FINANCIAL CONDITION

Since inception, the Company has incurred substantial operating losses, principally from expenses associated with the Company

’s research and development programs, clinical trials conducted in connection with the Company’s product candidates, and applications and submissions to the Food and Drug Administration. We have

not

generated significant revenue and have incurred significant net losses in each year since our inception. For the year ended

December 31, 2017,

we had a net loss of

$20.4

million and used

$16.6

million to fund operations. We have incurred approximately

$262

million of accumulated losses. As of

December 31, 2017,

we had approximately

$24.2

million in cash, investment securities and interest receivable. We have substantial future capital requirements to continue our research and development activities and advance our product candidates through various development stages. The Company believes these expenditures are essential for the commercialization of its technologies.

The Company expects its operating losses to continue for the foreseeable future as it continues its product development efforts, and when it undertakes marketing and sales activities. The Company

’s ability to achieve profitability is dependent upon its ability to obtain governmental approvals, produce, and market and sell its new product candidates. There can be

assurance that the Company will be able to commercialize its technology successfully or that profitability will ever be achieved. The operating results of the Company have fluctuated significantly in the past.

We have substantial future capital requirements associated with our continued research and development activities and to advance our product candidates through various stages of development. The Company believes these expenditures are essential for the commercialization of its technologies.

The actual amount of funds the Company will need to operate is subject to many factors, some of which are beyond the Company

’s control. These factors include the following:

	●	the progress of research activities;

	●	the number and scope of research programs;

	●	the progress of preclinical and clinical development activities;

	●	the progress of the development efforts of parties with whom the Company has entered into research and development agreements;

	●	the costs associated with additional clinical trials of product candidates;

	●	the ability to maintain current research and development licensing arrangements and to establish new research and development and licensing arrangements;

	●	the ability to achieve milestones under licensing arrangements;

	●	the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and

	●	the costs and timing of regulatory approvals.

The Company has based its estimate on assumptions that

may

prove to be wrong. The Company

may

need to obtain additional funds sooner or in greater amounts than it currently anticipates. Potential sources of financing include strategic relationships, public or private sales of the Company’s shares or debt and other sources. If the Company raises funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of existing stockholders

may

be diluted.

With the

$24.2

million in

in cash, investment securities and interest receivable

December 31, 2017,

the Company believes it has sufficient capital resources to fund its operations into the

third

quarter of

2019.

The Company will be required to obtain additional funding in order to continue the development of its current product candidates within the anticipated time periods, if at all, and to continue to fund operations. As more fully discussed in Note

10,

the Company has

$13.5

million available for future sale under a controlled equity offering facility it has with Cantor Fitzgerald & Co. as of

December 31, 2017.