone Shares if and when the milestones are achieved and the consideration becomes payable. At that time, the Company will record the cost of the Milestone Shares as in-process research and development expense. No milestones have been met as of September 30, 2017.

XML 20 R11.htm IDEA: XBRL DOCUMENT v3.8.0.1
Fair Value Measurements
9 Months Ended
Sep. 30, 2017
Fair Value Disclosures [Abstract]  
Fair Value Measurements

6. Fair Value Measurements

The Company follows the provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” for the Company’s financial assets and liabilities that are re-measured and reported at fair value at each reporting period and are re-measured and reported at fair value at least annually using a fair value hierarchy that is broken down into three levels. Level inputs are defined as follows:

Level 1 — quoted prices in active markets for identical assets or liabilities.

Level 2 — other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 — significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

The warrant issued to the Company by Thera Neuropharma, Inc. (“Thera”) is categorized as Level 3 hierarchy. The estimated fair value inputs utilizing the asset-based approach for the warrant issued to the Company by Thera include the stage of enterprise development, terms of existing contractual arrangements of the entity’s equity securities, the achievement of milestones and other unobservable inputs.

Financial assets measured at fair value on a recurring basis are summarized as follows, in thousands:

 

Description

   At
September 30,

2017
     Quoted Prices in
Active Markets
(Level 1)
     Other Significant
Observable Inputs
(Level 2)
     Significant
Unobservable Inputs
(Level 3)
 

Assets:

           

Warrant in Thera

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Description

   At
December 31,

2016
     Quoted Prices in
Active Markets
(Level 1)
     Other Significant
Observable Inputs
(Level 2)
     Significant
Unobservable Inputs
(Level 3)
 

Assets:

           

Warrant in Thera

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

A reconciliation of the beginning and ending Level 3 assets for the nine months ended September 30, 2017 is as follows (in thousands):

 

     Fair Value
Measurements
Using Significant
Unobservable Inputs
(Level 3)
 

Balance, beginning of period

   $ 5  

Change in value of the warrant in Thera

     —    
  

 

 

 

Balance, end of period

   $ 5  
  

 

 

 

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheet for cash equivalents, restricted cash and accounts payable approximate their fair values due to their short-term nature.

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity
9 Months Ended
Sep. 30, 2017
Equity [Abstract]  
Stockholders' Equity

7. Stockholders’ Equity

Series B Convertible Preferred Stock The Company’s remaining shares of Series B Convertible Preferred Stock (“Series B Convertible Preferred Stock”) outstanding at December 31, 2016 were fully converted into 637,445 shares of common stock of the Company during the first quarter of 2017, such that there are no shares of Series B Convertible Preferred Stock issued or outstanding at September 30, 2017. On November 7, 2017, the Company filed a Certificate Eliminating the Series B Convertible Preferred Stock from the Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware. Please refer to Note 10 for further discussion of the filing.

Series C Convertible Preferred Stock In connection with the Stock Purchase Agreement, on January 5, 2017, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (the “Series C Convertible Preferred Stock Certificate of Designation”) with the Secretary of State of the State of Delaware. The Series C Convertible Preferred Stock Certificate of Designation provides for the issuance of up to 1,800,000 shares of Series C Convertible Preferred Stock. The Series C Convertible Preferred Stock have no voting rights, with certain exceptions as described in the Series C Convertible Preferred Stock Certificate of Designations, and shall receive dividends on an as-converted basis at the same time and in the same form as any dividends paid out on shares of the Company’s common stock. Other than as set forth in the previous sentence, no other dividends shall be paid on the Series C Convertible Preferred Stock. The Company has never paid dividends on its common stock and presently has no intention of paying dividends.

Upon its issuance, the Series C Convertible Preferred Stock was assessed under ASC 480. The Company determined that the Series C Convertible Preferred Stock was not within the scope of ASC 480 and therefore, the Series C Convertible Preferred Stock was not considered a liability. The Series C Convertible Preferred Stock was recorded in permanent equity on the Company’s balance sheet.

The Series C Convertible Preferred Stock was then assessed under FASB ASC 815, “Derivatives and Hedging” (“ASC 815”). The Company believes that the Series C Convertible Preferred Stock is an equity host for the purposes of assessing the embedded conversion option for potential bifurcation. The Company concluded that the conversion option feature is clearly and closely related to the preferred stock host. As such, the conversion feature did not require bifurcation under ASC 815.

Pursuant to the Stock Purchase Agreement, the Company acquired all of the issued and outstanding shares of capital stock of MirImmune for an aggregate of 275,036 shares of common stock of the Company and an aggregate of 1,118,224 shares of Series C Convertible Preferred Stock. The Company was restricted from converting any of the Series C Convertible Preferred Stock into common stock to the extent that such conversion was not approved by the Company’s stockholders in accordance with the stockholder approval requirements of NASDAQ Marketplace Rule 5635. On June 9, 2017, with the approval of the Company’s stockholders in accordance with the NASDAQ stockholder approval requirements, every ten shares of the Series C Convertible Preferred Stock outstanding were automatically converted into one share of common stock, such that there were no shares of Series C Convertible Preferred Stock issued or outstanding at September 30, 2017. Please refer to Notes 5 and 10 for further details on the shares issued in connection with the acquisition of MirImmune.

Lincoln Park Capital Fund, LLC On August 8, 2017, the Company entered into a purchase agreement (the “2017 Purchase Agreement”) and a registration rights agreement with LPC, pursuant to which the Company has the right to sell to LPC up to $15,000,000 in shares of the Company’s common stock, subject to certain limitations and conditions set forth in the 2017 Purchase Agreement. As a commitment fee for entering into the 2017 Purchase Agreement, the Company issued to LPC 45,000 shares of Company common stock (the “Commitment Shares”). The Commitment Shares had a value per share of $5.80 and were recorded as a cost of capital. The Company intends to use the net proceeds from the 2017 Purchase Agreement for working capital and general corporate purposes. There have been no purchases under the 2017 Purchase Agreement as of September 30, 2017.

Warrants — The following table summarizes the Company’s outstanding warrants at September 30, 2017:

 

Exercise prices

   Number of Shares
Underlying Warrants
     Expiration  

$52.00

     130,007        June 2, 2020  

$9.00

     1,277,993        December 21, 2021  
  

 

 

    

Total warrants outstanding

     1,408,000     
  

 

 

    

During the second quarter of 2017, outstanding warrants for the purchase of 46 shares of the Company’s common stock with an exercise price of $390.00 expired.

No warrants were exercised during the nine months ended September 30, 2017 or 2016.

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-based Compensation
9 Months Ended
Sep. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-based Compensation

8. Stock-based Compensation

The Company uses the Black-Scholes option-pricing model to determine the fair value of all its option grants. For valuing options granted during the three and nine months ended September 30, 2017 and 2016, the following assumptions were used:

 

     For the Three Months Ended
September 30,
    For the Nine Months Ended
September 30,
 
     2017     2016     2017     2016  

Risk-free interest rate

     1.94 – 2.35     1.46     1.73 – 2.49     1.18 – 2.02

Expected volatility

     83.87 – 91.99     116.88     82.99 – 123.01     79.42 – 116.88

Weighted average expected volatility

     87.93     116.88     84.65     89.12

Expected lives (in years)

     6.25 – 10.00       10.00       5.20 – 10.00       5.20 – 10.00  

Expected dividend yield

     0.00     0.00     0.00     0.00

The weighted average fair value of options granted during the three months ended September 30, 2017 and 2016 was $4.90 and $22.70, respectively. The weighted average fair value of options granted during the nine months ended September 30, 2017 and 2016 was $4.90 and $21.50, respectively.

The risk-free interest rate used for each grant was based upon the yield on zero-coupon U.S. Treasury securities with a term similar to the expected life of the related option. The Company’s expected stock price volatility assumption is based upon the volatility of a composition of comparable companies. The expected life assumption for employee grants was based upon the simplified method provided for under ASC 718, and the expected life assumption for non-employees was based upon the contractual term of the option. The dividend yield assumption of zero is based upon the fact that the Company has never paid cash dividends and presently has no intention of paying cash dividends.

The following table summarizes the activity of Company’s stock option plan for the nine months ended September 30, 2017:

 

     Total Number
of Shares
     Weighted-Average
Exercise Price
Per Share
     Aggregate
Intrinsic
Value
 

Balance at December 31, 2016

     37,444      $ 272.90     

Granted

     33,038        6.90     

Exercised

     —          —       

Cancelled

     (17,382      44.80     
  

 

 

    

 

 

    

 

 

 

Balance at September 30, 2017

     53,100      $ 182.00      $ —    
  

 

 

    

 

 

    

 

 

 

Exercisable at September 30, 2017

     35,495      $ 262.10      $ —    
  

 

 

    

 

 

    

 

 

 

 

The Company recorded stock-based compensation expense for the three and nine months ended September 30, 2017 and 2016 as follows, in thousands:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2017      2016      2017      2016  

Research and development

   $ 7      $ 52      $ 80      $ 212  

General and administrative

     36        76        196        437  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation

   $ 43      $ 128      $ 276      $ 649  
  

 

 

    

 

 

    

 

 

    

 

 

 

Stock-based compensation expense for the nine months ended September 30, 2017 includes $22,000, recorded in research and development expense, related to stock option modifications in connection with the retirement of the Company’s former Chief Development Officer.

XML 23 R14.htm IDEA: XBRL DOCUMENT v3.8.0.1
Net Loss per Share
9 Months Ended
Sep. 30, 2017
Earnings Per Share [Abstract]  
Net Loss per Share

9. Net Loss per Share

The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:

 

     September 30,  
     2017      2016  

Options to purchase common stock

     53,100        39,096  

Warrants to purchase common stock

     1,408,000        130,046  
  

 

 

    

 

 

 

Total

     1,461,100        169,142  
  

 

 

    

 

 

 
XML 24 R15.htm IDEA: XBRL DOCUMENT v3.8.0.1
Subsequent Events
9 Months Ended
Sep. 30, 2017
Subsequent Events [Abstract]  
Subsequent Events

10. Subsequent Events

On November 7, 2017, the Company filed a Certificate Eliminating the Series B Convertible Preferred Stock from the Certificate of Incorporation of the Company and a Certificate Eliminating the Series C Convertible Preferred Stock from the Certificate of Incorporation of the Company (together, the “Certificates of Elimination”) with the Secretary of State of the State of Delaware, in order to eliminate from the Certificate of Incorporation all matters set forth in the Certificate of Incorporation, including the related certificates of designation, relating to the previously issued Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. As a result, the 8,100 shares of unissued Series B Convertible Preferred Stock and 1,800,000 shares of unissued Series C Convertible Preferred Stock were returned to the status of authorized but unissued shares of preferred stock of the Company, without designation as to series or preferences or rights. The foregoing summary of the Certificates of Elimination is qualified in its entirety by reference to the full text of the Certificates of Elimination, which are attached hereto as Exhibits 3.1 and 3.2 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

XML 25 R16.htm IDEA: XBRL DOCUMENT v3.8.0.1
Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2017
Accounting Policies [Abstract]  
Restatement of Consolidated Financial Statements

Restatement of Consolidated Financial Statements

Our condensed consolidated statement of operations and our condensed consolidated statement of cash flows for the quarter ended September, 2017 have been restated to include the tax-related impact of the Company’s acquisition of MirImmune Inc. (“MirImmune”) on January 6, 2017. Our results did not include the contemplation of deferred taxes based on the different book basis and tax basis for the acquisition of MirImmune. The acquisition resulted in an increase to acquired in-process research and development expense and a corresponding income tax benefit resulting from the reduction in the Company’s valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference. This adjustment does not affect previously reported net loss or operating cash flows, although certain adjustments have been made in our condensed consolidated statement of cash flows to correspond to the income statement adjustment as noted below. The restatement did not impact our condensed consolidated statement of operations for the three months ended September 30, 2017. The following table summarizes the effects of our restatement on the nine months ended September 30, 2017 resulting from the correction of this error.

 

    Nine Months Ended
September 30, 2017
 
    Previously
Reported
    Adjustment     Restated  
    ($ in thousands, except per share data)  

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS:

     

Operating Expenses:

     

Research and development

  $ 4,166     $ —       $ 4,166  

Acquired in-process research and development

    3,075       1,621       4,696  

General and administrative

    3,209       —         3,209  
 

 

 

   

 

 

   

 

 

 

Total operating expenses

    10,450       1,621       12,071  
 

 

 

   

 

 

   

 

 

 

Operating loss

    (10,450     (1,621     (12,071
 

 

 

   

 

 

   

 

 

 

Loss before income taxes

    (10,450     (1,621     (12,071

Income tax benefit

    —         1,621       1,621  
 

 

 

   

 

 

   

 

 

 

Net loss

  $ (10,450 )   $ —       $ (10,450
 

 

 

   

 

 

   

 

 

 

Net loss per common share: basic and diluted

  $ (4.71   $ —       $ (4.71

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS:

     

Cash flows from operating activities:

     

Net loss

  $ (10,450   $ —       $ (10,450

Adjustments to reconcile net loss to net cash used in operating activities

     

Depreciation and amortization

    48       —         48  

Non-cash stock-based compensation

    276       —         276  

Acquired in-process research and development

    3,075       1,621       4,696  

Deferred tax

    —         (1,621     (1,621

Changes in operating assets and liabilities:

     

Prepaid expenses and other assets

    (121     —         (121

Accounts payable

    (417     —         (417

Accrued expenses

    276       —         276  
 

 

 

   

 

 

   

 

 

 

Net cash used in operating expenses

  $ (7,313   $ —       $ (7,313
 

 

 

   

 

 

   

 

 

 
Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain information and footnote disclosures included in the Company’s annual financial statements have been condensed or omitted. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Interim results are not necessarily indicative of results for a full year.

Uses of Estimates in Preparation of Financial Statements

Uses of Estimates in Preparation of Financial Statements

The preparation of financial statements in accordance with GAAP requires management 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of amounts invested in certificates of deposit.

Restricted cash consists of certificates of deposit held by financial institutions as collateral for the Company’s corporate credit cards.

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):

 

     September 30,      December 31,  
     2017      2016  

Cash and cash equivalents

     5,416        12,906  

Restricted cash

     50        50  
  

 

 

    

 

 

 

Cash, cash equivalents and restricted cash shown in the statement of cash flows

     5,466        12,956  
  

 

 

    

 

 

 
Research and Development Expenses

Research and Development Expenses

Research and development costs are charged to expense as incurred and relate to salaries, employee benefits, facility-related expenses, supplies, stock-based compensation related to employees and non-employees involved in the Company’s research and development, external services, other operating costs and overhead related to our research and development departments, costs to acquire technology licenses and expenses associated with preclinical activities and our clinical trials. Payments made by the Company in advance for research and development services not yet provided and/or for materials not yet received are recorded as prepaid expenses. Accrued liabilities are recorded related to those expenses for which vendors have not yet billed us with respect to services provided and/or materials that we have received.

Preclinical and clinical trial expenses relate to third-party services, subject-related fees at the sites where our clinical trials are being conducted, laboratory costs, analysis costs, toxicology studies and investigator fees. Costs associated with these expenses are generally payable on the passage of time or when certain milestones are achieved. Expense is recorded during the period incurred or in the period in which a milestone is achieved. In order to ensure that we have adequately provided for preclinical and clinical expenses during the proper period, we maintain an accrual to cover these expenses. These accruals are assessed on a quarterly basis and are based on such assumptions as expected total cost, the number of subjects and clinical trial sites and length of the study. Actual results may differ from these estimates and could have a material impact on our reported results. Our historical accrual estimates have not been materially different from our actual costs.

Stock-based Compensation

Stock-based Compensation

The Company follows the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation — Stock Compensation” (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees, officers and non-employee directors, including stock options. Stock compensation expense based on the grant date fair value estimated in accordance with the provisions of ASC 718 is recognized as an expense over the requisite service period.

For stock options granted as consideration for services rendered by non-employees, the Company recognizes compensation expense in accordance with the requirements of FASB ASC Topic 505-50,Equity Based Payments to Non-Employees.” Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the requisite service period of the underlying stock options. At the end of each financial reporting period prior to vesting, the value of these options, as calculated using the Black-Scholes option-pricing model, will be re-measured using the fair value of the Company’s common stock and the non-cash compensation recognized during the period will be adjusted accordingly. Since the fair market value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense will include fair value re-measurements until the stock options are fully vested.

Comprehensive Loss

Comprehensive Loss

The Company’s comprehensive loss is equal to its net loss for all periods presented.

Net Loss per Share

Net Loss per Share

The Company accounts for and discloses net loss per share in accordance with FASB ASC Topic 260, “Earnings per Share.” Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing the Company’s net earnings by the weighted average number of common shares outstanding and the impact of all dilutive potential common shares.

XML 26 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2017
Accounting Policies [Abstract]  
Summary of Restatement of Consolidated Financial Statements

The following table summarizes the effects of our restatement on the nine months ended September 30, 2017 resulting from the correction of this error.

 

    Nine Months Ended
September 30, 2017
 
    Previously
Reported
    Adjustment     Restated  
    ($ in thousands, except per share data)  

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS:

     

Operating Expenses:

     

Research and development

  $ 4,166     $ —       $ 4,166  

Acquired in-process research and development

    3,075       1,621       4,696  

General and administrative

    3,209       —         3,209  
 

 

 

   

 

 

   

 

 

 

Total operating expenses

    10,450       1,621       12,071  
 

 

 

   

 

 

   

 

 

 

Operating loss

    (10,450     (1,621     (12,071
 

 

 

   

 

 

   

 

 

 

Loss before income taxes

    (10,450     (1,621     (12,071

Income tax benefit

    —         1,621       1,621  
 

 

 

   

 

 

   

 

 

 

Net loss

  $ (10,450 )   $ —       $ (10,450
 

 

 

   

 

 

   

 

 

 

Net loss per common share: basic and diluted

  $ (4.71   $ —       $ (4.71

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS:

     

Cash flows from operating activities:

     

Net loss

  $ (10,450   $ —       $ (10,450

Adjustments to reconcile net loss to net cash used in operating activities

     

Depreciation and amortization

    48       —         48  

Non-cash stock-based compensation

    276       —         276  

Acquired in-process research and development

    3,075       1,621       4,696  

Deferred tax

    —         (1,621     (1,621

Changes in operating assets and liabilities:

     

Prepaid expenses and other assets

    (121     —         (121

Accounts payable

    (417     —         (417

Accrued expenses

    276       —         276  
 

 

 

   

 

 

   

 

 

 

Net cash used in operating expenses

  $ (7,313   $ —       $ (7,313
 

 

 

   

 

 

   

 

 

 
Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash Reported Within Balance Sheet

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):

 

     September 30,      December 31,  
     2017      2016  

Cash and cash equivalents

     5,416        12,906  

Restricted cash

     50        50  
  

 

 

    

 

 

 

Cash, cash equivalents and restricted cash shown in the statement of cash flows

     5,466        12,956  
  

 

 

    

 

 

 
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.8.0.1
Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2017
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Financial assets measured at fair value on a recurring basis are summarized as follows, in thousands:

 

Description

   At
September 30,

2017
     Quoted Prices in
Active Markets
(Level 1)
     Other Significant
Observable Inputs
(Level 2)
     Significant
Unobservable Inputs
(Level 3)
 

Assets:

           

Warrant in Thera

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Description

   At
December 31,

2016
     Quoted Prices in
Active Markets
(Level 1)
     Other Significant
Observable Inputs
(Level 2)
     Significant
Unobservable Inputs
(Level 3)
 

Assets:

           

Warrant in Thera

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 5      $ —        $ —        $ 5  
  

 

 

    

 

 

    

 

 

    

 

 

 
Schedule of Reconciliation of the Beginning and Ending Level 3 Assets

A reconciliation of the beginning and ending Level 3 assets for the nine months ended September 30, 2017 is as follows (in thousands):

 

     Fair Value
Measurements
Using Significant
Unobservable Inputs
(Level 3)
 

Balance, beginning of period

   $ 5  

Change in value of the warrant in Thera

     —    
  

 

 

 

Balance, end of period

   $ 5  
  

 

 

 
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity (Tables)
9 Months Ended
Sep. 30, 2017
Equity [Abstract]  
Summary of Warrants Outstanding

 The following table summarizes the Company’s outstanding warrants at September 30, 2017:

 

Exercise prices

   Number of Shares
Underlying Warrants
     Expiration  

$52.00

     130,007        June 2, 2020  

$9.00

     1,277,993        December 21, 2021  
  

 

 

    

Total warrants outstanding

     1,408,000     
  

 

 

    
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-based Compensation (Tables)
9 Months Ended
Sep. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Assumptions Used to Determine Fair Value of Option Grants

The Company uses the Black-Scholes option-pricing model to determine the fair value of all its option grants. For valuing options granted during the three and nine months ended September 30, 2017 and 2016, the following assumptions were used:

 

     For the Three Months Ended
September 30,
    For the Nine Months Ended
September 30,
 
     2017     2016     2017     2016  

Risk-free interest rate

     1.94 – 2.35     1.46     1.73 – 2.49     1.18 – 2.02

Expected volatility

     83.87 – 91.99     116.88     82.99 – 123.01     79.42 – 116.88

Weighted average expected volatility

     87.93     116.88     84.65     89.12

Expected lives (in years)

     6.25 – 10.00       10.00       5.20 – 10.00       5.20 – 10.00  

Expected dividend yield

     0.00     0.00     0.00     0.00
Summary of Stock Option Activity

The following table summarizes the activity of Company’s stock option plan for the nine months ended September 30, 2017:

 

     Total Number
of Shares
     Weighted-Average
Exercise Price
Per Share
     Aggregate
Intrinsic
Value
 

Balance at December 31, 2016

     37,444      $ 272.90     

Granted

     33,038        6.90     

Exercised

     —          —       

Cancelled

     (17,382      44.80     
  

 

 

    

 

 

    

 

 

 

Balance at September 30, 2017

     53,100      $ 182.00      $ —    
  

 

 

    

 

 

    

 

 

 

Exercisable at September 30, 2017

     35,495      $ 262.10      $ —    
  

 

 

    

 

 

    

 

 

 
Details of Stock-based Compensation Expense Recorded

The Company recorded stock-based compensation expense for the three and nine months ended September 30, 2017 and 2016 as follows, in thousands:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2017      2016      2017      2016  

Research and development

   $ 7      $ 52      $ 80      $ 212  

General and administrative

     36        76        196        437  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation

   $ 43      $ 128      $ 276      $ 649  
  

 

 

    

 

 

    

 

 

    

 

 

 
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
Net Loss per Share (Tables)
9 Months Ended
Sep. 30, 2017
Earnings Per Share [Abstract]  
Common Shares Excluded from the Calculation of Net Loss per Common Share Attributable to Common Stockholders

The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:

 

     September 30,  
     2017      2016  

Options to purchase common stock

     53,100        39,096  

Warrants to purchase common stock

     1,408,000        130,046  
  

 

 

    

 

 

 

Total

     1,461,100        169,142  
  

 

 

    

 

 

 
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.8.0.1
Nature of Operations - Additional Information (Detail) - Subsequent Events [Member]
Jan. 03, 2018
Nature of Operations [Line Items]  
Stock split description Company approved a 1-for-10 reverse stock split of the Company's outstanding common stock, which was effected on January 8, 2018.
Reverse stock split ratio 0.001
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.8.0.1
Significant Accounting Policies - Summary of Restatement of Consolidated Financial Statements - (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Operating expenses:        
Research and development $ 1,490 $ 1,464 $ 4,166 $ 4,108
Acquired in-process research and development     4,696  
General and administrative 986 752 3,209 2,587
Total operating expenses 2,476 2,216 12,071 6,695
Operating loss (2,476) (2,216) (12,071) (6,676)
Loss before income taxes (2,476) (2,212) (12,071) (6,655)
Income tax benefit     1,621  
Net loss $ (2,476) $ (2,212) $ (10,450) $ (6,655)
Net loss per common share: basic and diluted $ (1.05) $ (3.36) $ (4.71) $ (10.16)
Cash flows from operating activities:        
Net loss $ (2,476) $ (2,212) $ (10,450) $ (6,655)
Adjustments to reconcile net loss to net cash used in operating activities        
Depreciation and amortization     48 41
Non-cash stock-based compensation $ 43 $ 128 276 649
Acquired in-process research and development     4,696  
Deferred tax     (1,621)  
Changes in operating assets and liabilities:        
Prepaid expenses and other assets     (121) (10)
Accounts payable     (417) (706)
Accrued expenses     276 302
Net cash used in operating activities     (7,313) $ (6,388)
Previously Reported [Member]        
Operating expenses:        
Research and development     4,166  
Acquired in-process research and development     3,075  
General and administrative     3,209  
Total operating expenses     10,450  
Operating loss     (10,450)  
Loss before income taxes     (10,450)  
Net loss     $ (10,450)  
Net loss per common share: basic and diluted     $ (4.71)  
Cash flows from operating activities:        
Net loss     $ (10,450)  
Adjustments to reconcile net loss to net cash used in operating activities        
Depreciation and amortization     48  
Non-cash stock-based compensation     276  
Acquired in-process research and development     3,075  
Changes in operating assets and liabilities:        
Prepaid expenses and other assets     (121)  
Accounts payable     (417)  
Accrued expenses     276  
Net cash used in operating activities     (7,313)  
Adjustment [Member]        
Operating expenses:        
Acquired in-process research and development     1,621  
Total operating expenses     1,621  
Operating loss     (1,621)  
Loss before income taxes     (1,621)  
Income tax benefit     1,621  
Adjustments to reconcile net loss to net cash used in operating activities        
Acquired in-process research and development     1,621  
Deferred tax     $ (1,621)  
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.8.0.1
Significant Accounting Policies - Additional Information (Detail)
9 Months Ended
Sep. 30, 2017
Accounting Policies [Abstract]  
Liquid instrument maturity period Three months or less
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.8.0.1
Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash Reported Within Balance Sheet (Detail) - USD ($)
$ in Thousands
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2016
Dec. 31, 2015
Accounting Policies [Abstract]        
Cash and cash equivalents $ 5,416 $ 12,906    
Restricted cash 50 50    
Cash, cash equivalents and restricted cash shown in the statement of cash flows $ 5,466 $ 12,956 $ 2,429 $ 5,167
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
MirImmune Inc. Acquisition - Additional Information (Detail) - USD ($)
$ in Thousands
9 Months Ended
Jan. 06, 2017
Sep. 30, 2017
Jun. 09, 2017
Dec. 31, 2016
Research and Development Assets Acquired Other than Through Business Combination [Line Items]        
Number of shares acquired 275,036 275,036    
Holdback of aggregate closing consideration, percentage 3.00%      
Income tax expense (benefit)   $ 1,621    
Acquired in-process research and development   $ 4,696    
MirImmune Stock Purchase Agreement [Member]        
Research and Development Assets Acquired Other than Through Business Combination [Line Items]        
Shares of common stock to be issued upon milestone 251,909      
Additional number of common stock to be issued upon milestone percentage 13.00%      
Series C Convertible Preferred Stock [Member]        
Research and Development Assets Acquired Other than Through Business Combination [Line Items]        
Number of shares acquired 1,118,224 1,118,224    
Stock conversion ratio   1 1  
Preferred Stock, shares issued   0   0
Preferred Stock, shares outstanding   0   0
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.8.0.1
Fair Value Measurements - Fair Value Measurements (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($)
$ in Thousands
Sep. 30, 2017
Dec. 31, 2016
Assets:    
Warrant in Thera $ 5 $ 5
Total 5 5
Unobservable Inputs (Level 3) [Member]    
Assets:    
Warrant in Thera 5 5
Total $ 5 $ 5
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.8.0.1
Fair Value Measurements - Schedule of Reconciliation of the Beginning and Ending Level 3 Assets (Detail) - Unobservable Inputs (Level 3) [Member]
$ in Thousands
9 Months Ended
Sep. 30, 2017
USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]  
Balance, beginning of period $ 5
Balance, end of period 5
Thera Warrant [Member]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]  
Change in value of the warrant in Thera $ 0
XML 38 R29.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity - Additional Information (Detail) - USD ($)
3 Months Ended 9 Months Ended
Aug. 08, 2017
Jan. 06, 2017
Jan. 05, 2017
Mar. 31, 2017
Sep. 30, 2017
Sep. 30, 2016
Jun. 30, 2017
Jun. 09, 2017
Dec. 31, 2016
Class of Stock [Line Items]                  
Number of common stock issued upon conversion of convertible instrument         0 0      
Preferred stock, shares authorized         10,000,000       10,000,000
Number of shares acquired   275,036     275,036        
Number of common stock, outstanding warrants         1,408,000        
Series B Convertible Preferred Stock [Member]                  
Class of Stock [Line Items]                  
Preferred Stock, shares outstanding         0       5,737
Convertible preferred stock, shares issued         0       5,737
Preferred stock, shares authorized         8,100       8,100
Series C Convertible Preferred Stock [Member]                  
Class of Stock [Line Items]                  
Preferred Stock, shares outstanding         0       0
Convertible preferred stock, shares issued         0       0
Preferred stock, shares authorized     1,800,000   1,800,000        
Preferred stock voting rights         No voting rights, with certain exceptions        
Other dividends paid     $ 0            
Number of shares acquired   1,118,224     1,118,224        
Shares issued upon conversion         1     1  
Common Stock [Member]                  
Class of Stock [Line Items]                  
Number of common stock issued upon conversion of convertible instrument       637,445          
Common Stock [Member] | Lincoln Park Capital Fund, LLC [Member]                  
Class of Stock [Line Items]                  
Number of common stock issued as a commitment fee 45,000                
Cost of capital, value per share $ 5.80                
Common Stock [Member] | Lincoln Park Capital Fund, LLC [Member] | Maximum [Member]                  
Class of Stock [Line Items]                  
Potential consideration under purchase agreement 15,000,000                
Warrants With Exercise Price $390.00 [Member]                  
Class of Stock [Line Items]                  
Exercise prices             $ 390.00    
Number of common stock, outstanding warrants             46    
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity - Summary of Warrants Outstanding (Detail)
9 Months Ended
Sep. 30, 2017
$ / shares
shares
Class of Warrant or Right [Line Items]  
Number of Shares Underlying Warrants 1,408,000
Warrants With Exercise Price $52.00 [Member]  
Class of Warrant or Right [Line Items]  
Exercise prices | $ / shares $ 52.00
Number of Shares Underlying Warrants 130,007
Expiration Jun. 02, 2020
2016 Warrants With Exercise Price $9.00 [Member]  
Class of Warrant or Right [Line Items]  
Exercise prices | $ / shares $ 9.00
Number of Shares Underlying Warrants 1,277,993
Expiration Dec. 21, 2021
XML 40 R31.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-based Compensation - Schedule of Assumptions Used to Determine Fair Value of Option Grants (Detail)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Risk-free interest rate   1.46%    
Risk-free interest rate, Minimum 1.94%   1.73% 1.18%
Risk-free interest rate, Maximum 2.35%   2.49% 2.02%
Expected volatility   116.88%    
Expected volatility, Minimum 83.87%   82.99% 79.42%
Expected volatility, Maximum 91.99%   123.01% 116.88%
Weighted average expected volatility 87.93% 116.88% 84.65% 89.12%
Expected lives (in years)   10 years    
Expected dividend yield 0.00% 0.00% 0.00% 0.00%
Minimum [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Expected lives (in years) 6 years 2 months 30 days   5 years 2 months 12 days 5 years 2 months 12 days
Maximum [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Expected lives (in years) 10 years   10 years 10 years
XML 41 R32.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-based Compensation - Additional Information (Detail) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]        
Weighted average grant date fair value per share of options granted $ 4.90 $ 22.70 $ 4.90 $ 21.50
Expected dividend yield 0.00% 0.00% 0.00% 0.00%
Stock-based compensation expense     $ 22,000  
XML 42 R33.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-based Compensation - Summary of Stock Option Activity (Detail)
9 Months Ended
Sep. 30, 2017
USD ($)
$ / shares
shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Total Number of Shares, Beginning Balance | shares 37,444
Total Number of Shares, Granted | shares 33,038
Total Number of Shares, Exercised | shares 0
Total Number of Shares, Cancelled | shares (17,382)
Total Number of Shares, Ending Balance | shares 53,100
Total Number of Shares, Exercisable | shares 35,495
Weighted-Average Exercise Price Per Share, Beginning Balance | $ / shares $ 272.90
Weighted-Average Exercise Price Per Share, Granted | $ / shares 6.90
Weighted-Average Exercise Price Per Share, Exercised | $ / shares 0
Weighted-Average Exercise Price Per Share, Cancelled | $ / shares 44.80
Weighted-Average Exercise Price Per Share, Ending Balance | $ / shares 182.00
Weighted-Average Exercise Price Per Share, Exercisable | $ / shares $ 262.10
Aggregate Intrinsic Value, Ending Balance | $ $ 0
Aggregate Intrinsic Value, Exercisable | $ $ 0
XML 43 R34.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-based Compensation - Details of Stock-based Compensation Expense Recorded (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation $ 43 $ 128 $ 276 $ 649
Research and Development [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation 7 52 80 212
General and Administrative [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation $ 36 $ 76 $ 196 $ 437
XML 44 R35.htm IDEA: XBRL DOCUMENT v3.8.0.1
Net Loss per Share - Common Shares Excluded from the Calculation of Net Loss per Common Share Attributable to Common Stockholders (Detail) - shares
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total amount of anti-dilutive securities excluded from computation of earnings per share 1,461,100 169,142
Options to Purchase Common Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total amount of anti-dilutive securities excluded from computation of earnings per share 53,100 39,096
Warrants to Purchase Common Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total amount of anti-dilutive securities excluded from computation of earnings per share 1,408,000 130,046
XML 45 R36.htm IDEA: XBRL DOCUMENT v3.8.0.1
Subsequent Events - Additional Information (Detail) - shares
Nov. 07, 2017
Sep. 30, 2017
Jan. 05, 2017
Dec. 31, 2016
Subsequent Event [Line Items]        
Preferred stock, shares authorized   10,000,000   10,000,000
Series C Convertible Preferred Stock [Member]        
Subsequent Event [Line Items]        
Preferred stock, shares authorized   1,800,000 1,800,000  
Series B Convertible Preferred Stock [Member]        
Subsequent Event [Line Items]        
Preferred stock, shares authorized   8,100   8,100
Subsequent Events [Member] | Series C Convertible Preferred Stock [Member]        
Subsequent Event [Line Items]        
Preferred stock, shares authorized 1,800,000      
Subsequent Events [Member] | Series B Convertible Preferred Stock [Member]        
Subsequent Event [Line Items]        
Preferred stock, shares authorized 8,100      
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