10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended March 31, 2015

Commission File Number 000-13789

MARINA BIOTECH, INC.

(Exact name of registrant as specified in its charter)

Delaware	11-2658569
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
P.O. Box 1559, Bothell, WA	98041
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (425) 892-4322

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 þ No ¨

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Date	Class	Shares Outstanding
April 30, 2015	Common stock — $0.006 par value	25,642,904

MARINA BIOTECH, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED)	3
Condensed Consolidated Balance Sheets as of December 31, 2014 and March 31, 2015	3
Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and 2015	4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2015	5
Notes to Condensed Consolidated Financial Statements	6
ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	14
ITEM 4 — CONTROLS AND PROCEDURES	14
PART II — OTHER INFORMATION
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	16
ITEM 6 — EXHIBITS	16
SIGNATURES	17
EXHIBIT INDEX	18

Items 1, 1A, 3, 4 and 5 of PART II have not been included as they are not applicable.

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PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

MARINA BIOTECH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	December 31,			March 31,
(In thousands, except share and per share data)	2014			2015
ASSETS
Current assets:
Cash	$	1,824		$	1,163
Accounts receivable		500			-
Prepaid expenses and other current assets		192			139
Total current assets		2,516			1,302
Intangible assets		6,700			6,700
Other assets		-			45
Total assets	$	9,216		$	8,047
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	687		$	581
Accrued payroll and employee benefits		183			218
Other accrued liabilities		1,072			1,058
Total current liabilities		1,942			1,857
Fair value liability for price adjustable warrants		9,225			7,496
Fair value of stock to be issued to settle liabilities		75			-
Deferred income tax liabilities		2,345			2,345
Total liabilities		13,587			11,698
Commitments and contingencies
Stockholders’ deficit:
Preferred stock, $.01 par value; 100,000 shares authorized, 1,200 shares of Series C convertible preferred stock issued and outstanding at December 31, 2014 and March 31, 2015 (liquidation preference  of $6,000,000 December 31, 2014 and March 31, 2015)		-			-
Common stock, $0.006 par value; 180,000,000 shares authorized, 25,523,216 and 25,642,904 shares  issued and outstanding at December 31, 2014 and March 31, 2015, respectively		153			154
Additional paid-in capital		333,264			333,569
Accumulated deficit		(337,788	)		(337,374	)
Total stockholders’ deficit		(4,371	)		(3,651	)
Total liabilities and stockholders’ deficit	$	9,216		$	8,047

See accompanying notes to the condensed consolidated financial statements.

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MARINA BIOTECH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
(In thousands, except per share amounts)	2014			2015
Operating expenses:
Research and development	$	46		$	254
General and administrative		517			1,061
Total operating expenses		563			1,315
Loss from operations		(563	)		(1,315	)
Other income (expense):
Interest and other expense		(1,007	)		-
Change in fair value liability for price adjustable warrants		(5,314	)		1,729
Change in fair value of stock reserved for issuance to settle liabilities		(2,455	)		-
Gain  on debt extinguishment		4			-
Gain on settled liabilities		257			-
Total other income (expense)		(8,515	)		1,729
Net income (loss) applicable to common stockholders		(9,078	)		414
Deemed dividend related to discount on beneficial conversion feature in Series C convertible preferred stock		(6,000	)		-
Net income (loss) applicable to common stockholders	$	(15,078	)	$	414
Net income (loss) per common share
Basic	$	(0.70	)	$	0.02
Diluted		(0.70	)		(0.04	)
Shares used in computing net income (loss) per share
Basic		21,447			25,632
Diluted		21,447			32,555

See accompanying notes to the condensed consolidated financial statements.

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MARINA BIOTECH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three months ended March 31,
(In thousands)	2014			2015
Operating activities:
Net income (loss)	$	(9,078	)	$	414
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Non-cash gain on debt extinguishment		(4	)		-
Non-cash interest expense		1,007			-
Non-cash gain on settlement of liabilities		(257	)		-
Compensation related to stock options and warrants		59			180
Changes in fair market value of liabilities
Stock reserved for issuance to settle liabilities		2,455			-
Price adjustable warrants		5,314			(1,729	)
Cash changes in assets and liabilities
Accounts receivable		5			500
Prepaid expenses and other assets		(9	)		8
Accounts payable		(24	)		(106	)
Accrued and other liabilities		(533	)		71
Net cash used in operating activities		(1,065	)		(662	)
Financing activities:
Proceeds from sales of Series C preferred shares and warrants, net		5,929			-
Cash payments on notes payable		(250	)		-
Insurance financing		(3	)		-
Proceeds from exercise of warrants for common stock		-			1
Net cash provided by financing activities		5,676			1
Net increase (decrease) in cash		4,611			(661	)
Cash and cash equivalents — January 1		909			1,824
Cash and cash equivalents — March 31	$	5,520		$	1,163
Supplemental disclosure of cash flow information and non-cash financing activities:
Cash paid for interest	$	83		$	-
Reclassification of fair value liability for price adjustable warrants exercised	$	1,862		$	-
Fair value of warrants issued to purchase common stock to settle liabilities	$	-		$	50
Issuance of common stock to settle liabilities	$	3,474		$	75
Debt conversion to common shares	$	1,479		$	-
Deemed dividend to Series C convertible preferred stockholders	$	6,000		$	-

See accompanying notes to the condensed consolidated financial statements.

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MARINA BIOTECH, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2014 and 2015

(Unaudited)

Note 1 — Business, Liquidity and Summary of Significant Accounting Policies

Business

Business

We are a biotechnology company focused on the discovery, development and commercialization of nucleic acid-based therapies to treat orphan diseases. Our pipeline includes CEQ508, a product in clinical development for the treatment of Familial Adenomatous Polyposis (“FAP”), for which we have received Orphan Drug Designation (“ODD”) from the U.S. Food and Drug Administration (“FDA”), and preclinical programs for the treatment of type 1 myotonic dystrophy (“DM1”) and Duchenne muscular dystrophy (“DMD”).

Since 2010, we have strategically acquired/in-licensed and further developed nucleic acid chemistry and delivery-related technologies in order to establish a novel and differentiated drug discovery platform. This platform allows us to distinguish ourselves from others in the nucleic acid therapeutics area in that we are the only company capable of creating a wide variety of therapeutics targeting coding and non-coding RNA via multiple mechanisms of action such as RNA interference (“RNAi”), messenger RNA translational inhibition, exon skipping, microRNA (“miRNA”) replacement, miRNA inhibition, and steric blocking in order to modulate gene expression either up or down depending on the specific mechanism of action. Our goal is to dramatically improve the lives of the patients and families affected by orphan diseases through either our own efforts or those of our collaborators and licensees.

Liquidity

The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. At March 31, 2015, we had an accumulated deficit of approximately $337.4 million, $111.7 million of which has been accumulated since we focused on RNA therapeutics in June 2008. To the extent that sufficient funding is available, we will continue to incur losses as we continue our research and development (“R&D”) activities. In addition, we have had and will continue to have negative cash flows from operations. We have funded our losses primarily through the sale of common and preferred stock and warrants, revenue provided from our license agreements and, to a lesser extent, equipment financing facilities and secured loans. In 2014, we funded operations with a combination of the issuance of preferred stock and license-related revenues. At March 31, 2015, we had negative working capital of $0.6 million and $1.2 million in cash. Our resumed operating activities consume the majority of our cash resources.

We believe that our current cash resources will enable us to fund our intended limited operations through September 2015. Our ability to execute our operating plan beyond September 2015 depends on our ability to obtain additional funding. The volatility in our stock price, as well as market conditions in general, could make it difficult for us to raise capital on favorable terms, or at all. If we fail to obtain additional capital when required, we may have to modify, delay or abandon some or all of our planned activities, or terminate our operations. We are currently pursuing both non-dilutive means of obtaining additional capital, primarily from existing and potential future licenses and partnerships, and dilutive means of obtaining additional capital, primarily through the offering of our equity and debt securities. However, there can be no assurance that we will be successful in such endeavors. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Basis of Preparation and Summary of Significant Accounting Policies

Basis of Preparation — The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The accompanying unaudited financial information should be read in conjunction with the audited consolidated financial statements, including the notes thereto, as of and for the year ended December 31, 2014, included in our 2014 Annual Report on Form 10-K filed with the SEC. The information furnished in this report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results for the year ending December 31, 2015 or for any future period.

Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Estimates having relatively higher significance include revenue recognition, stock-based compensation, valuation of warrants, valuation and estimated lives of identifiable intangible assets, impairment of long-lived assets, valuation of features embedded within note agreements and amendments, and income taxes. Actual results could differ from those estimates.

Fair Value of Financial Instruments — We consider the fair value of cash, accounts receivable, accounts payable and accrued liabilities to not be materially different from their carrying value. These financial instruments have short-term maturities.

We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Our cash is subject to fair value measurement and value is determined by Level 1 inputs. We measure the liability for committed stock issuances with a fixed share number using Level 1 inputs. We measure the liability for price adjustable warrants and certain features embedded in notes using the Black-Scholes option pricing model (“Black-Scholes Model”) under various probability weighted scenarios, using Level 3 inputs. The following tables summarize our liabilities measured at fair value on a recurring basis as of December 31, 2014 and March 31, 2015:

			Level 1				Level 3
	Balance at		Quoted prices in		Level 2		Significant
	December 31,		active markets for		Significant other		unobservable
(In thousands)	2014		identical assets		observable inputs		inputs
Liabilities:
Fair value liability for price adjustable warrants	$	9,225	$	-	$	-	$	9,225
Fair value liability for shares to be issued		75		75		-		-
Total liabilities at fair value	$	9,300	$	75	$	-	$	9,225

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			Level 1				Level 3
			Quoted prices in		Level 2		Significant
	Balance at		active markets for		Significant other		unobservable
(In thousands)	March 31, 2015		identical assets		observable inputs		inputs
Liabilities:
Fair value liability for price adjustable warrants	$	7,496	$	-	$	-	$	7,496
Total liabilities at fair value	$	7,496	$	-	$	-	$	7,496

The following presents activity of the fair value liability of price adjustable warrants determined by Level 3 inputs for the three-month period ended March 31, 2015:

				Weighted average as of each measurement date
	Fair value
	liability for price										Contractual
	adjustable warrants			Exercise		Stock					life		Risk free
	(in thousands)			Price		Price		Volatility			(in years)		rate
Balance at December 31, 2014	$	9,225		$	0.42	$	0.95		121	%		3.51		0.90	%
Change in fair value included in statement of operations		(1,729	)
Balance at March 31, 2015	$	7,496		$	0.42	$	0.64		110	%		2.42		0.66	%

Net Income (Loss) per Common Share — Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share includes the effect of common stock equivalents (stock options, unvested restricted stock, warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. The following number of shares have been excluded from diluted net income (loss) since such inclusion would be anti-dilutive:

	Three Months Ended March 31,
	2014		2015
Stock options outstanding		284,829		1,316,106
Warrants		21,235,695		1,285,693
Total		21,520,524		2,601,799

The following is a reconciliation of basic and diluted net income (loss) per share:

	Three Months Ended March 31,
	2014			2015
Net income (loss) – numerator basic	$	(15,078	)	$	414
Change in fair value liability for price adjustable warrants		-			(1,729	)
Net loss excluding change in fair value liability for price adjustable warrants	$	(15,078	)	$	(1,315	)
Weighted average common shares outstanding – denominator basic		21,447			25,632
Effect of price adjustable warrants		-			6,923
Weighted average dilutive common shares outstanding		21,447			32,555
Net income (loss) per common share – basic	$	(0.70	)	$	0.02
Net income (loss) per common share – diluted	$	(0.70	)	$	(0.04	)

Recently Issued Accounting Standards - In April 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2015-03, 'Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. ASU 2015-03 is intended to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. This new guidance is effective for fiscal years beginning after December 15, 2015 and interim periods

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within those fiscal years. Early adoption is permitted. We are currently in the process of evaluating the impact of the adoption of this ASU on the financial statements.

In January 2015, FASB issued ASU 2015-01 “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”. This ASU removes the concept of an extraordinary item.  Subtopic 225-20, Income Statement - Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item.  If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item.  The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.  Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption.  

Note 2 — Stockholders’ Deficit

Preferred Stock — Our board of directors has the authority, without action by the stockholders, to designate and issue up to 100,000 shares of preferred stock in one or more series and to designate the rights, preferences and privileges of each series, any or all of which may be greater than the rights of our common stock. We have designated 1,000 shares as Series B Preferred Stock (“Series B Preferred”) and 90,000 shares as Series A Junior Participating Preferred Stock (“Series A Preferred”). No shares of Series B Preferred or Series A Preferred are outstanding. In March 2014, we designated 1,200 shares of Series C Convertible Preferred Stock (“Series C Preferred”).

In March 2014, we entered into a Securities Purchase Agreement with certain investors pursuant to which we sold 1,200 shares of Series C Preferred, and price adjustable warrants to purchase up to 6.0 million shares of our common stock at an exercise price of $0.75 per share, for an aggregate purchase price of $6.0 million. Each share of Series C Preferred has a stated value of $5,000 per share and is convertible into shares of common stock at a conversion price of $0.75 per share. The Series C Preferred is initially convertible into an aggregate of 8,000,000 shares of our common stock, subject to certain limitations and adjustments, has no stated dividend rate, is not redeemable and has voting rights on an as-converted basis.

To account for the issuance of the Series C Preferred and warrants, we first assessed the terms of the warrants and determined that, due to certain anti-dilution provisions, they should be recorded as derivative liabilities. We determined the fair value of the warrants on the issuance date and recorded a liability of $6.5 million. Since the fair value of the warrants exceed the total proceeds received of $6.0 million, we recorded a loss of $0.5 million upon issuance, which is included in the change in fair value of price adjustable warrants in the consolidated statements of operations. The discount of $6.0 million on the Series C Preferred resulting from the allocation of the entire proceeds to the warrant was accreted as a dividend on the Series C Preferred through the earliest conversion date, which was immediately. The Series C Preferred dividend of $6.0 million was recorded to additional paid-in capital and as a deemed dividend on the Series C Preferred in determining net loss applicable to common stock holders in the consolidated statements of operations. We incurred $0.07 million of stock issuance costs in conjunction with the Series C Preferred, which were netted against the proceeds.

Common Stock — Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the holders of our common stock. Subject to the rights of the holders of any class of our capital stock having any preference or priority over our common stock, the holders of our common stock are entitled to receive dividends that are declared by our board of directors out of legally available funds. In the event of our liquidation, dissolution or winding-up, the holders of common stock are entitled to share ratably in our net assets remaining after payment of liabilities, subject to prior rights of preferred stock, if any, then outstanding. Our common stock has no preemptive rights, conversion rights, redemption rights or sinking fund provisions, and there are no dividends in arrears or default. All shares of our common stock have equal distribution, liquidation and voting rights, and have no preferences or exchange rights. Our common stock currently trades on the OTCQB tier of the OTC Markets.

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In January 2015, we issued 0.12 million shares with a value of $0.075 million to Novosom as the equity component owed under our December 2014 license agreement with MiNA Therapeutics.

Warrants — In January 2015, an investor exercised 2,500 warrants at an exercise price of $0.28 prior to warrant expiry.

In December 2013, we issued warrants to purchase up to 0.10 million shares of our common stock to a consultant who is our interim chief financial officer. These warrants vest over two years, have a fixed strike price of $0.48, and expire in December 2023. The total stock-based expense related to the warrants that vested during the three months ended March 31, 2015 amounted to $0.01 million. At March 31, 2015, we had $0.03 million of total unrecognized compensation expense related to unvested warrants. We expect to recognize this cost by end of 2015.

In January and February 2015, we issued warrants to purchase up to an aggregate of 0.064 million shares to a vendor providing scientific and development consulting services to our company. The fair value of these warrants at issuance was $0.05 million and was accrued at December 31, 2014.

The following table summarizes warrant activity during the three months ended March 31, 2015:

	Warrant Shares			Weighted Average Exercise Price
Outstanding, December 31, 2014		21,212,813		$	1.19
Exercised warrants		(2,500	)		0.28
Warrants issued		66,717			0.75
Outstanding, March 31, 2015		21,277,030		$	1.19
Expiring in 2015		285,345
Expiring in 2016		6,000,000
Expiring in 2017		7,235,622
Expiring thereafter		7,756,063

Note 3 — Stock Incentive Plans

Stock-based Compensation. Certain option and share awards provide for accelerated vesting if there is a change in control as defined in the applicable plan and certain employment agreements. The following table summarizes stock-based compensation expense:

	Three months ended March 31,
(In thousands)	2014		2015
Research and development	$	10	$	26
General and administrative		10		145
Total	$	20	$	171

Stock Options — Stock option activity was as follows:

	Options Outstanding
	2015
	Shares		Weighted Average Exercise Price
Outstanding, January 1		1,084,106	$	5.52
Options Issued		232,000	$	0.63
Outstanding, March 31		1,316,106	$	4.66
Exercisable, March 31		293,856	$	17.34

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The following table summarizes additional information on our stock options outstanding at March 31, 2015:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted-average Remaining Contractual Life (Years)		Weighted-average Exercise Price		Number Exercisable		Weighted- average Exercise Price
$0.63 - $0.82		252,000		4.75	$	0.65		126,000	$	0.65
$0.83 - $1.07		1,019,000		8.25		1.07		124,000		1.07
$1.08 - $2.20		2,500		6.44		2.20		1,250		2.20
$2.21 - $50.00		10,500		3.20		47.60		10,500		47.60
$50.01 - $100.00		10,500		3.20		87.60		10,500		87.60
$100.01 - $200.00		16,000		3.20		141.35		16,000		141.35
$200.01 - $526.40		5,606		3.17		213.63		5,606		213.63
Totals		1,316,106		7.41	$	4.66		293,856	$	17.34
Weighted-Average Exercisable Remaining Contractual Life										4.41

In January 2015, we issued options to purchase up to an aggregate of 152,000 shares of our common stock to non-employee members of our board of directors at an exercise price of $0.635 per share as the annual grant to such directors for their service on our board of directors during 2015, and we issued options to purchase up to an aggregate of 80,000 shares of our common stock to the members of our scientific advisory board at an exercise price of $0.63 per share as the annual grant to such persons for their service on our scientific advisory board during 2015.

At March 31, 2015, we had $0.75 million of total unrecognized compensation expense related to unvested stock options. We expect to recognize this cost over a weighted average period of 2.2 years.

At March 31, 2015, the intrinsic value of options outstanding or exercisable was zero as there were no options outstanding with an exercise price less than $0.58, the per share closing market price of our common stock at that date. No options were exercised during the three months ended March 31, 2015.

Note 4 — Intellectual Property and Collaborative Agreements

Novosom — In July 2010, we entered into an agreement pursuant to which we acquired intellectual property for Novosom’s SMARTICLES-based liposomal delivery system. In January 2015, we paid Novosom $0.08 million cash and issued 0.12 million shares of common stock valued at $0.075 million for amounts due related to the MiNA license signed in December 2014.

Note 5 — Commitments and Contingencies

Contingencies — We are subject to various legal proceedings and claims that arise in the ordinary course of business. Our management currently believes that resolution of such legal matters will not have a material adverse impact on our consolidated financial position, results of operations or cash flows.

Note 6 — Subsequent Events

On May 11, 2015, we amended the SMARTICLES licensing agreement that we entered into in December 2011 with Mirna Therapeutics, Inc. to allow for prepayment by Mirna to us of a future milestone. On May 12, 2015, Mirna paid $400,000 to satisfy that future milestone obligation.

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

Overview

Statements contained herein that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statement made by us. These factors include, but are not limited to: (i) the ability of our company to obtain additional and substantial funding in the future; (ii) the ability of our company to attract and/or maintain research, development, commercialization and manufacturing partners; (iii) the ability of our company and/or a partner to successfully complete product research and development, including pre-clinical and clinical studies and commercialization; (iv) the ability of our company and/or a partner to obtain required governmental approvals, including product and patent approvals; and (v) the ability of our company and/or a partner to develop and commercialize products that can compete favorably with those of competitors. In addition, significant fluctuations in quarterly results may occur as a result of the timing of milestone payments, the recognition of revenue from milestone payments and other sources, and the timing of costs and expenses related to our research and development programs. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in our filings with the Securities and Exchange Commission, including those factors discussed under the captions “Risk Factors” and “Forward-Looking Statements” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as may be supplemented or amended from time to time, which we urge investors to consider. We undertake no obligation to publicly release revisions in such forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events or circumstances, except as otherwise required by securities and other applicable laws.

Business

We are a biotechnology company focused on the discovery, development and commercialization of nucleic acid-based therapies to treat orphan diseases. Our pipeline includes CEQ508, a product in clinical development for the treatment of Familial Adenomatous Polyposis (“FAP”), for which we have received Orphan Drug Designation (“ODD”) from the U.S. Food and Drug Administration (“FDA”), and preclinical programs for the treatment of type 1 myotonic dystrophy (“DM1”) and Duchenne muscular dystrophy (“DMD”).

Since 2010, we have strategically acquired/in-licensed and further developed nucleic acid chemistry and delivery-related technologies in order to establish a novel and differentiated drug discovery platform. This platform allows us to distinguish ourselves from others in the nucleic acid therapeutics area in that we are the only company capable of creating a wide variety of therapeutics targeting coding and non-coding RNA via multiple mechanisms of action such as RNA interference (“RNAi”), messenger RNA translational inhibition, exon skipping, microRNA (“miRNA”) replacement, miRNA inhibition, and steric blocking in order to modulate gene expression either up or down depending on the specific mechanism of action. Our goal is to dramatically improve the lives of the patients and families affected by orphan diseases through either our own efforts or those of our collaborators and licensees.

Liquidity

The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. At March 31, 2015, we had an accumulated deficit of approximately $337.4 million, $111.7 million of which has been accumulated since we focused on RNA therapeutics in June 2008. To the extent that sufficient funding is available, we will continue to incur losses as we continue our research and development (“R&D”) activities. In addition, we have had and will continue to have negative cash flows from operations. We have funded our losses primarily through the sale of common and preferred stock and warrants, revenue provided from our license agreements with other parties and, to a lesser extent, equipment financing facilities and secured loans. In 2014, we funded operations with a combination of issuances of preferred stock and license-related

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revenues. At March 31, 2015, we had negative working capital of $0.6 million and $1.2 million in cash. Our resumed operating activities consume the majority of our cash resources.

We believe that our current cash resources will enable us to fund our intended limited operations through September 2015. Our ability to execute our operating plan beyond September 2015 depends on our ability to obtain additional funding. The volatility in our stock price, as well as market conditions in general, could make it difficult for us to raise capital on favorable terms, or at all. If we fail to obtain additional capital when required, we may have to modify, delay or abandon some or all of our planned activities, or terminate our operations. We are currently pursuing both non-dilutive means of obtaining additional capital, primarily from existing and potential future licenses and partnerships, and dilutive means of obtaining additional capital, primarily through the offering of our equity and debt securities. However, there can be no assurance that we will be successful in such endeavors. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Cash flows

Our operating activities used cash of $0.7 million in the three months ended March 31, 2015, compared to $1.1 million in the three months ended March 31, 2014. In the three months ended March 31, 2015, cash used in operating activities related primarily to funding our operating loss, adjusted for non-cash items. Adjustments for non-cash items, totaling $1.6 million, represented stock compensation and the change in fair value of price adjustable warrants. Changes in operating assets and liabilities provided $0.5 million from collecting $0.5 million due under a licensing agreement, with other items largely offsetting each other. During the three months ended March 31, 2014, cash used in operating activities related primarily to funding our net loss, adjusted for non-cash gains on the settlement of liabilities of $0.26 million. Adjustments for non-cash expenses totaling $8.8 million included charges related to beneficial conversion and debt extinguishment, interest expense, stock compensation, and the adjustment of warrants and stock to be issued to extinguish liabilities to reflect fair value. Changes in operating assets and liabilities used $0.6 million mostly from changes in accrued liabilities, predominantly related to payment of prior period accrued franchise taxes.

We had no investing activities in the three months ended March 31, 2014 or 2015.

We undertook minimal financing activities in the three months ended March 31, 2015, compared to financing activities that provided $5.7 million in the three months ended March 31, 2014, primarily due to the sale of preferred stock and warrants to purchase common shares, offset by cash we were required to pay to the holders of certain notes payable prior to the conversion of such notes into equity.

Consolidated Results of Operations

Comparison of Results of Operations for the three months ended March 31, 2015 to the three months ended March 31, 2014

Research and Development. R&D expense consists primarily of salaries and other personnel-related expenses, consulting and other outside services, and other costs. R&D expense increased $0.21 million from $0.05 million in the three months ended March 31, 2014 to $0.25 million in the three months ended March 31, 2015, due primarily to the resumption of FAP product development and increased stock compensation expense for members of the scientific advisory board.

We anticipate continued increased spending on FAP product development in 2015.

General and administrative. General and administrative (“G&A”) expense consists primarily of salaries and other personnel-related expenses to support our R&D activities, stock-based compensation for G&A personnel and non-employee members of our Board, professional fees, such as accounting and legal, and corporate insurance costs. G&A costs increased 105% from $0.5 million in the three months ended March 31, 2014 to $1.1 million in the three months ended March 31, 2015 as a result of the following:

· Personnel-related expenses (compensation, benefits, travel related) increased 47% from $0.2 million in the

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three months ended March 31, 2014 to $0.3 million in the three months ended March 31, 2015, due primarily to revisions in compensation levels as stated within the 2014 revised employment agreement with Mr. French, our Chief Executive Officer and increased stock compensation expense for Directors.

· Costs of legal and accounting fees, consulting, corporate insurance and other administrative costs increased $0.5 million, from $0.2 million in the three months ended March 31, 2014 to $0.7 million in the three months ended March 31, 2015 due to increased legal, accounting and filing fees, related primarily to regaining compliance with our reporting obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In general, G&A costs increased due to efforts associated with our company regaining compliance with our reporting obligations under the Exchange Act during the subsequent quarters of 2014. We incurred little compliance costs in the three months ended March 31, 2014 because we were not compliant with our reporting obligations and had not resumed the expenses associated with full SEC public company compliance and reporting. In addition to these costs, expense was incurred related to SEC filings in preparation for financing activities.

Interest & other expense. Interest and other expense was not incurred in the three months ended March 31, 2015 versus interest expense of $1.0 million in the three months ended March 31, 2014. This was mostly due to the 2014 non-cash interest expense related to the conversion of the notes payable into common stock.

Change in fair value liability for price adjustable securities. The fair value liability is revalued each balance sheet date utilizing Black-Scholes Model computations, with the decrease or increase in fair value being reported in the statement of operations as other income or expense, respectively. The loss associated with this mark-to-fair valuation requirement was $5.3 million during the first three months of 2014, but stock price decreases resulted in a $1.7 million gain during the first three months of 2015. There were no additional price adjustable warrants issued between reporting periods, thus the change is all related to the stock price decline between valuation dates.

Change in fair value liability for stock to be issued. During the first three months of 2014, we recognized a $2.5 million loss associated with the change in the value of share-denominated payments contractually obligated, but not yet issued. As of January 1, 2015, we had issued all share denominated contractually obligated stock and had taken on no new such obligations. As a result, there was no change in fair value of such stock during the three months ended March 31, 2015.

Gain on settled liabilities. During the three months ended March 31, 2014, we recorded a $0.26 million gain due to the negotiated settlement of liabilities accrued for our executive officers. The remaining $1.0 million of liabilities to those officers was paid through the January 2014 issuance of 2.8 million common shares with a fair value of $1.0 million.

Deemed dividend related to discount on beneficial conversion feature in Series C convertible preferred shares.

The Series C Preferred share terms include an immediate beneficial conversion feature, as the conversion price is established to be no higher than $0.75 while the closing price of common shares on the closing date for the issuance of the Series C Preferred was significantly higher, and the shares were immediately convertible.

Off-Balance Sheet Arrangements

As of March 31, 2015, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4 — CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures. As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our senior management,

14

including our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act.

(b) Internal Control Over Financial Reporting. There have been no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2015, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

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

During the fiscal quarter ended March 31, 2015, we issued 117,188 unregistered shares of common stock to Novosom as a result of the technology sublicense agreement that we entered into with Mina Therapeutics, Ltd. in December 2014. Also during the fiscal quarter ended March 31, 2015, we issued warrants to purchase up to 64,217 shares of common stock to a vendor providing scientific and development consulting services to our Company. These securities were issued in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act.

ITEM 6 — EXHIBITS

The exhibits required by this item are set forth in the Exhibit Index attached hereto.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, duly authorized, in Cambridge, Massachusetts, on May 14, 2015.

MARINA BIOTECH, INC.
By:	/s/ J. Michael French
	J. Michael French
	President and Chief Executive Officer
	(Principal Executive Officer and
	Principal Financial Officer)

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EXHIBIT INDEX

Exhibit  No.	Description
31.1	Certification of our Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. (1)
32.1	Certification of our Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)
101.INS	XBRL Instance Document (2)
101.SCH	XBRL Taxonomy Extension Schema Document (2)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (2)
101.DEF	XBRL Taxonomy Extension Definitions Linkbase Document (2)
101.LAB	XBRL Taxonomy Extension Label Linkbase Document (2)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (2)

(1)	Filed Herewith.
(2)	Furnished Herewith.

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EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

REQUIRED BY RULES 13A-14 AND 15D-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS AMENDED

I,  J. Michael French, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Marina Biotech, Inc.;

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

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

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

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

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

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 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;

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, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

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

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

Dated:	May 14, 2015	By:	/s/ J. Michael French
		Name:	J. Michael French
		Title:	President and Chief Executive Officer
			(Principal Executive Officer and
			Principal Financial Officer)

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

I, J. Michael French, the President and Chief Executive Officer of Marina Biotech, Inc. (“Marina Biotech”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Marina Biotech on Form 10-Q for the fiscal quarter ended March 31, 2015 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Marina Biotech.

By:	/s/ J. Michael French
Name:	J. Michael French
Title:	President and Chief Executive Officer
	(Principal Executive Officer and
	Principal Financial Officer)

Date: May 14, 2015

A signed original of this written statement required by Section 906 has been provided to Marina Biotech and will be retained by Marina Biotech and furnished to the Securities Exchange Commission or its staff upon request.

This certification accompanies each periodic report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by Marina Biotech for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

Stock Incentive Plans (Stock-Based Compensation Expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 171	$ 20
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	26	10
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 145	$ 10

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Intellectual Property and Collaborative Agreements

3 Months Ended

Mar. 31, 2015

Intellectual Property and Contractual Agreements [Abstract]

Intellectual Property and Collaborative Agreements

Note 4 — Intellectual Property and Collaborative Agreements

Novosom — In July 2010, we entered into an agreement pursuant to which we acquired intellectual property for Novosom’s SMARTICLES-based liposomal delivery system. In January 2015, we paid Novosom $0.08 million cash and issued 0.12 million shares of common stock valued at $0.075 million for amounts due related to the MiNA license signed in December 2014.

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Stock Incentive Plans (Detail Textuals 1) (USD $)	3 Months Ended
	Mar. 31, 2015
Stock Incentive Plans [Abstract]
Unrecognized compensation cost related to unvested stock options	$ 750,000
Unrecognized compensation cost related to unvested stock options, recognition period	2 years 2 months 12 days
Intrinsic value of options outstanding	0
Intrinsic value of options exercisable	$ 0
Options outstanding exercise price	$ 0.58

XML

Stock Incentive Plans (Detail Textuals) (USD $)	3 Months Ended	1 Months Ended
	Mar. 31, 2015	Jan. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares purchase	232,000
Options Issued	$ 0.63
Board of directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares purchase		152,000
Options Issued		$ 0.635
Board of directors | Subsequent event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares purchase		80,000
Options Issued		$ 0.63

XML

Intellectual Property and Collaborative Agreements (Detail Textuals) (Novosom, December 2014 license agreement with MiNA Therapeutics, USD $) Share data in Millions, unless otherwise specified	1 Months Ended
	Jan. 31, 2015
Novosom | December 2014 license agreement with MiNA Therapeutics
Intellectual Property And Collaborative Agreements [Line Items]
Cash payable	$ 80,000
Number of common stock issued for settlement	0.12
Amount pledged to issue common stock	$ 75,000

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Subsequent Events (Detail Textuals) (Subsequent event, Amended December 2011 with Mirna Therapeutics, Inc., USD $)	1 Months Ended
	May 11, 2015
Subsequent event | Amended December 2011 with Mirna Therapeutics, Inc.
Subsequent Event [Line Items]
Payment For Future Milestone Obligation	$ 400,000

XML

Stock Incentive Plans

3 Months Ended

Mar. 31, 2015

Stock Incentive Plans [Abstract]

Stock Incentive Plans

Note 3 — Stock Incentive Plans

Stock-based Compensation. Certain option and share awards provide for accelerated vesting if there is a change in control as defined in the applicable plan and certain employment agreements. The following table summarizes stock-based compensation expense:

	Three months ended March 31,
(In thousands)	2014		2015
Research and development	$	10	$	26
General and administrative		10		145
Total	$	20	$	171

Stock Options — Stock option activity was as follows:

	Options Outstanding
	2015
	Shares		Weighted Average Exercise Price
Outstanding, January 1		1,084,106	$	5.52
Options Issued		232,000	$	0.63
Outstanding, March 31		1,316,106	$	4.66
Exercisable, March 31		293,856	$	17.34

The following table summarizes additional information on our stock options outstanding at March 31, 2015:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted-average Remaining Contractual Life (Years)		Weighted-average Exercise Price		Number Exercisable		Weighted- average Exercise Price
$0.63 - $0.82		252,000		4.75	$	0.65		126,000	$	0.65
$0.83 - $1.07		1,019,000		8.25		1.07		124,000		1.07
$1.08 - $2.20		2,500		6.44		2.20		1,250		2.20
$2.21 - $50.00		10,500		3.20		47.60		10,500		47.60
$50.01 - $100.00		10,500		3.20		87.60		10,500		87.60
$100.01 - $200.00		16,000		3.20		141.35		16,000		141.35
$200.01 - $526.40		5,606		3.17		213.63		5,606		213.63
Totals		1,316,106		7.41	$	4.66		293,856	$	17.34
Weighted-Average Exercisable Remaining Contractual Life										4.41

In January 2015, we issued options to purchase up to an aggregate of 152,000 shares of our common stock to non-employee members of our board of directors at an exercise price of $0.635 per share as the annual grant to such directors for their service on our board of directors during 2015, and we issued options to purchase up to an aggregate of 80,000 shares of our common stock to the members of our scientific advisory board at an exercise price of $0.63 per share as the annual grant to such persons for their service on our scientific advisory board during 2015.

At March 31, 2015, we had $0.75 million of total unrecognized compensation expense related to unvested stock options. We expect to recognize this cost over a weighted average period of 2.2 years.

At March 31, 2015, the intrinsic value of options outstanding or exercisable was zero as there were no options outstanding with an exercise price less than $0.58, the per share closing market price of our common stock at that date. No options were exercised during the three months ended March 31, 2015.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash	$ 1,163	$ 1,824
Accounts receivable		500
Prepaid expenses and other current assets	139	192
Total current assets	1,302	2,516
Intangible assets	6,700	6,700
Other assets	45
Total assets	8,047	9,216
Current liabilities:
Accounts payable	581	687
Accrued payroll and employee benefits	218	183
Other accrued liabilities	1,058	1,072
Total current liabilities	1,857	1,942
Fair value liability for price adjustable warrants	7,496	9,225
Fair value of stock to be issued to settle liabilities		75
Deferred income tax liabilities	2,345	2,345
Total liabilities	11,698	13,587
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $.01 par value; 100,000 shares authorized, 1,200 shares of Series C convertible preferred stock issued and outstanding at December 31, 2014 and March 31, 2015 (liquidation preference of $6,000,000 December 31, 2014 and March 31, 2015)
Common stock, $0.006 par value; 180,000,000 shares authorized, 25,523,216 and 25,642,904 shares issued and outstanding at December 31, 2014 and March 31, 2015, respectively	154	153
Additional paid-in capital	333,569	333,264
Accumulated deficit	(337,374)	(337,788)
Total stockholders' deficit	(3,651)	(4,371)
Total liabilities and stockholders' deficit	$ 8,047	$ 9,216

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Business, Liquidity and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business, Liquidity and Summary of Significant Accounting Policies

Note 1 — Business, Liquidity and Summary of Significant Accounting Policies

Business

Business

We are a biotechnology company focused on the discovery, development and commercialization of nucleic acid-based therapies to treat orphan diseases. Our pipeline includes CEQ508, a product in clinical development for the treatment of Familial Adenomatous Polyposis (“FAP”), for which we have received Orphan Drug Designation (“ODD”) from the U.S. Food and Drug Administration (“FDA”), and preclinical programs for the treatment of type 1 myotonic dystrophy (“DM1”) and Duchenne muscular dystrophy (“DMD”).

Since 2010, we have strategically acquired/in-licensed and further developed nucleic acid chemistry and delivery-related technologies in order to establish a novel and differentiated drug discovery platform. This platform allows us to distinguish ourselves from others in the nucleic acid therapeutics area in that we are the only company capable of creating a wide variety of therapeutics targeting coding and non-coding RNA via multiple mechanisms of action such as RNA interference (“RNAi”), messenger RNA translational inhibition, exon skipping, microRNA (“miRNA”) replacement, miRNA inhibition, and steric blocking in order to modulate gene expression either up or down depending on the specific mechanism of action. Our goal is to dramatically improve the lives of the patients and families affected by orphan diseases through either our own efforts or those of our collaborators and licensees.

Liquidity

The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. At March 31, 2015, we had an accumulated deficit of approximately $337.4 million, $111.7 million of which has been accumulated since we focused on RNA therapeutics in June 2008. To the extent that sufficient funding is available, we will continue to incur losses as we continue our research and development (“R&D”) activities. In addition, we have had and will continue to have negative cash flows from operations. We have funded our losses primarily through the sale of common and preferred stock and warrants, revenue provided from our license agreements and, to a lesser extent, equipment financing facilities and secured loans. In 2014, we funded operations with a combination of the issuance of preferred stock and license-related revenues. At March 31, 2015, we had negative working capital of $0.6 million and $1.2 million in cash. Our resumed operating activities consume the majority of our cash resources.

We believe that our current cash resources will enable us to fund our intended limited operations through September 2015. Our ability to execute our operating plan beyond September 2015 depends on our ability to obtain additional funding. The volatility in our stock price, as well as market conditions in general, could make it difficult for us to raise capital on favorable terms, or at all. If we fail to obtain additional capital when required, we may have to modify, delay or abandon some or all of our planned activities, or terminate our operations. We are currently pursuing both non-dilutive means of obtaining additional capital, primarily from existing and potential future licenses and partnerships, and dilutive means of obtaining additional capital, primarily through the offering of our equity and debt securities. However, there can be no assurance that we will be successful in such endeavors. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of Preparation and Summary of Significant Accounting Policies

Basis of Preparation — The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The accompanying unaudited financial information should be read in conjunction with the audited consolidated financial statements, including the notes thereto, as of and for the year ended December 31, 2014, included in our 2014 Annual Report on Form 10-K filed with the SEC. The information furnished in this report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results for the year ending December 31, 2015 or for any future period.

Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Estimates having relatively higher significance include revenue recognition, stock-based compensation, valuation of warrants, valuation and estimated lives of identifiable intangible assets, impairment of long-lived assets, valuation of features embedded within note agreements and amendments, and income taxes. Actual results could differ from those estimates.

Fair Value of Financial Instruments — We consider the fair value of cash, accounts receivable, accounts payable and accrued liabilities to not be materially different from their carrying value. These financial instruments have short-term maturities.

We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Our cash is subject to fair value measurement and value is determined by Level 1 inputs. We measure the liability for committed stock issuances with a fixed share number using Level 1 inputs. We measure the liability for price adjustable warrants and certain features embedded in notes using the Black-Scholes option pricing model (“Black-Scholes Model”) under various probability weighted scenarios, using Level 3 inputs. The following tables summarize our liabilities measured at fair value on a recurring basis as of December 31, 2014 and March 31, 2015:

			Level 1				Level 3
	Balance at		Quoted prices in		Level 2		Significant
	December 31,		active markets for		Significant other		unobservable
(In thousands)	2014		identical assets		observable inputs		inputs
Liabilities:
Fair value liability for price adjustable warrants	$	9,225	$	-	$	-	$	9,225
Fair value liability for shares to be issued		75		75		-		-
Total liabilities at fair value	$	9,300	$	75	$	-	$	9,225

7

			Level 1				Level 3
			Quoted prices in		Level 2		Significant
	Balance at		active markets for		Significant other		unobservable
(In thousands)	March 31, 2015		identical assets		observable inputs		inputs
Liabilities:
Fair value liability for price adjustable warrants	$	7,496	$	-	$	-	$	7,496
Total liabilities at fair value	$	7,496	$	-	$	-	$	7,496

The following presents activity of the fair value liability of price adjustable warrants determined by Level 3 inputs for the three-month period ended March 31, 2015:

				Weighted average as of each measurement date
	Fair value
	liability for price										Contractual
	adjustable warrants			Exercise		Stock					life		Risk free
	(in thousands)			Price		Price		Volatility			(in years)		rate
Balance at December 31, 2014	$	9,225		$	0.42	$	0.95		121	%		3.51		0.90	%
Change in fair value included in statement of operations		(1,729	)
Balance at March 31, 2015	$	7,496		$	0.42	$	0.64		110	%		2.42		0.66	%

Net Income (Loss) per Common Share — Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share includes the effect of common stock equivalents (stock options, unvested restricted stock, warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. The following number of shares have been excluded from diluted net income (loss) since such inclusion would be anti-dilutive:

	Three Months Ended March 31,
	2014		2015
Stock options outstanding		284,829		1,316,106
Warrants		21,235,695		1,285,693
Total		21,520,524		2,601,799

The following is a reconciliation of basic and diluted net income (loss) per share:

	Three Months Ended March 31,
	2014			2015
Net income (loss) – numerator basic	$	(15,078	)	$	414
Change in fair value liability for price adjustable warrants		-			(1,729	)
Net loss excluding change in fair value liability for price adjustable warrants	$	(15,078	)	$	(1,315	)
Weighted average common shares outstanding – denominator basic		21,447			25,632
Effect of price adjustable warrants		-			6,923
Weighted average dilutive common shares outstanding		21,447			32,555
Net income (loss) per common share – basic	$	(0.70	)	$	0.02
Net income (loss) per common share – diluted	$	(0.70	)	$	(0.04	)

Recently Issued Accounting Standards - In April 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2015-03, 'Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. ASU 2015-03 is intended to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. This new guidance is effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. We are currently in the process of evaluating the impact of the adoption of this ASU on the financial statements.

In January 2015, FASB issued ASU 2015-01 “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”. This ASU removes the concept of an extraordinary item.  Subtopic 225-20, Income Statement - Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item.  If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item.  The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.  Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption.

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Stockholders' Equity (Preferred Stock) (Detail Textuals) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2015	Dec. 31, 2014
Stockholders' Equity [Abstract]
Derivative Liability		$ 6.5
Amount of loss upon issuance		0.5
Class of Stock [Line Items]
Preferred stock, shares authorized		100,000	100,000
Number of warrants called by common stock aggregate purchase price	6,000,000
Proceeds from sales of Series C preferred shares and warrants, net	6.0
Exercise price of warrants		$ 1.19	$ 1.19
Series A Junior Participating Preferred Stock ("Series A Preferred")
Class of Stock [Line Items]
Shares issued during period		90,000
Series B Preferred Stock ("Series B Preferred")
Class of Stock [Line Items]
Shares issued during period		1,000
Series C Convertible Preferred Stock ("Series C Stock")
Class of Stock [Line Items]
Preferred stock, shares authorized		1,200
Shares issued during period	1,200
Number of warrants called by common stock aggregate purchase price	6,000,000
Conversion price per dollar of stated value	$ 0.75
Proceeds from sales of Series C preferred shares and warrants, net	6.0
Stated value per share of preferred stock	$ 5,000
Exercise price of warrants	$ 0.75
Shares issued upon conversion	8,000,000
Stock issuance costs		$ 0.07

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Stockholders' Equity (Warrants) (Detail Textuals 2) (USD $)	3 Months Ended		1 Months Ended	12 Months Ended	2 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jan. 31, 2015	Dec. 31, 2013	Feb. 28, 2015	Dec. 31, 2014
Stockholders Equity Note [Line Items]
Number of warrants called by common stock		6,000,000
Number of warrants exercised	2,500
Exercise price of warrants	$ 1.19					$ 1.19
Fair value of warrants issuance	$ (1,729,000)	$ 5,314,000
Stock-based expense related to warrants	171,000	20,000
Warrants
Stockholders Equity Note [Line Items]
Number of warrants exercised			2,500
Exercise price of warrants			$ 0.28
Stock-based expense related to warrants	10,000
Unrecognized compensation cost related to unvested warrants	30,000
Warrants | Consultant
Stockholders Equity Note [Line Items]
Number of warrants called by common stock				100,000
Exercise price of warrants				$ 0.48
Warrants vesting period				2 years
Warrants | Vendor
Stockholders Equity Note [Line Items]
Number of warrants called by common stock					64,000
Fair value of warrants issuance					$ 50,000

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Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 2 — Stockholders’ Deficit

Preferred Stock — Our board of directors has the authority, without action by the stockholders, to designate and issue up to 100,000 shares of preferred stock in one or more series and to designate the rights, preferences and privileges of each series, any or all of which may be greater than the rights of our common stock. We have designated 1,000 shares as Series B Preferred Stock (“Series B Preferred”) and 90,000 shares as Series A Junior Participating Preferred Stock (“Series A Preferred”). No shares of Series B Preferred or Series A Preferred are outstanding. In March 2014, we designated 1,200 shares of Series C Convertible Preferred Stock (“Series C Preferred”).

In March 2014, we entered into a Securities Purchase Agreement with certain investors pursuant to which we sold 1,200 shares of Series C Preferred, and price adjustable warrants to purchase up to 6.0 million shares of our common stock at an exercise price of $0.75 per share, for an aggregate purchase price of $6.0 million. Each share of Series C Preferred has a stated value of $5,000 per share and is convertible into shares of common stock at a conversion price of $0.75 per share. The Series C Preferred is initially convertible into an aggregate of 8,000,000 shares of our common stock, subject to certain limitations and adjustments, has no stated dividend rate, is not redeemable and has voting rights on an as-converted basis.

To account for the issuance of the Series C Preferred and warrants, we first assessed the terms of the warrants and determined that, due to certain anti-dilution provisions, they should be recorded as derivative liabilities. We determined the fair value of the warrants on the issuance date and recorded a liability of $6.5 million. Since the fair value of the warrants exceed the total proceeds received of $6.0 million, we recorded a loss of $0.5 million upon issuance, which is included in the change in fair value of price adjustable warrants in the consolidated statements of operations. The discount of $6.0 million on the Series C Preferred resulting from the allocation of the entire proceeds to the warrant was accreted as a dividend on the Series C Preferred through the earliest conversion date, which was immediately. The Series C Preferred dividend of $6.0 million was recorded to additional paid-in capital and as a deemed dividend on the Series C Preferred in determining net loss applicable to common stock holders in the consolidated statements of operations. We incurred $0.07 million of stock issuance costs in conjunction with the Series C Preferred, which were netted against the proceeds.

Common Stock — Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the holders of our common stock. Subject to the rights of the holders of any class of our capital stock having any preference or priority over our common stock, the holders of our common stock are entitled to receive dividends that are declared by our board of directors out of legally available funds. In the event of our liquidation, dissolution or winding-up, the holders of common stock are entitled to share ratably in our net assets remaining after payment of liabilities, subject to prior rights of preferred stock, if any, then outstanding. Our common stock has no preemptive rights, conversion rights, redemption rights or sinking fund provisions, and there are no dividends in arrears or default. All shares of our common stock have equal distribution, liquidation and voting rights, and have no preferences or exchange rights. Our common stock currently trades on the OTCQB tier of the OTC Markets.

In January 2015, we issued 0.12 million shares with a value of $0.075 million to Novosom as the equity component owed under our December 2014 license agreement with MiNA Therapeutics.

Warrants — In January 2015, an investor exercised 2,500 warrants at an exercise price of $0.28 prior to warrant expiry.

In December 2013, we issued warrants to purchase up to 0.10 million shares of our common stock to a consultant who is our interim chief financial officer. These warrants vest over two years, have a fixed strike price of $0.48, and expire in December 2023. The total stock-based expense related to the warrants that vested during the three months ended March 31, 2015 amounted to $0.01 million. At March 31, 2015, we had $0.03 million of total unrecognized compensation expense related to unvested warrants. We expect to recognize this cost by end of 2015.

In January and February 2015, we issued warrants to purchase up to an aggregate of 0.064 million shares to a vendor providing scientific and development consulting services to our company. The fair value of these warrants at issuance was $0.05 million and was accrued at December 31, 2014.

The following table summarizes warrant activity during the three months ended March 31, 2015:

	Warrant Shares			Weighted Average Exercise Price
Outstanding, December 31, 2014		21,212,813		$	1.19
Exercised warrants		(2,500	)		0.28
Warrants issued		66,717			0.75
Outstanding, March 31, 2015		21,277,030		$	1.19
Expiring in 2015		285,345
Expiring in 2016		6,000,000
Expiring in 2017		7,235,622
Expiring thereafter		7,756,063

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.006	$ 0.006
Common stock, shares authorized	180,000,000	180,000,000
Common stock, shares issued	25,642,904	25,523,216
Common stock, shares outstanding	25,642,904	25,523,216
Statement [Line Items]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000	100,000
Series C Convertible Preferred Stock ("Series C Stock")
Statement [Line Items]
Preferred stock, shares authorized	1,200
Preferred stock, shares issued	1,200	1,200
Preferred stock, shares outstanding	1,200	1,200
Preferred Stock, Liquidation Preference, Value	$ 6,000,000

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Business, Liquidity and Summary of Significant Accounting Policies (Details 1) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Fair value liability for price adjustable warrants
Balance at December 31, 2014	$ 9,225
Change in fair value included in statement of operations	(1,729)
Balance at March 31, 2015	7,496
Fair Value Liability For Price Adjustable Warrants | Level 3 Significant unobservable inputs
Fair value liability for price adjustable warrants
Balance at December 31, 2014	9,225
Change in fair value included in statement of operations	(1,729)
Balance at March 31, 2015	$ 7,496	$ 9,225
Exercise Price
Balance at December 31, 2014	$ 0.42
Balance at March 31, 2015	$ 0.42	$ 0.42
Stock Price
Balance at December 31, 2014	$ 0.95
Balance at March 31, 2015	$ 0.64	$ 0.95
Volatility
Balance at December 31, 2014	121.00%
Balance at March 31, 2015	110.00%	121.00%
Contractual life (in years)
Contractual life (in years)	2 years 5 months 1 day	3 years 6 months 4 days
Risk free rate
Balance at December 31, 2014	0.90%
Balance at March 31, 2015	0.66%	0.90%

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	Apr. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Marina Biotech, Inc.
Entity Central Index Key	0000737207
Trading Symbol	mrna
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		25,642,904
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Business, Liquidity and Summary of Significant Accounting Policies (Details 2)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	2,601,799	21,520,524
Stock options outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	1,316,106	284,829
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	1,285,693	21,235,695

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating expenses:
Research and development	$ 254	$ 46
General and administrative	1,061	517
Total operating expenses	1,315	563
Loss from operations	(1,315)	(563)
Other income (expense):
Interest and other expense		(1,007)
Change in fair value liability for price adjustable warrants	1,729	(5,314)
Change in fair value of stock reserved for issuance to settle liabilities		(2,455)
Gain on debt extinguishment		4
Gain on settled liabilities		257
Total other income (expense)	1,729	(8,515)
Net income (loss) applicable to common stockholders	414	(9,078)
Deemed dividend related to discount on beneficial conversion feature in Series C convertible preferred stock		(6,000)
Net income (loss) applicable to common stockholders	$ 414	$ (15,078)
Net income (loss) per common share
Basic (in dollars per share)	$ 0.02	$ (0.70)
Diluted (in dollars per share)	$ (0.04)	$ (0.70)
Shares used in computing net income (loss) per share
Basic (in shares)	25,632	21,447
Diluted (in shares)	32,555	21,447

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Business, Liquidity and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Basis of Preparation

Basis of Preparation — The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The accompanying unaudited financial information should be read in conjunction with the audited consolidated financial statements, including the notes thereto, as of and for the year ended December 31, 2014, included in our 2014 Annual Report on Form 10-K filed with the SEC. The information furnished in this report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results for the year ending December 31, 2015 or for any future period.

Use of Estimates

Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Estimates having relatively higher significance include revenue recognition, stock-based compensation, valuation of warrants, valuation and estimated lives of identifiable intangible assets, impairment of long-lived assets, valuation of features embedded within note agreements and amendments, and income taxes. Actual results could differ from those estimates.

Fair Value of Financial Instruments

Fair Value of Financial Instruments — We consider the fair value of cash, accounts receivable, accounts payable and accrued liabilities to not be materially different from their carrying value. These financial instruments have short-term maturities.

We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Our cash is subject to fair value measurement and value is determined by Level 1 inputs. We measure the liability for committed stock issuances with a fixed share number using Level 1 inputs. We measure the liability for price adjustable warrants and certain features embedded in notes using the Black-Scholes option pricing model (“Black-Scholes Model”) under various probability weighted scenarios, using Level 3 inputs. The following tables summarize our liabilities measured at fair value on a recurring basis as of December 31, 2014 and March 31, 2015:

			Level 1				Level 3
	Balance at		Quoted prices in		Level 2		Significant
	December 31,		active markets for		Significant other		unobservable
(In thousands)	2014		identical assets		observable inputs		inputs
Liabilities:
Fair value liability for price adjustable warrants	$	9,225	$	-	$	-	$	9,225
Fair value liability for shares to be issued		75		75		-		-
Total liabilities at fair value	$	9,300	$	75	$	-	$	9,225

			Level 1				Level 3
			Quoted prices in		Level 2		Significant
	Balance at		active markets for		Significant other		unobservable
(In thousands)	March 31, 2015		identical assets		observable inputs		inputs
Liabilities:
Fair value liability for price adjustable warrants	$	7,496	$	-	$	-	$	7,496
Total liabilities at fair value	$	7,496	$	-	$	-	$	7,496

The following presents activity of the fair value liability of price adjustable warrants determined by Level 3 inputs for the three-month period ended March 31, 2015:

				Weighted average as of each measurement date
	Fair value
	liability for price										Contractual
	adjustable warrants			Exercise		Stock					life		Risk free
	(in thousands)			Price		Price		Volatility			(in years)		rate
Balance at December 31, 2014	$	9,225		$	0.42	$	0.95		121	%		3.51		0.90	%
Change in fair value included in statement of operations		(1,729	)
Balance at March 31, 2015	$	7,496		$	0.42	$	0.64		110	%		2.42		0.66	%

Net Income (Loss) per Common Share

Net Income (Loss) per Common Share — Basic net income (loss) per common share is computed by dividing the netincome (loss) by the weighted average number of common shares outstanding during the period. Dilutednet income (loss) per shareincludesthe effect of common stock equivalents (stock options, unvested restricted stock, warrants)when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. The following number of shares have been excluded from diluted netincome (loss) since such inclusion would be anti-dilutive:

	Three Months Ended March 31,
	2014		2015
Stock options outstanding		284,829		1,316,106
Warrants		21,235,695		1,285,693
Total		21,520,524		2,601,799

The following is a reconciliation ofbasic and diluted net income (loss) per share:

	Three Months Ended March 31,
	2014			2015
Net income (loss) – numerator basic	$	(15,078	)	$	414
Change in fair value liability for price adjustable warrants		-			(1,729	)
Net loss excluding change in fair value liability for price adjustable warrants	$	(15,078	)	$	(1,315	)
Weighted average common shares outstanding – denominator basic		21,447			25,632
Effect of price adjustable warrants		-			6,923
Weighted average dilutive common shares outstanding		21,447			32,555
Net income (loss) per common share – basic	$	(0.70	)	$	0.02
Net income (loss) per common share – diluted	$	(0.70	)	$	(0.04	)

Recently Issued Accounting Standards

Recently Issued Accounting Standards - In April 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2015-03, 'Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. ASU 2015-03 is intended to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. This new guidance is effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. We are currently in the process of evaluating the impact of the adoption of this ASU on the financial statements.

In January 2015, FASB issued ASU 2015-01 “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”. This ASU removes the concept of an extraordinary item. Subtopic 225-20, Income Statement - Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption.

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Subsequent Events

3 Months Ended

Mar. 31, 2015

Subsequent Events [Abstract]

Subsequent Events

Note 6 — Subsequent Events

On May 11, 2015, we amended the SMARTICLES licensing agreement that we entered into in December 2011 with Mirna Therapeutics, Inc. to allow for prepayment by Mirna to us of a future milestone. On May 12, 2015, Mirna paid $400,000 to satisfy that future milestone obligation.

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Stockholders' Equity (Common Stock) (Detail Textuals 1) (USD $) In Thousands, except Share data in Millions, unless otherwise specified	3 Months Ended	1 Months Ended
	Mar. 31, 2015	Jan. 31, 2015
Stockholders' Equity [Abstract]
Number of voting right	one vote
Novosom | December 2014 license agreement with MiNA Therapeutics
Stockholders Equity Note [Line Items]
Number of common stock issued for settlement		0.12
Amount pledged to issue common stock		$ 75

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Business, Liquidity and Summary of Significant Accounting Policies (Details 3) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net income (loss) - numerator basic	$ 414	$ (15,078)
Change in fair value liability for price adjustable warrants	(1,729)
Net loss excluding change in fair value liability for price adjustable warrants	$ (1,315)	$ (15,078)
Weighted average common shares outstanding - denominator basic	25,632	21,447
Effect of price adjustable warrants	6,923
Weighted average dilutive common shares outstanding	32,555	21,447
Net income (loss) per common share - basic (in dollars per share)	$ 0.02	$ (0.70)
Net income (loss) per common share - diluted (in dollars per share)	$ (0.04)	$ (0.70)

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Stock Incentive Plans (Tables)

3 Months Ended

Mar. 31, 2015

Stock Incentive Plans [Abstract]

Schedule of stock-based compensation expense

	Three months ended March 31,
(In thousands)	2014		2015
Research and development	$	10	$	26
General and administrative		10		145
Total	$	20	$	171

Schedule of stock option activity

	Options Outstanding
	2015
	Shares		Weighted Average Exercise Price
Outstanding, January 1		1,084,106	$	5.52
Options Issued		232,000	$	0.63
Outstanding, March 31		1,316,106	$	4.66
Exercisable, March 31		293,856	$	17.34

Schedule of summary of additional information on stock options outstanding

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted-average Remaining Contractual Life (Years)		Weighted-average Exercise Price		Number Exercisable		Weighted- average Exercise Price
$0.63 - $0.82		252,000		4.75	$	0.65		126,000	$	0.65
$0.83 - $1.07		1,019,000		8.25		1.07		124,000		1.07
$1.08 - $2.20		2,500		6.44		2.20		1,250		2.20
$2.21 - $50.00		10,500		3.20		47.60		10,500		47.60
$50.01 - $100.00		10,500		3.20		87.60		10,500		87.60
$100.01 - $200.00		16,000		3.20		141.35		16,000		141.35
$200.01 - $526.40		5,606		3.17		213.63		5,606		213.63
Totals		1,316,106		7.41	$	4.66		293,856	$	17.34
Weighted-Average Exercisable Remaining Contractual Life										4.41

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Business, Liquidity and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of liabilities measured at fair value on a recurring basis

			Level 1				Level 3
	Balance at		Quoted prices in		Level 2		Significant
	December 31,		active markets for		Significant other		unobservable
(In thousands)	2014		identical assets		observable inputs		inputs
Liabilities:
Fair value liability for price adjustable warrants	$	9,225	$	-	$	-	$	9,225
Fair value liability for shares to be issued		75		75		-		-
Total liabilities at fair value	$	9,300	$	75	$	-	$	9,225

			Level 1				Level 3
			Quoted prices in		Level 2		Significant
	Balance at		active markets for		Significant other		unobservable
(In thousands)	March 31, 2015		identical assets		observable inputs		inputs
Liabilities:
Fair value liability for price adjustable warrants	$	7,496	$	-	$	-	$	7,496
Total liabilities at fair value	$	7,496	$	-	$	-	$	7,496

Schedule of fair value liability of price adjustable warrants determined by Level 3

				Weighted average as of each measurement date
	Fair value
	liability for price										Contractual
	adjustable warrants			Exercise		Stock					life		Risk free
	(in thousands)			Price		Price		Volatility			(in years)		rate
Balance at December 31, 2014	$	9,225		$	0.42	$	0.95		121	%		3.51		0.90	%
Change in fair value included in statement of operations		(1,729	)
Balance at March 31, 2015	$	7,496		$	0.42	$	0.64		110	%		2.42		0.66	%

Schedule of anti-dilutive securities

	Three Months Ended March 31,
	2014		2015
Stock options outstanding		284,829		1,316,106
Warrants		21,235,695		1,285,693
Total		21,520,524		2,601,799

Schedule of reconciliation of diluted weighted average shares outstanding

	Three Months Ended March 31,
	2014			2015
Net income (loss) – numerator basic	$	(15,078	)	$	414
Change in fair value liability for price adjustable warrants		-			(1,729	)
Net loss excluding change in fair value liability for price adjustable warrants	$	(15,078	)	$	(1,315	)
Weighted average common shares outstanding – denominator basic		21,447			25,632
Effect of price adjustable warrants		-			6,923
Weighted average dilutive common shares outstanding		21,447			32,555
Net income (loss) per common share – basic	$	(0.70	)	$	0.02
Net income (loss) per common share – diluted	$	(0.70	)	$	(0.04	)

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2015

Stockholders' Equity [Abstract]

Schedule of warrant activity

	Warrant Shares			Weighted Average Exercise Price
Outstanding, December 31, 2014		21,212,813		$	1.19
Exercised warrants		(2,500	)		0.28
Warrants issued		66,717			0.75
Outstanding, March 31, 2015		21,277,030		$	1.19
Expiring in 2015		285,345
Expiring in 2016		6,000,000
Expiring in 2017		7,235,622
Expiring thereafter		7,756,063

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Business, Liquidity and Summary of Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Liabilities:
Fair value liability for price adjustable warrants	$ 7,496	$ 9,225
Fair value liability for shares to be issued		75
Fair value on recurring basis
Liabilities:
Fair value liability for price adjustable warrants	7,496	9,225
Fair value liability for shares to be issued		75
Total liabilities at fair value	7,496	9,300
Fair value on recurring basis | Level 1 Quoted prices in active markets for identical assets
Liabilities:
Fair value liability for price adjustable warrants
Fair value liability for shares to be issued		75
Total liabilities at fair value		75
Fair value on recurring basis | Level 2 Significant other observable inputs
Liabilities:
Fair value liability for price adjustable warrants
Fair value liability for shares to be issued
Total liabilities at fair value
Fair value on recurring basis | Level 3 Significant unobservable inputs
Liabilities:
Fair value liability for price adjustable warrants	7,496	9,225
Fair value liability for shares to be issued
Total liabilities at fair value	$ 7,496	$ 9,225

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Stockholders' Equity (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Warrant Shares
Outstanding, December 31, 2014	21,212,813
Warrants issued	66,717
Outstanding, March 31, 2015	21,277,030
Expiring in 2015	285,345
Expiring in 2016	6,000,000
Expiring in 2017	7,235,622
Expiring thereafter	7,756,063
Weighted average exercise price
Number of warrants exercised	2,500
Exercised warrants	$ 0.28
Outstanding, March 31, 2015	$ 1.19
Warrants issued	$ 0.75
Outstanding, December 31, 2014	$ 1.19

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Stock Incentive Plans (Stock Option Activity) (Detail 1) (USD $)	3 Months Ended
	Mar. 31, 2015
Shares
Outstanding on January 1	1,084,106
Options Issued	232,000
Outstanding, March 31	1,316,106
Exercisable, March 31	293,856
Weighted Average Exercise Price
Outstanding on January 1	$ 5.52
Options Issued	$ 0.63
Outstanding, March 31	$ 4.66
Exercisable, March 31	$ 17.34

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating activities:
Net income (loss)	$ 414	$ (9,078)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Non-cash gain on debt extinguishment		(4)
Non-cash interest expense		1,007
Non-cash gain on settlement of liabilities		(257)
Compensation related to stock options and warrants	180	59
Changes in fair market value of liabilities
Stock reserved for issuance to settle liabilities		2,455
Price adjustable warrants	(1,729)	5,314
Cash changes in assets and liabilities
Accounts receivable	500	5
Prepaid expenses and other assets	8	(9)
Accounts payable	(106)	(24)
Accrued and other liabilities	71	(533)
Net cash used in operating activities	(662)	(1,065)
Financing activities:
Proceeds from sales of Series C preferred shares and warrants, net		5,929
Cash payments on notes payable		(250)
Insurance financing		(3)
Proceeds from exercise of warrants for common stock	1
Net cash provided by financing activities	1	5,676
Net increase (decrease) in cash	(661)	4,611
Cash and cash equivalents - January 1	1,824	909
Cash and cash equivalents - March 31	1,163	5,520
Supplemental disclosure of cash flow information and non-cash financing activities:
Cash paid for interest		83
Reclassification of fair value liability for price adjustable warrants exercised		1,862
Fair value of warrants issued to purchase common stock to settle liabilities	50
Issuance of common stock to settle liabilities	75	3,474
Debt conversion to common shares		1,479
Deemed dividend to Series C convertible preferred stockholders		$ 6,000

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 5 — Commitments and Contingencies

Contingencies — We are subject to various legal proceedings and claims that arise in the ordinary course of business. Our management currently believes that resolution of such legal matters will not have a material adverse impact on our consolidated financial position, results of operations or cash flows.

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Stock Incentive Plans (Stock options outstanding) (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Number Outstanding	1,316,106	1,084,106
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	7 years 4 months 28 days
Options Outstanding, Weighted Average Exercise Price	$ 4.66	$ 5.52
Options Exercisable, Number Exercisable	293,856
Options Exercisable, Weighted Average Exercise Price	$ 17.34
Options Outstanding, Weighted-Average Remaining Contractual Life, Exercisable (Years)	4 years 4 months 28 days
Stock options | $0.63 - $0.82
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower range of price	$ 0.63
Upper range of price	$ 0.82
Options Outstanding, Number Outstanding	252,000
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	4 years 9 months
Options Outstanding, Weighted Average Exercise Price	$ 0.65
Options Exercisable, Number Exercisable	126,000
Options Exercisable, Weighted Average Exercise Price	$ 0.65
Stock options | $0.83 - $1.07
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower range of price	$ 0.83
Upper range of price	$ 1.07
Options Outstanding, Number Outstanding	1,019,000
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	8 years 3 months
Options Outstanding, Weighted Average Exercise Price	$ 1.07
Options Exercisable, Number Exercisable	124,000
Options Exercisable, Weighted Average Exercise Price	$ 1.07
Stock options | $1.08 - $2.20
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower range of price	$ 1.08
Upper range of price	$ 2.20
Options Outstanding, Number Outstanding	2,500
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	6 years 5 months 9 days
Options Outstanding, Weighted Average Exercise Price	$ 2.20
Options Exercisable, Number Exercisable	1,250
Options Exercisable, Weighted Average Exercise Price	$ 2.20
Stock options | $2.21 - $50.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower range of price	$ 2.21
Upper range of price	$ 50.00
Options Outstanding, Number Outstanding	10,500
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	3 years 2 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 47.60
Options Exercisable, Number Exercisable	10,500
Options Exercisable, Weighted Average Exercise Price	$ 47.60
Stock options | $50.01 - $100.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower range of price	$ 50.01
Upper range of price	$ 100.00
Options Outstanding, Number Outstanding	10,500
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	3 years 2 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 87.60
Options Exercisable, Number Exercisable	10,500
Options Exercisable, Weighted Average Exercise Price	$ 87.60
Stock options | $100.01 - $200.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower range of price	$ 100.01
Upper range of price	$ 200.00
Options Outstanding, Number Outstanding	16,000
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	3 years 2 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 141.35
Options Exercisable, Number Exercisable	16,000
Options Exercisable, Weighted Average Exercise Price	$ 141.35
Stock options | $200.01 - $526.40
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower range of price	$ 200.01
Upper range of price	$ 526.40
Options Outstanding, Number Outstanding	5,606
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	3 years 2 months 1 day
Options Outstanding, Weighted Average Exercise Price	$ 213.63
Options Exercisable, Number Exercisable	5,606
Options Exercisable, Weighted Average Exercise Price	$ 213.63

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Business, Liquidity and Summary of Significant Accounting Policies (Detail Textuals) (USD $)	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013	Jun. 30, 2008
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ (337,374,000)	$ (337,788,000)			$ (111,700,000)
Working capital	(600,000)
Cash	$ 1,163,000	$ 1,824,000	$ 5,520,000	$ 909,000