false
--12-31
Q3
2015
2015-09-30
10-Q
0001626878
32184465
Yes
Non-accelerated Filer
XBiotech Inc.
No
No
xbit
3964000
1629000
994000
1518000
-11000
-153000
701000
2269000
1677000
2810000
185000
255000
1678000
2162000
886000
2524000
3355000
4972000
4998343
4480665
4998343
4480665
119047000
62177000
107587000
58064000
0
0
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 6pt 0 0"><div style="display: inline; font-weight: bold;">Basis of Presentation </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or US GAAP.</div><div style=" font-size: 10pt; margin: 12pt 0 0">In the Company’s opinion, the accompanying interim unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim unaudited consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these interim unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes for fiscal year ended December 31, 2014, which are included in the Company’s Registration Statement on Form S-1, filed with the SEC on April 14, 2015. The results of operations for the three and nine months ended September 30, 2015, are not necessarily indicative of the results to be expected for the year ending December 31, 2015, or for any other period.</div></div></div></div></div>
105680000
57329000
7244000
15496000
48351000
8252000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Cash and Cash Equivalents </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">The Company considers highly liquid investments with a maturity of 90 days or less when purchased to be cash equivalents. Cash and cash equivalents consisted primarily of cash on deposit in U.S., German, Swiss and Canadian banks. Cash and cash equivalents are stated at cost which approximates fair value.</div></div></div></div></div>
15
15
15
493000
0
0
410000
32052965
27546632
232850000
152351000
-10813000
-6863000
-25452000
-15376000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Comprehensive Income (Loss)</div></div><div style=" font-size: 10pt; margin: 6pt 0 0">ASC Topic 220, <div style="display: inline; font-style: italic;">Comprehensive Income</div>, requires that all components of comprehensive income (loss), including net income (loss), be reported in the financial statements in the period in which they are recognized. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on investments and foreign currency translation adjustments.</div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Concentrations of Credit Risk </div></div><div style=" font-size: 10pt; margin: 6pt 0 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 one financial institution. These amounts at times may exceed federally insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds. The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.</div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Basis of Consolidation </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated upon consolidation.</div></div></div></div></div>
6606000
886000
324000
12000
510000
433000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt; width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;">4.</div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Common Stock Options</div></td> </tr> </table> <div style=" font-size: 10pt; margin: 6pt 0 0">On November 11, 2005, the board of directors of the Company adopted a stock option plan (“the Plan”) pursuant to which the Company may grant incentive stock and non-qualified stock options to directors, officers, employees or consultants of the Company or an affiliate or other persons as the Compensation Committee may approve.</div> <div style=" font-size: 10pt; margin: 6pt 0 0">On March 13, 2015, the shareholders approved the 2015 Equity Incentive Plan adopted by the board of directors which approves the granting of incentive stock options, non-qualified stock options, restricted stock units, performance stock units and share appreciation rights to directors, officers, employees and consultants. The Company may grant incentive stock option and other stock-based awards to officers and employees as defined in Section 422 of the Internal Revenue Code of 1986 and may grant stock options and other stock based-awards to directors and consultants of the Company.</div> <!-- Field: Page; Sequence: 12; Value: 2 --> <div style="page-break-before: always; margin-top: 6pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; margin: 12pt 0 0">In February and August 2011 the Company granted stock options to a non-employee consultant that vest over 3 and 4 years, respectively. The fair value of these awards is remeasured at each reporting date until the date the consultant’s services are completed.</div> <div style=" font-size: 10pt; margin: 12pt 0 0">All options will be non-transferable and may 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 first anniversary of the participant’s death, or such other date as may be specified by the Compensation Committee.</div> <div style=" font-size: 10pt; margin: 12pt 0 0">The term of the options is at the discretion of the Compensation Committee, but may not exceed 10 years from the grant date. The options expire on the earlier of the expiration date or the date three months following the day on which the participant ceases to be a director, 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.</div> <div style=" font-size: 10pt; margin: 12pt 0 0">The number of common shares reserved for issuance to any one person pursuant to this Plan shall not, in aggregate, exceed 5% 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; margin: 12pt 0 0">A summary of changes in common stock options issued under the Plan is as follows:</div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt"></td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Options</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">Exercise Price</td> <td style="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-<br /> Average<br /> Exercise Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt">Options outstanding at December 31, 2014 </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right">4,884,165</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 4%; font-size: 10pt; text-align: center">$0.55</td> <td style="width: 4%; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="width: 4%; font-size: 10pt; text-align: center">$15.00</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">7.03</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 20pt">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">65,000</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">15.00</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">15.00</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 20pt">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">(15,000</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">0.56</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">0.56</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 20pt">Forfeitures </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(95,625</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">0.55</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center">15.00</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">8.83</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"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </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"> </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"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Options outstanding at March 31, 2015 </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">4,838,540</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center">$0.55</td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="font-size: 10pt; text-align: center">$15.00</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">7.12</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 20pt">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">219,528</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center">10.00</td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="font-size: 10pt; text-align: center">21.99</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">19.04</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 20pt">Exercised </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(106,000</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">2.50</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center">10.00</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">6.32</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"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </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"> </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"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Options outstanding at June 30, 2015 </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">4,952,068</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center">0.57</td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="font-size: 10pt; text-align: center">21.99</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">7.66</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 20pt">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">65,900</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">$16.91</td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">16.91</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 20pt">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">(12,000</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">2.50</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">2.50</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 20pt">Forfeitures </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(7,625</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">10.00</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center">15.00</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">14.26</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: center"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: center"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 2.5pt">Options outstanding at September 30, 2015 </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,998,343</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: center">0.57</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: center">21.99</td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">7.77</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 12pt 0 0">As of September 30, 2015, there was approximately $6.0 million of unrecognized compensation cost, related to stock options granted under the Plan which will be amortized to stock compensation expense over the next 2.11 years.</div></div>
-0.33
-0.29
-0.84
-0.64
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Net Loss per Share </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">Net loss per share (“EPS”) is computed by dividing net loss by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net loss by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which include stock options, is computed using the treasury stock method.</div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt; width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;">5.</div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Net Loss per Share</div></td> </tr> </table> <div style=" font-size: 10pt; margin: 6pt 0 0">The following summarizes the computation of basic and diluted net loss per share for the three months and nine months ended September 30, 2015 and 2014 (in thousands, except share and per share data):</div> <div style=" font-size: 10pt; margin: 6pt 0 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended <br />September 30,</td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Nine Months Ended <br />September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</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">2015</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">2014</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: right"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; font-size: 10pt; text-align: left">Net loss </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">(10,736</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">(6,963</td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">(25,594</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">(15,372</td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Weighted-average number of common shares—basic and diluted </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">32,050,565</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">24,116,917</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">30,342,741</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">23,873,486</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Net loss per share—basic and diluted </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">(0.33</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">(0.29</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">(0.84</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">(0.64</td> <td style="font-size: 10pt; text-align: left">)</td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 12pt 0 0">The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or if-converted method, have been excluded from the computation of diluted weighted-average common shares outstanding, because including them would have had an anti-dilutive effect due to the losses reported.</div> <div style=" font-size: 10pt; margin: 12pt 0 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; font-size: 10pt; text-align: left">Stock options </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">4,998,343</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">4,480,665</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">Warrants to purchase common stock </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—</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">Total </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </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">4,998,343</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </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">4,480,665</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div></div>
142000
-4000
P2Y40D
6000000
0
0
0
0
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Fair Value Measurements </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">The Company follows ASC Topic 820, <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 data (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of three levels:</div><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 6pt; margin-bottom: 0; width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities.</td> </tr> </table><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 6pt; margin-bottom: 0; width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level 2—Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.</td> </tr> </table><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 6pt; margin-bottom: 0; width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level 3—Unobservable 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; margin: 12pt 0 0">At September 30, 2015 and December 31, 2014, the Company did not have any assets or liabilities that were remeasured 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 September 30, 2015 and December 31, 2014, due to their short-term nature.</div></div></div></div></div>
78000
17000
-155000
17000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Foreign Currency Transactions </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">Certain transactions are denominated in a currency other than the Company’s functional currency of the U.S. dollar, and the Company generates assets and liabilities that are fixed in terms of the amount of foreign currency that will be received or paid. At each balance sheet date, the Company adjusts the assets and liabilities to reflect the current exchange rate, resulting in a translation gain or loss. Transaction gains and losses are also realized upon a settlement of a foreign currency transaction in determining net loss for the period in which the transaction is settled.</div></div></div></div></div>
1083000
2639000
4542000
5452000
0
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Impairment of Long-Lived Assets </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, <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 may not 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 not recognized any impairment through September 30, 2015.</div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt; width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;">2.</div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Income Taxes</div></td> </tr> </table> <div style=" font-size: 10pt; text-align: justify; margin: 6pt 0 0">The Company did not provide for income taxes in 2015 because the Company has projected net loss for all jurisdictions for the full year 2015. The Company has recorded a full valuation allowance for its net deferred tax assets in 2015 and 2014.</div></div>
0
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Income Taxes </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">The Company makes estimates and judgments in determining the need for a provision for income taxes, including the estimation of its taxable income or loss for the full fiscal year. The Company has accumulated significant deferred tax assets that reflect the tax effects of net operating losses and tax credit carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of certain deferred tax assets is dependent upon future earnings. The Company is uncertain about the timing and amount of any future earnings. Accordingly, the Company offsets these deferred tax assets with a valuation allowance. The Company may in the future determine that certain deferred tax assets will likely be realized, in which case the Company will reduce its valuation allowance in the period in which such determination is made. If the valuation allowance is reduced, the Company may recognize a benefit from income taxes in its statement of operations in that period.</div></div></div></div></div>
1124000
717000
-524000
926000
12000
1496000
-75000
4970000
3147000
119047000
62177000
4958000
3147000
0
0
77468000
17351000
-6646000
-846000
-22613000
-8249000
-25594000
-15372000
-10736000
-6963000
<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: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Recent Accounting Pronouncements </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">In June 2014 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-10, <div style="display: inline; font-style: italic;">Elimination of Certain Financial Reporting Requirements, including an Amendment to Variable Interest Entities Guidance in Topic 810 Consolidation</div>. These updates remove the definition of a development stage entity from the Master Glossary of the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. This standard is effective for annual reporting periods beginning after December 15, 2014. The Company has early adopted this standard in the presentation of its financial statements.</div><div style="page-break-before: always; margin-top: 6pt"> </div><div style=" margin-top: 0; margin-bottom: 0"> </div><div style=" margin-top: 0; margin-bottom: 0">In August 2014 the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The ASU is intended to define management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. For all entities, the ASU is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016.</div></div></div>
78000
17000
-155000
17000
1
10814000
6980000
25439000
15389000
-10814000
-6980000
-25439000
-15389000
-77000
100000
142000
-4000
400000
4687000
28000
1900000
-325000
1959000
818000
1907000
411000
70600000
70558000
9000000
44800000
678000
5497000
17351000
150000
8000
700000
30000
12000000
2400000
3100000
4854000
3227000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Property and Equipment </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">Property and equipment, which consists of land, furniture and fixtures, computers and office equipment, scientific equipment, leasehold improvements and vehicles are stated at cost and depreciated over the estimated useful lives of the assets, with the exception of land which is not depreciated, using the straight line method. The useful lives are as follows:</div><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; font-size: 10pt; width: 700px;"> <tr> <td style="width: 4%"> </td> <td style="width: 30%"> </td> <td style="width: 66%"> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><div style="display: inline; font-size: 10pt">• Furniture and fixtures</div> (years)</td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">7 </div></td> </tr> <tr> <td> </td> <td> </td> <td> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><div style="display: inline; font-size: 10pt">• Office equipment</div> (years)</td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">5</div></td> </tr> <tr> <td> </td> <td> </td> <td> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><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> <td> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><div style="display: inline; font-size: 10pt">• Scientific equipment (years)</div></td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">5 </div></td> </tr> <tr> <td> </td> <td> </td> <td> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><div style="display: inline; font-size: 10pt">• Vehicles</div> (years)</td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">5</div></td> </tr> </table><div style=" font-size: 10pt; margin: 12pt 0 0">Costs of major additions and betterments are capitalized; maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized.</div></div></div></div></div>
P7Y
P5Y
P5Y
P5Y
9731000
4341000
20897000
9937000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Research and Development Costs </div></div><div style=" font-size: 10pt; margin: 6pt 0 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 no alternative future use are expensed as incurred as research and development costs.</div><div style=" font-size: 10pt; margin: 12pt 0 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></div>
-118762000
-93168000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; font-size: 10pt; text-align: left">Stock options </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">4,998,343</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">4,480,665</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">Warrants to purchase common stock </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—</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">Total </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </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">4,998,343</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </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">4,480,665</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 cellpadding="0" cellspacing="0" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended <br />September 30,</td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Nine Months Ended <br />September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</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">2015</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">2014</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: right"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; font-size: 10pt; text-align: left">Net loss </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">(10,736</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">(6,963</td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">(25,594</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">(15,372</td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Weighted-average number of common shares—basic and diluted </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">32,050,565</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">24,116,917</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">30,342,741</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">23,873,486</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Net loss per share—basic and diluted </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">(0.33</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">(0.29</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">(0.84</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">(0.64</td> <td style="font-size: 10pt; text-align: left">)</td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> September 30,</td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Nine Months Ended <br />September 30</td> </tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; font-size: 10pt; text-align: left">Research and development </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">701</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,269</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">1,677</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,810</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">General and administrative </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">185</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">255</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,678</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,162</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total share-based compensation expense </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">886</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,524</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,355</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,972</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt"></td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Options</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">Exercise Price</td> <td style="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-<br /> Average<br /> Exercise Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt">Options outstanding at December 31, 2014 </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right">4,884,165</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 4%; font-size: 10pt; text-align: center">$0.55</td> <td style="width: 4%; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="width: 4%; font-size: 10pt; text-align: center">$15.00</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">7.03</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 20pt">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">65,000</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">15.00</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">15.00</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 20pt">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">(15,000</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">0.56</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">0.56</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 20pt">Forfeitures </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(95,625</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">0.55</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center">15.00</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">8.83</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"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </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"> </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"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Options outstanding at March 31, 2015 </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">4,838,540</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center">$0.55</td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="font-size: 10pt; text-align: center">$15.00</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">7.12</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 20pt">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">219,528</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center">10.00</td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="font-size: 10pt; text-align: center">21.99</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">19.04</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 20pt">Exercised </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(106,000</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">2.50</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center">10.00</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">6.32</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"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </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"> </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"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Options outstanding at June 30, 2015 </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">4,952,068</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center">0.57</td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="font-size: 10pt; text-align: center">21.99</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">7.66</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 20pt">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">65,900</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">$16.91</td> <td style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right">16.91</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-indent: 20pt">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">(12,000</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">2.50</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">2.50</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-indent: 20pt">Forfeitures </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(7,625</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">10.00</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center">15.00</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">14.26</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: center"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: center"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 2.5pt">Options outstanding at September 30, 2015 </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,998,343</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: center">0.57</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: center"><div style="display: inline; font-size: 10pt">–</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: center">21.99</td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">7.77</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><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: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Segment and Geographic Information </div></div><div style=" font-size: 10pt; margin: 6pt 0 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 one operating segment. Substantially all of the Company’s operations are in the U.S. geographic segment.</div></div></div></div></div>
3355000
4972000
P3Y
P4Y
95625
7625
65000
219528
65900
4884165
4838540
4952068
4998343
0.55
15
7.03
0.55
15
7.12
0.57
21.99
7.66
0.57
21.99
7.77
0.05
10
0.55
2.50
0.56
2.50
10
6.32
2.50
0.55
15
8.83
10
15
14.26
15
10
21.99
19.04
16.91
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Share-Based Compensation </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">The Company accounts for its share-based compensation awards in accordance with ASC Topic 718, <div style="display: inline; font-style: italic;">Compensation-Stock Compensation</div> (“ASC 718”). ASC 718 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 life of the option and 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.</div><div style=" font-size: 10pt; margin: 6pt 0 0"> </div><div style=" font-size: 10pt; margin: 0">Share-based compensation expense recognized for the three months and nine months ended September 30, 2015 and 2014 was included in the following line items on the Consolidated Statements of Operations (in thousands).</div><div style=" font-size: 10pt; margin: 0"> </div><div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> September 30,</td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Nine Months Ended <br />September 30</td> </tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</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">2015</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">2014</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">701</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,269</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">1,677</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,810</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">General and administrative </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">185</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">255</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">1,678</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">2,162</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total share-based compensation expense </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">886</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,524</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,355</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,972</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div><div style=" font-size: 10pt; margin: 12pt 0 0">No related tax benefits were recognized for the three months and nine months ended September 30, 2015 and 2014.</div></div></div></div></div>
15
15
19
P10Y
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt; width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;">1.</div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Significant Accounting Policies</div></td> </tr> </table> <div style=" font-size: 10pt; margin: 6pt 0 0"><div style="display: inline; font-weight: bold;">Basis of Presentation </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or US GAAP.</div> <div style=" font-size: 10pt; margin: 12pt 0 0">In the Company’s opinion, the accompanying interim unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim unaudited consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these interim unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes for fiscal year ended December 31, 2014, which are included in the Company’s Registration Statement on Form S-1, filed with the SEC on April 14, 2015. The results of operations for the three and nine months ended September 30, 2015, are not necessarily indicative of the results to be expected for the year ending December 31, 2015, or for any other period.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Basis of Consolidation </div></div> <div style=" font-size: 10pt; margin: 6pt 0 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; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Use of Estimates </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">The preparation of financial statements in accordance with accounting principles generally accepted in the United States 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; margin: 12pt 0 0">Prior to its initial public offering on April 15, 2015, 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 third parties and external market conditions affecting the biotechnology industry sector.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Research and Development Costs </div></div> <div style=" font-size: 10pt; margin: 6pt 0 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 no alternative future use are expensed as incurred as research and development costs.</div> <div style=" font-size: 10pt; margin: 12pt 0 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; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Income Taxes </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">The Company makes estimates and judgments in determining the need for a provision for income taxes, including the estimation of its taxable income or loss for the full fiscal year. The Company has accumulated significant deferred tax assets that reflect the tax effects of net operating losses and tax credit carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of certain deferred tax assets is dependent upon future earnings. The Company is uncertain about the timing and amount of any future earnings. Accordingly, the Company offsets these deferred tax assets with a valuation allowance. The Company may in the future determine that certain deferred tax assets will likely be realized, in which case the Company will reduce its valuation allowance in the period in which such determination is made. If the valuation allowance is reduced, the Company may recognize a benefit from income taxes in its statement of operations in that period.</div> <!-- Field: Page; Sequence: 8; Value: 2 --> <!-- Field: /Page --> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Share-Based Compensation </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">The Company accounts for its share-based compensation awards in accordance with ASC Topic 718, <div style="display: inline; font-style: italic;">Compensation-Stock Compensation</div> (“ASC 718”). ASC 718 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 life of the option and 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.</div> <div style=" font-size: 10pt; margin: 6pt 0 0"> </div> <div style=" font-size: 10pt; margin: 0">Share-based compensation expense recognized for the three months and nine months ended September 30, 2015 and 2014 was included in the following line items on the Consolidated Statements of Operations (in thousands).</div> <div style=" font-size: 10pt; margin: 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended<br /> September 30,</td> <td style="font-size: 10pt; font-weight: bold"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Nine Months Ended <br />September 30</td> </tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</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">2015</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">2014</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">701</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,269</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">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">1,677</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,810</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">General and administrative </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">185</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">255</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">1,678</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">2,162</td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total share-based compensation expense </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">886</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,524</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,355</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; border-bottom: Black 2.5pt double"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,972</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 12pt 0 0">No related tax benefits were recognized for the three months and nine months ended September 30, 2015 and 2014.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Cash and Cash Equivalents </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">The Company considers highly liquid investments with a maturity of 90 days or less when purchased to be cash equivalents. Cash and cash equivalents consisted primarily of cash on deposit in U.S., German, Swiss and Canadian banks. Cash and cash equivalents are stated at cost which approximates fair value.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Concentrations of Credit Risk </div></div> <div style=" font-size: 10pt; margin: 6pt 0 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 one financial institution. These amounts at times may exceed federally insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds. The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.</div> <!-- Field: Page; Sequence: 9; Value: 2 --> <!-- Field: /Page --> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Fair Value Measurements </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">The Company follows ASC Topic 820, <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 data (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of three levels:</div> <table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 6pt; margin-bottom: 0; width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 6pt; margin-bottom: 0; width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level 2—Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 6pt; margin-bottom: 0; width: 700px;"> <tr style="vertical-align: top"> <td style="width: 30.6pt"></td> <td style="width: 18.35pt">•</td> <td>Level 3—Unobservable 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; margin: 12pt 0 0">At September 30, 2015 and December 31, 2014, the Company did not have any assets or liabilities that were remeasured 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 September 30, 2015 and December 31, 2014, due to their short-term nature.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Property and Equipment </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">Property and equipment, which consists of land, furniture and fixtures, computers and office equipment, scientific equipment, leasehold improvements and vehicles are stated at cost and depreciated over the estimated useful lives of the assets, with the exception of land which is not depreciated, using the straight line method. The useful lives are as follows:</div> <table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; font-size: 10pt; width: 700px;"> <tr> <td style="width: 4%"> </td> <td style="width: 30%"> </td> <td style="width: 66%"> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><div style="display: inline; font-size: 10pt">• Furniture and fixtures</div> (years)</td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">7 </div></td> </tr> <tr> <td> </td> <td> </td> <td> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><div style="display: inline; font-size: 10pt">• Office equipment</div> (years)</td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">5</div></td> </tr> <tr> <td> </td> <td> </td> <td> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><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> <td> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><div style="display: inline; font-size: 10pt">• Scientific equipment (years)</div></td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">5 </div></td> </tr> <tr> <td> </td> <td> </td> <td> </td> </tr> <tr> <td> </td> <td style="vertical-align: top"><div style="display: inline; font-size: 10pt">• Vehicles</div> (years)</td> <td style="vertical-align: bottom"><div style="display: inline; font-size: 10pt">5</div></td> </tr> </table> <div style=" font-size: 10pt; margin: 12pt 0 0">Costs of major additions and betterments are capitalized; maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized.</div> <div style=" font-size: 10pt; margin: 12pt 0 0"><div style="display: inline; font-weight: bold;">Building Construction in Progress</div></div> <div style=" font-size: 10pt; margin: 12pt 0 0">Building construction in progress consists of the accumulated expenditures to build the new XBiotech manufacturing facility located in Austin, Texas, which includes the cost for land cleaning, architecture design, engineering services, city permits, installation of utilities, construction materials and labor and construction management.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Impairment of Long-Lived Assets </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, <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 may not 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 not recognized any impairment through September 30, 2015.</div> <!-- Field: Page; Sequence: 10; Value: 2 --> <!-- Field: /Page --> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Foreign Currency Transactions </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">Certain transactions are denominated in a currency other than the Company’s functional currency of the U.S. dollar, and the Company generates assets and liabilities that are fixed in terms of the amount of foreign currency that will be received or paid. At each balance sheet date, the Company adjusts the assets and liabilities to reflect the current exchange rate, resulting in a translation gain or loss. Transaction gains and losses are also realized upon a settlement of a foreign currency transaction in determining net loss for the period in which the transaction is settled.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Comprehensive Income (Loss)</div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">ASC Topic 220, <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; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Segment and Geographic Information </div></div> <div style=" font-size: 10pt; margin: 6pt 0 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 one operating segment. Substantially all of the Company’s operations are in the U.S. geographic segment.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Net Loss per Share </div></div> <div style=" font-size: 10pt; margin: 6pt 0 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; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Subsequent Events </div></div> <div style=" font-size: 10pt; margin: 6pt 0 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 10-Q.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Recent Accounting Pronouncements </div></div> <div style=" font-size: 10pt; margin: 6pt 0 0">In June 2014 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-10, <div style="display: inline; font-style: italic;">Elimination of Certain Financial Reporting Requirements, including an Amendment to Variable Interest Entities Guidance in Topic 810 Consolidation</div>. These updates remove the definition of a development stage entity from the Master Glossary of the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. This standard is effective for annual reporting periods beginning after December 15, 2014. The Company has early adopted this standard in the presentation of its financial statements.</div> <!-- Field: Page; Sequence: 11; Value: 2 --> <div style="page-break-before: always; margin-top: 6pt"> </div> <!-- Field: /Page --> <div style=" margin-top: 0; margin-bottom: 0"> </div> <div style=" margin-top: 0; margin-bottom: 0">In August 2014 the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The ASU is intended to define management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. For all entities, the ASU is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016.</div></div>
601000
3000000
4000000
208333
15000
15000
106000
12000
131500
15000
12000
359876.92
114077000
59030000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt; width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left"><div style="display: inline; font-weight: bold;">3.</div></td> <td style="width: 5pt"></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Common Stock</div></td> </tr> </table> <div style=" font-size: 10pt; margin: 12pt 0 0">In February 2014, the Company sold 1.2 million shares of common stock for total proceeds of approximately $12.0 million from the exercise of warrants by its warrant holders. From July through November 18, 2014, the Company sold approximately 601,000 shares of common stock at a price of $15.00 per share for total proceeds of approximately $9.0 million. Each share had one warrant attached, which would be exercisable for 180 days into a single common share in the Company at a price of $15.00 per share. As of December 31, 2014, the Company had total warrants outstanding for the purchase of 493,000 shares of common stock at a price of $15.00 per share.</div> <div style=" font-size: 10pt; margin: 12pt 0 0">From November 24, 2014 through December 31, 2014, the Company sold 3.0 million shares of common stock at $15.00 per share pursuant to stock subscription agreements for total proceeds of $44.8 million of which $410,000 remained uncollected as of December 31, 2014 and was received in January 2015. The Company incurred issuance costs of approximately $1.9 million in cash and $0.4 million in non-cash consideration.</div> <div style=" font-size: 10pt; margin: 12pt 0 0">In December 2014, 15,000 stock options were exercised at a price of $10.00 for total proceeds of $0.15 million.</div> <div style=" font-size: 10pt; margin: 12pt 0 0">From January to March 2015, the Company received requests from investors for the exercise of warrants to purchase a total of 164,999 shares of common stock at $15.00 per share for a total of $2.4 million. Also, the Company received approximately $8,000 in January 2015 from 15,000 exercised options at $0.55 per share.</div> <div style=" font-size: 10pt; margin: 12pt 0 0">On April 17, 2015, the Company sold 4.0 million shares of common stock at $19.00 per share in its Initial Public Offering (“IPO”) resulting in net proceeds of $70.6 million.</div> <div style=" font-size: 10pt; margin: 0.25in 0 0">From April to June 2015, excluding the IPO, the Company sold 208,333 shares of common stock for total proceeds of approximately $3.1 million from the exercise of warrants by common stock shareholders. Also, the Company received $0.7 million from 106,000 exercised stock options.</div> <div style=" font-size: 10pt; margin: 12pt 0 0">In July 2015, 12,000 stock options were exercised at a price of $2.50 for total proceeds of $30,000.</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=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Subsequent Events </div></div><div style=" font-size: 10pt; margin: 6pt 0 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 10-Q.</div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font-size: 10pt; font-weight: bold; margin-top: 0pt; margin-bottom: 6pt; width: 700px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 35pt; text-align: left">6.</td> <td style="width: 5pt"></td> <td style="text-align: justify">Subsequent Events</td> </tr> </table> <div style=" font-size: 10pt; margin: 0 0 0pt"> </div> <div style=" font-size: 10pt; margin: 0 0 10pt">Subsequent to September 30, 2015, the Company received requests from employees for the exercise of stock options to purchase 13,1500 shares of the Company's common stock for a total of $359,876.92.</div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0.25in 0 0"><div style="display: inline; font-weight: bold;">Use of Estimates </div></div><div style=" font-size: 10pt; margin: 6pt 0 0">The preparation of financial statements in accordance with accounting principles generally accepted in the United States 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; margin: 12pt 0 0">Prior to its initial public offering on April 15, 2015, 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 third parties and external market conditions affecting the biotechnology industry sector.</div></div></div></div></div>
32050565
24116917
30342741
23873486
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 12pt 0 0"><div style="display: inline; font-weight: bold;">Building Construction in Progress</div></div><div style=" font-size: 10pt; margin: 12pt 0 0">Building construction in progress consists of the accumulated expenditures to build the new XBiotech manufacturing facility located in Austin, Texas, which includes the cost for land cleaning, architecture design, engineering services, city permits, installation of utilities, construction materials and labor and construction management.</div></div></div></div></div>
1200000
164999
P180D
1
410000
iso4217:USD
xbrli:pure
xbrli:shares
iso4217:USD
xbrli:shares
0001626878
us-gaap:EmployeeStockOptionMember
xbit:ThePlanMember
2011-02-01
2011-02-28
0001626878
us-gaap:EmployeeStockOptionMember
xbit:ThePlanMember
2011-08-01
2011-08-31
0001626878
2014-01-01
2014-09-30
0001626878
us-gaap:EmployeeStockOptionMember
2014-01-01
2014-09-30
0001626878
us-gaap:WarrantMember
2014-01-01
2014-09-30
0001626878
us-gaap:GeneralAndAdministrativeExpenseMember
2014-01-01
2014-09-30
0001626878
us-gaap:ResearchAndDevelopmentExpenseMember
2014-01-01
2014-09-30
0001626878
2014-02-01
2014-02-28
0001626878
2014-07-01
2014-09-30
0001626878
us-gaap:GeneralAndAdministrativeExpenseMember
2014-07-01
2014-09-30
0001626878
us-gaap:ResearchAndDevelopmentExpenseMember
2014-07-01
2014-09-30
0001626878
2014-07-01
2014-11-18
0001626878
2014-11-24
2014-12-31
0001626878
xbit:NoncashConsiderationOfStockIssuanceCostsMember
2014-11-24
2014-12-31
0001626878
2014-12-01
2014-12-31
0001626878
2015-01-01
2015-01-31
0001626878
2015-01-01
2015-03-31
0001626878
us-gaap:MaximumMember
2015-01-01
2015-03-31
0001626878
us-gaap:MinimumMember
2015-01-01
2015-03-31
0001626878
2015-01-01
2015-09-30
0001626878
us-gaap:EmployeeStockOptionMember
2015-01-01
2015-09-30
0001626878
us-gaap:WarrantMember
2015-01-01
2015-09-30
0001626878
us-gaap:EmployeeStockOptionMember
xbit:ThePlanMember
2015-01-01
2015-09-30
0001626878
us-gaap:GeneralAndAdministrativeExpenseMember
2015-01-01
2015-09-30
0001626878
us-gaap:ResearchAndDevelopmentExpenseMember
2015-01-01
2015-09-30
0001626878
xbit:ThePlanMember
xbit:AnyOnePersonMember
2015-01-01
2015-09-30
0001626878
us-gaap:EquipmentMember
2015-01-01
2015-09-30
0001626878
us-gaap:FurnitureAndFixturesMember
2015-01-01
2015-09-30
0001626878
us-gaap:OfficeEquipmentMember
2015-01-01
2015-09-30
0001626878
us-gaap:VehiclesMember
2015-01-01
2015-09-30
0001626878
2015-04-01
2015-06-30
0001626878
us-gaap:MaximumMember
2015-04-01
2015-06-30
0001626878
us-gaap:MinimumMember
2015-04-01
2015-06-30
0001626878
2015-04-17
2015-04-17
0001626878
us-gaap:IPOMember
2015-04-17
2015-04-17
0001626878
2015-07-01
2015-07-31
0001626878
2015-07-01
2015-09-30
0001626878
us-gaap:GeneralAndAdministrativeExpenseMember
2015-07-01
2015-09-30
0001626878
us-gaap:ResearchAndDevelopmentExpenseMember
2015-07-01
2015-09-30
0001626878
us-gaap:MaximumMember
2015-07-01
2015-09-30
0001626878
us-gaap:MinimumMember
2015-07-01
2015-09-30
0001626878
us-gaap:SubsequentEventMember
2015-10-01
2015-11-13
0001626878
2013-12-31
0001626878
2014-09-30
0001626878
2014-11-18
0001626878
2014-12-31
0001626878
us-gaap:MaximumMember
2014-12-31
0001626878
us-gaap:MinimumMember
2014-12-31
0001626878
2015-03-31
0001626878
us-gaap:MaximumMember
2015-03-31
0001626878
us-gaap:MinimumMember
2015-03-31
0001626878
us-gaap:IPOMember
2015-04-17
0001626878
2015-06-30
0001626878
us-gaap:MaximumMember
2015-06-30
0001626878
us-gaap:MinimumMember
2015-06-30
0001626878
2015-09-30
0001626878
xbit:ThePlanMember
2015-09-30
0001626878
us-gaap:MaximumMember
2015-09-30
0001626878
us-gaap:MinimumMember
2015-09-30
0001626878
2015-11-10