1. Business

Overview

ZIOPHARM Oncology, Inc., which is referred to herein as “ZIOPHARM” or the “Company,” is a biopharmaceutical company seeking to develop, acquire, and commercialize, on its own or with partners, a diverse portfolio of immuno-oncology therapies.

The Company’s operations to date have consisted primarily of raising capital and conducting research and development. The Company’s fiscal year ends on December 31.

The Company has operated at a loss since its inception in 2003 and has minimal revenues to date. The Company anticipates that its losses will continue for the foreseeable future. As of September 30, 2017, the Company has approximately $84.4 million of cash and cash equivalents. At September 30, 2017, the Company’s accumulated deficit was approximately $699.2 million. Given its development plans, the Company anticipates its cash resources will be sufficient to fund its operations into the fourth quarter of 2018. The Company will need to raise additional capital, whether through a sale of equity or debt securities, licensing arrangements, asset sales, additional product collaborations or other means, to complete the development and commercialization of its product candidates, to support its ongoing activities and to continue as a going concern. The forecast of cash requirements is forward-looking information that involves risks and uncertainties, and the actual amount of the Company’s expenses could vary materially and adversely as a result of a number of factors including changes in the Company’s business strategy and direction of its research and development efforts, competitive and technical advances, regulatory changes or other developments.

The Company has based its estimates on assumptions that may prove to be wrong, and its expenses could prove to be significantly higher than it currently anticipates. Management does not know whether additional financing will be on terms favorable or acceptable to the Company when needed, if at all. There can be no assurance that any such financing can be realized by the Company, or if realized, what the terms thereof may be, or that any amount that the Company is able to raise will be adequate to support the Company’s working capital requirements until it achieves profitable operations. If adequate additional funds are not available when required, or if the Company is unsuccessful in entering into collaboration or partnership agreements for further development of its product candidates, management may need to curtail its current development efforts and cut operating costs in order to conserve its cash. Based on the forecast, management determined that there is substantial doubt regarding the Company’s ability to continue as a going concern.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. Certain information and note disclosures required by generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations.

It is management’s opinion that the accompanying unaudited interim financial statements reflect all adjustments (which are normal and recurring) that are necessary for a fair statement of the results for the interim periods. The unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2016, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on February 16, 2017, or the Form 10-K.

The interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements, as allowed by the relevant SEC rules and regulations; however, the Company believes that its disclosures are adequate to ensure that the information presented is not misleading.

The results disclosed in the statements of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full fiscal year.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. Although the Company regularly assesses these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

The Company’s most significant estimates and judgments used in the preparation of its financial statements are:

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clinical trial expenses;

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collaboration agreements;

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fair value measurements of stock based compensation, warrants and Series 1 preferred stock; and

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income taxes

Subsequent Events

The Company evaluated all events and transactions that occurred after the balance sheet date through the date of this filing. During this period, the Company did not have any material subsequent events that impacted its financial statements or disclosures.