Notes Payable

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Notes Payable

Note 5 – Notes Payable

Following is a breakdown of notes payable as of December 31, 2017

	2017		2016
Notes payable	$	97,523	$	121,523
Convertible notes payable		346,700		314,475
Total notes payable	$	444,223	$	435,998
Notes payable – related parties		93,662	$	-
Convertible notes payable – related parties (net of debt discount of $113,170)		1,368,378		250,000
Total notes payable – related parties	$	1,462,040	$	250,000

Note Payable – Service Provider

In December 2016, we entered into an Agreement and Promissory Note with a law firm for past services performed totaling $121,523. The note calls for monthly payments of $6,000 per month, beginning with an initial payment on March 31, 2017. The note is unsecured and non-interest bearing. The note will be considered paid in full if the Company pays $100,000 by December 31, 2017, which was not paid. The balance due on the note was $121,523 and $97,523 as of December 31, 2017 and 2016, respectively.

Note Purchase Agreement and Amendment

In June 2016, Marina entered into a Note Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”), pursuant to which Marina issued to the Purchasers unsecured promissory notes in the aggregate principal amount of $300,000 (the “Notes”). Interest accrued on the unpaid principal balance of the Notes at the rate of 12% per annum beginning on September 20, 2016. The Notes were due and payable on June 20, 2017.

In July 2017, we entered into an amendment agreement (the “Amendment Agreement”) with respect to those Notes and the warrants to purchase shares of our common stock that are currently held by the Purchasers and that were originally issued pursuant to a certain Note and Warrant Purchase Agreement dated as of February 10, 2012 by and among Marina, MDRNA Research, Inc., Cequent Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto (as amended from time to time), to, among other things, extend the maturity date of the Notes to December 31, 2017 and to extend the price protection applicable to certain of the warrants held by the Purchasers with respect to dilutive offerings afforded thereunder to February 10, 2020. Refer to our Form 10-Q for  the six months ended June 30, 2017 for a more detailed discussion and additional terms for these Notes. 

The unpaid principal balance of the Notes, together with accrued and unpaid interest thereon, converted into shares of Series E Convertible Preferred Stock and warrants to purchase shares of common stock upon the Initial Closing of the Private Placement. As a result of the conversion of the Notes, all obligations of the Company to the Purchasers thereunder have been satisfied and the Notes are no longer outstanding. Also see Note 11 – Subsequent Events below.

As of December 31, 2017 and 2016, the accrued interest expense on the Notes amounted to $46,700 and $14,475, respectively, with a total balance of principal and interest of $346,700 and $314,475, respectively.

Bridge Note Financing  

In June 2017, we issued convertible promissory notes (the “Notes”) in the aggregate principal amount of $400,000 to 10 investors pursuant to a Note Purchase Agreement (the “Note Purchase Agreement”) that we entered into with such investors. The Notes bear interest at a rate of five percent (5%) per annum and are due and payable at any time on or after the earlier of (i) June 1, 2018 and (ii) the occurrence of an event of default (as defined in the Note Purchase Agreement). Our Executive Chairman and our Chief Science Officer were each investors in the Notes.

Upon written notice delivered to us by the holders of a majority in interest of the aggregate principal amount of Notes that are outstanding at the time of such calculation (the “Majority Holders”) not more than five (5) days following the maturity date of the Notes, the Majority Holders shall have the right, but not the obligation, on behalf of themselves and all other holders of Notes, upon written notice delivered to us, to elect to convert the entire unpaid principal amount of all, but not less than all, of the Notes and the accrued and unpaid interest thereon into such number of shares of our common stock as is equal to, with respect to each Note: (x) the entire unpaid principal amount of such Note and the accrued and unpaid interest thereon on the date of the delivery of such notice by (y) $3.50.

The unpaid principal balance of the Notes, together with accrued and unpaid interest thereon, converted into shares of Series E Convertible Preferred Stock and warrants to purchase shares of common stock upon the Initial Closing of the Private Placement. As a result of the conversion of the Notes, all obligations of the Company to the holders of the Notes thereunder have been satisfied and the Notes are no longer outstanding. Also see Note 11 – Subsequent Events below.

As of December 31, 2017, the accrued interest expense on the Notes amounted to $11,365, with a total balance of principal and interest of $411,365 and is included in convertible notes payable – related parties on the accompanying balance sheet.

Convertible Notes Payable

In July 2016, IThena issued convertible promissory notes with an aggregate principal balance of $50,000 to certain related-party investors. Borrowings under each of these convertible notes bore interest at 3% per annum and these notes mature on June 30, 2018. Upon the completion of certain funding events, IThena had the right to convert the outstanding principal amount of these notes into shares of the IThena’s common stock. The notes were assumed by Autotelic Inc. on November 15, 2016 as part of its acquisition of the technology asset (IT-101).

On November 22, 2017, the Company issued a convertible promissory note with a related party for $500,000, with annual interest at 8%, maturing on March 31, 2018, and convertible at the price equal to any financing transaction involving the sale by the Company of its equity securities yielding aggregate gross proceeds to the Company of not less than $5 million. Total principal and interest was $504,274 as of December 31, 2017 and is included in convertible notes to related parties on the accompanying balance sheet. The note included warrants to purchase 66,667 shares of the Company’s common stock, with a 5-year term and an exercise price of $0.75. The note included a debt discount of $162,210 consisting of loan costs of $50,000 and the fair value of the warrants of $112,210. Total amortization of this debt discount was $49,041 for the year ended December 31, 2017, with a remaining unamortized value of $113,169. The net balance of the note of $391,105 is included in convertible notes to related parties on the accompanying balance sheet at December 31, 2017.

The unpaid principal balance of the related party note, together with accrued and unpaid interest thereon, automatically converted into shares of Series E Convertible Preferred Stock and Warrants to purchase shares of common stock upon the Initial Closing of the Private Placement. As a result of the conversion of the related party note, all obligations of the Company to the holder under such note have been satisfied and the note is no longer outstanding. Also see Note 11 – Subsequent Events below.

Convertible Notes Payable, Dr. Trieu

In connection with the Merger, Marina entered into a Line Letter dated November 15, 2016 with Dr. Trieu, our Executive Chairman, for an unsecured line of credit in an amount not to exceed $540,000, to be used for current operating expenses. Dr. Trieu has advanced the full $540,000 under the Line Letter as of December 31, 2017 ($250,000 as of December 31, 2016). Accrued interest on the Line Letter was $25,836 and $0 as of December 31, 2017 and December 31, 2016, respectively, and is included in convertible notes payable to related parties on the accompanying balance sheets. The line of credit is currently convertible at any time into shares of the Company’s common stock at a price of $1.77 per share.

The unpaid principal balance of the line of credit, together with accrued and unpaid interest thereon, converted into shares of Series E Convertible Preferred Stock and Warrants to purchase shares of common stock upon the Initial Closing of the Private Placement. As a result of the conversion of the line of credit, all obligations of the Company to Dr. Trieu thereunder have been satisfied and the line of credit is no longer outstanding. Also see Note 11 – Subsequent Events below.

Line Letter with Autotelic Inc.

On April 4, 2017, the Company entered into a Line Letter with Autotelic Inc for an unsecured line of credit in an amount not to exceed $500,000, to be used for current operating expenses. Autotelic Inc. is. a stockholder of IThenaPharma that became the holder of 525,535   shares of Marina common stock as a result of the Merger, and an entity of which Dr. Trieu serves as Chairman of the Board. Autotelic Inc. was to consider requests for advances under the Line Letter until September 1, 2017. Autotelic Inc. shall have the right at any time for any reason in its sole and absolute discretion to terminate the line of credit available under the Line Letter or to reduce the maximum amount available thereunder without notice . Advances made under the Line Letter bear interest at the rate of five percent (5%) per annum, are evidenced by the Demand Promissory Note issued to Autotelic Inc., and are due and payable upon demand by Autotelic, Inc. Autotelic Inc. advanced funds after September 1, 2017 but is no longer considering additional requests for advances as of December 31, 2017.

The balance under the line was $93,662, including accrued interest of $2,847 as of December 31, 2017 and is included in notes to related parties on the accompanying balance sheet. Since this line was not extended, no further funds are available under this line of credit.

The unpaid principal balance of the line of credit, together with accrued and unpaid interest thereon, converted into shares of Series E Convertible Preferred Stock and warrants to purchase shares of common stock upon the Initial Closing of the Private Placement. As a result of the conversion of the line of credit, all obligations of the Company to Autotelic Inc. thereunder have been satisfied and the line of credit is no longer outstanding. Also see Note 11 – Subsequent Events below.