Note 6 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Intangible Assets

The Company completes its annual impairment test on

October

each year, or more frequently if triggering events indicate a possible impairment. The Company continually evaluates financial performance, economic conditions and other relevant developments in assessing if an interim period impairment test is necessary.

Changes in the carrying amount of goodwill for the period ended

December

31,

2016

consisted of the following:

	Goodwill
Balance as of December 31, 2015	$	—
Goodwill as a result of the Merger		6,929,258
Balance as of December 31, 2016	$	6,929,258

Intangible assets consisted of the following:

	Acquisition Date Fair Value		Accumulated Amortization		Impairment Upon Abandonment			Carrying Value at December 31, 2016
RES-529	$	8,639,000	$	-	$	-		$	8,639,000
RES-440		961,000		-		(961,000	)	$	-
Total in-process research and development costs (IPR&D)	$	9,600,000	$	-	$	(961,000	)	$	8,639,000

The Company’s novel

PI3K/Akt/mTOR

pathway inhibitor, RES-

529,

is in preclinical development for oncology. Through a series of in vitro and in vivo animal models, RES-

529

has been shown to have activity in several cancer types due to its ability to target and inhibit the

PI3K/Akt/mTOR

signal transduction pathway. RES-

529

is a

first

-in-class inhibitor of both

TORC1

and

TORC2

that is mechanistically differentiated from other

PI3K/Akt/mTOR

pathway inhibitors currently in development. RES-

529

has shown activity in both in vitro and in vivo glioblastoma animal models and has been demonstrated to be orally bioavailable and can cross the blood brain barrier.

August

2016,

the Board of Directors determined that RES-

440,

a “soft” anti-androgen compound for the treatment of acne vulgaris, was outside the Company’s core product focus, and was not a priority. Therefore, future development efforts were abandoned in the

third

quarter of

2016.

In connection with its review of such abandonment, the Company concluded RES-

440

was impaired in its entirety and the CVRs were remeasured and determined to have no value as of

December

31,

2016.

The abandonment resulted in a net impairment charge of

$1.0

million and was recorded as a component of research and development expenses within the Company’s consolidated statement of operations for the year ended

December

31,

2016.

The abandonment also resulted in an income tax benefit of

$0.4

million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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