false
--12-31
Q1
2019
2019-03-31
10-Q
0001626878
36113175
Yes
true
false
Accelerated Filer
XBiotech Inc.
false
xbit
1861000
1653000
980000
1291000
-117000
-255000
570000
570000
110000
110000
295000
88000
275000
22000
570000
110000
39824000
44345000
12982000
17016000
0
0
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Basis of Presentation </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“US GAAP”). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring items) considered necessary to present fairly the Company’s financial position at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2018, </div>the results of its operations and comprehensive loss for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> and the cash flows for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018.</div></div></div></div></div></div></div>
109000
25000
15823000
31768000
12019000
28416000
-3804000
-3352000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Cash and Cash Equivalents </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company considers highly liquid investments with a maturity of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months or less when purchased to be cash equivalents. Cash and cash equivalents consisted primarily of cash on deposit in U.S., German, Swiss, Japanese and Canadian banks. Cash and cash equivalents are stated at cost which approximates fair value.</div></div></div></div></div></div>
0
0
Unlimited
Unlimited
36090125
38899772
280664000
279353000
-5726000
-4062000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Comprehensive Income (Loss)</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">ASC Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">220,</div> <div style="display: inline; font-style: italic;">Comprehensive Income</div>, requires that all components of comprehensive income (loss), including net income (loss), be reported in the financial statements in the period in which they are recognized. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on investments and foreign currency translation adjustments.</div></div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Concentrations of Credit Risk </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents. The Company holds these investments in highly-rated financial institutions, and limits the amounts of credit exposure to any <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> financial institution. These amounts at times <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>exceed federally insured limits. The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> experienced any credit losses in such accounts and does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> believe it is exposed to any significant credit risk on these funds. The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.</div></div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Basis of Consolidation </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated upon consolidation.</div></div></div></div></div></div>
0
3000
602000
588000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.</div></div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Common Stock Options</div></td> </tr> </table> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2005</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April 1, 2015, </div>the board of directors of the Company adopted stock option plans (“the Plans”) pursuant to which the Company <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>grant incentive stock options to directors, officers, employees or consultants of the Company or an affiliate or other persons as the Compensation Committee <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>approve.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 15; Value: 1 --> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">All options will be non-transferable and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be exercised only by the participant, or in the event of the death of the participant, a legal representative until the earlier of the options’ expiry date or the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> anniversary of the participant’s death, or such other date as <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be specified by the Compensation Committee.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The term of the options is at the discretion of the Compensation Committee, but <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> exceed <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div> years from the grant date. The options expire on the earlier of the expiration date or the date <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months following the day on which the participant ceases to be an officer or employee of or consultant to the Company, or in the event of the termination of the participant with cause, the date of such termination. Options held by non-employee Directors have an exercise period coterminous with the term of the options.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The number of common shares reserved for issuance to any <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> person pursuant to the Plans shall <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not,</div> in aggregate, exceed <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5%</div> of the total number of outstanding common shares. The exercise price per common share under each option will be the fair market value of such shares at the time of the grant. Upon stock option exercise, the Company issues new shares of common stock.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">A summary of changes in common stock options issued under the Plans is as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; margin-left: 0.5in; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center; white-space: nowrap">Options</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; white-space: nowrap"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center; white-space: nowrap">Exercise Price</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center; white-space: nowrap">Weighted-Average<br /> Exercise Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; font-size: 10pt">Options outstanding at December 31, 2018</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,535,439</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 5%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.5</div></td> <td style="width: 5%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="width: 5%; font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> $21.99</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.30</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 10pt">Granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">215,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.15</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9.84</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.60</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 10pt">Exercised</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(190,903</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.5</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.38</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 10pt">Forfeitures</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(126,875</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.5</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14.18</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.06</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 2.5pt">Options outstanding at March 31, 2019</td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,432,661</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.5</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> $21.99</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.36</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019, </div>there was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.2</div> million of unrecognized compensation cost, related to stock options granted under the Plans which will be amortized to stock compensation expense over the next <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.02</div> years.</div></div>
-0.16
-0.11
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Net Loss Per Share </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Net loss per share (“EPS”) is computed by dividing net loss by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net loss by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which include stock options, is computed using the treasury stock method.</div></div></div></div></div></div>
138000
7000
P2Y7D
3200000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Fair Value Measurements </div></div> <div style=" font-size: 10pt; text-indent: 30.6pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company follows ASC Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">820,</div> <div style="display: inline; font-style: italic;">Fair Value Measurements and Disclosures</div>, which establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market date (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> levels:</div> <div style=" font-size: 10pt; text-indent: 30.6pt; margin: 0pt 0"> </div> <table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1—Unadjusted</div> quoted prices in active markets for identical assets or liabilities.</td> </tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2—Quoted</div> prices for similar assets and liabilities in active markets, quoted prices in markets that are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.</td> </tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3—Unobservable</div> inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.</td> </tr> </table> <div style=" font-size: 10pt; text-indent: 30.6pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">At <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2018, </div>the Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div></div></div></div> have any assets or liabilities that are measured at fair value on a recurring basis. The carrying amounts reflected in the balance sheets for cash and cash equivalents, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2018, </div>due to their short-term nature.</div></div></div></div></div></div>
-146000
17000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Foreign Currency Transactions </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Certain transactions are denominated in a currency other than the Company’s functional currency of the U.S. dollar, and the Company generates assets and liabilities that are fixed in terms of the amount of foreign currency that will be received or paid. At each balance sheet date, the Company adjusts the assets and liabilities to reflect the current exchange rate, resulting in a translation gain or loss. Transaction gains and losses are also realized upon a settlement of a foreign currency transaction in determining net loss for the period in which the transaction is settled.</div></div></div></div></div></div>
1278000
1157000
0
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Impairment of Long-Lived Assets </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">360,</div> <div style="display: inline; font-style: italic;">Property, Plant and Equipment</div>. Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> recognized any impairment through <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019.</div></div></div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Income Taxes</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Income taxes are recorded in accordance with ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">740,</div> Accounting for Income Taxes (“ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">740”</div>), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> that some or all of the deferred tax assets will <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be realized.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0; text-indent: 0.5in">ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">740</div> clarifies the accounting for uncertainty in income taxes recognized in the financial statements and provides that a tax benefit from an uncertain tax position <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be recognized when it is more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of tax expense.</div></div></div></div></div></div>
99000
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212000
-3000
-3000
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78000
64000
2841000
2947000
39824000
44345000
2841000
2944000
0
0
741000
201000
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-34000
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-4069000
-4069000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Recent Accounting Pronouncements</div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"></div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;"><div style="display: inline; text-decoration: underline;">Recently Issued Accounting Pronouncements</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2016, </div>the FASB established Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842,</div> Leases, by issuing Accounting Standards Update (ASU) <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02,</div> which supersedes ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">840,</div> Leases, and requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842</div> was subsequently amended by ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">01,</div> Land Easement Practical Expedient for Transition to Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842;</div> ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,</div> Codification Improvements to Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842,</div> Leases; and ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,</div> Targeted Improvements. Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842,</div> as amended (the "new lease standard") establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12</div> months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The effective date of the new guidance is for the Company’s <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> quarter of fiscal year <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019.</div> The FASB has approved an optional, alternative method to adopt the lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard effective <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 1, 2019, </div>using the alternative method. The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have a cumulative adjustment impacting retained earnings. Adoption of the lease standard does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have a material impact on the Company’s consolidated financial statements.</div></div></div>
-59000
81000
1
5805000
4150000
-5805000
-4150000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.</div></div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Organization</div></td> </tr> </table> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">XBiotech Inc. (“XBiotech” or “the Company”) was incorporated in Canada on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2005.</div> XBiotech USA, Inc., a wholly-owned subsidiary of the Company, was incorporated in Delaware, United States (“U.S.”) in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007.</div> XBiotech Switzerland AG, a wholly-owned subsidiary of the Company, was incorporated in Zug, Switzerland in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2010.</div> XBiotech Japan K.K., a wholly-owned subsidiary of the Company, was incorporated in Tokyo, Japan in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 2013. </div>XBiotech Germany GmbH, a wholly-owned subsidiary of the Company, was incorporated in Germany in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 2014. </div>The Company’s headquarters are located in Austin, Texas.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">XBiotech Inc. is a pre-market biopharmaceutical company engaged in discovering and developing True Human™ monoclonal antibodies for treating a variety of diseases. True Human™ monoclonal antibodies are those which occur naturally in human beings—as opposed to being derived from animal immunization or otherwise engineered. The Company believes that naturally occurring monoclonal antibodies have the potential to be safer and more effective than their non-naturally occurring counterparts. XBiotech is focused on developing its True Human™ pipeline and manufacturing system. The Company’s pipeline consists of product candidates at various stages of development across an array of indications including oncology, dermatology, other inflammatory conditions, such as peripheral vascular disease, type <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div> diabetes, and infectious diseases.</div></div>
138000
138000
6000
6000
9000
6000
34000
0
0
Unlimited
Unlimited
0
0
0
0
963000
1193000
541000
201000
401000
643000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.</div></div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Property and Equipment</div></td> </tr> </table> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Property and equipment consisted of the following as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> (in thousands):</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="margin-left: 0.5in; border-collapse: collapse; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: center; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap">March 31, 2019</td> <td style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap">December 31, 2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 68%; font-size: 10pt; text-align: left">Manufacturing equipment</td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,567</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,937</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Winnebago building</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,810</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,945</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Other fixed assets</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,465</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,447</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total property and equipment</td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26,842</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27,329</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div></div>
4567000
4937000
19810000
19945000
2465000
2447000
26842000
27329000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Property and Equipment </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Property and equipment, which consists of land, construction in process, furniture and fixtures, computers and office equipment, scientific equipment, leasehold improvements, vehicles and building are stated at cost and depreciated over the estimated useful lives of the assets, with the exception of land and construction in process which are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> depreciated, using the straight line method. The useful lives are as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; font-size: 10pt; min-width: 700px;"> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0; width: 43%"><div style="display: inline; font-size: 10pt">• Furniture and fixtures</div></td> <td style="vertical-align: bottom; width: 57%; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7</div> years</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Office equipment</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div> years</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Leasehold improvements</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt">Shorter of asset’s useful life or remaining lease term</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Scientific equipment</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div> years</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Vehicles</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div> years</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Building</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39</div> years</div></td> </tr> </table> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Costs of major additions and betterments are capitalized; maintenance and repairs, which do <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> improve or extend the life of the respective assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized.</div></div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="margin-left: 0.5in; border-collapse: collapse; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: center; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap">March 31, 2019</td> <td style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap">December 31, 2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 68%; font-size: 10pt; text-align: left">Manufacturing equipment</td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,567</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,937</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Winnebago building</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,810</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,945</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Other fixed assets</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,465</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,447</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total property and equipment</td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26,842</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27,329</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
P7Y
P5Y
P5Y
P5Y
P39Y
4527000
2993000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Research and Development Costs </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">All research and development costs are charged to expense as incurred. Research and development costs include salaries and personnel-related costs, consulting fees, fees paid for contract clinical trial research services, the costs of laboratory consumables, equipment and facilities, license fees and other external costs. Costs incurred to acquire licenses for intellectual property to be used in research and development activities with <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> alternative future use are expensed as incurred as research and development costs.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. These nonrefundable advance payments are recorded within other prepaid expenses and other current assets in the consolidated balance sheets. The capitalized amounts are expensed as the related goods are delivered or the services are performed.</div></div></div></div></div></div>
-243564000
-237700000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="margin-left: 0.5in; border-collapse: collapse; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> March 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2019</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 68%; font-size: 10pt; text-align: left">Research and development</td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">295</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">88</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">General and administrative</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">275</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total share-based compensation expense</td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">570</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">110</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; margin-left: 0.5in; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center; white-space: nowrap">Options</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; white-space: nowrap"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center; white-space: nowrap">Exercise Price</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center; white-space: nowrap">Weighted-Average<br /> Exercise Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; font-size: 10pt">Options outstanding at December 31, 2018</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,535,439</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 5%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.5</div></td> <td style="width: 5%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="width: 5%; font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> $21.99</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.30</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 10pt">Granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">215,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.15</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9.84</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.60</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 10pt">Exercised</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(190,903</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.5</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.38</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 10pt">Forfeitures</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(126,875</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.5</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14.18</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.06</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 2.5pt">Options outstanding at March 31, 2019</td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,432,661</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.5</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> $21.99</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.36</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; margin-left: 0.5in; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; white-space: nowrap"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap">Three Months Ended<br /> March 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">2019</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Dividend yield</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Expected volatility</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">82%</div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">67%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80%</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Risk-free interest rate</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.46%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.64% </div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.38%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.71%</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Expected life (in years)</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.75</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.0</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 68%; font-size: 10pt; white-space: nowrap">Weighted-average grant date fair value per share</td> <td style="width: 1%; font-size: 10pt; white-space: nowrap"> </td> <td style="width: 5%; font-size: 10pt; text-align: right; white-space: nowrap"></td> <td style="width: 5%; font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.92</div></td> <td style="width: 5%; font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="width: 1%; font-size: 10pt; white-space: nowrap"> </td> <td style="width: 5%; font-size: 10pt; text-align: right; white-space: nowrap"></td> <td style="width: 5%; font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.02</div></td> <td style="width: 5%; font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Segment and Geographic Information </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company and the chief operating decision maker view the Company’s operations and manage its business as <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> operating segment. Substantially all of the Company’s operations are in the U.S. geographic segment.</div></div></div></div></div></div>
570000
110000
0.8
0.82
0.67
0.8
0.0246
0.0264
0.0238
0.0271
126875
215000
3.92
3.02
5535439
5432661
2.50
21.99
7.30
2.50
21.99
7.36
0.05
2.50
2.50
10
3.38
2.50
14.18
8.06
5.15
9.84
5.60
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Share-Based Compensation </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company accounts for its share-based compensation awards in accordance with ASC Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">718,</div> <div style="display: inline; font-style: italic;">Compensation-Stock Compensation</div> (“ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">718”</div>). ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">718</div> requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statements of operations based on their grant date fair values. For stock options granted to employees and to members of the board of directors for their services on the board of directors, the Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. To determine the fair value of its common stock, the Company uses the closing price of the Company’s common stock as reported by NASDAQ. For awards subject to service-based vesting conditions, the Company recognizes share-based compensation expense, equal to the grant date fair value of stock options on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur rather than on an estimated basis.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Share-based compensation expense recognized for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> was included in the following line items on the Consolidated Statements of Operations (in thousands).</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="margin-left: 0.5in; border-collapse: collapse; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> March 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2019</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 68%; font-size: 10pt; text-align: left">Research and development</td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">295</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">88</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">General and administrative</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">275</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total share-based compensation expense</td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">570</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">110</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The fair value of each option is estimated on the date of grant using the Black-Scholes method with the following assumptions:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; margin-left: 0.5in; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; white-space: nowrap"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap">Three Months Ended<br /> March 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">2019</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Dividend yield</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Expected volatility</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">82%</div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">67%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80%</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Risk-free interest rate</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.46%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.64% </div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.38%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.71%</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Expected life (in years)</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.75</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.0</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 68%; font-size: 10pt; white-space: nowrap">Weighted-average grant date fair value per share</td> <td style="width: 1%; font-size: 10pt; white-space: nowrap"> </td> <td style="width: 5%; font-size: 10pt; text-align: right; white-space: nowrap"></td> <td style="width: 5%; font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.92</div></td> <td style="width: 5%; font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="width: 1%; font-size: 10pt; white-space: nowrap"> </td> <td style="width: 5%; font-size: 10pt; text-align: right; white-space: nowrap"></td> <td style="width: 5%; font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.02</div></td> <td style="width: 5%; font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> </tr> </table> </div></div></div></div></div></div>
P10Y
P5Y273D
P10Y
P6Y
P10Y
35900000
36090000
35439000
35520000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.</div></div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Significant Accounting Policies</div></td> </tr> </table> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Basis of Presentation </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“US GAAP”). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring items) considered necessary to present fairly the Company’s financial position at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2018, </div>the results of its operations and comprehensive loss for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> and the cash flows for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018.</div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Basis of Consolidation </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated upon consolidation.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Use of Estimates </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The preparation of financial statements in accordance with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported values of amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Research and Development Costs </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">All research and development costs are charged to expense as incurred. Research and development costs include salaries and personnel-related costs, consulting fees, fees paid for contract clinical trial research services, the costs of laboratory consumables, equipment and facilities, license fees and other external costs. Costs incurred to acquire licenses for intellectual property to be used in research and development activities with <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> alternative future use are expensed as incurred as research and development costs.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. These nonrefundable advance payments are recorded within other prepaid expenses and other current assets in the consolidated balance sheets. The capitalized amounts are expensed as the related goods are delivered or the services are performed.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 11; Value: 1 --> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Share-Based Compensation </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company accounts for its share-based compensation awards in accordance with ASC Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">718,</div> <div style="display: inline; font-style: italic;">Compensation-Stock Compensation</div> (“ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">718”</div>). ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">718</div> requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statements of operations based on their grant date fair values. For stock options granted to employees and to members of the board of directors for their services on the board of directors, the Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. To determine the fair value of its common stock, the Company uses the closing price of the Company’s common stock as reported by NASDAQ. For awards subject to service-based vesting conditions, the Company recognizes share-based compensation expense, equal to the grant date fair value of stock options on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur rather than on an estimated basis.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Share-based compensation expense recognized for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> was included in the following line items on the Consolidated Statements of Operations (in thousands).</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="margin-left: 0.5in; border-collapse: collapse; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> March 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2019</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 68%; font-size: 10pt; text-align: left">Research and development</td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">295</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">88</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">General and administrative</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">275</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total share-based compensation expense</td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">570</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">110</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The fair value of each option is estimated on the date of grant using the Black-Scholes method with the following assumptions:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; margin-left: 0.5in; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; white-space: nowrap"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; white-space: nowrap">Three Months Ended<br /> March 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">2019</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; white-space: nowrap"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Dividend yield</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Expected volatility</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">82%</div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">67%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80%</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Risk-free interest rate</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.46%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">-</div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.64% </div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.38%</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.71%</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; white-space: nowrap">Expected life (in years)</td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.75</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt; white-space: nowrap"> </td> <td style="font-size: 10pt; text-align: right; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.0</div></td> <td style="font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">- </div></div></td> <td style="font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 68%; font-size: 10pt; white-space: nowrap">Weighted-average grant date fair value per share</td> <td style="width: 1%; font-size: 10pt; white-space: nowrap"> </td> <td style="width: 5%; font-size: 10pt; text-align: right; white-space: nowrap"></td> <td style="width: 5%; font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.92</div></td> <td style="width: 5%; font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="width: 1%; font-size: 10pt; white-space: nowrap"> </td> <td style="width: 5%; font-size: 10pt; text-align: right; white-space: nowrap"></td> <td style="width: 5%; font-size: 10pt; text-align: center; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.02</div></td> <td style="width: 5%; font-size: 10pt; text-align: left; white-space: nowrap"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Cash and Cash Equivalents </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company considers highly liquid investments with a maturity of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months or less when purchased to be cash equivalents. Cash and cash equivalents consisted primarily of cash on deposit in U.S., German, Swiss, Japanese and Canadian banks. Cash and cash equivalents are stated at cost which approximates fair value.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Concentrations of Credit Risk </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents. The Company holds these investments in highly-rated financial institutions, and limits the amounts of credit exposure to any <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> financial institution. These amounts at times <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>exceed federally insured limits. The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> experienced any credit losses in such accounts and does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> believe it is exposed to any significant credit risk on these funds. The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 12; Value: 1 --> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Fair Value Measurements </div></div> <div style=" font-size: 10pt; text-indent: 30.6pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company follows ASC Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">820,</div> <div style="display: inline; font-style: italic;">Fair Value Measurements and Disclosures</div>, which establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market date (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> levels:</div> <div style=" font-size: 10pt; text-indent: 30.6pt; margin: 0pt 0"> </div> <table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1—Unadjusted</div> quoted prices in active markets for identical assets or liabilities.</td> </tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2—Quoted</div> prices for similar assets and liabilities in active markets, quoted prices in markets that are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.</td> </tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td> </tr> </table> <table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3—Unobservable</div> inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.</td> </tr> </table> <div style=" font-size: 10pt; text-indent: 30.6pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">At <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2018, </div>the Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"></div></div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div></div></div> </div>have any assets or liabilities that are measured at fair value on a recurring basis. The carrying amounts reflected in the balance sheets for cash and cash equivalents, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2018, </div>due to their short-term nature.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Property and Equipment </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Property and equipment, which consists of land, construction in process, furniture and fixtures, computers and office equipment, scientific equipment, leasehold improvements, vehicles and building are stated at cost and depreciated over the estimated useful lives of the assets, with the exception of land and construction in process which are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> depreciated, using the straight line method. The useful lives are as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; font-size: 10pt; min-width: 700px;"> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0; width: 43%"><div style="display: inline; font-size: 10pt">• Furniture and fixtures</div></td> <td style="vertical-align: bottom; width: 57%; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7</div> years</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Office equipment</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div> years</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Leasehold improvements</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt">Shorter of asset’s useful life or remaining lease term</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Scientific equipment</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div> years</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Vehicles</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div> years</div></td> </tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> </tr> <tr> <td style="font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-size: 10pt">• Building</div></td> <td style="vertical-align: bottom; white-space: nowrap"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39</div> years</div></td> </tr> </table> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Costs of major additions and betterments are capitalized; maintenance and repairs, which do <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> improve or extend the life of the respective assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Impairment of Long-Lived Assets </div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">360,</div> <div style="display: inline; font-style: italic;">Property, Plant and Equipment</div>. Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> recognized any impairment through <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 31, 2019.</div></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 13; Value: 1 --> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Income Taxes</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Income taxes are recorded in accordance with ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">740,</div> Accounting for Income Taxes (“ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">740”</div>), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> that some or all of the deferred tax assets will <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be realized.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0; text-indent: 0.5in">ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">740</div> clarifies the accounting for uncertainty in income taxes recognized in the financial statements and provides that a tax benefit from an uncertain tax position <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be recognized when it is more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of tax expense.</div> <div style=" font-size: 10pt; margin: 0pt 0; text-indent: 0.5in"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Foreign Currency Transactions </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Certain transactions are denominated in a currency other than the Company’s functional currency of the U.S. dollar, and the Company generates assets and liabilities that are fixed in terms of the amount of foreign currency that will be received or paid. At each balance sheet date, the Company adjusts the assets and liabilities to reflect the current exchange rate, resulting in a translation gain or loss. Transaction gains and losses are also realized upon a settlement of a foreign currency transaction in determining net loss for the period in which the transaction is settled.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Comprehensive Income (Loss)</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">ASC Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">220,</div> <div style="display: inline; font-style: italic;">Comprehensive Income</div>, requires that all components of comprehensive income (loss), including net income (loss), be reported in the financial statements in the period in which they are recognized. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on investments and foreign currency translation adjustments.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Segment and Geographic Information </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company and the chief operating decision maker view the Company’s operations and manage its business as <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> operating segment. Substantially all of the Company’s operations are in the U.S. geographic segment.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Net Loss Per Share </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">Net loss per share (“EPS”) is computed by dividing net loss by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net loss by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which include stock options, is computed using the treasury stock method.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Subsequent Events </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company considered events or transactions occurring after the balance sheet date but prior to the date the consolidated financial statements are available to be issued for potential recognition or disclosure in its consolidated financial statements. We have evaluated subsequent events through the date of filing this Form <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div>-Q.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 14; Value: 1 --> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Recent Accounting Pronouncements</div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"></div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;"><div style="display: inline; text-decoration: underline;">Recently Issued Accounting Pronouncements</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2016, </div>the FASB established Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842,</div> Leases, by issuing Accounting Standards Update (ASU) <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02,</div> which supersedes ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">840,</div> Leases, and requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842</div> was subsequently amended by ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">01,</div> Land Easement Practical Expedient for Transition to Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842;</div> ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,</div> Codification Improvements to Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842,</div> Leases; and ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,</div> Targeted Improvements. Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842,</div> as amended (the "new lease standard") establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12</div> months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The effective date of the new guidance is for the Company’s <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> quarter of fiscal year <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019.</div> The FASB has approved an optional, alternative method to adopt the lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard effective <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 1, 2019, </div>using the alternative method. The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have a cumulative adjustment impacting retained earnings. Adoption of the lease standard does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have a material impact on the Company’s consolidated financial statements.</div></div>
4334453
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643000
201000
201000
279353000
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41398000
280664000
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60162000
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56410000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.</div></div></div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-size: 10pt"><div style="display: inline; font-weight: bold;">Common Stock</div></div></td> </tr> </table> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0">Pursuant to its Articles, the Company has an unlimited number of shares available for issuance with <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> par value.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">From <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January </div>through <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 2018, </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">161</div> thousand shares of common stock were issued upon the exercise of stock options at a price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.50</div> per share for a total of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$401</div> thousand, of which <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$200</div> thousand is subscription receivable.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">From <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January </div>through <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 2019, </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">190</div> thousand shares of common stock were issued upon the exercise of stock options at a price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.5</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10.00</div> per share for a total of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$643</div> thousand.</div></div>
200000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Subsequent Events </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The Company considered events or transactions occurring after the balance sheet date but prior to the date the consolidated financial statements are available to be issued for potential recognition or disclosure in its consolidated financial statements. We have evaluated subsequent events through the date of filing this Form <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div>-Q.</div></div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.</div></div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Subsequent Events</div></td> </tr> </table> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April 30, 2019, </div>the Company entered into an Equity Distribution Agreement with Piper Jaffray & Co which establishes an at-the-market equity program. The Sales Agreement provides for the sale of up to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,334,453</div> shares of our Common Stock (for details see Form <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">424B5</div> filed <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April 30, 2019).</div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Use of Estimates </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0pt 0">The preparation of financial statements in accordance with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported values of amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.</div></div></div></div></div></div>
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