1.	Business

Cara Therapeutics, Inc. (the “Company”, “we”, “our” or “us”) is a clinical-stage biopharmaceutical corporation formed on July 2, 2004. The Company is focused on developing and commercializing new chemical entities designed to alleviate pain and pruritus by selectively targeting kappa opioid receptors. The Company’s primary activities to date have been organizing and staffing the company, developing its product candidates, including conducting preclinical studies and clinical trials of CR845-based product candidates and raising capital.

As of June 30, 2015, the Company has raised aggregate net proceeds of approximately $129,600 from several rounds of equity financing, including its initial public offering, and the issuance of debt. In addition, the Company received $30,100 under its license agreements for CR845, primarily with Maruishi Pharmaceutical Co. Ltd. (“Maruishi”) and Chong Kun Dang Pharmaceutical Corp. (“CKD”), and an earlier product candidate for which development efforts ceased in 2007. Included in those aforementioned payments pursuant to license agreements, in April 2013, the Company received $15,000 as an upfront payment, and in August 2014, the Company received an additional $480 related to achievement of a milestone in connection with the license of rights to CR845 in Japan to Maruishi. In 2012, the Company received aggregate upfront and milestone payments of $1,190 pursuant to a license agreement with CKD, in connection with the license of rights to CR845 in South Korea. The Company has incurred substantial losses and negative cash flows from operating activities in nearly every fiscal period since inception, and expects operating losses and negative cash flows to continue into the foreseeable future.

As of June 30, 2015, the Company had unrestricted cash and cash equivalents of $43,191 and an accumulated deficit of $90,574. The Company had net cash used in operating activities of $9,495 and $7,330 for the six months ended June 30, 2015 and 2014, respectively. The Company expects that cash and cash equivalents at June 30, 2015 will be sufficient to fund its operations beyond one year. The Company recognized net losses of $5,684 and $10,373 for the three and six months ended June 30, 2015, respectively, and $3,645 and $7,028 for the three and six months ended June 30, 2014, respectively, and expects to incur additional losses for the full year ending December 31, 2015.

In order to fund future operations, including clinical trials, the Company filed a shelf registration statement on Form S-3 (File No. 333-203072), which the Securities and Exchange Commission (“SEC”) declared effective on May 13, 2015. The shelf registration statement provides for the offering of up to $150,000 of common stock, preferred stock, debt securities, warrants or any combination thereof. The Company may offer the securities under its shelf registration statement from time to time in response to market conditions or other circumstances if it believes such a plan of financing is in the best interests of its stockholders.

On August 4, 2015, the Company closed an underwritten public offering of 4,327,956 shares of its common stock at a public offering price of $18.60 per share pursuant to its shelf registration statement, receiving net proceeds of approximately $75,060, after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company (see Note 11, Subsequent Event, of Notes to Condensed Financial Statements).

The Company is subject to risks common to other life science companies including, but not limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability protection of proprietary technology, ability to raise additional financing, and compliance with Food and Drug Administration (“FDA”) and other government regulations. If the Company does not successfully commercialize any of its product candidates, it will be unable to generate recurring product revenue or achieve profitability.