0.001
10.25
2900000
137894487
627735767
500000
250000
6423000
3423000
13423000
6423000
290000000
100000000
500000000
2200000
500000
6900000
1894000
8727000
12.25
8032000
1084000
143469000
73664000
-450682000
599796000
-12000
103594000
104000
-5737000
-45000
449636000
81725000
-455712000
905256000
-45000
136640000
137000
200000000
136722000
0.001
136722000
10394000
7.04
-517418000
544000
14421000
413875000
3810000
216000
151000
151000
7002000
399454000
301000
137000
916584000
7133000
972000
149000
290000
6767000
351000
13971000
148883000
6618000
382535000
139000
24000
3479000
152000
286558000
27657000
77261000
127376000
10758000
15256000
314064000
27657000
10725000
1010000
10612000
413875000
314215000
286558000
148883000
0
410000
52000
396000
3460000
416000
1228000
1441000
314215000
-517418000
916584000
151000
136722000
137000
53896000
267000
96891000
97158000
173475000
86844000
4000
129000
163286000
163161000
19000
10000
53887000
53896000
33000
1729000
4598000
4252000
4.68
0
6.37
200000000
137894000
11758000
8321000
12160000
6.37
0.001
137894000
0
8321000
6.63
12160000
6.37
6.63
21000
18961000
5000000
-602654000
328000
2047000
900000
13098000
337613000
4014000
149000
-389000
-389000
5253000
324515000
925000
131000
138000
927420000
8060000
735000
222000
83000
9000
7461000
170000
12884000
138491000
7461000
303938000
398000
282000
2816000
152000
257000
256578000
30511000
43496000
115009000
13480000
60000
287478000
30511000
9720000
12312000
1260000
10876000
337613000
287089000
256578000
138491000
0
275000
196000
205000
3804000
258000
465000
1599000
2384000
1000
287089000
497646000
6047000
5189000
0.10
1591000
750000
0.025
93000
134000
10.50
10.55
3195000
3360000
3.08
3.07
128000
128000
1.05
1.05
166000
2487000
4.19
4.50
1022000
1113000
8.71
8.71
1136000
1412000
13.44
13.43
2581000
3526000
7.49
7.48
6859000
-602654000
927420000
-389000
137894000
138000
369929000
42030000
9000
2000
29079000
29086000
170175000
74884000
324000
216297000
215973000
72000
42102000
42030000
8000
1885000
4706000
4277000
250000
3000000
7000000
1700000
66122000
18367000
225000000
2673000
13800000
132558000
P60D
2018-01-31
0.20
1500000
70000
P180D
P60D
8944000
2811000
2811000
20400000
0.340
0.3564
0.0284
5577000
P6Y3M
-0.050
4.64
0
6.66
125592000
0.0052
-0.04
0.00
66122000
1188000
411000
-2000
290000
248000
704000
8944000
-15107000
-5030000
50000
-5063000
-33000
10072000
692525000
3857000
-33000
837000
0
693000
694000
-2285000
55000
-298654000
394575000
10072000
296000
290000
699000
24676000
3856000
301138000
629000
56553000
5302000
8061000
-699000
2002000
81229000
229000
3730000
53000
2486000
9887000
25000
9913000
5567000
4346000
P6M
0
160000
0.0008
0.88
0.0007
0.57
66122000
66122000
-5030000
290000
10072000
3730000
132509000
158859000
-33000
36000
835000
1000
8000
13800000
14000
18367000
18000
126000
5611000
138134000
138260000
158877000
158877000
8501000
2833000
1.00
0.0193
0.91
0.0154
0.84
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Cash,
Cash Equivalents and Restricted Cash</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cash and cash
equivalents are stated at cost, which approximates fair value, and
include short-term, highly-liquid investments with original
maturities of less than three months. The Company also holds
certificates of deposit, which collateralize the Company’s
facility lease which are classified as restricted cash in the
accompanying balance sheets. The restricted cash will be released
from restriction in 2020. At December 31, 2017 and 2016, the
Company had $43,496 and $77,261, respectively, of cash and cash
equivalents.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>5.
Collaboration Arrangements</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Janssen
Pharmaceuticals, Inc.</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">On
September 9, 2017, the Company received notice from Janssen of
its termination, effective as of November 8, 2017, of the
Collaboration and License Agreement between the Company and Janssen
dated May 19, 2015, as amended (the “Janssen
Agreement”).</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Under the
terms of the Janssen Agreement, the Company granted Janssen
exclusive worldwide rights to develop and commercialize products
that contained one or more of the Company’s drug candidates
for the treatment of chronic hepatitis C virus,
(“HCV”), namely odalasvir, a second-generation NS5A
inhibitor, <font style="WHITE-SPACE: nowrap">ACH-3422,</font> a NS5B HCV
polymerase inhibitor, and sovaprevir, a NS3/4A HCV protease
inhibitor. In May 2015, the Company also entered into a parallel
transaction with Janssen’s affiliate, JJDC, Inc.
(“JJDC”) pursuant to which JJDC purchased 18,367 shares
(the “Shares”) of the Company’s common stock at a
price of $12.25 per share, for an aggregate purchase price of
$225,000. In connection with the purchase of the Shares, the
Company and JJDC also entered into an investor agreement (the
“Investor Agreement”) on July 1, 2015 governing
specified rights and obligations of JJDC with respect to its
ownership of the Shares.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Janssen
terminated the Janssen Agreement under section 14.6 of the Janssen
Agreement, which allows for unilateral termination at
Janssen’s discretion upon 60 days’ written notice to
the Company at any time prior to the submission of the first
application for marketing approval for a licensed product in any of
the major market countries specified in the Janssen Agreement.
Pursuant to its notice of termination, Janssen informed the Company
that with an increasing number of effective therapies addressing
medical need in hepatitis C, Janssen had made a strategic decision
to discontinue the development of JNJ-4178, a three-drug
combination regimen that contained one of the Company’s HCV
product candidates that it licensed to Janssen under the Janssen
Agreement. Following the termination, all licenses granted by
either party to the other under the Janssen Agreement terminated,
except to the extent necessary to allow either party to perform any
obligations or exercise rights that survive the
termination.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Under the
terms of the Janssen Agreement, the Company earned a $15,000
clinical milestone payment in December 2016 and would have been
eligible to receive (1) up to an additional $100,000 of
clinical milestone payments based upon the achievement of clinical
enrollment and dosing in a phase III study, (2) up to an
additional $290,000 of milestone payments based upon regulatory
approvals and first commercial sale in specified territories, the
majority of which related to regulatory approval and the first
commercial sale in the United States, and (3) up to an
additional $500,000 of milestone payments based upon achieving
worldwide sales targets. The Company would also have been eligible
to receive royalties on worldwide annual net sales of licensed
products, if any, at tiered royalty rate percentages beginning in
the mid-teens and rising to the low-twenties, subject to customary
reductions. Janssen was to bear the future costs of worldwide
development and commercialization of licensed products.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Pursuant to
the terms of the Janssen Agreement, the Company was required to
provide technology transfer services related to the chemistry,
manufacturing and know-how to Janssen for up to 180 days after the
effective date. In accordance with ASC 605-25, “Revenue
Recognition—Multiple-element arrangements,” which
provides guidance on accounting for multiple-element arrangements,
including the determination of the units of accounting and
allocation of total arrangement consideration, the Company
identified all of the obligations at the inception of the Janssen
Agreement. The significant obligations were determined to be the
license and the technology transfer services. The Company
determined that license and technology transfer services
represented a single unit of accounting because they were not
viewed to have standalone value. The only upfront amount received
by the Company in exchange for the license and technology transfer
services and the issuance of the Company’s common stock was
the $225,000. The Company determined that the amount received in
excess of the fair value of the Company’s common stock upon
issuance of $66,122 was attributed to the license and technology
services. The Company also determined that there was no discernable
pattern in which the technology services would be provided during
the 180 day period after the effective date. In accordance with ASC
605-10, “Revenue Recognition—Overall,” the
Company determined that straight-line attribution of the license
and technology services revenues would be used to recognize
revenue. As such, revenue of $66,122 was recorded during the year
ended December 31, 2015 associated with this
transaction.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Pursuant to
the terms of the Investor Agreement, which remained in effect
following the termination of the Janssen Agreement, the Shares were
subject to a lock-up restriction, voting covenants and a standstill
agreement, each of which expired on July 1, 2016. In February
2017, the Company entered into an agreement with JJDC (the
“Lock-Up Agreement”) pursuant to which the Shares
became subject to a new lock-up restriction, which expired on the
earlier of January 31, 2018, or the date that was sixty days
after the first public announcement of top-line clinical results
from Janssen’s phase IIb OMEGA-1 clinical trial of JNJ-4178,
a three drug combination for the treatment of HCV which contained
odalasvir, one of the HCV drug candidates the Company had licensed
to Janssen under the Janssen Agreement. On November 15, 2017,
the Company entered into an underwriting agreement (the
“Underwriting Agreement”) with Goldman Sachs &
Co. LLC and Leerink Partners LLC, acting as representatives of the
underwriters named therein, and JJDC, as selling stockholder,
relating to an underwritten public offering (the
“Offering”) of the Shares of the Company’s common
stock, held by JJDC. The Shares were offered pursuant to a shelf
registration that was declared effective on April 28, 2017. In
connection with the Offering, the Company entered into a letter
agreement (the “Letter Agreement”), dated
November 14, 2017, with JJDC pursuant to which the Company and
JJDC agreed, that effective upon execution and delivery of the
Underwriting Agreement: (1) the Company agreed to release the
restrictions on the disposition of the Shares by JJDC, which JJDC
previously agreed to in the Lock-Up Agreement in connection with
the filing of the shelf registration statement referred to above;
(2) the Company and JJDC agreed to amend the investor
agreement (the “Investor Agreement”) that the Company
and JJDC entered into on July 1, 2015 in connection with
JJDC’s acquisition of the Shares to provide that the Company
would pay $2,900 of the aggregate underwriting discounts and
commissions of the Offering, which was determined based on a
calculation set forth in the Letter Agreement; and (3) the
Company and JJDC agreed that, following the closing of the
Offering, the Investor Agreement would terminate and be of no
further force or effect.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Other
Arrangements.</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
also has license agreements with GCA Therapeutics, Ltd
(“GCAT”), for elvucitabine, its nucleoside reverse
transcriptase inhibitor for the treatment of both hepatitis B
infection and human immunodeficiency virus infection and with Ora,
Inc. (“ORA”), for the development and commercialization
of ACH-702 delivered topically or locally. The Company does not
believe that the milestones specified under these agreements are
substantive as achievement of the milestones is based solely on the
performance of GCAT and ORA and does not relate to any past or
future performance by the Company. Because the Company has no
performance obligations under these agreements, it intends to
recognize revenue related to any milestone payment upon achievement
of a milestone by GCAT or Ora.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>13.
Commitments and Contingencies</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 24px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>401(k)
Retirement Plan</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
has a 401(k) defined contribution retirement plan covering
substantially all full-time employees. The Company currently
matches employee contributions at a rate of $0.50 cents for each
dollar contribution, up to 6% of salary deferrals. However, the
decision to match any employee contributions is at the sole
discretion of the Company. The Company made matching contributions
of $415, $406 and $296 for the years ended December 31, 2017,
2016 and 2015, respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 24px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Operating Leases</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
Company’s commitments consist of obligations under operating
leases for its facilities and office equipment. The Company leases
its operating facility located in New Haven, Connecticut. The lease
agreement requires monthly lease payments through March 2020. The
Company is recording the expense associated with the lease on a
straight-line basis over the expected term of the lease and, as a
result, has accrued $149 and $216 at December 31, 2017 and
2016, respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The future
minimum annual lease payments under these operating leases at
December 31, 2017 are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 89pt; BORDER-BOTTOM: rgb(0,0,0) 1px solid; DISPLAY: inline">
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Year Ended
December 31,</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">925</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">900</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2020</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">222</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,047</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Rent expense
under operating leases was $811, $801 and $629 for the years ended
December 31, 2017, 2016 and 2015, respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">From time to
time, in the ordinary course of business, the Company is subject to
litigation and regulatory examinations as well as information
gathering requests, inquiries and investigations. As of
December 31, 2017, there were no active matters.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>11.
Stock-Based Compensation</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 31px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>2006
Stock Incentive Plan</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
Company’s 2006 Stock Incentive Plan (“the 2006
Plan”) was adopted by the Company’s board of directors
in May 2006, amended by its board of directors in September 2006,
approved by its stockholders in September 2006 and became effective
in October 2006, upon the closing of the Company’s initial
public offering. The Company originally reserved for issuance 750
shares of common stock under the 2006 Plan. In addition, the Plan
contained an “evergreen” provision, which allowed for
an annual increase in the number of shares available for issuance
under the Plan on the first day of each fiscal year during the
period beginning on the first day of fiscal year 2007 and ending on
the second day of fiscal year 2010. Under the evergreen provision,
the Company registered an additional 2,673 shares of common stock
to be issued under the 2006 Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">On
June 10, 2010, stockholders of the Company approved an
amendment to the 2006 Plan to increase by 3,000 shares the number
of shares of common stock reserved for issuance under the 2006 Plan
from 3,423 shares to 6,423 shares.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">On
June 5, 2012, stockholders of the Company approved an
amendment to the 2006 Plan to increase by 7,000 shares the number
of shares of common stock reserved for issuance under the 2006 Plan
from 6,423 shares to 13,423 shares.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The 2006 Plan
provided for the grant of incentive stock options, nonstatutory
stock options, restricted stock, restricted stock units, stock
appreciation rights and other stock-based awards. The
Company’s officers, employees, consultants, advisors and
directors, and those of any subsidiaries, were eligible to receive
awards under the 2006 Plan. The Company’s board of directors
administered the 2006 Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Following the
adoption of the 2015 Stock Incentive Plan, the Company no longer
grants stock options or other awards under the 2006
Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 31px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>2015
Stock Incentive Plan</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
Company’s 2015 Stock Incentive Plan (“the 2015
Plan”) was approved by the Company’s stockholders in
June 2015. The 2015 Plan replaced the Company’s 2006 Plan.
Upon the approval of the 2015 Plan by stockholders, the 2006 Plan
terminated, and all then outstanding awards under the 2006 Plan
remained in effect, but no additional awards will be made under the
2006 Plan. However, the terms of the 2006 Plan will continue to
apply to awards previously granted under the 2006 Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The 2015 Plan
allows for the issuance of 6,900 new shares of common stock plus up
to 1,894 shares of common stock that remained available for
issuance under the previously approved 2006 Plan immediately prior
to the effectiveness of the 2015 Plan, all of which shares rolled
over and became available for issuance under the 2015 Plan upon its
effectiveness. Solely to the extent that any of the 8,727 shares of
common stock subject to awards that were issued and outstanding
under the 2006 Plan immediately prior to the effectiveness of the
2015 Plan expire, terminate, are surrendered, cancelled or
forfeited, such shares also will become available for the future
grant of awards under the 2015 Plan. All of the foregoing share
numbers are subject, in the case of incentive stock options, to any
limitations under the Internal Revenue Code of 1986, as amended
(the “Code”), and are also subject to adjustment upon
stock splits, stock dividends, and other specified events. Certain
sub-limitations apply to the shares available for issuance under
the 2015 Plan. The 2015 Plan allows for the issuance of incentive
stock options intended to qualify under Section 422 of the
Code, nonstatutory stock options, stock appreciation rights,
restricted stock awards, restricted stock units and other
stock-based awards. The maximum number of shares with respect to
which awards may be granted to any participant under the 2015 Plan
may not exceed 1,500 shares per fiscal year (subject to adjustment
upon stock splits, stock dividends, and other specified events).
The maximum aggregate number of shares with respect to which awards
may be granted to directors who are not employees of the Company at
the time of grant will be 10% of the maximum number of shares
authorized for issuance under the 2015 Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The 2015 Plan
is administered by the Company’s Board of Directors. The
Company’s officers, employees, consultants, advisors and
directors are eligible to receive awards under the 2015 Plan;
however, incentive stock options may only be granted to
employees.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Options
granted under the Company’s 2006 Stock Incentive Plan and the
2015 Stock Incentive Plan (the “Plans”), are
exercisable for a period determined by the Company, but in no event
longer than ten years from the date of the grant. Options generally
vest over four years.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As of
December 31, 2017, there were 5,189 shares available to be
granted under the 2015 Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">A summary of
the status of the Company’s stock option activity for the
year ended December 31, 2017 is presented in the table and
narrative below:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Options</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted<br />
Average<br />
Exercise<br />
Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding at
January 1, 2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,394</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.04</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Granted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,055</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.10</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Exercised</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Forfeited</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(801</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Cancelled</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(474</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.64</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding at
December 31, 2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">12,160</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Options exercisable at
December 31, 2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,321</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.63</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Options vested and
expected to vest at December 31, 2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,758</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
table summarizes information about stock options outstanding at
December 31, 2017:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="52%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Options
Outstanding</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Options
Vested</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 84pt; BORDER-BOTTOM: rgb(0,0,0) 1px solid; DISPLAY: inline">
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Range of
Exercise Prices</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number<br />
Outstanding</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted Average<br />
Remaining<br />
Contractual Life<br />
(Years)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted<br />
Average<br />
Exercise<br />
Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number<br />
Vested</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted<br />
Average<br />
Exercise<br />
Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$0.00 –
$2.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">128</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.05</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">128</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.05</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$2.01 –
$4.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,360</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3.08</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,195</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3.07</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$4.01 –
$6.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,487</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.19</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">166</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.50</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$6.01 –
$8.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,526</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.49</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,581</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.48</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$8.01 –
$10.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,113</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5.4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.71</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,022</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.71</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$10.01
– $12.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">134</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10.50</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">93</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10.55</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$12.01 –
$14.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,412</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13.44</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,136</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13.43</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">12,160</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,321</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.63</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As of
December 31, 2017, the intrinsic value of the options
outstanding was $258, of which $257 related to vested stock options
and $1 related to unvested stock options. The intrinsic value for
stock options is calculated based on the difference between the
exercise prices of the underlying awards and the quoted stock price
of the Company’s common stock as of the reporting
date.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The total
intrinsic value of stock options exercised for the years ended
December 31, 2017, 2016 and 2015 was $261, $193 and $5,302,
respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
weighted-average, grant-date fair value of options granted during
the years ended December 31, 2017, 2016 and 2015 was $2.91,
$5.56 and $6.66, respectively. The weighted-average, grant-date
fair value of options vested at December 31, 2017, 2016 and
2015 was $4.92, $4.67 and $4.64, respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The weighted
average remaining contractual life is 4.9 years for options
exercisable and 4.7 years for options vested and expected to
vest.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 18px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><i>Stock-Based Compensation</i></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Under the
provisions of ASC 718, stock-based compensation cost is based on
the fair value of the portion of stock-based awards that is
ultimately expected to vest during the period. The Company utilizes
the Black-Scholes option pricing model for determining the
estimated fair value for stock-based awards. The Black-Scholes
model requires the use of assumptions which determine the fair
value of the stock-based awards. Determining the fair value of
stock-based awards at the grant date requires judgment, including
estimating the expected term of stock options, the expected
volatility of our stock and expected dividends. The Company also
estimates forfeitures at the grant date and recognizes compensation
costs for only those awards that are expected to vest. Judgment is
required in estimating the number of stock-based awards that are
expected to be forfeited. The Company bases its estimate of the
expected term on historical data for similar stock option grants,
and calculates volatility based on actual volatility for the
expected term of the option.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
assumptions used to value options granted are as
follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="59%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>For the Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected term of
option</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.0 years</font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.0 – 6.25 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.25 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected
volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">82% – 83%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">81% – 84%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">84% – 91%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Risk free interest
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.04 – 2.27%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.15 – 2.09%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.54 – 1.93%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected dividend
yield</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Total
compensation expense recorded in the accompanying statements of
comprehensive loss associated with option grants made to employees
for the years ended December 31, 2017, 2016 and 2015 was
$10,479, $10,900 and $9,887, respectively. Total compensation
expense recorded in the accompanying statements of comprehensive
loss associated with option grants made to consultants for the
years ended December 31, 2017, 2016 and 2015 was $0, $5 and
$25, respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
recorded no tax benefit related to these options as the Company is
currently in a net operating loss position and maintains a full
valuation allowance.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As of
December 31, 2017, the total compensation cost related to
options not yet recognized in the financial statements is
approximately $12,312, net of estimated forfeitures, and the
weighted average period over which it is expected to be recognized
is 2.3 years.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Compensation
expense related to option grants made to employees and consultants
is included in research and development and general and
administrative expense as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>For the Years Ended December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2017    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2016    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2015    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Research and
development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,408</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,601</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,346</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">General and
administrative</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,071</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,304</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,567</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,479</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,905</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9,913</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><i>2006
Employee Stock Purchase Plan</i></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
established an Employee Stock Purchase Plan effective
December 1, 2006 (the “2006 ESPP Plan”). Eligible
employees can purchase common stock pursuant to payroll deductions
at a price equal to 85% of the lower of the fair market value of
the common stock at the beginning or end of each six-month offering
period. The Company originally reserved for issuance 250 shares of
common stock under the 2006 ESPP Plan. On June 10, 2010,
stockholders of the Company approved an amendment to the 2006 ESPP
Plan to increase by 250 shares the number of shares of common stock
reserved for issuance under the 2006 ESPP Plan from 250 shares
to 500 shares. On June 2, 2015, stockholders of the Company
approved an amendment to the 2006 ESPP Plan to increase by 1,700
shares the number of shares of common stock reserved for issuance
under the 2006 ESPP Plan from 500 to 2,200 shares.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
measures the fair value of issuances under the 2006 ESPP Plan using
the Black-Scholes option pricing model at the end of each reporting
period. The compensation cost for the 2006 ESPP Plan consists of
the 15% of the grant date stock price discount and the fair value
of the option features.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
recorded compensation cost related to the 2006 ESPP Plan of $94,
$100 and $160 for the years ended December 31, 2017, 2016 and
2015, respectively. As of December 31, 2017, there were 1,591
shares available for future issuance under the 2006 ESPP
Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
assumptions used to value options granted under the 2006 ESPP Plan
are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="56%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="5" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>For the Years Ended
December 31,</b></font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected term of
option</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">6 months</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">6 months</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">6 months</font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected
volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">58% – 73%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">55% – 66%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">57% – 88%</font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Risk free interest
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.05 – 1.3%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.05 – 0.06%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.07 – 0.08%</font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected dividend
yield</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
</tr>
</table>
</div>
FY
2017
10-K
0.340
-0.2266
0.0035
0001070336
No
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
Company’s financial instruments, including cash, cash
equivalents, accounts receivable, and accounts payable are carried
at cost, which approximates their fair value because of the
short-term maturity of these instruments.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
believes that the carrying value of its debt balance outstanding
approximates fair value. Fair value is determined using a
discounted cash flow model based on current interest
rates.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Marketable Securities and Equity
Investments</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
applies the provisions of ASC 820, <i>Fair Value
Measurements and Disclosures,</i> for financial
assets and liabilities measured on a recurring basis which requires
disclosure that establishes a framework for measuring fair value.
The guidance requires that fair value measurements be classified
and disclosed in one of three categories:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 49px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Level 1:
Quoted prices in active markets for identical assets and
liabilities that the reporting entity has the ability to access at
the measurement date;</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 49px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Level 2:
Inputs other than quoted prices in active markets, that are
observable either directly or indirectly, such as quoted prices for
similar assets or liabilities, quoted in markets that are not
active, or other inputs that are observable; or</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 49px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Level 3:
Unobservable inputs.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The fair
value of the Company’s marketable securities of $287,089 and
$314,215 as of December 31, 2017 and 2016, respectively, was
valued based on level 2 inputs. The Company’s investments
consist mainly of U.S. government and agency securities,
government-sponsored bond obligations and certain other corporate
debt securities. Fair value is determined by taking into
consideration valuations obtained from third-party pricing
services. The third-party pricing services utilize industry
standard valuation models, for which all significant inputs are
observable, either directly or indirectly, to estimate fair value.
These inputs include reported trades of and broker/dealer quotes on
the same or similar securities; issuer credit spreads; benchmark
securities; and other observable inputs. The Company has assessed
these as level 2 within the fair value hierarchy of ASC 820. The
Company classifies its entire investment portfolio as available for
sale as defined in ASC 320, “Debt and Equity
Securities.” Securities are carried at fair value with the
unrealized gains (losses) reported as a separate component of
stockholders’ equity within accumulated other comprehensive
income.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>1. Nature
of the Business</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Achillion
Pharmaceuticals, Inc. (the “Company”) was incorporated
on August 17, 1998 in Delaware. The Company is a
science-driven, patient-focused biopharmaceutical company seeking
to leverage its believed strengths across the continuum from
discovery through commercialization by discovering and developing
small molecule therapeutics to meet the needs of patients with
complement-mediated diseases. The Company is devoting substantially
all of its efforts towards product research and
development.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
incurred losses of $588,793 from inception through
December 31, 2017 and had an accumulated deficit of $602,654
at December 31, 2017, which includes preferred stock dividends
recognized until the Company’s initial public offering in
2006. The Company has funded its operations primarily through the
sale of equity securities.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Based on the
Company’s current development plan, the Company believes that
its existing cash, cash equivalents and marketable securities will
be sufficient to meet its current projected operating requirements
for at least the next 12 months. However, the Company’s
future capital requirements may change and will depend upon
numerous factors, including but not limited to:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the scope, progress, results and costs of drug discovery,
preclinical development, laboratory testing and clinical trials for
the Company’s drug candidates;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the Company’s ability to realize the planned cost savings
benefits of the restructuring it implemented in February 2018,
which included a significant reduction in its workforce;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the Company’s ability to enter into and the terms and
timing of any collaborations, licensing or other arrangements that
it may establish;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the number of future drug candidates that the Company pursues
and their development requirements;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the outcome, timing and costs of seeking regulatory
approvals;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the costs of commercialization activities for any of the
Company’s drug candidates that receive marketing approval to
the extent such costs are not the responsibility of any
collaborators, including the costs and timing of establishing
product sales, marketing, distribution and manufacturing
capabilities;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">subject to receipt of marketing approval, revenue, if any,
received from commercial sales of the Company’s drug
candidates;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the Company’s headcount growth and associated costs as it
seeks to expand its research and development and establish a
commercial infrastructure;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the costs involved in preparing, filing, prosecuting,
maintaining, enforcing and defending patent and other intellectual
property rights and defending against intellectual property-related
claims;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the Company’s ability to raise debt or equity capital,
including any changes in the credit or equity markets that may
impact its ability to obtain capital in the future;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
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<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the costs associated with, and the outcome of, lawsuits against
the Company, if any;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the Company’s acquisition and development of new
technologies and drug candidates; and</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">competing technological and market developments, including
those currently unknown to the Company.</font></p>
</td>
</tr>
</table>
</div>
-59478000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Accounting Standards Updates</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In
May 2014, the Financial Accounting Standards Board
(“FASB”) issued Accounting Standards Update
(“ASU”) No. 2014-09, “Revenue from Contracts
with Customers (Topic 606),” which supersedes all existing
revenue recognition requirements, including most industry-specific
guidance. ASU No. 2014-09 requires a company to recognize
revenue when it transfers goods or services to customers in an
amount that reflects the consideration that the company expects to
receive for those goods or services. In August 2015, the FASB
issued ASU No. 2015-14, “Revenue from Contracts with
Customers (Topic 606): Deferral of the Effective Date,” which
delays the effective date of ASU No. 2014-09 by one year. The
new standard is effective for reporting periods beginning after
December 15, 2017. In March 2016, FASB also issued ASU
No. 2016-08, “Revenue from Contracts with Customers
(Topic 606): Principal versus Agent Considerations,” which
clarifies the implementation guidance on principal versus agent
considerations. Further, in April 2016, FASB issued
ASU No. 2016-10, “Revenue from Contracts with
Customers (Topic 606): Identifying Performance Obligations and
Licensing,” which clarifies the implementation guidance on
identifying performance obligations and licensing. ASU
No. 2014-09 or Topic 606 will not have a material impact on
its financial position and results of operations, as it does not
have any material revenue-generating contracts.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In
February 2016, FASB issued ASU No. 2016-02
“Leases—Topic 842.” ASU No. 2016-02 requires
the recognition of lease assets and lease liabilities by lessees
for all leases greater than one year in duration and classified as
operating leases under previous GAAP. ASU No. 2016-02 is
effective for fiscal years beginning after December 15, 2018,
and for interim periods within that fiscal year. The Company is
currently evaluating the impact ASU No. 2016-02 will have on
its financial position and results of operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In
March 2016, FASB issued ASU No. 2016-09,
“Compensation—Stock Compensation (Topic 718).”
The new guidance simplifies certain aspects related to income
taxes, statement of cash flows, and forfeitures when accounting for
share-based payment transactions. ASU No. 2016-09 is effective
for annual periods beginning after December 15, 2017, and
interim periods within annual periods beginning after
December 15, 2018. Early adoption is permitted. The Company
adopted ASU No 2016-09 as of January 1, 2017. The adoption of
this guidance did not have a material effect on the Company’s
financial position and results of operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In
August 2016, FASB issued ASU No. 2016-15<i>,
“</i>Classification of Certain Cash Receipts and Cash
Payments.<i>”</i> ASU No. 2016-15
eliminates the diversity in practice related to the classification
of certain cash receipts and payments in the statement of cash
flows by adding or clarifying guidance on eight specific cash flow
issues. ASU No. 2016-15 is effective for fiscal years
beginning after December 15, 2017 and for interim periods
within those fiscal years. The Company does not believe ASU
No. 2016-15 will have a material effect on its financial
position and results of operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In November
2016, FASB issued ASU No. 2016-18, “Statement of Cash
Flows (Topic 230): Restricted Cash.” ASU No. 2016-18
requires that the statement of cash flows explain the change during
the period in the total of cash, cash equivalents and restricted
cash. As a result, restricted cash will be included with cash and
cash equivalents when reconciling the beginning-of-period and
end-of-period total amounts shown on the statement of cash flows.
The new guidance is effective for fiscal years beginning after
December 15, 2017 and for interim periods within those fiscal
years. Early adoption is permitted, and the new guidance is to be
applied retrospectively. The Company does not believe ASU 2016-18
will have a material effect on its financial position and results
of operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In January
2017, FASB issued ASU No. 2017-01, “Business
Combinations (Topic 805): Clarifying the Definition of a
Business.” ASU 2017-01 adds guidance to assist entities with
evaluating whether transactions should be accounted for as
acquisitions (or disposals) of assets or businesses. The new
guidance is effective for fiscal years beginning after
December 15, 2017 and for interim periods within those fiscal
years. The Company does not believe ASU 2017-01 will have a
material effect on its financial position and results of
operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In May 2017,
FASB issued ASU No. 2017-09, “Compensation-Stock
Compensation (Topic 718): Scope of Modification Accounting”
which provides clarification on when modification accounting should
be used for changes to the terms or conditions of a share-based
payment award. ASU No. 2017-09 does not change the accounting
for modifications but clarifies that modification accounting
guidance should only be applied if there is a change to the value,
vesting conditions, or award classification. ASU No. 2017-09
is effective for fiscal years beginning after December 15,
2017 and interim periods within those fiscal years. Early adoption
is permitted. The Company does not believe ASU No. 2017-09
will have a material effect on its financial position and results
of operations.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The income
tax provision (benefit) consists of the following:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="76%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Deferred:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal and
state</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15,506</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(23,232</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">699</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(15,506</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,232</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(699</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total deferred</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The future
minimum annual lease payments under these operating leases at
December 31, 2017 are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="90%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 89pt; BORDER-BOTTOM: rgb(0,0,0) 1px solid; DISPLAY: inline">
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Year Ended
December 31,</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">925</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">900</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2020</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">222</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,047</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
474000
P4Y8M12D
2.70
P6Y1M6D
P6Y
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>2. Summary
of Significant Accounting Policies</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Use of
Estimates</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States
(“GAAP”) requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Revenue
Recognition</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
recognizes revenue from contract research and development and
research progress payments in accordance with Accounting Standards
Codification (“ASC”) 605, <i>Revenue
Recognition</i>. Revenue-generating research and development
collaborations are often multiple element arrangements, providing
for a license as well as research and development services. In
order to account for these arrangements, the Company must identify
the deliverables included within the arrangement and evaluate which
deliverables represent separate units of accounting based on if
certain criteria are met, including whether the delivered element
has stand-alone value to the collaborator. The consideration
received is allocated among the separate units of accounting and
the applicable revenue recognition criteria are applied to each of
the separate units.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">When the
Company determines that an arrangement should be accounted for as a
single unit of accounting, it must determine the period over which
the performance obligations will be performed and revenue related
to upfront license payments will be recognized. Revenue will be
recognized using either a proportionate performance or
straight-line method. The Company recognizes revenue using the
proportionate performance method provided that it can reasonably
estimate the level of effort required to complete its performance
obligations under an arrangement and such performance obligations
are provided on a best-efforts basis. Under the proportionate
performance method, periodic revenue related to up-front license
payments is recognized as the percentage of actual effort expended
in that period to total effort expected for all of its performance
obligations under the arrangement. Actual effort is generally
determined based upon actual direct labor hours or full-time
equivalents (“FTE”) incurred and include research and
development activities performed by internal scientists. Total
expected effort is generally based upon the total direct labor
hours of FTEs incorporated into the detailed budget and project
plan that is agreed to by both parties to the collaboration.
Significant management judgment is required in determining the
level of effort required under an arrangement and the period over
which the Company expects to complete the related performance
obligations. In the event that a change in estimate occurs, the
change will be accounted for using the cumulative catch-up method
which provides for an adjustment to revenue in the current period.
Estimates of the Company’s level of effort may change in the
future, resulting in a material change in the amount of revenue
recognized in future periods, including negative revenue in some
periods. Generally, under collaboration arrangements, payments
received during the period of performance may include up-front
payments, time-or performance-based milestones and reimbursement of
internal and external costs. The proportion of actual performance
to total expected performance is applied to these payments in
determining periodic revenue but will be limited by the aggregate
cash received or receivable to date.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Substantive
milestone payments are recognized upon achievement of the
milestone. Determining whether a milestone is substantive requires
judgment that should be made at the inception of the arrangement.
To meet the definition of a substantive milestone, the
consideration earned by achieving the milestone (1) would have
to be commensurate with either the level of effort required to
achieve the milestone or the enhancement in the value of the item
delivered, (2) would have to relate solely to past
performance, and (3) should be reasonable relative to all
deliverables and payment terms in the arrangement. No bifurcation
of an individual milestone is allowed and there can be more than
one milestone in an arrangement.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Under the
terms of the Collaboration and License Agreement between the
Company and Janssen Pharmaceuticals, Inc. (“Janssen”)
dated May 19, 2015, as amended (the “Janssen
Agreement”), the Company had granted Janssen exclusive
worldwide rights to develop and commercialize products that
contained one or more of the Company’s drug candidates for
the treatment of chronic hepatitis C virus, (“HCV”),
namely odalasvir, a second-generation NS5A inhibitor, ACH-3422, a
NS5B HCV polymerase inhibitor, and sovaprevir, a NS3/4A HCV
protease inhibitor. In May 2015, the Company also entered into a
parallel transaction with Janssen’s affiliate, JJDC, Inc.
(“JJDC”) pursuant to which JJDC purchased 18,367 shares
(the “Shares”) of the Company’s common stock at a
price of $12.25 per share, for an aggregate purchase price of
$225,000 pursuant to a stock purchase agreement (the “JJDC
Stock Purchase Agreement”). In connection with the purchase
of the Shares, the Company and JJDC also entered into an investor
agreement (the “Investor Agreement”) on July 1,
2015 governing specified rights and obligations of JJDC with
respect to its ownership of the Shares.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Pursuant to
the terms of the Janssen Agreement, the Company was required to
provide technology transfer services related to the chemistry,
manufacturing and know-how to Janssen for up to 180 days after the
effective date of the agreement. In accordance with ASC 605-25,
which provides guidance on accounting for multiple-element
arrangements, including the determination of the units of
accounting and allocation of total arrangement consideration, the
Company identified all of the obligations at the inception of the
Janssen Agreement. The significant obligations were determined to
be the license and the technology transfer services. The Company
determined that license and technology transfer services
represented a single unit of accounting because they were not
viewed to have standalone value. The Janssen Agreement entered into
by the Company and Janssen, and the JJDC Stock Purchase Agreement
and the Investor Agreement, which were entered into by the Company
and Janssen’s affiliate, were entered into in contemplation
of each other. The only upfront amount received by the Company in
exchange for the license and technology transfer services and the
issuance of the Shares was the $225,000. The Company determined
that the amount received in excess of the fair value of the Shares
upon issuance of $66,122 was attributed to the license and
technology services. The Company also determined that there was no
discernable pattern in which the technology services would be
provided during the 180 day period after the effective date. In
accordance with ASC 605-10, the Company determined that
straight-line attribution of the license and technology services
revenues would be used to recognize revenue. As such, revenue of
$66,122 was recorded during the year ended December 31, 2015
associated with this transaction.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Under the
terms of the Janssen Agreement, the Company earned a $15,000
clinical milestone payment in December 2016 and would have been
eligible to receive additional milestones in the future. The
Company elected to apply the guidance in ASC 605-28 to the
milestones. These milestones, if achieved, were substantive as they
would relate solely to past performance and were commensurate with
estimated enhancement of value associated with the achievement of
each milestone as a result of the Company’s
performance.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">On
September 9, 2017, the Company received notice from Janssen of
Janssen’s termination, effective as of November 8, 2017,
of the Janssen Agreement. In November 2017, JJDC sold all of the
Shares of the Company’s common stock it acquired under the
JJDC Stock Purchase Agreement.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Stock-Based Compensation—Employee Stock-Based
Awards</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
applies the provisions of ASC 718, <i>Stock
Compensation, </i>which requires measurement and
recognition of compensation expense for all stock-based awards made
to employees and directors, including employee stock options and
employee stock purchases under the Company’s 2006 ESPP Plan
based on estimated fair values.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
primarily grants nonqualified stock options for a fixed number of
shares to employees with an exercise price equal to the market
value of the shares at the date of grant. Under the fair value
recognition provisions, stock-based compensation cost is based on
the fair value of the portion of stock-based awards that is
ultimately expected to vest.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
utilizes the Black-Scholes option pricing model for determining the
estimated fair value for stock-based awards. The Black-Scholes
model requires the use of assumptions which determine the fair
value of the stock-based awards. Determining the fair value of
stock-based awards at the grant date requires judgment, including
estimating the expected term of stock options, the expected
volatility of our stock and expected dividends.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
bases its estimate of the expected term on historical data for
similar stock option grants and calculates volatility based on
actual volatility for the expected term of the option. The Company
estimates forfeitures at the grant date and recognizes compensation
costs for only those awards that are expected to vest.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Accrued
Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As part of
the process of preparing financial statements, the Company is
required to estimate accrued expenses. This process involves
identifying services which have been performed on its behalf and
estimating the level of service performed and the associated cost
incurred for such service as of each balance sheet date in its
financial statements.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In accruing
service fees, the Company estimates the time period over which
services will be provided and the level of effort in each period.
If the actual timing of the provision of services or the level of
effort varies from the estimate, the Company will adjust the
accrual accordingly. The majority of service providers invoice the
Company monthly in arrears for services performed. Some service
providers require upfront or milestone payments. If the estimate of
services performed is less than the upfront or milestone payments,
the difference is accounted for as a prepaid expense. In the event
that the Company does not identify costs that have begun to be
incurred or the Company underestimates or overestimates the level
of services performed or the costs of such services, actual
expenses could differ from such estimates. The date on which some
services commence, the level of services performed on or before a
given date and the cost of such services are often subjective
determinations. The Company makes judgments based upon facts and
circumstances known to it in accordance with GAAP.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Cash,
Cash Equivalents and Restricted Cash</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cash and cash
equivalents are stated at cost, which approximates fair value, and
include short-term, highly-liquid investments with original
maturities of less than three months. The Company also holds
certificates of deposit, which collateralize the Company’s
facility lease which are classified as restricted cash in the
accompanying balance sheets. The restricted cash will be released
from restriction in 2020. At December 31, 2017 and 2016, the
Company had $43,496 and $77,261, respectively, of cash and cash
equivalents.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Marketable Securities and Equity
Investments</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
applies the provisions of ASC 820, <i>Fair Value
Measurements and Disclosures,</i> for financial
assets and liabilities measured on a recurring basis which requires
disclosure that establishes a framework for measuring fair value.
The guidance requires that fair value measurements be classified
and disclosed in one of three categories:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 62px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Level 1:
Quoted prices in active markets for identical assets and
liabilities that the reporting entity has the ability to access at
the measurement date;</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 62px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Level 2:
Inputs other than quoted prices in active markets, that are
observable either directly or indirectly, such as quoted prices for
similar assets or liabilities, quoted in markets that are not
active, or other inputs that are observable; or</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 62px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Level 3:
Unobservable inputs.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The fair
value of the Company’s marketable securities of $287,089 and
$314,215 as of December 31, 2017 and 2016, respectively, was
valued based on level 2 inputs. The Company’s investments
consist mainly of U.S. government and agency securities,
government-sponsored bond obligations and certain other corporate
debt securities. Fair value is determined by taking into
consideration valuations obtained from third-party pricing
services. The third-party pricing services utilize industry
standard valuation models, for which all significant inputs are
observable, either directly or indirectly, to estimate fair value.
These inputs include reported trades of and broker/dealer quotes on
the same or similar securities; issuer credit spreads; benchmark
securities; and other observable inputs. The Company has assessed
these as level 2 within the fair value hierarchy of ASC 820. The
Company classifies its entire investment portfolio as available for
sale as defined in ASC 320, “Debt and Equity
Securities.” Securities are carried at fair value with the
unrealized gains (losses) reported as a separate component of
stockholders’ equity within accumulated other comprehensive
income.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
Company’s financial instruments, including cash, cash
equivalents, accounts receivable, and accounts payable are carried
at cost, which approximates their fair value because of the
short-term maturity of these instruments.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
believes that the carrying value of its debt balance outstanding
approximates fair value. Fair value is determined using a
discounted cash flow model based on current interest
rates.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Concentration of Risk</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Concentration
of credit risk exists with respect to cash and cash equivalents and
investments. The Company maintains its cash and cash equivalents
and investments with high quality financial institutions. At times,
amounts may exceed federally insured deposit limits.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">For the years
ended December 31, 2017, 2016, and 2015, 0%, 100% and 100%,
respectively, of the Company’s revenue was generated from the
Janssen Agreement. At December 31, 2017 and 2016, 53% and 99%,
respectively, of the Company’s accounts receivable was from
Janssen.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 18px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Fixed
Assets</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Property and
equipment are recorded at cost and are depreciated and amortized
over the shorter of their remaining lease term or their estimated
useful lives on a straight-line basis as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="84%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Laboratory
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4-7 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Office
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3-5 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Leasehold
improvements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> <br /></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">Lesser of life
of<br />
improvement or lease term</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> <br />
 </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Expenditures
for maintenance and repairs, which do not improve or extend the
useful lives of the respective assets, are expensed as incurred.
When assets are sold or retired, the related cost and accumulated
depreciation are removed from their respective accounts and any
resulting gain or loss is included in income (loss) from
operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Long-lived Assets</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">ASC
360, <i>Property, Plant and
Equipment, </i>addresses the financial accounting
and reporting for impairment or disposal of long-lived assets. The
Company reviews the recorded values of long-lived assets for
impairment whenever events or changes in business circumstance
indicate that the carrying amount of an asset or group of assets
may not be fully recoverable.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Research and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">All costs
associated with internal research and development, research and
development services for which the Company has externally
contracted and licensed technology are expensed as incurred.
Research and development expense includes direct and indirect costs
for salaries, employee benefits, subcontractors, including clinical
research organizations (“CROs”), operating supplies,
facility-related expenses and depreciation.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Patent
Costs</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
expenses the costs of obtaining and maintaining patents.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Income
Taxes</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
uses an asset and liability approach for financial accounting and
reporting of income taxes. Deferred tax assets and liabilities are
determined based on temporary differences between financial
reporting and tax basis of assets and liabilities and are measured
by applying enacted rates and laws to taxable years in which
differences are expected to be recovered or settled. Further, the
effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that the rate change is
enacted. A valuation allowance is required when it is “more
likely than not” that all or a portion of deferred tax assets
will not be realized.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
applies the provisions of ASC 740, <i>Income
Taxe</i>s, which prescribes a comprehensive model for how a company
should recognize, measure, present, and disclose in its financial
statements uncertain tax positions that the company has taken or
expects to take on a tax return (including a decision whether to
file or not file a return in a particular jurisdiction). The
financial statements reflect expected future tax consequences of
such positions presuming the taxing authorities’ full
knowledge of the position and all relevant facts.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
did not have any unrecognized tax benefits as of December 31,
2017. The Company reviews all tax positions to ensure the tax
treatment selected is sustainable based on its technical merits and
that the position would be sustained if challenged.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Segment
Information</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
is engaged solely in the discovery and development of innovative
small molecule drug therapies. Accordingly, the Company has
determined that it operates in one operating segment.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Accounting Standards Updates</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In
May 2014, the Financial Accounting Standards Board
(“FASB”) issued Accounting Standards Update
(“ASU”) No. 2014-09, “Revenue from Contracts
with Customers (Topic 606),” which supersedes all existing
revenue recognition requirements, including most industry-specific
guidance. ASU No. 2014-09 requires a company to recognize
revenue when it transfers goods or services to customers in an
amount that reflects the consideration that the company expects to
receive for those goods or services. In August 2015, the FASB
issued ASU No. 2015-14, “Revenue from Contracts with
Customers (Topic 606): Deferral of the Effective Date,” which
delays the effective date of ASU No. 2014-09 by one year. The
new standard is effective for reporting periods beginning after
December 15, 2017. In March 2016, FASB also issued ASU
No. 2016-08, “Revenue from Contracts with Customers
(Topic 606): Principal versus Agent Considerations,” which
clarifies the implementation guidance on principal versus agent
considerations. Further, in April 2016, FASB issued
ASU No. 2016-10, “Revenue from Contracts with
Customers (Topic 606): Identifying Performance Obligations and
Licensing,” which clarifies the implementation guidance on
identifying performance obligations and licensing. ASU
No. 2014-09 or Topic 606 will not have a material impact on
its financial position and results of operations, as it does not
have any material revenue-generating contracts.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In
February 2016, FASB issued ASU No. 2016-02
“Leases—Topic 842.” ASU No. 2016-02 requires
the recognition of lease assets and lease liabilities by lessees
for all leases greater than one year in duration and classified as
operating leases under previous GAAP. ASU No. 2016-02 is
effective for fiscal years beginning after December 15, 2018,
and for interim periods within that fiscal year. The Company is
currently evaluating the impact ASU No. 2016-02 will have on
its financial position and results of operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In
March 2016, FASB issued ASU No. 2016-09,
“Compensation—Stock Compensation (Topic 718).”
The new guidance simplifies certain aspects related to income
taxes, statement of cash flows, and forfeitures when accounting for
share-based payment transactions. ASU No. 2016-09 is effective
for annual periods beginning after December 15, 2017, and
interim periods within annual periods beginning after
December 15, 2018. Early adoption is permitted. The Company
adopted ASU No 2016-09 as of January 1, 2017. The adoption of
this guidance did not have a material effect on the Company’s
financial position and results of operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In
August 2016, FASB issued ASU No. 2016-15<i>,
“</i>Classification of Certain Cash Receipts and Cash
Payments.<i>”</i> ASU No. 2016-15
eliminates the diversity in practice related to the classification
of certain cash receipts and payments in the statement of cash
flows by adding or clarifying guidance on eight specific cash flow
issues. ASU No. 2016-15 is effective for fiscal years
beginning after December 15, 2017 and for interim periods
within those fiscal years. The Company does not believe ASU
No. 2016-15 will have a material effect on its financial
position and results of operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In November
2016, FASB issued ASU No. 2016-18, “Statement of Cash
Flows (Topic 230): Restricted Cash.” ASU No. 2016-18
requires that the statement of cash flows explain the change during
the period in the total of cash, cash equivalents and restricted
cash. As a result, restricted cash will be included with cash and
cash equivalents when reconciling the beginning-of-period and
end-of-period total amounts shown on the statement of cash flows.
The new guidance is effective for fiscal years beginning after
December 15, 2017 and for interim periods within those fiscal
years. Early adoption is permitted, and the new guidance is to be
applied retrospectively. The Company does not believe ASU 2016-18
will have a material effect on its financial position and results
of operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In January
2017, FASB issued ASU No. 2017-01, “Business
Combinations (Topic 805): Clarifying the Definition of a
Business.” ASU 2017-01 adds guidance to assist entities with
evaluating whether transactions should be accounted for as
acquisitions (or disposals) of assets or businesses. The new
guidance is effective for fiscal years beginning after
December 15, 2017 and for interim periods within those fiscal
years. The Company does not believe ASU 2017-01 will have a
material effect on its financial position and results of
operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In May 2017,
FASB issued ASU No. 2017-09, “Compensation-Stock
Compensation (Topic 718): Scope of Modification Accounting”
which provides clarification on when modification accounting should
be used for changes to the terms or conditions of a share-based
payment award. ASU No. 2017-09 does not change the accounting
for modifications but clarifies that modification accounting
guidance should only be applied if there is a change to the value,
vesting conditions, or award classification. ASU No. 2017-09
is effective for fiscal years beginning after December 15,
2017 and interim periods within those fiscal years. Early adoption
is permitted. The Company does not believe ASU No. 2017-09
will have a material effect on its financial position and results
of operations.</font></p>
</div>
ACHN
false
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Concentration of Risk</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Concentration
of credit risk exists with respect to cash and cash equivalents and
investments. The Company maintains its cash and cash equivalents
and investments with high quality financial institutions. At times,
amounts may exceed federally insured deposit limits.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">For the years
ended December 31, 2017, 2016, and 2015, 0%, 100% and 100%,
respectively, of the Company’s revenue was generated from the
Janssen Agreement. At December 31, 2017 and 2016, 53% and 99%,
respectively, of the Company’s accounts receivable was from
Janssen.</font></p>
</div>
0.06
-0.050
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>14. Income
Taxes</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
uses an asset and liability approach for financial accounting and
reporting of income taxes. Deferred tax assets and liabilities are
determined based on temporary differences between financial
reporting and tax basis of assets and liabilities and are measured
by applying enacted rates and laws to taxable years in which
differences are expected to be recovered or settled. Further, the
effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that the rate
changes.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
applies the provisions of ASC 740, <i>Income
Taxes,</i> which prescribes a comprehensive model
for how a company should recognize, measure, present, and disclose
in its financial statements uncertain tax positions that the
company has taken or expects to take on a tax return (including a
decision whether to file or not file a return in a particular
jurisdiction). The Company’s financial statements reflect
expected future tax consequences of such positions presuming the
taxing authorities’ full knowledge of the position and all
relevant facts.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
does not have any interest or penalties accrued related to
uncertain tax positions as it does not have any unrecognized tax
benefits. In the event the Company determines that accrual of
interest or penalties is necessary in the future, the amount will
be presented as a component of income taxes.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">On
December 22, 2017, the President signed into law new
legislation, known as the Tax Cuts and Jobs Act of 2017 (the
“Tax Act”), that resulted in significant changes to the
Internal Revenue Code of 1986, as amended. These changes include a
federal statutory rate reduction from 35% to 21%, limitation of the
deduction for net operating losses to 80% of taxable income while
providing that the net operating loss carryovers for years after
2017 will not expire, limitation on the amount of research and
development expenses deductible per year beginning in years after
2021, reduction of the Orphan Drug Credit from 50% to 25% of
qualified clinical testing expenditures, increased limitations on
certain executive compensation, elimination of the Corporate
Alternative Minimum Tax, and modifying or repealing other business
deductions and credits.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As a result
of the Tax Act being signed into law, the Company recognized a
provisional charge of $52,653 in the fourth quarter of 2017 related
to the re-measurement of its U.S. deferred tax assets at the lower
enacted corporate tax rate. Due to the history of net operating
losses, the Company is in a full valuation allowance position. As a
result, the additional tax expense due to the Tax Act was offset by
an equal reduction to the valuation allowance, resulting in no net
tax impact from the Tax Act to the overall financial condition and
results of operations of the Company.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The income
tax provision (benefit) consists of the following:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="76%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Deferred:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal and
state</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15,506</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(23,232</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">699</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(15,506</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,232</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(699</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total deferred</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">A
reconciliation of the statutory tax rates to the effective tax
rates is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="75%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2017    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2016    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2015    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal statutory
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(34.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">)% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(34.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">)% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(34.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">)% </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">State tax, net of federal
benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.46</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.06</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.52</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Share-based
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.35</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.80</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.84</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Change in federal tax
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">61.77</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(22.66</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">38.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">35.64</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Future tax
benefits (deferred tax assets) related to temporary differences are
as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="75%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2"><b>Gross deferred tax
assets:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net operating
losses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">115,009</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">127,376</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Tax credits (federal and
state)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,480</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,758</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Share-based
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9,720</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,725</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">282</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">138,491</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">148,883</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Less—valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(138,491</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(148,883</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net deferred tax
asset</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">At
December 31, 2017 and 2016, the Company had gross deferred
income tax assets of approximately $138,491 and $148,883,
respectively, which result primarily from net operating loss and
tax credit carryforwards. ASC 740 requires that a valuation
allowance be established when it is “more likely than
not” that all or a portion of deferred tax assets will not be
realized. A review of all positive and negative evidence is
required when measuring the need for a valuation allowance. The
Company’s cumulative loss from inception represents
sufficient negative evidence to require a valuation allowance. The
Company concluded that it is appropriate to maintain a full
valuation allowance for its net deferred tax assets. Additionally,
the Company intends to maintain a valuation allowance until
sufficient positive evidence exists to support its
reversal.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">At
December 31, 2017, the Company had the following net operating
loss and credit carryforwards available:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="86%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of<br />
December 31,<br />
2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal net operating
loss carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">369,929</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">State net operating loss
carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">497,646</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal research and
development credit carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">State research and
development credit carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,047</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
Company’s federal net operating loss carryforwards expire
commencing in 2018 through 2037 and state net operating loss
carryforwards which expire commencing in 2020 through 2037. The
Company’s federal research and development credit
carryforwards expire commencing in 2028 through 2036. The
Connecticut research and development carryforwards have no
expiration period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Deferred tax
assets relating to tax benefits of employee stock options have been
reduced to reflect exercises. Some exercises resulted in tax
deductions in excess of previously recorded benefits based on the
option value at the time of grant (“windfalls”). Prior
to the adoption of ASU 2016-09 for the year ended December 31,
2017, the additional tax benefit associated with the windfall was
not recognized until the deduction reduced taxes payable.
Accordingly, the tax benefit of approximately $14,579 of the net
operating loss carryforwards available but previously unrecognized,
have been recognized upon adoption of ASU 2016-09. There was an
offsetting adjustment to the valuation allowance equal to the tax
benefit recognized for the windfall, resulting in no net tax impact
upon adoption of ASU 2016-09.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Utilization
of the net operating losses and research and development credit
carryforwards may be subject to a substantial annual limitation
under Section 382 of the Internal Revenue Code of 1986, or
Section 382, due to changes in ownership of the Company that
have occurred previously or that could occur in the future. The
changes in ownership resulted in net operating loss carryforwards
and research and development credits that the Company expects to
expire unutilized and thus are not included in gross deferred tax
assets disclosed above. The Company will continue to update its
analysis of ownership changes and the potential limitations on its
deferred tax assets.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The federal
and state tax authorities could challenge tax positions taken by
the Company for the periods for which there are open tax years.
Years subject to audit are years in which unused net operating
losses were generated that remain open by the statute of
limitations. The Company is open to challenge for the periods of
2006 through 2017 in federal and the State of Connecticut
jurisdictions.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
did not have any unrecognized tax benefits as of December 31,
2017 and 2016.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The State of
Connecticut provides companies with the opportunity to exchange
certain research and development credit carryforwards for cash in
exchange for foregoing the carryforward of the research and
development credit. The program provides for such exchange of the
research and development credits at a rate of 65% of the annual
research and development credit, as defined. The Company records
the benefit for the estimated proceeds from the exchange as a
reduction of research and development expenditures.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>6.
Marketable Securities</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The fair
value of the Company’s marketable securities of $287,089 and
$314,215 as of December 31, 2017 and 2016, respectively, is
valued based on level 2 inputs. The Company’s investments
consist mainly of U.S. government and agency securities,
government-sponsored bond obligations and certain other corporate
debt securities. Fair value is determined by taking into
consideration valuations obtained from third-party pricing
services. The third-party pricing services utilize industry
standard valuation models, for which all significant inputs are
observable, either directly or indirectly, to estimate fair value.
These inputs include reported trades of and broker/dealer quotes on
the same or similar securities; issuer credit spreads; benchmark
securities; and other observable inputs. There were no transfers
between levels within the hierarchy during the years ended
December 31, 2017 and 2016. The Company has assessed these as
level 2 within the fair value hierarchy of ASC 820. The Company
classifies its entire investment portfolio as available for sale as
defined in ASC 320, <i>Debt and Equity
Securities</i>. Securities are carried at fair value with the
unrealized gains (losses) reported in other comprehensive
income.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
unrealized (loss) gain from marketable securities was $(389), $151
and $(45) at December 31, 2017, 2016 and 2015,
respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As of
December 31, 2017, none of the Company’s investments
were determined to be other than temporarily impaired.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
table summarizes the Company’s investments:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="35%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,
2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,
2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Amortized<br />
Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrealized<br />
Gain</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrealized<br />
(Loss)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Estimated<br />
Fair Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Amortized<br />
Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrealized<br />
Gain</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrealized<br />
(Loss)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Estimated<br />
Fair Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Commercial
Paper</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29,079</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">)</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29,086</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">96,891</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">267</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">97,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Corporate Debt
Securities</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">216,297</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(324</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">215,973</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">163,286</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(129</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">163,161</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Government and Agency
Securities</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">42,102</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(72</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">42,030</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,887</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,896</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">287,478</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(398</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">287,089</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">314,064</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">290</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(139</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">314,215</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
additional table summarizes, by industry, the fair value of
investments:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="76%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Government</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">42,030</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,896</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Banking</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">74,884</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">86,844</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Industrial</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">170,175</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">173,475</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">287,089</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">314,215</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
table summarizes the contractual maturities of the Company’s
investments:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,<br />
2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,<br />
2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Mature in less than one
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">256,578</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">286,558</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Mature in one to five
years</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30,511</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">27,657</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">287,089</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">314,215</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">A summary of
property and equipment is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="79%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Laboratory
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,277</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,252</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Office
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,885</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,729</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Leasehold
improvements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,706</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,598</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Construction in
process</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">33</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,876</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,612</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Less—accumulated
depreciation and amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(8,060</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(7,133</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,816</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,479</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Revenue
Recognition</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
recognizes revenue from contract research and development and
research progress payments in accordance with Accounting Standards
Codification (“ASC”) 605, <i>Revenue
Recognition</i>. Revenue-generating research and development
collaborations are often multiple element arrangements, providing
for a license as well as research and development services. In
order to account for these arrangements, the Company must identify
the deliverables included within the arrangement and evaluate which
deliverables represent separate units of accounting based on if
certain criteria are met, including whether the delivered element
has stand-alone value to the collaborator. The consideration
received is allocated among the separate units of accounting and
the applicable revenue recognition criteria are applied to each of
the separate units.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">When the
Company determines that an arrangement should be accounted for as a
single unit of accounting, it must determine the period over which
the performance obligations will be performed and revenue related
to upfront license payments will be recognized. Revenue will be
recognized using either a proportionate performance or
straight-line method. The Company recognizes revenue using the
proportionate performance method provided that it can reasonably
estimate the level of effort required to complete its performance
obligations under an arrangement and such performance obligations
are provided on a best-efforts basis. Under the proportionate
performance method, periodic revenue related to up-front license
payments is recognized as the percentage of actual effort expended
in that period to total effort expected for all of its performance
obligations under the arrangement. Actual effort is generally
determined based upon actual direct labor hours or full-time
equivalents (“FTE”) incurred and include research and
development activities performed by internal scientists. Total
expected effort is generally based upon the total direct labor
hours of FTEs incorporated into the detailed budget and project
plan that is agreed to by both parties to the collaboration.
Significant management judgment is required in determining the
level of effort required under an arrangement and the period over
which the Company expects to complete the related performance
obligations. In the event that a change in estimate occurs, the
change will be accounted for using the cumulative catch-up method
which provides for an adjustment to revenue in the current period.
Estimates of the Company’s level of effort may change in the
future, resulting in a material change in the amount of revenue
recognized in future periods, including negative revenue in some
periods. Generally, under collaboration arrangements, payments
received during the period of performance may include up-front
payments, time-or performance-based milestones and reimbursement of
internal and external costs. The proportion of actual performance
to total expected performance is applied to these payments in
determining periodic revenue but will be limited by the aggregate
cash received or receivable to date.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Substantive
milestone payments are recognized upon achievement of the
milestone. Determining whether a milestone is substantive requires
judgment that should be made at the inception of the arrangement.
To meet the definition of a substantive milestone, the
consideration earned by achieving the milestone (1) would have
to be commensurate with either the level of effort required to
achieve the milestone or the enhancement in the value of the item
delivered, (2) would have to relate solely to past
performance, and (3) should be reasonable relative to all
deliverables and payment terms in the arrangement. No bifurcation
of an individual milestone is allowed and there can be more than
one milestone in an arrangement.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Under the
terms of the Collaboration and License Agreement between the
Company and Janssen Pharmaceuticals, Inc. (“Janssen”)
dated May 19, 2015, as amended (the “Janssen
Agreement”), the Company had granted Janssen exclusive
worldwide rights to develop and commercialize products that
contained one or more of the Company’s drug candidates for
the treatment of chronic hepatitis C virus, (“HCV”),
namely odalasvir, a second-generation NS5A inhibitor, ACH-3422, a
NS5B HCV polymerase inhibitor, and sovaprevir, a NS3/4A HCV
protease inhibitor. In May 2015, the Company also entered into a
parallel transaction with Janssen’s affiliate, JJDC, Inc.
(“JJDC”) pursuant to which JJDC purchased 18,367 shares
(the “Shares”) of the Company’s common stock at a
price of $12.25 per share, for an aggregate purchase price of
$225,000 pursuant to a stock purchase agreement (the “JJDC
Stock Purchase Agreement”). In connection with the purchase
of the Shares, the Company and JJDC also entered into an investor
agreement (the “Investor Agreement”) on July 1,
2015 governing specified rights and obligations of JJDC with
respect to its ownership of the Shares.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Pursuant to
the terms of the Janssen Agreement, the Company was required to
provide technology transfer services related to the chemistry,
manufacturing and know-how to Janssen for up to 180 days after the
effective date of the agreement. In accordance with ASC 605-25,
which provides guidance on accounting for multiple-element
arrangements, including the determination of the units of
accounting and allocation of total arrangement consideration, the
Company identified all of the obligations at the inception of the
Janssen Agreement. The significant obligations were determined to
be the license and the technology transfer services. The Company
determined that license and technology transfer services
represented a single unit of accounting because they were not
viewed to have standalone value. The Janssen Agreement entered into
by the Company and Janssen, and the JJDC Stock Purchase Agreement
and the Investor Agreement, which were entered into by the Company
and Janssen’s affiliate, were entered into in contemplation
of each other. The only upfront amount received by the Company in
exchange for the license and technology transfer services and the
issuance of the Shares was the $225,000. The Company determined
that the amount received in excess of the fair value of the Shares
upon issuance of $66,122 was attributed to the license and
technology services. The Company also determined that there was no
discernable pattern in which the technology services would be
provided during the 180 day period after the effective date. In
accordance with ASC 605-10, the Company determined that
straight-line attribution of the license and technology services
revenues would be used to recognize revenue. As such, revenue of
$66,122 was recorded during the year ended December 31, 2015
associated with this transaction.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Under the
terms of the Janssen Agreement, the Company earned a $15,000
clinical milestone payment in December 2016 and would have been
eligible to receive additional milestones in the future. The
Company elected to apply the guidance in ASC 605-28 to the
milestones. These milestones, if achieved, were substantive as they
would relate solely to past performance and were commensurate with
estimated enhancement of value associated with the achievement of
each milestone as a result of the Company’s
performance.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">On
September 9, 2017, the Company received notice from Janssen of
Janssen’s termination, effective as of November 8, 2017,
of the Janssen Agreement. In November 2017, JJDC sold all of the
Shares of the Company’s common stock it acquired under the
JJDC Stock Purchase Agreement.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Future tax
benefits (deferred tax assets) related to temporary differences are
as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="75%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2"><b>Gross deferred tax
assets:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net operating
losses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">115,009</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">127,376</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Tax credits (federal and
state)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,480</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,758</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Share-based
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9,720</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,725</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">282</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">138,491</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">148,883</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Less—valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(138,491</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(148,883</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net deferred tax
asset</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
calculations of basic and diluted net loss per share are as
follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="67%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(in
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net loss
(numerator)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(85,236</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(61,706</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5,030</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Weighted-average shares,
in thousands (denominator)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">137,180</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,667</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">125,592</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Basic and diluted net
loss per share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.62</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.45</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.04</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Compensation
expense related to option grants made to employees and consultants
is included in research and development and general and
administrative expense as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>For the Years Ended December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2017    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2016    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2015    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Research and
development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,408</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,601</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,346</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">General and
administrative</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,071</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,304</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,567</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,479</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,905</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9,913</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
assumptions used to value options granted under the 2006 ESPP Plan
are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="56%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="5" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>For the Years Ended
December 31,</b></font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected term of
option</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">6 months</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">6 months</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">6 months</font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected
volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">58% – 73%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">55% – 66%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">57% – 88%</font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Risk free interest
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.05 – 1.3%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.05 – 0.06%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.07 – 0.08%</font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected dividend
yield</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
</tr>
</table>
</div>
4.92
6.37
4.10
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Stock-Based Compensation—Employee Stock-Based
Awards</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
applies the provisions of ASC 718, <i>Stock
Compensation, </i>which requires measurement and
recognition of compensation expense for all stock-based awards made
to employees and directors, including employee stock options and
employee stock purchases under the Company’s 2006 ESPP Plan
based on estimated fair values.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
primarily grants nonqualified stock options for a fixed number of
shares to employees with an exercise price equal to the market
value of the shares at the date of grant. Under the fair value
recognition provisions, stock-based compensation cost is based on
the fair value of the portion of stock-based awards that is
ultimately expected to vest.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
utilizes the Black-Scholes option pricing model for determining the
estimated fair value for stock-based awards. The Black-Scholes
model requires the use of assumptions which determine the fair
value of the stock-based awards. Determining the fair value of
stock-based awards at the grant date requires judgment, including
estimating the expected term of stock options, the expected
volatility of our stock and expected dividends.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
bases its estimate of the expected term on historical data for
similar stock option grants and calculates volatility based on
actual volatility for the expected term of the option. The Company
estimates forfeitures at the grant date and recognizes compensation
costs for only those awards that are expected to vest.</font></p>
</div>
0
P4Y10M25D
801000
2.91
137180000
--12-31
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">A summary of
prepaid expenses and other current assets is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="82%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Prepaid research and
development costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,599</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,228</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Tax credit
receivable</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">275</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">410</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Software and maintenance
agreements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">465</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">416</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Interest
receivable</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,260</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,010</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Other prepaid
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">205</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">396</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,804</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,460</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
0.50
0.6177
-0.0046
2017-12-31
Yes
Large Accelerated Filer
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
table summarizes the contractual maturities of the Company’s
investments:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,<br />
2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,<br />
2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Mature in less than one
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">256,578</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">286,558</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Mature in one to five
years</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30,511</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">27,657</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">287,089</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">314,215</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Patent
Costs</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
expenses the costs of obtaining and maintaining patents.</font></p>
</div>
1
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>8. Fixed
Assets, net</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">A summary of
property and equipment is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="79%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Laboratory
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,277</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,252</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Office
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,885</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,729</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Leasehold
improvements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,706</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,598</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Construction in
process</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">33</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,876</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,612</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Less—accumulated
depreciation and amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(8,060</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(7,133</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,816</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,479</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Depreciation
expense was $1,126, $955 and $693 for the years ended
December 31, 2017, 2016 and 2015, respectively.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Long-lived Assets</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">ASC
360, <i>Property, Plant and
Equipment, </i>addresses the financial accounting
and reporting for impairment or disposal of long-lived assets. The
Company reviews the recorded values of long-lived assets for
impairment whenever events or changes in business circumstance
indicate that the carrying amount of an asset or group of assets
may not be fully recoverable.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Research and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">All costs
associated with internal research and development, research and
development services for which the Company has externally
contracted and licensed technology are expensed as incurred.
Research and development expense includes direct and indirect costs
for salaries, employee benefits, subcontractors, including clinical
research organizations (“CROs”), operating supplies,
facility-related expenses and depreciation.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
table summarizes the Company’s investments:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="35%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,
2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,
2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Amortized<br />
Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrealized<br />
Gain</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrealized<br />
(Loss)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Estimated<br />
Fair Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Amortized<br />
Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrealized<br />
Gain</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrealized<br />
(Loss)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Estimated<br />
Fair Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Commercial
Paper</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29,079</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">)</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29,086</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">96,891</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">267</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">97,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Corporate Debt
Securities</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">216,297</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(324</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">215,973</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">163,286</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(129</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">163,161</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Government and Agency
Securities</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">42,102</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(72</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">42,030</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,887</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,896</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">287,478</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(398</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">287,089</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">314,064</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">290</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(139</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">314,215</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<br class="Apple-interchange-newline" />
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">A
reconciliation of the statutory tax rates to the effective tax
rates is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="75%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2017    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2016    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>    2015    </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal statutory
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(34.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">)% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(34.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">)% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(34.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">)% </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">State tax, net of federal
benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.46</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.06</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.52</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Share-based
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.35</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.80</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.84</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Change in federal tax
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">61.77</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(22.66</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">38.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">35.64</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
table summarizes information about stock options outstanding at
December 31, 2017:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="52%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Options
Outstanding</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Options
Vested</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 84pt; BORDER-BOTTOM: rgb(0,0,0) 1px solid; DISPLAY: inline">
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Range of
Exercise Prices</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number<br />
Outstanding</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted Average<br />
Remaining<br />
Contractual Life<br />
(Years)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted<br />
Average<br />
Exercise<br />
Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number<br />
Vested</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted<br />
Average<br />
Exercise<br />
Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$0.00 –
$2.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">128</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.05</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">128</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.05</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$2.01 –
$4.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,360</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3.08</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,195</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3.07</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$4.01 –
$6.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,487</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.19</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">166</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.50</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$6.01 –
$8.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,526</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.49</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,581</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.48</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$8.01 –
$10.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,113</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5.4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.71</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,022</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.71</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$10.01
– $12.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">134</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10.50</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">93</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10.55</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">$12.01 –
$14.00</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,412</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13.44</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,136</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13.43</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">12,160</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,321</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.63</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: "Times New Roman"" size="2">A summary of
the status of the Company’s stock option activity for the
year ended December 31, 2017 is presented in the table and
narrative below:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<br class="Apple-interchange-newline" />
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Options</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted<br />
Average<br />
Exercise<br />
Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding at
January 1, 2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,394</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.04</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Granted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,055</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.10</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Exercised</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Forfeited</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(801</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Cancelled</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(474</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.64</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding at
December 31, 2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">12,160</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Options exercisable at
December 31, 2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,321</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.63</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Options vested and
expected to vest at December 31, 2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,758</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom"></td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">  </td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom"> </td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td style="FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; BACKGROUND-COLOR: rgb(255,255,255); TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
assumptions used to value options granted are as
follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="59%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>For the Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected term of
option</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.0 years</font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.0 – 6.25 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.25 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected
volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">82% – 83%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">81% – 84%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">84% – 91%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Risk free interest
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.04 – 2.27%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.15 – 2.09%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.54 – 1.93%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected dividend
yield</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">0%</font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Segment
Information</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
is engaged solely in the discovery and development of innovative
small molecule drug therapies. Accordingly, the Company has
determined that it operates in one operating segment.</font></p>
</div>
3055000
14000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">At
December 31, 2017, the Company had the following net operating
loss and credit carryforwards available:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="86%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of<br />
December 31,<br />
2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal net operating
loss carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">369,929</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">State net operating loss
carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">497,646</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal research and
development credit carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">State research and
development credit carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,047</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<br class="Apple-interchange-newline" />
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Use of
Estimates</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States
(“GAAP”) requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.</font></p>
</div>
-0.62
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>4.
Earnings (Loss) Per Share</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Basic
earnings (loss) per share (“EPS”) is calculated in
accordance with Accounting Standards Codification
(“ASC”) 260, “Earnings Per Share,” by
dividing net income or loss attributable to common stockholders by
the weighted average common stock outstanding. Diluted EPS is
calculated by adjusting weighted average common shares outstanding
for the dilutive effect of common stock options and warrants. In
periods in which a net loss is recorded, no effect is given to
potentially dilutive securities, since the effect would be
antidilutive. Securities that could potentially dilute basic EPS in
the future were not included in the computation of diluted EPS
because to do so would have been antidilutive. The calculations of
basic and diluted net loss per share are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="67%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(in
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net loss
(numerator)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(85,236</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(61,706</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5,030</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Weighted-average shares,
in thousands (denominator)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">137,180</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,667</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">125,592</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Basic and diluted net
loss per share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.62</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.45</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.04</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Potentially
dilutive securities outstanding as of December 31, 2017, 2016
and 2015 are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="74%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(in
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Stock Options</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">12,160</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,394</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,501</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Warrants</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,833</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,833</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
</div>
0.00
P2Y3M18D
ACHILLION PHARMACEUTICALS INC
No
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Income
Taxes</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
uses an asset and liability approach for financial accounting and
reporting of income taxes. Deferred tax assets and liabilities are
determined based on temporary differences between financial
reporting and tax basis of assets and liabilities and are measured
by applying enacted rates and laws to taxable years in which
differences are expected to be recovered or settled. Further, the
effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that the rate change is
enacted. A valuation allowance is required when it is “more
likely than not” that all or a portion of deferred tax assets
will not be realized.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
applies the provisions of ASC 740, <i>Income
Taxe</i>s, which prescribes a comprehensive model for how a company
should recognize, measure, present, and disclose in its financial
statements uncertain tax positions that the company has taken or
expects to take on a tax return (including a decision whether to
file or not file a return in a particular jurisdiction). The
financial statements reflect expected future tax consequences of
such positions presuming the taxing authorities’ full
knowledge of the position and all relevant facts.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The Company
did not have any unrecognized tax benefits as of December 31,
2017. The Company reviews all tax positions to ensure the tax
treatment selected is sustainable based on its technical merits and
that the position would be sustained if challenged.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>12. Other
Income</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In August
2015, a stockholder of the Company paid $8,944 to the Company
relating to the disgorgement of short swing profits under
Section 16(b) of the Securities Exchange Act.</font></p>
</div>
2020-03-31
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Fixed
Assets</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Property and
equipment are recorded at cost and are depreciated and amortized
over the shorter of their remaining lease term or their estimated
useful lives on a straight-line basis as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="84%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Laboratory
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4-7 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Office
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3-5 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Leasehold
improvements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> <br /></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">Lesser of life
of<br />
improvement or lease term</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> <br />
 </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Expenditures
for maintenance and repairs, which do not improve or extend the
useful lives of the respective assets, are expensed as incurred.
When assets are sold or retired, the related cost and accumulated
depreciation are removed from their respective accounts and any
resulting gain or loss is included in income (loss) from
operations.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>16.
Unaudited Quarterly Results</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
tables summarize unaudited quarterly financial data for the years
ended December 31, 2017 and 2016. This data has been derived
from unaudited financial statements that, in the Company’s
opinion, include all adjustments necessary for a fair statement of
such information. The operating results for any quarter are not
necessarily indicative of results for any future period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017
Quarters</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>First</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Second</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Third</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Fourth</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total operating
revenue</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total operating
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">21,143</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,616</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">20,463</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24,354</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income
(loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(20,152</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(22,543</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(19,338</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(23,203</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income (loss) per
share—basic and diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.16</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.17</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Weighted average number
of shares outstanding—basic and diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,722</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,736</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">137,375</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">137,870</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="62%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016
Quarters</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>First</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Second</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Third</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Fourth
(1)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total operating
revenue</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total operating
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18,718</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19,309</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">21,549</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">20,289</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income
(loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(18,054</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(18,493</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(20,730</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(4,429</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income (loss) per
share—basic and diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.13</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.03</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Weighted average number
of shares outstanding—basic and diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,640</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,680</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,681</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,693</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">(1) In May
2015, the Company entered into an exclusive collaboration and
license agreement with Janssen, and its affiliate,
Johnson & Johnson Innovation-JJDC, Inc., or JJDC, which we
refer to as the Janssen Agreement for the further clinical
advancement of a portfolio of antivirals the Company discovered and
developed for the treatment of HCV. In addition, upon the closing
of the transactions contemplated by the Janssen Agreement, the
Company entered into a stock purchase agreement with JJDC. Pursuant
to the JJDC Stock Purchase Agreement, on July 1, 2015, the
Company issued 18,367 shares of common stock to JJDC at a price of
$12.25 per share for an aggregate purchase price of $225,000. The
Company recorded revenue of $66,122 during the year ended
December 31, 2015 associated with this transaction. The
Company also recorded revenue of $15,000 during the year ended
December 31, 2016 related to the achievement of a clinical
enrollment milestone under the Janssen Agreement. On
September 9, 2017, the Company received notice from Janssen of
Janssen’s termination of the Janssen Agreement effective
November 8, 2017. As a result of the termination of the
Janssen Agreement, the Company will not receive any future
milestone-based or royalty payments under the agreement. Also refer
to footnote 5.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>15.
Related Party Transactions</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><i>Nicole
Vitullo</i></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In connection
with Domain Associates, LLC’s (“Domain”)
agreement to invest in the Company, the board of directors of the
Company elected Nicole Vitullo of Domain as a Class II member of
the board of directors on September 30, 2010 to serve until
her successor is duly elected and qualified. Ms. Vitullo is a
partner at Domain.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In August
2010, Domain purchased 8,032 shares of common stock and warrants to
purchase 2,811 shares of common stock for an aggregate purchase
price of $20.4 million.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In August
2017, Domain exercised the 2,811 warrants purchased in August 2010
by means of a cashless exercise of the warrants, resulting in the
issuance of 1,084 shares of common stock.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As of
December 31, 2017, Domain was the beneficial owner of
approximately 2.5% of the Company’s total issued and
outstanding shares of common stock.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
tables summarize unaudited quarterly financial data for the years
ended December 31, 2017 and 2016. This data has been derived
from unaudited financial statements that, in the Company’s
opinion, include all adjustments necessary for a fair statement of
such information. The operating results for any quarter are not
necessarily indicative of results for any future period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017
Quarters</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>First</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Second</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Third</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Fourth</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total operating
revenue</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total operating
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">21,143</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,616</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">20,463</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24,354</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income
(loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(20,152</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(22,543</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(19,338</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(23,203</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income (loss) per
share—basic and diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.16</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.17</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Weighted average number
of shares outstanding—basic and diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,722</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,736</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">137,375</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">137,870</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="62%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016
Quarters</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>First</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Second</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Third</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Fourth
(1)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total operating
revenue</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total operating
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18,718</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19,309</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">21,549</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">20,289</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income
(loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(18,054</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(18,493</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(20,730</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(4,429</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income (loss) per
share—basic and diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.13</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.03</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Weighted average number
of shares outstanding—basic and diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,640</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,680</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,681</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">136,693</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">(1) In May
2015, the Company entered into an exclusive collaboration and
license agreement with Janssen, and its affiliate,
Johnson & Johnson Innovation-JJDC, Inc., or JJDC, which we
refer to as the Janssen Agreement for the further clinical
advancement of a portfolio of antivirals the Company discovered and
developed for the treatment of HCV. In addition, upon the closing
of the transactions contemplated by the Janssen Agreement, the
Company entered into a stock purchase agreement with JJDC. Pursuant
to the JJDC Stock Purchase Agreement, on July 1, 2015, the
Company issued 18,367 shares of common stock to JJDC at a price of
$12.25 per share for an aggregate purchase price of $225,000. The
Company recorded revenue of $66,122 during the year ended
December 31, 2015 associated with this transaction. The
Company also recorded revenue of $15,000 during the year ended
December 31, 2016 related to the achievement of a clinical
enrollment milestone under the Janssen Agreement. On
September 9, 2017, the Company received notice from Janssen of
Janssen’s termination of the Janssen Agreement effective
November 8, 2017. As a result of the termination of the
Janssen Agreement, the Company will not receive any future
milestone-based or royalty payments under the agreement. Also refer
to footnote 5.</font></p>
</div>
6.64
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>17.
Subsequent Events</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In February
2018, the Company implemented a restructuring plan that will reduce
employee headcount by approximately 20% to approximately 70
employees in March 2018. The restructuring plan was implemented
following a strategic assessment of the Company’s portfolio.
During the assessment, the Company’s management team and
board of directors concluded that the Company’s strategic
focus would be on the development of its existing clinical
candidates and late-stage preclinical compounds. The Company
assessed the staffing levels required to accomplish its revised
strategic goals and determined to reduce its staff across several
functional areas.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In connection
with this reduction, the Company offered individuals whose
employment was terminated a severance package that included
severance pay, continuation of benefits and outplacement services.
The Company will recognize expense relating to the restructuring in
the first quarter of 2018 and estimates that the costs will be
approximately $1,500.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
additional table summarizes, by industry, the fair value of
investments:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="76%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Government</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">42,030</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,896</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Banking</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">74,884</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">86,844</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Industrial</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">170,175</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">173,475</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">287,089</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">314,215</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
4390000
-15196000
225000
351000
626000
175000
-89576000
-85236000
52000
-85776000
-540000
10573000
345490000
39000
-540000
313000
0
1126000
1126000
-1577000
50000
25975000
372091000
10573000
415000
-66000
225000
15506000
24524000
834000
-262000
811000
65052000
261000
-33765000
-15506000
1079000
89576000
39000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Potentially
dilutive securities outstanding as of December 31, 2017, 2016
and 2015 are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="74%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(in
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Stock Options</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">12,160</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,394</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,501</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Warrants</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,833</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,833</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Property and
equipment are recorded at cost and are depreciated and amortized
over the shorter of their remaining lease term or their estimated
useful lives on a straight-line basis as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="84%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Laboratory
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4-7 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Office
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3-5 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Leasehold
improvements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> <br /></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">Lesser of life
of<br />
improvement or lease term</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> <br />
 </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>3.
Financing Activities</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Public
Offerings</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In February
2015, the Company entered into an underwriting agreement (the
“Underwriting Agreement”) with Leerink Partners LLC and
Deutsche Bank Securities Inc., as representatives of the several
underwriters named therein (collectively, the
“Underwriters”), relating to a public offering of
shares of the Company’s common stock, par value $0.001 per
share, at a price of $10.25 per share less underwriting discounts
and commissions (the “Offering”). The Company issued
and sold to the Underwriters an aggregate of 13,800 shares of
common stock in connection with the Offering. The Offering resulted
in net proceeds to the Company of $132,558.</font></p>
</div>
8750000
P2M12D
1094000
36000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Accrued
Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As part of
the process of preparing financial statements, the Company is
required to estimate accrued expenses. This process involves
identifying services which have been performed on its behalf and
estimating the level of service performed and the associated cost
incurred for such service as of each balance sheet date in its
financial statements.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In accruing
service fees, the Company estimates the time period over which
services will be provided and the level of effort in each period.
If the actual timing of the provision of services or the level of
effort varies from the estimate, the Company will adjust the
accrual accordingly. The majority of service providers invoice the
Company monthly in arrears for services performed. Some service
providers require upfront or milestone payments. If the estimate of
services performed is less than the upfront or milestone payments,
the difference is accounted for as a prepaid expense. In the event
that the Company does not identify costs that have begun to be
incurred or the Company underestimates or overestimates the level
of services performed or the costs of such services, actual
expenses could differ from such estimates. The date on which some
services commence, the level of services performed on or before a
given date and the cost of such services are often subjective
determinations. The Company makes judgments based upon facts and
circumstances known to it in accordance with GAAP.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>9. Accrued
Expenses and Other Long-Term Liabilities</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued
expenses consist of the following:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="82%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,014</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued research and
development expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,384</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,441</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued professional
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">735</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">972</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Other accrued
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">328</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">544</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,767</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued
research and development expenses are comprised of amounts owed to
third-party contract research organizations, (“CROs”),
clinical investigators, laboratories and data managers for research
and development work performed on behalf of the Company.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>10.
Capital Structure</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 24px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Preferred Stock</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">At
December 31, 2017, the Company had 5,000 authorized shares of
undesignated preferred stock of which no shares were issued and
outstanding.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 24px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Common
Stock</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">At
December 31, 2017, the Company had 200,000 authorized shares
of $0.001 par value common stock of which 137,894 shares were
issued and outstanding and 18,961 shares were reserved for future
issuance.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 24px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Warrants</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">At
December 31, 2017, there were 21 warrants outstanding with an
exercise price of $4.68 and a remaining contractual life of 0.2
years.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued
expenses consist of the following:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="82%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,014</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued research and
development expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,384</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,441</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued professional
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">735</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">972</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Other accrued
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">328</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">544</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,767</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>7. Prepaid
Expenses and Other Current Assets</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">A summary of
prepaid expenses and other current assets is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="82%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>As of December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2017</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Prepaid research and
development costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,599</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,228</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Tax credit
receivable</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">275</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">410</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Software and maintenance
agreements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">465</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">416</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Interest
receivable</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,260</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,010</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Other prepaid
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">205</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">396</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,804</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,460</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
14579000
10479000
0
10479000
6071000
4408000
0.65
2037
2020
0.50
0.35
1500000
P6M
0.85
0
94000
0.15
0.0130
0.73
0.0005
0.58
P6Y8M12D
10.01
12.00
P4Y3M19D
2.01
4.00
P1Y
0.00
2.00
P9Y
4.01
6.00
P5Y4M24D
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10.00
P6Y3M19D
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P6Y1M6D
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8.00
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225000
10573000
39000
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P5Y
P3Y
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P7Y
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0.0204
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In May 2015, the Company entered into an exclusive collaboration and license agreement with Janssen, and its affiliate, Johnson & Johnson Innovation-JJDC, Inc., or JJDC, which we refer to as the Janssen Agreement for the further clinical advancement of a portfolio of antivirals the Company discovered and developed for the treatment of HCV. In addition, upon the closing of the transactions contemplated by the Janssen Agreement, the Company entered into a stock purchase agreement with JJDC. Pursuant to the JJDC Stock Purchase Agreement, on July 1, 2015, the Company issued 18,367 shares of common stock to JJDC at a price of $12.25 per share for an aggregate purchase price of $225,000. The Company recorded revenue of $66,122 during the year ended December 31, 2015 associated with this transaction. The Company also recorded revenue of $15,000 during the year ended December 31, 2016 related to the achievement of a clinical enrollment milestone under the Janssen Agreement. On September 9, 2017, the Company received notice from Janssen of Janssen's termination of the Janssen Agreement effective November 8, 2017. As a result of the termination of the Janssen Agreement, the Company will not receive any future milestone-based or royalty payments under the agreement. Also refer to footnote 5.