false
--12-31
Q2
2017
2017-06-30
10-Q
0001626878
35419772
Yes
Accelerated Filer
XBiotech Inc.
No
No
xbit
3385000
4431000
1278000
3532000
-326000
57000
-273000
587000
21000
1184000
1171000
511000
1601000
1730000
898000
1098000
1622000
2914000
77841000
67050000
47301000
36930000
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=" 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 style="display: inline; font-weight: bold;"> </div></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;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2016, </div>the results of its operations and comprehensive loss for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">six</div> month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016,</div> and the cash flows for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">six</div> month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016.</div></div></div></div></div>
122000
581000
45949000
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-26253000
<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; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 11; Value: 1 --></div></div></div>
<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;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.</div> Commitments and Contingencies</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">XBiotech Corporate officers, Queena Han (VP of Finance) and John Simard (President and CEO), XBiotech Inc., and certain directors were named defendants in securities class action civil suits filed in federal court at the U.S. District Court for the Western District of Texas, in Austin, Texas and state court at the Los Angeles County Superior Court, in California. In the California action, the underwriter WR Hambrecht & Co., LLC was also named as a defendant. These civil suits were filed on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 1, 2015. </div>The foundation for both suits are similar in that the plaintiffs allege the officers of the Company made false and misleading statements, violating the securities laws, in the IPO documents in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April 2015. </div>Specifically, these alleged false statements in the IPO documents are in relation to the European Phase III clinical trial for Xilonix™. The allegations focus on a press release posted by XBiotech on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November 23, 2015, </div>explaining certain issues with patient data. Plaintiffs allege the company knew of these issues during the IPO and neglected to disclose them in supporting documentation filed with the Security and Exchange Commission (SEC). As a result of the news release, XBiotech (traded on the NASDAQ) stock declined. The resulting securities class action lawsuits are seeking relief for plaintiffs who report financial losses due to the alleged false and misleading statements. In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 2016, </div>a stay was granted in the California case. Plaintiffs were, at that time, left with the opportunity to re-file in Texas prior to the decision on the motion to dismiss. Plaintiffs did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> re-file in Texas before the case was dismissed with prejudice in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> October 2016. </div>Plaintiffs sought to re-open the case in California. A hearing to address whether the case should be dismissed, was scheduled <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div> At the hearing, counsel for XBiotech argued that California was a forum non conveniens given the nexus of the allegations in the suit took place in Texas. The judge granted the forum non conveniens motion, finding that the case does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> belong in California. As a result, the case is stayed rather than dismissed per California procedural rules. Plaintiffs were compelled to re-file in 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">A status conference on the California case is tentatively scheduled for <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 2018. </div>Meanwhile, the plaintiffs re-filed their suit in Travis County district court, located in Austin, Texas, on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July 6, 2017. </div>A hearing date has yet to be scheduled in this matter.</div></div>
0
0
35419772
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242419000
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-13648000
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<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 style="display: inline; font-weight: bold;"> </div></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 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"><!-- Field: /Page --> <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; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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 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 style="display: inline; font-weight: bold;"> </div></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>
1550000
19978000
22000
23000
592000
350000
<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;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.</div> Common Stock Options</div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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">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 this Plan 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; text-indent: 0.5in; margin: 0pt 0"> </div> <div> <table style="border-collapse: collapse;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </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">Options</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Exercise Price</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">Weighted-Average<br /> Exercise Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; font-size: 10pt">Options outstanding at December 31, 2016</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;">5,188,658</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: center"> </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">$0.52</div></div></td> <td style="width: 2%; 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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">$21.99 </div></div></td> <td style="width: 1%; font-size: 10pt; text-align: center"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.49</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; padding-left: 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;">880,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">4.24</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">12.62 </div></div></td> <td style="font-size: 10pt; text-align: center"> </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;">4.85</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; padding-left: 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;">(387,167</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">0.93</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">14.71 </div></div></td> <td style="font-size: 10pt; text-align: center"> </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;">2.27</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; padding-bottom: 1pt; padding-left: 10pt">Forfeitures</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;">(235,370</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: center"> </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">0.94</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">21.99 </div></div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"> </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;">14.26</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: 2.25pt">Options outstanding at June 30, 2017</td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,446,121</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: center"> </td> <td style="border-bottom: Black 2.25pt 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">$0.94</div></div></td> <td style="border-bottom: Black 2.25pt 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 2.25pt 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">$21.99 </div></div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.09</div></td> <td style="border-bottom: Black 2.25pt 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"></div> <!-- Field: Page; Sequence: 14 --> <!-- Field: /Page --> <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;"> June 30, 2017, </div>there was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.5</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;">2.53</div> years.</div></div>
-0.26
-0.42
-0.57
-0.74
<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 style="display: inline; font-weight: bold;"> </div></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>
-383000
12000
P2Y193D
3500000
<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; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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 style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <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> </table> <div style=" margin-top: 0; margin-bottom: 0"> </div> <table style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <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> </table> <div style=" margin-top: 0; margin-bottom: 0"> </div> <table style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <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;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2016, </div>the Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</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;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2016, </div>due to their short-term nature.</div></div></div></div>
441000
-7000
99000
-16000
<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; text-indent: 0.5in; 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, 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>
2289000
2399000
4372000
4835000
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"><!-- Field: /Page --> <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; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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;"> June 30, 2017.</div></div></div></div></div>
-1167000
1536000
-2254000
416000
-2000
5000
-1255000
-460000
114000
164000
4685000
7986000
77841000
67050000
4663000
7963000
0
0
33274000
707000
-890000
-8774000
-20376000
-18198000
-9133000
-13622000
-19696000
-23879000
<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;">Recent Accounting Pronouncements </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">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2016, </div>the FASB issued 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> “Leases.” ASU <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> requires companies that lease assets to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The pronouncement will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2018, </div>and early adoption is permitted. Management is currently evaluating the impact of this pronouncement on XBiotech’s consolidated financial statements.</div></div></div></div>
555000
-7000
263000
-16000
9688000
13615000
19959000
23863000
-9688000
-13615000
-19959000
-23863000
<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;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.</div> Organization </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">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. (“XBiotech” or the “Company) 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, and other inflammatory conditions such as peripheral vascular disease and type <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div> diabetes.</div></div>
-493000
-26000
-383000
12000
890000
3602000
0
0
0
0
0
0
1352000
2606000
1800000
1000000
31600000
654000
707000
32620000
1100000
454000
30540000
10142000
<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; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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 style="; border-collapse: collapse; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td style="width: 43%"> </td> <td style="width: 57%"> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Furniture and fixtures</div></td> <td style="vertical-align: bottom"><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> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Office equipment</div></td> <td style="vertical-align: bottom"><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> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Leasehold improvements</div></td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">Shorter of asset’s useful life or remaining lease term</div></td> </tr> <tr> <td> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Scientific equipment</div></td> <td style="vertical-align: bottom"><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> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Vehicles</div></td> <td style="vertical-align: bottom"><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> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Building</div></td> <td style="vertical-align: bottom"><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; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"></div></div> <!-- Field: Page; Sequence: 12 --></div></div></div>
P7Y
P5Y
P5Y
P5Y
P39Y
7399000
11216000
15587000
19028000
<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 style="display: inline; font-weight: bold;"> </div></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"></div> <!-- Field: Page; Sequence: 10; Value: 1 --> <!-- Field: /Page --> <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. The capitalized amounts are expensed as the related goods are delivered or the services are performed.</div></div></div></div>
-203107000
-183412000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="border-collapse: collapse;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> June 30,</td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Six Months Ended<br /> June 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: center"> </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">2017</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">2016</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">2017</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">2016</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; font-size: 10pt; text-align: left">Research and development</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;">(273</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">587</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21</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;">1,184</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; 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;">1,171</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;">511</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;">1,601</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;">1,730</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: 2.25pt">Total share-based compensation expense</td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">898</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,098</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,622</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,914</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="border-collapse: collapse;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </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">Options</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Exercise Price</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">Weighted-Average<br /> Exercise Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; font-size: 10pt">Options outstanding at December 31, 2016</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;">5,188,658</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: center"> </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">$0.52</div></div></td> <td style="width: 2%; 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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">$21.99 </div></div></td> <td style="width: 1%; font-size: 10pt; text-align: center"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.49</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; padding-left: 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;">880,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">4.24</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">12.62 </div></div></td> <td style="font-size: 10pt; text-align: center"> </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;">4.85</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; padding-left: 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;">(387,167</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">0.93</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">14.71 </div></div></td> <td style="font-size: 10pt; text-align: center"> </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;">2.27</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; padding-bottom: 1pt; padding-left: 10pt">Forfeitures</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;">(235,370</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: center"> </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">0.94</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">21.99 </div></div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"> </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;">14.26</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: 2.25pt">Options outstanding at June 30, 2017</td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,446,121</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: center"> </td> <td style="border-bottom: Black 2.25pt 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">$0.94</div></div></td> <td style="border-bottom: Black 2.25pt 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 2.25pt 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">$21.99 </div></div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.09</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="border-collapse: collapse;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> June 30,</td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center">Six Months Ended<br /> June 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; width: 40%">Dividend yield</td> <td style="font-size: 10pt; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected volatility</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </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">67% </div></div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">65%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">70%</div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">65%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">67% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">65%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">70% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Risk-free interest rate</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.83%</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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.97% </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">1.16%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">1.51%</div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">1.83%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">2.41% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">1.16%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">1.82% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected life (in years)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.38</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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">6 </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">5.25</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">6.25</div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">5.38</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">10 </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">5</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">10 </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Weighted-average grant date fair value per share</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.66</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.17</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.85</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.64</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </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=" 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 style="display: inline; font-weight: bold;"> </div></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>
896000
2914000
0.67
0.65
0.7
0.65
0.67
0.65
0.7
0.0183
0.0197
0.0116
0.0151
0.0183
0.0241
0.0116
0.0182
235370
880000
4.66
8.17
4.85
6.64
5188658
5446121
0.52
21.99
8.49
0.94
21.99
8.09
0.05
0.74
19.09
2.50
14.71
0.93
10
0.93
14.71
2.27
0.94
21.99
14.26
4.24
12.62
4.85
<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"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">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> which 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. 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> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">six</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div> was included in the following line items on the Consolidated Statement of Operations (in thousands).</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="border-collapse: collapse;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> June 30,</td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Six Months Ended<br /> June 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: center"> </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">2017</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">2016</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">2017</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">2016</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; font-size: 10pt; text-align: left">Research and development</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(273</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">587</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,184</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; 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;">1,171</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;">511</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;">1,601</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;">1,730</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: 2.25pt">Total share-based compensation expense</td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">898</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,098</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,622</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,914</div></td> <td style="border-bottom: Black 2.25pt 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 style="border-collapse: collapse;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> June 30,</td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center">Six Months Ended<br /> June 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; width: 40%">Dividend yield</td> <td style="font-size: 10pt; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected volatility</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </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">67% </div></div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">65%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">70%</div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">65%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">67% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">65%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">70% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Risk-free interest rate</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.83%</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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.97% </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">1.16%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">1.51%</div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">1.83%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">2.41% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">1.16%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">1.82% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected life (in years)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.38</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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">6 </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">5.25</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">6.25</div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">5.38</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">10 </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">5</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">10 </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Weighted-average grant date fair value per share</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.66</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.17</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.85</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.64</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> </table> </div></div></div></div>
13.60
14.17
P10Y
P5Y138D
P6Y
P5Y91D
P6Y91D
P5Y138D
P10Y
P5Y
P10Y
12.09
12.37
<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;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.</div> Significant Accounting Policies</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-weight: bold;">Basis of Presentation</div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2016, </div>the results of its operations and comprehensive loss for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">six</div> month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016,</div> and the cash flows for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">six</div> month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016.</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 style="display: inline; font-weight: bold;"> </div></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 style="display: inline; font-weight: bold;"> </div></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; text-indent: 0.5in; margin: 0pt 0">Prior to its initial public offering on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April 15, 2015, </div>the Company utilized significant estimates and assumptions in determining the fair value of its common stock. The board of directors determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including the prices at which the Company sold shares of its common stock to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">third</div> parties and external market conditions affecting the biotechnology industry sector. After the initial public offering, the fair market value is calculated by using the closing price of the Company’s common stock as reported by NASDAQ.</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 style="display: inline; font-weight: bold;"> </div></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"></div> <!-- Field: Page; Sequence: 10; Value: 1 --> <!-- Field: /Page --> <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. 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; 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"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">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> which 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. 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> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">six</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div> was included in the following line items on the Consolidated Statement of Operations (in thousands).</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="border-collapse: collapse;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> June 30,</td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Six Months Ended<br /> June 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: center"> </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">2017</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">2016</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">2017</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">2016</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; font-size: 10pt; text-align: left">Research and development</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(273</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">587</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,184</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; 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;">1,171</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;">511</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;">1,601</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;">1,730</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: 2.25pt">Total share-based compensation expense</td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">898</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,098</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,622</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.25pt double"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,914</div></td> <td style="border-bottom: Black 2.25pt 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 style="border-collapse: collapse;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> June 30,</td> <td style="font-size: 10pt; font-weight: bold"> <br /> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center">Six Months Ended<br /> June 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center"> </td> <td colspan="5" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; width: 40%">Dividend yield</td> <td style="font-size: 10pt; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center; width: 1%"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected volatility</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </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">67% </div></div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">65%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">70%</div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">65%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">67% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">65%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">70% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Risk-free interest rate</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.83%</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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.97% </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">1.16%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">1.51%</div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">1.83%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">2.41% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">1.16%</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">1.82% </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected life (in years)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.38</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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">6 </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">5.25</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">6.25</div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </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">5.38</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">10 </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </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">5</div></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: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt">10 </div></div></td> <td style="font-size: 10pt; text-align: center"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Weighted-average grant date fair value per share</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.66</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.17</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.85</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.64</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: center"> </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; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 11; Value: 1 --> <!-- Field: /Page --> <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; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Fair Value Measurements</div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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 style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <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> </table> <div style=" margin-top: 0; margin-bottom: 0"> </div> <table style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <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> </table> <div style=" margin-top: 0; margin-bottom: 0"> </div> <table style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <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;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2016, </div>the Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</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;"> June 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2016, </div>due to their short-term nature.</div> <div style=" font-size: 10pt; text-indent: 30.6pt; 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; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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 style="; border-collapse: collapse; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td style="width: 43%"> </td> <td style="width: 57%"> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Furniture and fixtures</div></td> <td style="vertical-align: bottom"><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> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Office equipment</div></td> <td style="vertical-align: bottom"><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> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Leasehold improvements</div></td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">Shorter of asset’s useful life or remaining lease term</div></td> </tr> <tr> <td> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Scientific equipment</div></td> <td style="vertical-align: bottom"><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> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Vehicles</div></td> <td style="vertical-align: bottom"><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> </td> <td> </td> </tr> <tr> <td style="vertical-align: top; padding-left: 24pt; text-indent: -0.25in"><div style="display: inline; font-size: 10pt">• Building</div></td> <td style="vertical-align: bottom"><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; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"></div></div> <!-- Field: Page; Sequence: 12 --> <!-- Field: /Page --> <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; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></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;"> June 30, 2017.</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;">Foreign Currency Transactions </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">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, 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 style="display: inline; font-weight: bold;"> </div></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 style="display: inline; font-weight: bold;"> </div></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 style="display: inline; font-weight: bold;"> </div></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 style="display: inline; font-weight: bold;"> </div></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; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Recent Accounting Pronouncements </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">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2016, </div>the FASB issued 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> “Leases.” ASU <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> requires companies that lease assets to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The pronouncement will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2018, </div>and early adoption is permitted. Management is currently evaluating the impact of this pronouncement on XBiotech’s consolidated financial statements.</div></div>
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<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-size: 10pt"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.</div> Common Stock </div></div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0"> </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-align: justify; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-align: justify; 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 2016, </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">204</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;">$0.74</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$19.09</div> per share for total proceeds of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.1</div> million.</div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0">From <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November </div>through <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 2016, </div>under the Common Stock Sales Agreement with H.C. Wainwright & Co. LLC, the Company sold <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">145</div> thousand shares of common stock at a price between <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$13.60</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$14.17</div> per share for total proceeds of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.8</div> million.</div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2017, </div>under the Common Stock Sales Agreement with H.C. Wainwright & Co. LLC, the Company sold <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">87</div> thousand shares of common stock at a price between <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$12.09</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$12.37</div> per share for total proceeds of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.0</div> million.</div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 2017, </div>the Company sold <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.4</div> million shares of common stock for total proceeds of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$31.6</div> million from investors. Also, in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 2017, </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">66</div> thousand shares of common stock were issued upon the exercise of stock options at the price between <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.50</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$14.71</div> per share for total proceeds of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$315</div> thousand.</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> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">From <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April </div>to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 2017, </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">204</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;">$0.93</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10</div> per share for a total of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$454</div> thousand.</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=" 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 style="display: inline; font-weight: bold;"> </div></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 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 style="display: inline; font-weight: bold;"> </div></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; text-indent: 0.5in; margin: 0pt 0">Prior to its initial public offering on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April 15, 2015, </div>the Company utilized significant estimates and assumptions in determining the fair value of its common stock. The board of directors determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including the prices at which the Company sold shares of its common stock to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">third</div> parties and external market conditions affecting the biotechnology industry sector. After the initial public offering, the fair market value is calculated by using the closing price of the Company’s common stock as reported by NASDAQ.</div></div></div></div>
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