0000926617-18-000061.txt : 20180809 0000926617-18-000061.hdr.sgml : 20180809 20180809172708 ACCESSION NUMBER: 0000926617-18-000061 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 39 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180809 DATE AS OF CHANGE: 20180809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VERMILLION, INC. CENTRAL INDEX KEY: 0000926617 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 330595156 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-34810 FILM NUMBER: 181006447 BUSINESS ADDRESS: STREET 1: 12117 BEE CAVES ROAD BUILDING THREE STREET 2: SUITE 100 CITY: AUSTIN STATE: TX ZIP: 78738 BUSINESS PHONE: 512-519-0400 MAIL ADDRESS: STREET 1: 12117 BEE CAVES ROAD BUILDING THREE STREET 2: SUITE 100 CITY: AUSTIN STATE: TX ZIP: 78738 FORMER COMPANY: FORMER CONFORMED NAME: CIPHERGEN BIOSYSTEMS INC DATE OF NAME CHANGE: 20000316 FORMER COMPANY: FORMER CONFORMED NAME: ABIOTIC SYSTEMS DATE OF NAME CHANGE: 19950407 10-Q 1 vrml-20180630x10q.htm 10-Q 2018-06-30 10Q Q2



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,  DC 20549

                                      

FORM 10-Q

                                      

(Mark One)



    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018



OR



    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from ______ to ______



Commission file number:  001-34810

                                            

Picture 17







Vermillion, Inc.

(Exact Name of Registrant as Specified in Its Charter)



                                            



 

 

Delaware

 

33-0595156

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification No.)

12117 Bee Caves Road, Building Three, Suite 100, Austin, Texas

 

78738

(Address of Principal Executive Offices)

 

(Zip Code)



(512) 519-0400

(Registrant’s Telephone Number, Including Area Code)

1

 


 







Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  No 



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  No 



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):





 

Large accelerated filer

Accelerated filer



 

Non-accelerated filer 

Smaller reporting company

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  No 





As of July 31, 2018, the registrant had 75,274,251 shares of common stock, par value $0.001 per share, outstanding.





2

 


 

VERMILLION, INC.



FORM 10-Q

For the Quarter Ended June 30, 2018

Table of Contents







 

 



 

Page

PART I 

Financial Information

             4

Item 1

Financial Statements

4



Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017 (unaudited)

4



Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017 (unaudited)

             5



Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited)

6



Notes to Condensed Consolidated Financial Statements (unaudited)

7

Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

14

Item 3

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4

Controls and Procedures

26

PART II

Other Information

27

Item 1

Legal Proceedings

27

Item 1A

Risk Factors

27

Item 6

Exhibits

29

SIGNATURES

30 



Vermillion, OVA1 and Overa are registered trademarks of Vermillion, Inc.



3

 


 

PART I - FINANCIAL INFORMATION



ITEM 1.FINANCIAL STATEMENTS



Vermillion, Inc.

Condensed Consolidated Balance Sheets

(Amounts in Thousands, Except Share and Par Value Amounts)

(Unaudited)









 

 

 

 

 



June 30,

 

December 31,



2018

 

2017

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

14,135 

 

$

5,539 

Accounts receivable, net

 

707 

 

 

205 

Prepaid expenses and other current assets

 

334 

 

 

459 

Inventories

 

110 

 

 

102 

Total current assets

 

15,286 

 

 

6,305 

Property and equipment, net

 

835 

 

 

1,181 

Other assets

 

 -

 

 

11 

Total assets

$

16,121 

 

$

7,497 



 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

783 

 

$

745 

Accrued liabilities

 

1,686 

 

 

1,650 

Short-term debt

 

187 

 

 

185 

Other current liabilities

 

10 

 

 

29 

Total current liabilities

 

2,666 

 

 

2,609 

Non-current liabilities:

 

 

 

 

 

Long-term debt

 

1,387 

 

 

1,481 

Total liabilities

 

4,053 

 

 

4,090 

Commitments and contingencies (Note 3)

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, par value $0.001 per share, 150,000,000 shares authorized at

 

 

 

 

 

June 30, 2018 and December 31, 2017; 75,274,251 and 60,036,017 shares

 

 

 

 

 

issued and outstanding at June 30, 2018 and December 31, 2017,

 

 

 

 

 

respectively

 

75 

 

 

60 

Additional paid-in capital

 

413,445 

 

 

399,400 

Accumulated deficit

 

(401,452)

 

 

(396,053)

Total stockholders’ equity

 

12,068 

 

 

3,407 

Total liabilities and stockholders’ equity

$

16,121 

 

$

7,497 



See accompanying notes to the unaudited condensed consolidated financial statements.

4

 


 

Vermillion, Inc.

Condensed Consolidated Statements of Operations

(Amounts in Thousands, Except Share and Per Share Amounts)

(Unaudited)







 

 

 

 

 

 

 

 

 

 

 



Three Months Ended June 30,

 

Six Months Ended June 30,



2018

 

2017

 

2018

 

2017

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Product

$

627 

 

$

860 

 

$

1,240 

 

$

1,538 

Service

 

81 

 

 

38 

 

 

117 

 

 

86 

Total revenue

 

708 

 

 

898 

 

 

1,357 

 

 

1,624 

Cost of revenue:(1)

 

 

 

 

 

 

 

 

 

 

 

Product

 

528 

 

 

428 

 

 

1,061 

 

 

850 

Service

 

280 

 

 

266 

 

 

550 

 

 

571 

Total cost of revenue

 

808 

 

 

694 

 

 

1,611 

 

 

1,421 

Gross profit (loss)

 

(100)

 

 

204 

 

 

(254)

 

 

203 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development(2)

 

154 

 

 

268 

 

 

296 

 

 

493 

Sales and marketing(3)

 

1,478 

 

 

1,041 

 

 

2,703 

 

 

2,064 

General and administrative(4)

 

1,299 

 

 

1,241 

 

 

2,613 

 

 

2,648 

Total operating expenses

 

2,931 

 

 

2,550 

 

 

5,612 

 

 

5,205 

Loss from operations

 

(3,031)

 

 

(2,346)

 

 

(5,866)

 

 

(5,002)

Interest income (expense), net

 

(7)

 

 

(10)

 

 

(19)

 

 

(22)

Other income (expense), net

 

(11)

 

 

(4)

 

 

(14)

 

 

(9)

Net loss

$

(3,049)

 

$

(2,360)

 

$

(5,899)

 

$

(5,033)

Net loss per share - basic and diluted

$

(0.04)

 

$

(0.04)

 

$

(0.09)

 

$

(0.09)

Weighted average common shares used to compute basic and diluted net loss per common share

 

69,353,622 

 

 

56,113,917 

 

 

64,721,128 

 

 

55,123,977 

Non-cash stock-based compensation expense included in cost of revenue and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

(1)  Cost of revenue

$

28 

 

$

40 

 

$

58 

 

$

79 

(2)  Research and development

 

 

 

 

 

 

 

(3)  Sales and marketing

 

28 

 

 

40 

 

 

71 

 

 

77 

(4)  General and administrative

 

304 

 

 

295 

 

 

412 

 

 

510 



See accompanying notes to the unaudited condensed consolidated financial statements.

5

 


 

Vermillion, Inc.

Condensed Consolidated Statements of Cash Flows

(Amounts in Thousands)

(Unaudited)







 

 

 

 

 



Six Months Ended



June 30,



2018

 

2017

Cash flows from operating activities:

 

 

 

 

 

Net loss

$

(5,899)

 

$

(5,033)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Depreciation and amortization

 

370 

 

 

401 

Stock-based compensation expense

 

543 

 

 

671 

Loss on sale and disposal of property and equipment

 

10 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(2)

 

 

61 

Prepaid expenses and other assets

 

136 

 

 

218 

Inventories

 

(8)

 

 

(9)

Accounts payable, accrued liabilities and other liabilities

 

74 

 

 

(504)

Net cash used in operating activities

 

(4,776)

 

 

(4,191)

Cash flows from investing activities:

 

 

 

 

 

Purchase of property and equipment

 

(34)

 

 

(43)

Net cash used in investing activities

 

(34)

 

 

(43)

Cash flows from financing activities:

 

 

 

 

 

Proceeds from private placement offering of common stock, net of issuance costs

 

 -

 

 

5,127 

Proceeds from public offering of preferred stock, net of issuance costs

 

4,496 

 

 

 -

Proceeds from public offering of common stock, net of issuance costs

 

8,992 

 

 

 -

Principal repayment of DECD loan

 

(92)

 

 

(92)

Repayment of capital lease obligations

 

(19)

 

 

(15)

Proceeds from issuance of common stock from exercise of stock options

 

29 

 

 

 -

Net cash provided by financing activities

 

13,406 

 

 

5,020 

Net increase in cash and cash equivalents

 

8,596 

 

 

786 

Cash and cash equivalents, beginning of period

 

5,539 

 

 

5,242 

Cash and cash equivalents, end of period

$

14,135 

 

$

6,028 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash paid during the period for interest

 

23 

 

 

24 

Non-cash investing and financing activities:

 

 

 

 

 

50,000 shares of convertible preferred stock converted to 5,000,000 shares of common stock, net of issuance costs

 

4,496 

 

 

 -



See accompanying notes to the unaudited condensed consolidated financial statements.

6

 


 

Vermillion, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)





1.   ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Organization

Vermillion, Inc. (“Vermillion”; Vermillion and its wholly-owned subsidiaries are collectively referred to as the “Company,” “we” or “our) is incorporated in the state of Delaware, and is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. The Company sells OVA1™ and Overa™ risk of malignancy tests for ovarian cancer (“OVA1” and “Overa, respectively) through Vermillion’s wholly-owned Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) certified clinical laboratory, ASPiRA LABS, Inc. (“ASPiRA LABS”).  



The Company also offers in-vitro diagnostic (“IVD”) trial services to third-party customers through its wholly-owned subsidiary, ASPiRA IVD, Inc. (“ASPiRA IVD”), which commenced operations in June 2016. ASPiRA IVD is a specialized, CLIA certified, laboratory provider dedicated to meeting the unique testing needs of IVD manufacturers seeking to commercialize high-complexity assays.

Liquidity

The Company has incurred significant net losses and negative cash flows from operations since inception, and as a result has an accumulated deficit of approximately $401,452,000 at June 30, 2018. The Company also expects to incur a net loss and negative cash flows from operations for the remainder of 2018.  There can be no assurance that the Company will achieve or sustain profitability or positive cash flow from operations.  However, management believes that the current working capital position will be sufficient to meet the Company’s working capital needs for at least the next 12 months.



As discussed in Note 4, on April 17, 2018, the Company completed two public offerings, pursuant to which certain investors purchased Vermillion common stock and Vermillion Series B convertible preferred stock for net proceeds of approximately $13,500,000 after deducting offering expenses.

 

As discussed in Note 4, on August 31, 2017, certain investors exercised outstanding warrants to purchase shares of Vermillion common stock for net proceeds of approximately $3,577,000 after deducting offering expenses.



As discussed in Note 4, on February 17, 2017, the Company completed a private placement pursuant to which certain investors purchased Vermillion common stock and warrants to purchase shares of Vermillion common stock for net proceeds of approximately $5,127,000 after deducting offering expenses.



As discussed in Note 3, in March 2016, the Company entered into an agreement (the “Loan Agreement”) pursuant to which it may borrow up to $4,000,000 from the State of Connecticut Department of Economic and Community Development (the “DECD”). An initial disbursement of $2,000,000 was made to the Company on April 15, 2016 under the Loan Agreement. The remaining $2,000,000 will be advanced if and when the Company achieves certain future milestones. The loan may be prepaid at any time without premium or penalty.





Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they

7

 


 

do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period.



The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal year. The condensed consolidated balance sheet at December 31, 2017 included in this report has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2017 included in Vermillion’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 13,  2018 (the “2017 Annual Report”).



The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated results. 



Significant Accounting and Reporting Policies



Revenue Recognition 



The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), which it adopted on January 1, 2018 using the modified retrospective method.



In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services.



Product Revenue



Prior to January 1, 2018, the Company recognized product revenue in accordance with the provisions of ASC 954-605, Health Care Entities - Revenue Recognition. The Company's product revenue is generated by performing diagnostic services using its OVA1 and Overa tests, and the service is completed upon the delivery of the test result to the prescribing physician. The entire transaction price is allocated to the single performance obligation contained in a contract with a patient. Under the previous revenue recognition accounting methodology, certain product revenue was recognized upon the ultimate receipt of cash. Under ASC 606, all revenue is recognized upon completion of the OVA1 or Overa test based on estimates of amounts that will ultimately be realized. In determining the amount of revenue to be recognized for a delivered test result, the Company considers factors such as payment history and amount, payer coverage, whether there is a reimbursement contract between the payer and the Company, and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management as the collection cycle on some accounts can be as long as one year.    

 

The Company also reviewed its patient account population and determined an appropriate distribution of patient accounts by payer (i.e., Medicare, patient pay, other third-party payer, etc.) into portfolios with similar collection experience. The Company has elected this practical expedient that, when evaluated for collectability, results in a materially consistent revenue amount for such portfolios as if each patient account were evaluated on an individual contract basis. There were no impairment losses on accounts receivable recorded during the three and six months ended June 30, 2018.



Under the modified retrospective implementation method, the Company recorded a one-time cumulative effect adjustment at January 1, 2018 to reflect the aggregate effect of all open OVA1 and Overa tests performed

8

 


 

prior to January 1, 2018 as if revenue had been recognized under ASC 606.  The cumulative effect adjustment was recorded increasing the opening balance of Accounts Receivable by $500,000 in the condensed consolidated balance sheets with an offsetting reduction to Accumulated Deficit. The Company’s right to receive payment on this balance is contingent only on the passage of time.



The following tables show the impact of adoption to our consolidated statement of operations and balance sheet:





 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2018



 

Impact of changes in accounting policies



 

As Reported

 

Balances without adoption of ASC 606

 

Effect of Change Higher/(Lower)

Product revenue

 

$

1,240 

 

$

1,249 

 

$

(9)

Operating loss

 

$

(5,866)

 

$

(5,857)

 

$

(9)

Net loss

 

$

(5,899)

 

$

(5,890)

 

$

(9)

Net loss per share, basic and diluted

 

$

(0.09)

 

$

(0.09)

 

$

 -







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

June 30, 2018



 

Impact of changes in accounting policies



 

As Reported

 

Balances without adoption of ASC 606

 

Effect of Change Higher/(Lower)

Assets:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

707 

 

$

216 

 

$

491 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

Accumulated deficit

 

$

(401,452)

 

$

(401,943)

 

$

491 



ASC 606 did not have an aggregate impact on the Company’s net cash provided by operating activities, but resulted in offsetting changes in certain assets and liabilities presented within net cash provided by operating activities in the Company’s condensed consolidated statement of cash flows, as reflected in the above tables.





Other Practical Expedients 

   

The Company does not adjust the transaction price for the effects of a significant financing component, as at contract inception, the Company expects the collection cycle to be one year or less.

   

The Company expenses sales commissions when incurred because the amortization period would have been one year or less.  These costs are recorded within sales and marketing expenses.



Service Revenue

The Company’s service revenue is generated by performing IVD trial services for third-party customers. Application of the modified retrospective method did not impact amounts previously reported by the Company, nor did it require a cumulative effect adjustment upon adoption, as the Company’s method of recognizing revenue under ASC 606 was analogous to the method utilized immediately prior to adoption.  Accordingly, there is no need for the Company to disclose the amount by which each financial statement line item was affected as a result of applying the new standard and an explanation of significant changes. 



Measurement of progress on contracts with customers will generally be based on the input measurement of cost incurred relative to the total expected costs to satisfy the performance obligation. The Company has not disclosed the value of unsatisfied performance obligations for all service revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adoption rules. The remainder are not material to the consolidated financial statements.



9

 


 

Recent Accounting Pronouncements



In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), Compensation - Stock Compensation (“ASU 2016-09”). The new guidance simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within that reporting period. The Company adopted this standard on January 1, 2018, and the adoption did not have a material impact on the consolidated financial statements.  In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Base Payment Accounting.  This new guidance expands the scope of Topic 718 to include share-based payment transactions from acquiring goods and services from nonemployees, which was previously codified under Topic 505, where this change will modify the measurement requirements of nonemployee awards.    This amendment is effective for annual periods after December 15, 2018.  The Company is currently evaluating the impact of adoption of this standard.



In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) (“ASU 2016-2). This guidance is intended to make leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. ASU 2016-2 will be effective for interim and annual periods beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption is permitted. The Company expects to adopt this standard beginning in 2019. The Company is still evaluating the effect adoption will have on our financial statements.



In May 2014, the FASB issued ASC 606, which superseded existing revenue recognition guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 effective on January 1, 2018 using the modified retrospective method. Please see the above “Revenue Recognition” section for a discussion of the Company’s revenue recognition under ASC 606.

 

2.   AGREEMENTS WITH QUEST DIAGNOSTICS INCORPORATED



In March 2015, the Company entered into a commercial agreement with Quest Diagnostics, Incorporated (“Quest Diagnostics”). Pursuant to this agreement,  all OVA1 U.S. testing services for Quest Diagnostics customers were transferred to Vermillion’s wholly-owned subsidiary, ASPiRA LABS, as of August 2015. Pursuant to this agreement, as amended as of March 1, 2018, Quest Diagnostics is continuing to provide blood draw and logistics support by transporting specimens from its clients to ASPiRA LABS for testing through at least March 11, 2019 in exchange for a market value fee. Per the terms of the new commercial agreement, the Company will not offer to existing or future Quest Diagnostics customers tests that Quest Diagnostics offers.

 

3.   COMMITMENTS AND CONTINGENCIES



Development Loan



On March 22, 2016, the Company entered into the Loan Agreement with the DECD, pursuant to which the Company may borrow up to $4,000,000 from the DECD.  Proceeds from the loan were utilized primarily to fund the build-out, information technology infrastructure and other costs related to the Company’s Trumbull, Connecticut facility and operations.  The loan bears interest at a fixed rate of 2.0% per annum and requires equal monthly payments of principal and interest until maturity, which occurs on April 15, 2026.  As security for the loan, the Company has granted the DECD a blanket security interest in the Company’s personal and intellectual

10

 


 

property.  The DECD’s security interest in the Company’s intellectual property may be subordinated to a qualified institutional lender.  Under the terms of the Loan Agreement, as amended, the Company may be eligible for forgiveness of up to $2,000,000 of the principal amount of the loan if the Company achieves certain job creation and retention milestones by March 1, 2021 (the “Measurement Date”).  Conversely, if the Company is either unable to meet these job creation and retention milestones, namely, hiring and retaining for a consecutive two-year period 40 full-time employees with a specified average annual salary by the Measurement Date,  or does not maintain the Company’s Connecticut operations for a period of 10 years, the DECD may require early repayment of a portion or all of the loan depending on job attainment as compared to the required amount plus a penalty of 5% of the total funded loan.  



An initial disbursement of $2,000,000 was made to the Company on April 15, 2016 under the Loan Agreement.  The remaining $2,000,000 will be advanced if and when the Company achieves certain other future milestones. The loan may be prepaid at any time without premium or penalty.



Operating Leases



The Company leases facilities to support its business of discovering, developing and commercializing diagnostic tests in the fields of gynecologic disease. The Company’s principal facility, including the CLIA laboratory used by ASPiRA LABS, is located in Austin, Texas, and the CLIA laboratory used by ASPiRA IVD is located in Trumbull, Connecticut.  The Austin, Texas lease includes an aggregate annual base rent of $86,000 and annual estimated common area charges, taxes and insurance of $46,000 and expires on January 31, 2019.    



In October 2015, the Company entered into a lease agreement for a facility in Trumbull, Connecticut. The lease required initial payments for the buildout of leasehold improvements to the office space, which were approximately $596,000. The term of the lease is five years beginning after the initial date of occupancy in January 2016 and a rent abatement period of five months. The lease includes an aggregate annual base rent of $32,000 and annual estimated common area charges, taxes and insurance of $95,000.  



Building rent for the three months ended June 30, 2018 and 2017 totaled $67,000 and $62,000, respectively. Building rent for the six months ended June 30, 2018 and 2017 totaled $134,000 and $123,000, respectively.



Capital Lease



In April 2015, the Company leased a laboratory instrument for a total initial payment of $125,000 and ongoing payments of approximately $3,500 per month for 36 months after delivery. The agreement also requires minimum annual purchases of reagents from the manufacturer of the equipment. The laboratory instrument was placed into service on July 1, 2015.



The accumulated amortization of assets under capital lease obligations was $232,000 and $155,000 as of June 30, 2018 and 2017, respectively. The net book value of assets under capital lease obligations was $0 and $77,000 as of June 30, 2018 and 2017, respectively. 



Non-cancelable Royalty Obligations



The Company is a party to an amended research collaboration agreement with The Johns Hopkins University School of Medicine under which the Company licenses certain of its intellectual property.  Under the terms of the amended research collaboration agreement, Vermillion is required to pay the greater of 4% royalties on net sales of diagnostic tests using the assigned patents or annual minimum royalties of $57,500.  Royalty expense for the three months ended June 30, 2018 and 2017 totalled $25,000 and $34,000, respectively. Royalty expense for the six months ended June 30, 2018 and 2017 totalled $49,000 and $63,000, respectively.

  

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4.   STOCKHOLDERS’ EQUITY

2018 Offerings    



On  April 13, 2018,  the Company entered into two underwriting agreements (each, an Underwriting Agreement) with Piper Jaffray & Co., as the sole underwriter (the “Underwriter), in connection with separate but concurrent public offerings of the Company’s securities.



Pursuant to the first Underwriting Agreement, the Company agreed to issue and sell an aggregate of 10,000,000 shares of Vermillion common stock, par value $0.001 per share, offered by the Underwriter in a public offering at a price to the public of $1.00 per share (the “Common Stock Offering”). Under this Underwriting Agreement, the Company granted the Underwriter an option to purchase up to an additional 1,500,000 shares of Vermillion common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments, if any. The Underwriter did not exercise this option. The Common Stock Offering closed on April 17, 2018 and resulted in proceeds, net of 7% underwriting costs and other offering costs, to the Company of $8,992,000.



Pursuant to the second Underwriting Agreement, the Company agreed to issue and sell an aggregate of 50,000 shares of Vermillion Series B Convertible Preferred Stock, par value $0.001 per share, offered by the Underwriter in a public offering at a price to the public of $100.00 per share (the “Series B Offering).  The Series B Offering closed on April 17, 2018 and resulted in proceeds, net of 7% underwriting costs and other offering costs, to the Company of $4,496,000.



Upon obtaining Company stockholder approval at the annual meeting of Company stockholders on June 21, 2018, each of the 50,000 shares of Vermillion Series B Convertible Preferred Stock was automatically converted into shares of Vermillion common stock, at a conversion rate of 100 shares of Vermillion common stock per one share of Vermillion Series B Convertible Preferred Stock, including shares issuable pursuant to customary anti-dilution provisions.

2017 Warrant Repricing and Exercise      



In December 2014, the Company issued warrants to purchase up to an aggregate of 4,166,659 shares of Vermillion common stock at an exercise price of $2.00 per share in conjunction with a December 2014 private placement of Vermillion common stock.  



On August 31, 2017, certain holders of these warrants exercised warrants to purchase 3,796,818 shares of Vermillion common stock in consideration for the Company agreeing to reduce the exercise price to $1.00 per share of Vermillion common stock. The remaining 369,841 unexercised warrants expired by their original terms on December 23, 2017.



 The Company issued 3,796,818 shares of Vermillion common stock and received $3,796,818 in aggregate gross proceeds (approximately $3,577,000 net of transaction costs). The incremental non-cash fair value of approximately $942,000 from the modification of the warrants was calculated using the Black-Scholes model and recorded as a deemed dividend to the warrant holders within stockholders’ equity.



2017 Private Placement       

On February 17, 2017, the Company completed a private placement pursuant to which certain investors purchased 3,747,125 shares of Vermillion common stock at a price of $1.40 per share. Vermillion also issued warrants to purchase shares of Vermillion common stock at a price of $0.125 per warrant share in the private placement. Net proceeds of the private placement were approximately $5,127,000 after deducting offering expenses. The warrants are exercisable for 2,810,338 shares of Vermillion common stock at $1.80 per share. The warrants expire on the fifth anniversary of the date of issuance or, if earlier, five business days after Vermillion delivers notice that the closing price per share of its common stock exceeded the exercise price for 20 consecutive trading days during the exercise period.



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The sale of common stock and issuance of warrants qualified for equity treatment under GAAP. The respective values of the warrants and common stock were calculated using their relative fair values and classified under common stock and additional paid-in capital. The value ascribed to the warrants is $804,000 and to the common stock is approximately $4,296,000.



2010 Stock Incentive Plan

The Company’s employees, directors, and consultants are eligible to receive awards under the Vermillion, Inc. Second Amended and Restated 2010 Stock Incentive Plan (the “2010 Plan”). The 2010 Plan permits the granting of a variety of awards, including stock options, share appreciation rights, restricted shares, restricted share units, unrestricted shares, deferred share units, performance and cash-settled awards, and dividend equivalent rights. The 2010 Plan provides for issuance of up to 12,122,983 shares of Vermillion common stock, subject to adjustment as provided in the 2010 Plan.



Stock-Based Compensation



During the three ended June 30, 2018,  the Company awarded Vermillion’s non-employee directors an aggregate of 398,400 shares of restricted stock under the 2010 Plan having a fair value of approximately $442,000.  The vesting of these shares of restricted stock is as follows: 50% on June 1, 2018, 25% on September 1, 2018, and 25% on December 1, 2018. The Company also awarded certain consultants 6,534 shares of restricted stock under the 2010 Plan having a fair value of approximately $10,000.  



During the three months ended June 30, 2018, the Company granted certain officers and employees options to purchase an aggregate of 934,000 shares of Vermillion common stock with an exercise price of $1.11 per share and 125,000 shares of Vermillion common stock with an exercise price of $0.90 per share. These stock options vest 25% on each of the four anniversaries of the vesting commencement date for each such stock option. 



During the three months ended June 30, 2018, the Company awarded a certain consultant 3,213 shares of restricted stock under the 2010 Plan having a fair value of approximately $4,500.  



The allocation of employee stock-based compensation expense by functional area for the three and six months ended June 30, 2018 and 2017 was as follows:

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands)

 

2018

 

2017

 

2018

 

2017

Cost of revenue

 

$

23 

 

$

20 

 

$

47 

 

$

40 

Research and development

 

 

 

 

 

 

 

 

Sales and marketing

 

 

34 

 

 

38 

 

 

81 

 

 

70 

General and administrative

 

 

355 

 

 

283 

 

 

494 

 

 

414 

Total

 

$

413 

 

$

343 

 

$

624 

 

$

529 



 

 

 

 

 

 

 

 

 

 

 

 



































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5.   LOSS PER SHARE

The Company calculates basic loss per share using the weighted average number of shares of Vermillion common stock outstanding during the period. Because the Company is in a net loss position, diluted loss per share is calculated using the weighted average number of shares of Vermillion common stock outstanding and excludes the effects of 7,572,134 and  11,662,820 potential shares of Vermillion common stock as of June 30, 2018 and 2017, respectively, that are anti-dilutive. Potential shares of Vermillion common stock include incremental shares of Vermillion common stock issuable upon the exercise of outstanding warrants, stock options and unvested restricted stock units.



6.   RELATED PARTY TRANSACTIONS

On December 18, 2017, the Company entered into a consulting agreement for a term of up to five months with the Company’s former Senior Vice President, Finance and Chief Accounting Officer.  Pursuant to the terms of the consulting agreement through May 15, 2018, the consultant provided accounting and finance services related to the transition of financial leadership. The Company agreed to pay $150 per hour for such consulting services.  The consultant also remained eligible for payout under the Company’s 2017 Corporate Incentive Plan after he satisfactorily met certain performance obligations as outlined in the consulting agreement. During the six months ended June 30, 2018, the consultant was paid an aggregate of $53,925 for services provided pursuant to the consulting agreement. 



   ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995.



These statements involve a number of risks and uncertainties. Words such as “may,” “expects,” “intends,” “anticipates,” “believes,” “estimates,” “plans,” “seeks,” “could,” “should,” “continue,” “will,” “potential,” “projects” and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward-looking statements speak only as of the date on which this Quarterly Report on Form 10-Q is filed with the Securities and Exchange Commission (the SEC”), and, except as required by law, Vermillion, Inc. (“Vermillion” and, together with its subsidiaries, the “Company,” “we,” “our,” or “us”) does not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after such date.



Examples of forward-looking statements regarding our business include the following:

·

projections or expectations regarding our future test volumes, revenue, cost of revenue, operating expenses, cash flow, results of operations and financial condition;

·

our plan to broaden our commercial focus from ovarian cancer to differential diagnosis of women with a range of gynecological disorders;

·

our planned business strategy and the anticipated timing of the implementation thereof;

·

plans with respect to our market expansion and growth, including plans to market OVA1 and Overa outside the United States;

·

plans to develop new algorithms and molecular diagnostic tests; 

·

plans to develop a product or tool combining an OVA1 with results of a symptom index;

·

plans to establish our own payer coverage for Overa and expand coverage for OVA1;

·

intentions to address clinical questions related to early disease detection, treatment response, monitoring of disease progression, prognosis and other issues in the fields of oncology and women’s health;

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·

plans to leverage infrastructure and enhance our pipeline of future technologies by fostering relationships with in vitro diagnostic (“IVD”) companies;

·

plans with respect to ASPiRA IVD, Inc. (“ASPiRA IVD”); 

·

expected service revenue

·

our planned focus on the execution of five core strategic business drivers in ovarian cancer diagnostics and specialized laboratory services to address unmet medical needs for women faced with gynecologic disease and other conditions and the continued development of our business;

·

anticipated efficacy of our products, product development activities and product innovations;

·

expected competition in the markets in which we compete;

·

plans with respect to ASPiRA LABS, Inc. (“ASPiRA LABS”);

·

expectations regarding future services provided by Quest Diagnostics Incorporated (“Quest Diagnostics”);

·

plans to expand our ovarian cancer franchise beyond OVA1, including with respect to Overa, OVA1/Overa Reflex, and DxA1 and DxA2;

·

plans regarding the commercialization of Overa; 

·

plans to decentralize OVA1 testing to physician offices and healthcare systems;

·

plans to develop informatics products and develop and perform laboratory developed tests (“LDTs”);

·

plans with respect to the Company’s pelvic mass registry, including anticipated sources of funding;  

·

anticipated effects on reimbursement for OVA1 from changes to Novitas Solutions’ administrative requirements;

·

expectations regarding the Company’s approach of monitoring and combining multiple protein biomarkers to create diagnostic tests to aid physicians considering treatment options for patients with complex diseases, and the Company’s future development of new In Vitro Diagnostic Multivariate Index Assays (IVDMIA);

·

expectations regarding existing and future collaborations and partnerships, including OVA1 and Overa distribution agreements;

·

plans regarding future publications;

·

our continued ability to comply with applicable governmental regulations,  expectations regarding pending regulatory submissions and plans to seek regulatory approvals for our tests outside the United States;

·

our ability to obtain and maintain the regulatory approvals required to market Overa in other countries;

·

our continued ability to expand and protect our intellectual property portfolio;

·

anticipated liquidity and capital requirements;

·

anticipated future losses and our ability to continue as a going concern; 

·

expectations regarding the second disbursement from our financing arrangement, as amended, with the State of Connecticut Department of Economic and Community Development (the “DECD”);

·

expected expenditures, including the expected increase in expenses related to sales and marketing of OVA1 and Overa in 2018;

·

our ability to use our net operating loss carryforwards; 

·

anticipated future tax liability under U.S. federal and state income tax legislation;

·

expected market adoption of our diagnostic tests, including OVA1 and Overa;

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·

expectations regarding our ability to launch new products we develop, license, co-market or acquire;

·

expectations regarding raising capital and the amount of financing anticipated to be required to fund our planned operations; and

·

expectations regarding reimbursement for our products, and our ability to obtain such reimbursement, from third-party payers such as private insurance companies and government insurance plans.

  

Forward-looking statements are subject to significant risks and uncertainties, including those discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2017 (our “2017 Annual Report”), that could cause actual results to differ materially from those projected in such forward-looking statements due to various factors, including our ability to increase the volume of OVA1 or Overa sales; our ability to market our test through sales channels other than Quest Diagnostics including ASPiRA LABS; failures by third-party payers to reimburse OVA1 or Overa or changes or variances in reimbursement rates; our ability to secure additional capital on acceptable terms to execute our business plan; our ability to commercialize OVA1 or Overa both within and outside the United States; in the event that we succeed in commercializing OVA1 or Overa outside the United States, the political, economic and other conditions affecting other countries (including foreign exchange rates); our ability to continue developing certain existing technologies; our ability to develop and commercialize additional diagnostic products and achieve market acceptance with respect to these products; our ability to compete successfully; our ability to obtain any regulatory approval required for our future diagnostic products; our or our suppliers’ ability to comply with Food and Drug Administration (“FDA”) requirements for production, marketing and post-market monitoring of our products; additional costs that may be required to make further improvements to our manufacturing operations; our ability to maintain sufficient or acceptable supplies of immunoassay kits from our suppliers; our ability to continue to develop, protect and promote our proprietary technologies; our ability to use intellectual property directed to diagnose biomarkers; our ability to successfully defend our proprietary technology against third parties; future litigation against us, including infringement of intellectual property and product liability exposure; our ability to retain key employees; business interruptions; legislative actions resulting in higher compliance costs; changes in healthcare policy; our ability to comply with environmental laws; our ability to generate sufficient demand for ASPiRA LABS’ services to cover its operating costs; our ability to comply with the additional laws and regulations that apply to us in connection with the operation of ASPiRA LABS; our ability to comply with FDA regulations that relate to our products and to obtain any FDA clearance or approval required to develop and perform LDTs; ASPiRA IVD’s lack of operating history; ASPiRA IVD’s ability to generate and maintain business; fluctuations over time with respect to ASPiRA IVD’s operating results; ASPiRA IVD’s ability to enter into profitable contracts; ASPiRA IVD’s ability to maintain effective information systems without significant interruption; ASPiRA IVD’s ability to perform its services in compliance with contractual requirements, regulatory standards and ethical considerations;  our ability to integrate and achieve anticipated results from any acquisitions or strategic alliances; and our ability to comply with continued listing requirements of The Nasdaq Capital Market.   



Overview

Our vision is to drive the advancement of women’s health by providing innovative methods to detect, monitor and manage the treatment of both benign and malignant gynecologic disease, with our primary focus being diseases of the female pelvic cavity.



We have expanded our corporate strategy with the goal of transforming Vermillion from a technology license company to a diagnostic service and bio-analytic solutions provider. Our plan is to broaden our commercial focus from ovarian cancer to differential diagnosis of women with a range of gynecological disorders. Our strategy is being deployed in three phases. The three phases are a rebuild phase, which was completed in the third quarter of 2015, a transformation phase, which is now virtually complete except for continuing expansion of payer coverage, and a market expansion and growth phase, which we began in 2017.  



During the first phase, we expanded our leadership team by hiring several new senior leaders including a chief executive officer.  In addition, we expanded our commercial strategy, reestablished medical and advisory support, rebuilt our patient advocacy strategy and established a billing system and a payer strategy outside of our relationship with Quest Diagnostics.  During the second phase, we completed the process of obtaining licensure of ASPiRA LABS in all of the states that require licenses, and are in the process of establishing our own payer

16

 


 

coverage for OVA1, Multivariate Index Assay (MIA), and our second-generation OVA1 test, trademarked Overa, Multivariate Index Assay, 2nd Generation (MIA2G). Overa has been launched on a targeted basis.  In the third phase, we plan to fully commercialize OVA1 and Overa by utilizing the full national licensure of ASPiRA LABS, select laboratories for distribution, decentralized OVA1 testing to physician offices and healthcare systems, managed care coverage in select markets, our sales force and existing customer base.  Unlike OVA1, Overa uses a global testing platform, which will allow Overa to be deployed internationally.  We initiated the targeted launch of Overa in October 2016 with two key accounts converting from OVA1 to Overa. In October 2015, we announced registration of the CE mark for and clearance to market Overa in the European Union.  We also plan to develop an LDT product series, which we refer to internally as Diagnostic Algorithms #1 (DxA1) and Diagnostic Algorithms #2 (DxA2).  We anticipate that DxA1 and DxA2 will include not only biomarkers, but also clinical risk factors, other diagnostics and patient history data in order to boost predictive value. 



We are dedicated to the discovery, development and commercialization of novel high-value diagnostic and bio-analytical solutions that help physicians diagnose, treat and improve outcomes for women. Our tests are intended to detect, characterize and stage disease, and to help guide decisions regarding patient treatment, which may include decisions to refer patients to specialists, to perform additional testing, or to assist in monitoring response to therapy. A distinctive feature of our approach is to combine multiple biomarkers, other modalities and diagnostics, clinical risk factors and patient data into a single, reportable index score that has higher diagnostic accuracy than its constituents. We concentrate on our development of novel diagnostic tests for gynecologic disease, with an initial focus on ovarian cancer. We also intend to address clinical questions related to early disease detection, treatment response, monitoring of disease progression, prognosis and others through collaborations with leading academic and research institutions.



Our initial product, OVA1, is an  FDA-cleared blood test designed to, in addition to a physician’s clinical assessment of a woman with a pelvic mass, identify women who are at high risk of having a malignant ovarian tumor prior to planned surgery. We have launched on a targeted basis a second-generation biomarker panel known as Overa, which is intended to maintain our product’s high sensitivity while improving specificity. We received FDA clearance for Overa in March 2016. Overa uses the Roche cobas 4000, 6000 and 8000 platforms.  



In June 2014, Vermillion launched ASPiRA LABS, a Clinical Laboratory Improvements Amendments of 1988 (“CLIA”) certified national laboratory based in Austin, Texas, which specializes in applying biomarker-based technologies to address critical needs in the management of gynecologic cancers and disease. ASPiRA LABS provides expert diagnostic services using a state-of-the-art biomarker-based diagnostic algorithm to aid in clinical decision making and advance personalized treatment plans. The lab currently processes our OVA1 and Overa tests, and we plan to develop and perform LDTs at ASPiRA LABS in the future. ASPiRA LABS holds a CLIA Certificate of Registration and a state laboratory license in California, Florida, Maryland, New York, Pennsylvania and Rhode Island. The Centers for Medicare & Medicaid Services issued a provider number to ASPiRA LABS in March 2015.



In 2016, we created a new service within the ASPiRA channel strategy, “an ASPiRA IVD Services Program”. In April 2016, we formed ASPiRA IVD to offer IVD trial services to third-party customers. ASPiRA IVD is a specialized laboratory provider dedicated to meeting the unique testing needs of IVD manufacturers seeking to commercialize high-complexity assays. ASPiRA IVD was built around a core of laboratory expertise and an FDA-compliant quality system,  and strives to deliver accurate and reliable results to its third-party customers suitable for FDA submission.  ASPiRA IVD received  a CLIA laboratory license in June 2016 and commenced operations in the second quarter of 2016.



Strategy:

We are focused on the execution of five core strategic business drivers in ovarian cancer diagnostics and specialized laboratory services to build long-term value for our investors:

·

Maximizing the existing OVA1 opportunity in the United States by taking the lead in payer coverage and commercialization of OVA1. This strategy included the launch of a CLIA certified clinical laboratory, ASPiRA LABS, in June 2014;

17

 


 

·

Expanding the distribution platform beyond the U.S. by launching Overa, a next generation biomarker panel, while building the clinical utility and health economics foundation of both OVA1 and Overa, which we believe may allow for better domestic market penetration and international expansion (FDA clearance for Overa was received in March 2016);

·

Leveraging our existing database and specimen bank while building the largest specimen and data repository of gynecologic pelvic mass patients worldwide;

·

Expanding our product offerings to additional pelvic disease conditions such as endometriosis and polycystic ovarian syndrome by adding additional gynecologic bio-analytic solutions involving biomarkers, other modalities (e.g., imaging), clinical risk factors and patient data to aid diagnosis and risk stratification of women presenting with a pelvic mass disease; and

·

Expanding our customer offerings with the launch of our ASPiRA IVD laboratory services.



We believe that these business drivers will contribute significantly to addressing unmet medical needs for women faced with gynecologic disease and other conditions and the continued development of our business.



OVA1 addresses a clear clinical need, namely the pre-surgical identification of women who are at risk of having a malignant ovarian tumor. Numerous studies have documented the benefit of referral of these women to gynecologic oncologists for their initial surgery. Prior to the clearance of OVA1, no blood test had been cleared by the FDA for physicians to use in the pre-surgical management of ovarian adnexal masses. OVA1 is a qualitative serum test that utilizes five well-established biomarkers and proprietary software cleared as part of the OVA1 510(k) to determine the likelihood of malignancy in women over age 18, with a pelvic mass for whom surgery is planned. OVA1 should not be used without an independent clinical/radiological evaluation and is not intended to be a screening test or to determine whether a patient should proceed to surgery. Incorrect use of OVA1 carries the risk of unnecessary testing, surgery and delayed diagnosis.  OVA1 was developed through large pre-clinical studies in collaboration with numerous academic medical centers encompassing over 2,500 clinical samples. OVA1 was fully validated in a prospective multi-center clinical trial encompassing 27 sites reflective of the diverse nature of the clinical centers at which ovarian adnexal masses are evaluated.



In the United States, revenue for diagnostic tests comes from several sources, including third-party payers such as insurance companies, government healthcare programs, such as Medicare and Medicaid, client bill accounts and patients. Novitas Solutions, the Medicare contractor, covers and reimburses for OVA1 tests performed in certain states, including Texas. Because OVA1 tests are exclusively performed at ASPiRA LABS in Texas this local coverage determination from Novitas Solutions essentially provides national coverage for patients enrolled in Medicare as well as Medicare Advantage health plans. ASPiRA LABS also bills third-party commercial and other government payers as well as client bill accounts and patients for OVA1.



In October 2016, we launched our pelvic mass specimen and data repository and began the collection of Institutional Review Board patient consents for collection and cataloguing of serum samples for future research purposes.



In November 2016, The American College of Obstetricians and Gynecologists ("ACOG”) issued Practice Bulletin Number 174 which included OVA1 as a “Multivariate Index Assay”. This bulletin outlines ACOG's “new” clinical management guidelines for adnexal mass management. 



These new clinical management guidelines replace the July 2007 version, Practice Bulletin 83. Practice Bulletins summarize current information on techniques and clinical management issues for the practice of obstetrics and gynecology. Practice Bulletins are evidence-based documents, and recommendations are based on the evidence. This is also the only clinical management tool used for adnexal masses. Guidelines do not exist for adnexal masses, only Practice Bulletins. Guidelines do exist, however, for ovarian cancer management.  



The Practice Bulletin recommends that obstetricians and gynecologists evaluating women with adnexal masses who do not meet Level A criteria of a low risk transvaginal ultrasound should proceed with Level B clinical guidelines. Level B guidelines state that the physician may use risk assessment tools such as existing CA125

18

 


 

technology or OVA1 (“Multivariate Index Assay”) as listed in the bulletin.  Based on this, OVA1 has now achieved parity with CA125 as a Level B recommendation for the management of adnexal masses.



In December 2016, we received an FDA Clarification Letter regarding OVA1 and Overa. This letter was in reference to the September 7, 2016 FDA Safety Communication advising women and their physicians against the use of ovarian cancer screening tests for asymptomatic women.



In order to avoid any confusion, as well as to document the FDA position on OVA1 and Overa, Jeffrey Shuren, M.D., J.D., Director for the Center for Devices and Radiological Health at the FDA, sent a letter to Vermillion, dated December 21, 2016. In the letter, Dr. Shuren stated:

We agree that this safety communication does not apply to Vermillion’s FDA-cleared tests, OVA1 (MIA) and Overa (MIA2G), which are not screening tests for ovarian cancer.

FDA cleared OVA1 (MIA) and Overa (MIA2G) as aids to further assess the likelihood that malignancy is present when the physician’s independent clinical and radiological evaluation does not indicate malignancy. The intended uses of the two assays are the same—to help physicians more reliably identify which patients would benefit from consultation with or referral to a gynecologic oncologist. OVA1 (MIA) and Overa (MIA2G) are indicated for women who present with an adnexal mass.



In March 2015, we entered into a new commercial agreement with Quest Diagnostics.  Pursuant to this agreement, all OVA1 U.S. testing services for Quest Diagnostics customers were transferred to Vermillion’s wholly-owned subsidiary, ASPiRA LABS, as of August 10, 2015.  Pursuant to this agreement, as amended as of March 11, 2017, Quest Diagnostics has agreed to provide blood draw and logistics support by transporting specimens from its clients to ASPiRA LABS for testing through at least March 11, 2018 in exchange for a market value fee.   Per the terms of this agreement, we will not offer to existing or future Quest Diagnostics customers CA 125-II or other tests that Quest Diagnostics offers.



In 2016, we continued to make progress with increased payer positive medical polices and in network agreements for a total of over 80 million covered lives.



In the first half of 2017, ASPiRA IVD services landed two top pharmaceutical trial service agreements including one enrollment study.



In July 2017, ASPiRA LABS expanded its patient advocacy program nationally to assist patients with proactive benefit checks, with over 90% resulting in OVA1 utilization.



In September 2017, the preliminary Protecting Access to Medicare Act of 2014 (PAMA) price for OVA1 and Overa was published by the Center for Medicare and Medicaid Service. The preliminary OVA1 rate is based on the median of private payer payments we submitted as part of the market-based payment reforms mandated through PAMA. The Overa price was benchmarked to the only proteomic test currently on the fee schedule, which uses biomarkers and an algorithm to produce a prognostic score. Under the new fee schedule effective January 1, 2018, the price for OVA1 (MIA) (code 81503) is $897 and the price for Overa is $950. 



In 2018, we have continued to make progress with increased payer positive medical polices and in network agreements. As of June 30, 2018, we had 129 million covered lives and 111 million lives under contract agreement.





Recent Developments



On April 17, 2018, the Company completed two underwritten public offerings, pursuant to which certain investors purchased 10,000,000 shares of Vermillion common stock, par value $0.001 per share, for $1.00 per share (the “Common Stock Offering”) and 50,000 shares of Vermillion Series B convertible preferred stock, par value

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$0.001 per share, for $100.00 per share (the “Series B Offering” and, together with the Common Stock Offering, the “Offerings”) for net proceeds of approximately $13,500,000 after deducting offering expenses. 



Upon obtaining Company stockholder approval at the annual meeting of Company stockholders on June 21, 2018, each of the 50,000 shares of Vermillion Series B Convertible Preferred Stock was automatically converted into shares of Vermillion common stock, at a conversion rate of 100 shares of Vermillion common stock per one share of Vermillion Series B Convertible Preferred Stock, including shares issuable pursuant to customary anti-dilution provisions.

  

Critical Accounting Policies and Estimates

Prior to January 1, 2018, we recognized product revenue in accordance with the provisions of ASC 954-605, Health Care Entities - Revenue Recognition.  Our product revenue is generated by performing diagnostic services using its OVA1 and Overa tests, and the service is completed upon the delivery of test result to the prescribing physician. Under the previous revenue recognition accounting methodology, certain product revenue was recognized upon the ultimate receipt of cash. Under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), all revenue is recognized upon completion of the OVA1 or Overa test based on estimates of amounts that will ultimately be realized. In determining the amount to accrue for a delivered test result, we consider factors such as historical payment history and amount, payer coverage, whether there is a reimbursement contract between the payer and us, and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management. We also reviewed our patient account population and determined an appropriate distribution of patient accounts by payer (i.e., Medicare, patient pay, other third-party payer, etc.) into portfolios with similar collection experience. When evaluated for collectability, this results in a materially consistent revenue amount for such portfolios as if each patient account were evaluated on an individual contract basis.



Under the modified retrospective implementation method, we recorded a one-time cumulative effect adjustment at January 1, 2018 to reflect the aggregate effect of all OVA1 and Overa tests performed prior to January 1, 2018 as of revenue had been recognized under ASC 606.  The cumulative effect adjustment was recorded increasing the opening balance of Accounts Receivable by $500,000 in the condensed consolidated balance sheets with an offsetting reduction to Accumulated Deficit.



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Results of Operations - Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

The selected summary financial and operating data of the Company for the three months ended June 30,  2018 and 2017 were as follows:





 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Increase (Decrease)

(dollars in thousands)

 

2018

 

2017

 

Amount

 

%  

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

627 

 

$

860 

 

$

(233)

 

(27)

Service

 

 

81 

 

 

38 

 

 

43 

 

113 

Total revenue

 

 

708 

 

 

898 

 

 

(190)

 

(21)

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

Product

 

 

528 

 

 

428 

 

 

100 

 

23 

Service

 

 

280 

 

 

266 

 

 

14 

 

Total cost of revenue

 

 

808 

 

 

694 

 

 

114 

 

16 

Gross profit (loss)

 

 

(100)

 

 

204 

 

 

(304)

 

(149)

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

154 

 

 

268 

 

 

(114)

 

(43)

Sales and marketing

 

 

1,478 

 

 

1,041 

 

 

437 

 

42 

General and administrative

 

 

1,299 

 

 

1,241 

 

 

58 

 

Total operating expenses

 

 

2,931 

 

 

2,550 

 

 

381 

 

15 

Loss from operations

 

 

(3,031)

 

 

(2,346)

 

 

(685)

 

29 

Interest income (expense), net

 

 

(7)

 

 

(10)

 

 

 

(30)

Other income (expense), net

 

 

(11)

 

 

(4)

 

 

(7)

 

175 

Net loss

 

$

(3,049)

 

 

(2,360)

 

$

(689)

 

29 



Product Revenue.  Product revenue was $627,000 for the three months ended June 30, 2018 compared to $860,000 for the same period in 2017.  Effective January 1, 2018, revenue for ASPiRA LABS is being recognized when the OVA1 test is being performed based on estimates of what we expect to ultimately realize.   The 27% product revenue decrease is due to a decrease in our tests performed, especially those for client bill customers.

The number of OVA1 tests performed decreased 22% to approximately 1,884 OVA1 tests during the three months ended June 30, 2018 compared to approximately 2,418 OVA1 tests for the same period in 2017. The volume decrease was primarily due to the previously announced loss of a client bill customer in July 2017,  which was concentrated in uncovered territories (territories not covered by an ASPiRA sales representative).  We expect the test volume to improve sequentially over the course of the year, primarily in the second half of the year as we increase our sales and marketing investments. 

Service Revenue.  Service revenue was $81,000 for the three months ended June 30, 2018 compared to $38,000 for the same period in 2017.  Service revenue varies from quarter to quarter based on the stages of ongoing customer projects. Revenue for ASPiRA IVD is being recognized once certain revenue recognition criteria have been met (see Note 1 to the financial statements included in Part I, Item I of this Form 10-Q). Due to the existing pipeline, we expect service revenue to increase in the third and fourth quarters of 2018.

Cost of Revenue - Product.  Cost of product revenue was $528,000 for the three months ended June 30, 2018 compared to $428,000 for the same period in 2017, representing an increase of 23% due primarily to some increased non-recurring lab supply costs due to clinical validation expenses and postage costs due to new kits, as well as Quest project management fees incurred in 2018.  We expect the cost of product revenue to remain consistent in the third quarter of 2018  compared to the second quarter of 2018.

Cost of Revenue - Service.    Cost of service revenue was $280,000 for the three months ended June 30, 2018 compared to $266,000 for the same period in 2017. The 5%  increase related primarily to lab supplies purchased in connection with larger projects in the second quarter of 2018. We expect the cost of service revenue to

21

 


 

fluctuate consistent with service revenue some but to be largely consistent with the second quarter due to the fixed nature of the costs.     

Research and Development Expenses.  Research and development expenses represent costs incurred to develop our technology and carry out clinical studies, and include personnel-related expenses, regulatory costs, reagents and supplies used in research and development laboratory work, infrastructure expenses, contract services and other outside costs. Research and development expenses for the three months ended June 30, 2018 decreased $114,000, or 43%, compared to the same period in 2017.  This decrease was primarily due to a reduction in consulting expenses. We expect research and development expenses to increase slightly over the second quarter 2018 levels in the third and fourth quarters of 2018 due to the completion of ongoing studies and publications.

Sales and Marketing Expenses.  Our sales and marketing expenses consist primarily of personnel-related expenses, education and promotional expenses, and infrastructure expenses. These expenses include the costs of educating physicians, laboratory personnel and other healthcare professionals regarding OVA1 and Overa. Sales and marketing expenses also include the costs of sponsoring continuing medical education, medical meeting participation, and dissemination of scientific and health economic publications. Sales and marketing expenses for the three months ended June 30, 2018 increased $437,000, or 42%, compared to the same period in 2017.  This increase was primarily due to increased headcount and personnel-related expenses, one-time costs for Chief Operating Officer severance and increased consulting costs in the second quarter of 2018 compared to 2017. We expect sales and marketing expenses to increase modestly over the remainder of 2018 as we focus efforts on the commercialization of OVA1 and Overa.

General and Administrative Expenses.  General and administrative expenses consist primarily of personnel-related expenses, professional fees and other costs, including legal, finance and accounting expenses and other infrastructure expenses. General and administrative expenses for the three months ended June 30, 2018 increased by $58,000, or 5%, compared to the same period in 2017.  The increase was primarily due to an increase in consulting costs, partially offset by the remeasurement of consultant stock options at the end of the second quarter. We expect general and administrative expenses to remain consistent with the second quarter in the third quarter of 2018.



22

 


 

Results of Operations - Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

The selected summary financial and operating data of the Company for the six months ended June 30, 2018 and 2017 were as follows:







 

 

 

 

 

 

 

 

 

 

 



 

Six Months Ended June 30,

 

Increase (Decrease)

(dollars in thousands)

 

2018

 

2017

 

Amount

 

%  

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

1,240 

 

$

1,538 

 

$

(298)

 

(19)

Service

 

 

117 

 

 

86 

 

 

31 

 

36 

Total revenue

 

 

1,357 

 

 

1,624 

 

 

(267)

 

(16)

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

Product

 

 

1,061 

 

 

850 

 

 

211 

 

25 

Service

 

 

550 

 

 

571 

 

 

(21)

 

(4)

Total cost of revenue

 

 

1,611 

 

 

1,421 

 

 

190 

 

13 

Gross profit (loss)

 

 

(254)

 

 

203 

 

 

(457)

 

(225)

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

296 

 

 

493 

 

 

(197)

 

(40)

Sales and marketing

 

 

2,703 

 

 

2,064 

 

 

639 

 

31 

General and administrative

 

 

2,613 

 

 

2,648 

 

 

(35)

 

(1)

Total operating expenses

 

 

5,612 

 

 

5,205 

 

 

407 

 

Loss from operations

 

 

(5,866)

 

 

(5,002)

 

 

(864)

 

17 

Interest income (expense), net

 

 

(19)

 

 

(22)

 

 

 

(14)

Other income (expense), net

 

 

(14)

 

 

(9)

 

 

(5)

 

56 

Net loss

 

$

(5,899)

 

 

(5,033)

 

$

(866)

 

17 



Product Revenue.  Product revenue was $1,240,000 for the six months ended June 30, 2018 compared to $1,538,000 for the same period in 2017.  Effective January 1, 2018, revenue for ASPiRA LABS is being recognized when the OVA1 test is being performed based on estimates of what we expect to ultimately realize.   The 19% product revenue decrease is due to a decrease in our tests performed, especially those for client bill customers.

The number of OVA1 tests performed decreased 21% to approximately 3,702 OVA1 tests during the six months ended June  30, 2018 compared to approximately 4,711 OVA1 tests for the same period in 2017. The volume decrease was primarily due to the previously announced loss of a client bill customer in July 2017,  which was concentrated in uncovered territories (territories not covered by an ASPiRA sales representative).  

Service Revenue.  Service revenue was $117,000 for the six months ended June 30, 2018 compared to $86,000 for the same period in 2017.  Service revenue varies based on the stages of ongoing customer projects. Revenue for ASPiRA IVD is being recognized once certain revenue recognition criteria have been met (see Note 1 to the financial statements included in Part I, Item I of this Form 10-Q).  

Cost of Revenue - Product.  Cost of product revenue was $1,061,000 for the six months ended June  30, 2018 compared to $850,000 for the same period in 2017, representing an increase of 25% due primarily to some equipment maintenance costs, increased postage costs and lab supplies as well as Quest project management fees incurred in 2018.  

Cost of Revenue - Service.  Cost of service revenue was $550,000 for the six months ended June  30, 2018 compared to $571,000 for the same period in 2017.  The 4% decrease related primarily to consulting costs incurred in 2017, offset by lab supplies and equipment maintenance in 2018. 

Research and Development Expenses.  Research and development expenses represent costs incurred to develop our technology and carry out clinical studies, and include personnel-related expenses, regulatory costs, reagents and supplies used in research and development laboratory work, infrastructure expenses, contract services

23

 


 

and other outside costs. Research and development expenses for the six months ended June 30, 2018 decreased $197,000, or 40%, compared to the same period in 2017.  This decrease was primarily due to a reduction in consulting expenses.

Sales and Marketing Expenses.  Our sales and marketing expenses consist primarily of personnel-related expenses, education and promotional expenses, and infrastructure expenses. These expenses include the costs of educating physicians, laboratory personnel and other healthcare professionals regarding OVA1 and Overa. Sales and marketing expenses also include the costs of sponsoring continuing medical education, medical meeting participation, and dissemination of scientific and health economic publications. Sales and marketing expenses for the six months ended June 30, 2018 increased $639,000, or 31%, compared to the same period in 2017.  This increase was primarily due to increased headcount and personnel-related expenses, one-time costs for Chief Operating Officer severance and increased consulting costs in 2018 compared to 2017.  

General and Administrative Expenses.  General and administrative expenses consist primarily of personnel-related expenses, professional fees and other costs, including legal, finance and accounting expenses and other infrastructure expenses. General and administrative expenses for the six months ended June 30, 2018 decreased by $35,000, or 1%, compared to the same period in 2017. The decrease was primarily due to the remeasurement of consultant stock options in 2018, partially offset by increased consulting fees in 2018. 



Liquidity and Capital Resources

We plan to continue to expend resources selling and marketing OVA1 and Overa, operating our IVD trial services business and developing additional diagnostic tests and service capabilities.  

We have incurred significant net losses and negative cash flows from operations since inception. At June 30, 2018, we had an accumulated deficit of $401,452,000 and stockholders’ equity of $12,068,000. As of June 30, 2018, we had $14,135,000 of cash and cash equivalents and $2,666,000 of current liabilities. Working capital was $12,620,000 and $3,696,000 at June 30, 2018 and December 31, 2017, respectively.

On April 17, 2018, the Company completed the Offerings pursuant to which certain investors purchased shares of Vermillion common stock and shares of Vermillion Series B Convertible Preferred Stock for net proceeds of approximately $13,500,000 after deducting offering expenses. 



On August 31, 2017, certain holders exercised warrants to purchase 3,796,818 shares of Vermillion common stock (which warrants were issued in conjunction with a December 2014 private placement of Vermillion common stock)  in consideration for the Company agreeing to reduce the exercise price from $2.00 to $1.00 per share of Vermillion common stock. As a result, the Company issued 3,796,818 shares of Vermillion common stock and received  $3,796,818 in aggregate gross proceeds (approximately $3,577,000 net of transaction costs).

On February 17, 2017, the Company completed a private placement pursuant to which certain investors purchased Vermillion common stock and warrants to purchase shares of Vermillion common stock for net proceeds of approximately $5,127,000 after deducting offering expenses.

On March 22, 2016, we entered into the Loan Agreement pursuant to which we may borrow up to $4,000,000 from the DECD.  Proceeds from the loan were utilized primarily to fund the build-out, information technology infrastructure and other costs related to our Trumbull, Connecticut facility and operations.  The loan bears interest at a fixed rate of 2.0% per annum and requires equal monthly payments of principal and interest until maturity, which occurs on April 15, 2026.  As security for the loan, we have granted the DECD a blanket security interest in our personal and intellectual property.  The DECD’s security interest in our intellectual property may be subordinated to a qualified institutional lender.  Under the terms of the agreement, as amended, we may be eligible for forgiveness of up to $2,000,000 of the principal amount of the loan if we achieve certain job creation and retention milestones measured by March 1, 2021 (the “Measurement Date”).  Conversely, if we are either unable to meet these job creation and retention milestones, namely, hiring and retaining for a consecutive two-year period 40 full-time employees with a specified average annual salary by the Measurement Date or do not maintain our Connecticut operations for a period of 10 years, the DECD may require early repayment of a portion or all of the

24

 


 

loan depending on job attainment as compared to the required amount plus a penalty of 5% of the total funded loan.  An initial disbursement of $2,000,000 was made to the Company on April 15, 2016 under the Loan Agreement. The remaining $2,000,000 will be advanced if and when the Company achieves certain other future milestones. The loan may be prepaid at any time without premium or penalty.

We expect to incur a net loss and negative cash flows from operations in the remainder of 2018.  Our management believes that successful achievement of our business objectives  may require additional financing.  

The Company expects to raise capital, if necessary, through a variety of sources, which may include the exercise of common stock warrants, equity offerings, debt financing, collaborations, licensing arrangements, grants and government funding and strategic alliances.   However, additional funding may not be available when needed or on terms acceptable to the Company. If the Company is unable to obtain additional capital, it may not be able to continue sales and marketing, research and development, or other operations on the scope or scale of current activity and that could have a material adverse effect on the Company’s business, results of operations and financial condition.

Net cash used in operating activities was $4,776,000 for the six months ended June 30, 2018, resulting primarily from the net loss reported of $5,899,000, partially offset by depreciation and amortization of $370,000,  stock compensation expense of $543,000,  changes in accounts payable, accrued and other liabilities of $74,000 and changes in prepaid expenses of $136,000.

Net cash used in operating activities was $4,191,000 for the six months ended June 30, 2017, resulting primarily from the net loss reported of $5,033,000 and changes in accounts payable, accrued and other liabilities of $504,000 partially offset by stock compensation expense of $671,000, depreciation and amortization of $401,000 and prepaid expenses of $218,000.

Net cash used in investing activities was $34,000 and $43,000 for the six months ended June 30, 2018 and 2017, respectively, which consisted of property and equipment purchases.

Net cash provided by financing activities was $13,406,000 for the six months ended June 30, 2018,  resulting primarily from the proceeds from the sale of Vermillion preferred stock of $4,496,000 and of Vermillion common stock of $8,992,000 in our April 2018 public offering. 

Net cash provided by financing activities was $5,020,000 for the six months ended June 30, 2017, which consisted primarily of proceeds from the sale of Vermillion common stock in our February 2017 private placement, net of issuance costs.

     

Our future liquidity and capital requirements will depend upon many factors, including, among others:   

·

resources devoted to sales, marketing and distribution capabilities;

·

the rate of OVA1 and Overa product adoption by physicians and patients;

·

the insurance payer community’s acceptance of and reimbursement for OVA1 and Overa;

·

the successful targeted launch of Overa;

·

resources devoted to our IVD trials laboratory and services;

·

the revenue generated by our IVD trial services business;

·

our plans to acquire or invest in other products, technologies and businesses; and

·

the market price of our common stock.

We have significant net operating loss (“NOL”) carryforwards as of June 30, 2018 for which a full valuation allowance has been provided due to our history of operating losses. Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions may restrict our ability to use our NOL credit

25

 


 

carryforwards due to ownership change limitations occurring in the past or that could occur in the future. These ownership changes may also limit the amount of NOL credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively.

New tax legislation, commonly referred to as the Tax Cuts and Jobs Act (H.R. 1), was enacted on December 22, 2017. ASC740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions is for tax years beginning after December 31, 2017. Since our federal deferred tax asset was fully offset by a valuation allowance, the reduction in the U.S. corporate income tax rate to 21% did not materially affect our financial statements. Significant provisions that are not yet effective but may impact income taxes in future years include: the repeal of the corporate Alternative Minimum Tax, the limitation on the current deductibility of net interest expense in excess of 30% of adjusted taxable income for levered balance sheets, a limitation on utilization of net operating losses generated after tax year 2017 to 80% of taxable income, the unlimited carryforward of net operating losses generated after tax year 2017, temporary 100% expensing of certain business assets, additional limitations on certain general and administrative expenses, and changes in determining the excessive compensation limitation. Currently, we do not anticipate paying cash federal income taxes in the near term due to any of the legislative changes, primarily due to the availability of our net operating loss carryforwards. Future interpretations relating to the recently enacted U.S. federal income tax legislation which vary from our current interpretation and possible changes to state tax laws in response to the recently enacted federal legislation may have a significant effect on this projection.



Off-Balance Sheet Arrangements

As of June 30, 2018, we had no off-balance sheet arrangements that are reasonably likely to have a current or future material effect on our condensed consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.





 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Per Item 305(e) of Regulation S-K, the information called for by this Item 3 is not required.





 

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

Our senior management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2018. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2018, our disclosure controls and procedures were effective.



26

 


 

Changes in internal controls over financial reporting.

There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



PART II - OTHER INFORMATION



 

ITEM 1.

LEGAL PROCEEDINGS



In the ordinary course of business, we may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities. The results of litigation and claims cannot be predicted with certainty, and unfavorable resolutions are possible and could materially and adversely affect our results of operations, cash flows and financial position. In addition, regardless of the outcome, litigation could have an adverse impact on us because of defense costs, diversion of management resources and other factors. While the outcome of these proceedings and claims cannot be predicted with certainty, there are no matters, as of June 30, 2018, that, in the opinion of management, will have a material adverse effect on our financial position, results of operations or cash flows.



 

 

 

 

 

ITEM 1A. RISK FACTORS



There have been no material changes, except for the following, to our risk factors from those disclosed under “Risk Factors” in Part I, Item 1A of our 2017 Annual Report. The risks and uncertainties described in our 2017 Annual Report are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also materially adversely affect our business, financial condition or results of operations. 



Our failure to meet Nasdaq’s continued listing requirements could result in the delisting of Vermillion common stock, negatively impact the price of Vermillion common stock and negatively impact our ability to raise additional capital.



On July 26, 2018, we received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market stating that, for the preceding 30 consecutive business days, the closing bid price for Vermillion common stock was below the minimum $1.00 per share requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2).  As provided in the Nasdaq rules, we have 180 calendar days, or until January 22, 2019, to regain compliance with the minimum bid price requirement. We may achieve compliance during this period if the closing bid price of Vermillion common stock is at least $1.00 per share for a minimum of 10 consecutive business days. If we fail to regain compliance on or prior to January 22, 2019, we may be eligible for an additional 180-calendar day compliance period.  There is no assurance that we will be able to regain compliance by the January 22, 2019 initial deadline or any extension thereof, and there is no assurance that we will otherwise maintain compliance with any of the other Nasdaq listing requirements.



If we fail to comply with Nasdaqs continued listing requirements, Vermillion common stock will be subject to delisting. If that were to occur, Vermillion common stock would be subject to rules that impose additional sales practice requirements on broker-dealers who sell Vermillion securities. The additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from effecting transactions in Vermillion common stock. This would adversely affect the ability of investors to trade Vermillion securities and would adversely affect the value and liquidity of Vermillion common stock. These factors could contribute to lower prices and larger spreads in the bid and ask prices for Vermillion common stock. If we seek to implement a reverse stock

27

 


 

split in order to remain listed on The Nasdaq Capital Market, the announcement or implementation of such a reverse stock split could negatively affect the price of Vermillion common stock.

28

 


 

ITEM 6.   EXHIBITS   The following exhibits are filed or incorporated by reference with this report as indicated below: 



 

 

 

 

 

 

 

 

 

 

 

 

Exhibit

 

 

 

Incorporated by Reference

 

Filed

Number

 

Exhibit Description

 

Form

 

File No.

 

Exhibit

 

Filing Date

 

Herewith



 

 

 

 

 

 

 

 

 

 

 

 

3.1

 

Fourth Amended and Restated Certificate of Incorporation of Vermillion, Inc. dated January 22, 2010

 

8-K

 

000-31617

 

3.1 

 

January 25, 2010

 

 

3.2

 

Certificate of Amendment of Fourth Amended and Restated Certificate of Incorporation, effective June 19, 2014

 

10-Q

 

001-34810

 

3.2 

 

August 14, 2014

 

 

3.3

 

Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock

 

8-K

 

001-34810

 

4.1 

 

April 17, 2018

 

 

3.4

 

Fifth Amended and Restated Bylaws of Vermillion, Inc., effective June 19, 2014

 

10-Q

 

001-34810

 

3.3 

 

August 14, 2014

 

 

10.1

 

Vermillion Inc. Second Amended and Restated 2010 Stock Incentive Plan (as amended effective June 21, 2018)

 

8-K

 

001-34810

 

10.1 

 

June 27, 2018

 

 

31.1

 

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

 

 

 

 

 

 

 

  

31.2

 

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

 

 

 

 

 

 

 

 

32.1

 

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

 

 

 

 

 

 

(1)

101

 

Interactive Data Files

 

 

 

 

 

 

 

 

 

 









 

(1)

Furnished herewith



 

29

 


 

SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





 



Vermillion, Inc.

Date:  August 9, 2018

 

 

/s/ Valerie B. Palmieri



Valerie B. Palmieri

President and Chief Executive Officer

(Duly Authorized Officer and

Principal Executive Officer)

Date:  August 9, 2018

 

 

/s/ Robert Beechey



Robert Beechey

Chief Financial Officer

(Duly Authorized Officer, Principal Financial Officer 

and Principal Accounting Officer)



30

 


EX-31.1 2 vrml-20180630xex31_1.htm EX-31.1 Exhibit 311

Exhibit 31.1



Certification of the Chief Executive Officer Pursuant to Section 302 of

The Sarbanes-Oxley Act Of 2002



I, Valerie B. Palmieri, certify that:



1.

I have reviewed this quarterly report on Form 10-Q of Vermillion, Inc.;



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:



(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and




 

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and



5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):



(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and



(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.





 

Date:  August 9, 2018

 

/s/ Valerie B. Palmieri



Valerie B. Palmieri

President and Chief Executive Officer

(Duly Authorized Officer and Principal Executive Officer)






EX-31.2 3 vrml-20180630xex31_2.htm EX-31.2 Exhibit 312

Exhibit 31.2



Certification of the Chief Accounting Officer Pursuant to Section 302 of

The Sarbanes-Oxley Act Of 2002



I, Robert Beechey, certify that:



1.

I have reviewed this quarterly report on Form 10-Q of Vermillion, Inc.;



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:



(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and




 

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and



5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):



(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and



(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.





 

Date:  August 9, 2018

/s/ Robert Beechey



Robert Beechey

Chief Financial Officer

(Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)








EX-32.1 4 vrml-20180630xex32_1.htm EX-32.1 Exhibit 321

Exhibit 32.1



Certification of the Chief Executive Officer and Senior Vice President, Finance and Chief Accounting Officer Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

with Respect to the Quarterly Report on Form 10-Q

for the Period Ended June 30, 2018



Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Vermillion, Inc., a Delaware corporation (the “Company”), does hereby certify, to the best of such officer’s knowledge, that:

1.

The Company’s quarterly report on Form 10-Q for the period ended June 30, 2018, (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and



2.

Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.





 

Date:  August 9,  2018

/s/ Valerie B. Palmieri



Valerie B. Palmieri

President and Chief Executive Officer

(Duly Authorized Officer and Principal Executive Officer)



 

Date:  August 9, 2018

/s/ Robert Beechey



Robert Beechey

Chief Financial Officer

(Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)



The certification set forth above is being furnished as an Exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Form 10-Q or as a separate disclosure document of the Company or the certifying officers.


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2018-06-30 0000926617 2018-06-30 0000926617 2017-12-31 0000926617 2018-07-31 0000926617 2018-01-01 2018-06-30 vrml:item vrml:employee xbrli:pure iso4217:USD xbrli:shares iso4217:USD xbrli:shares false --12-31 Q2 2018 2018-06-30 10-Q 0000926617 75274251 Smaller Reporting Company VERMILLION, INC. vrml 745000 783000 205000 707000 216000 491000 1650000 1686000 155000 232000 399400000 413445000 79000 510000 5000 77000 529000 40000 414000 5000 70000 40000 295000 2000 40000 343000 20000 283000 2000 38000 58000 412000 2000 71000 624000 47000 494000 2000 81000 28000 304000 1000 28000 413000 23000 355000 1000 34000 11662820 7572134 0 0 7497000 16121000 6305000 15286000 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Basis of Presentation </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201C;GAAP&#x201D;) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal year. The condensed consolidated balance sheet at December&nbsp;31,&nbsp;2017 included in this report has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2017 included in Vermillion&#x2019;s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 13, 2018 (the &#x201C;2017 Annual Report&#x201D;).</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated results.</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font> </p> <p><font size="1"> </font></p> </div> </div> 3500 5242000 6028000 5539000 14135000 786000 8596000 2.00 1.80 1.00 100 2810338 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">3.</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> &nbsp; </font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">COMMITMENT</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">S</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;"> AND CONTINGENCIES</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Development Loan</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 12pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">On March 22, 2016, the Company entered into the Loan Agreement with the DECD, pursuant to which the Company may borrow up to </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$4,000,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> from the DECD.&nbsp;&nbsp;Proceeds from the loan were utilized primarily to fund the build-out, information technology infrastructure and other costs related to the Company&#x2019;s Trumbull, Connecticut facility and operations.&nbsp;&nbsp;The loan bears interest at a fixed rate of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">2.0%</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> per annum and requires equal monthly payments of principal and interest until maturity, which occurs on&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">April 15, 2026</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">.&nbsp;&nbsp;As security for the loan, the Company has granted the DECD a blanket security interest in the Company&#x2019;s personal and intellectual property.&nbsp;&nbsp;The DECD&#x2019;s security interest in the Company&#x2019;s intellectual property may be subordinated to a qualified institutional lender.&nbsp;&nbsp;Under the terms of the Loan Agreement, as amended, the Company may be eligible for forgiveness of up to </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$2,000,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> of the principal amount of the loan if the Company achieves certain job creation and retention milestones by March 1, 2021 (the &#x201C;Measurement Date&#x201D;).&nbsp;&nbsp;Conversely, if the Company is either unable to meet these job creation and retention milestones, namely, hiring and retaining for a consecutive </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">two</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">-year period</font><font style="display: inline;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">40</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;full-time employees with a specified average annual salary&nbsp;by the Measurement Date</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">,</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp; or does not maintain the Company&#x2019;s Connecticut operations for a period of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">10</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> years, the DECD may require early repayment of a portion or all of the loan depending on job attainment as compared to the required amount&nbsp;plus a penalty of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">5%</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> of the total funded loan.&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;">&nbsp;</font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 12pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">An initial disbursement of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$2,000,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;was made to the Company on April 15, 2016 under the Loan Agreement.&nbsp;&nbsp;The remaining </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$2,000,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> will be advanced if and when the Company achieves&nbsp;certain other future milestones.&nbsp;The loan may be prepaid at any time without premium or penalty. </font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Operating Leases</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The Company leases facilities to support its business of discovering, developing and commercializing diagnostic tests in the fields of gynecologic disease</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. The Company&#x2019;s</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> principal facility</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">including</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">the </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">CLIA laboratory </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">used by ASPiRA LABS, is </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">located in Austin, Texas</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">the </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">CLIA laboratory </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">used by ASPiRA IVD is located </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">in Trumbull, Connecticut. </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">The</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> Austin, Texas lease include</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">s</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> an aggregate annual base rent of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$86,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and annual estimated common area charges, taxes and insurance of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$46,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> expires on </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">January 31, 2019.</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> &nbsp; &nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In October 2015, the Company entered </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">into </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">a lease agreement for a facility in Trumbull, Connecticut. The lease required initial payments for the buildout of leasehold improvements to the office space, which were approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$596,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. The term of the lease is </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">five</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> years beginning after the initial date of occupancy </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">i</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">n January 2016 and a rent abatement period of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">five</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> months</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">.</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> The lease includes an aggregate annual base rent of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$32,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and annual estimated common area charges, taxes and insurance of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$95,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. &nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">Building rent</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> for the three months ended</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> June 30, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">7</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> totaled </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$67,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$62,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, respectively. </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Building rent</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> for the </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">six</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> months ended</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> June 30, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">7</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> totaled </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$134,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$123,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> respectively. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Capital Lease</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In April 2015, the Company leased </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">a</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> laboratory instrument for a total initial payment of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$125,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and ongoing payments of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$3,500</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> per month for </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">36</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> months after delivery. The agreement also requires minimum annual purchases of reagents from the manufacturer of the equipment. The laboratory instrument was placed into service on July 1, 2015. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 11pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The accumulated amortization of assets under capital lease obligations was </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$232,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$155,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> as of June 30, 2018 and 2017, respectively. The net book value of assets under capital lease obligations was </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$0</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$77,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> as of</font><font style="display: inline;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">June 30, 2018 and 2017, respectively.</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Non-cancelable Royalty Obligations</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The Company is a party to an amended research collaboration agreement with The Johns Hopkins University School of Medicine </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">under which the Company licenses certain of its intellectual property</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. Under the terms of the amended research collaboration agreement, Vermillion is required to pay the greater of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">4%</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> royalties on net sales of diagnostic tests using the assigned patents or annual minimum royalties of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$57,500</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. Royalty expense for the three months ended </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">June 30, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and 201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">7</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> totalled </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$25,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$34,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> respectively. </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Royalty expense for the </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">six</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> months ended </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">June 30, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and 201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">7</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> totalled </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$49,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$63,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> respectively.</font> </p> <p style="margin:5pt 0pt 0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font> </p> <p><font size="1"> </font></p> </div> </div> 0.001 0.001 0.001 150000000 150000000 3747125 3796818 60036017 10000000 75274251 60036017 75274251 4296000 60000 75000 4496000 50000 50000 5000000 1421000 850000 571000 694000 428000 266000 1611000 1061000 550000 808000 528000 280000 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">2.&nbsp;&nbsp;&nbsp;AGREEMENTS WITH QUEST DIAGNOSTICS INCORPORATED</font> </p> <p style="margin:0pt;text-indent:36pt;line-height:100%;font-family:Times New Roman;font-size: 10pt"> <font style="display: inline;">&#xFEFF;</font> </p> <p style="margin:5pt 0pt 0pt;text-indent:36pt;line-height:100%;font-family:Arial Unicode MS;font-size: 12pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In March 2015, the Company entered into a commercial agreement with Quest Diagnostics</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font><a name="_cp_text_1_39"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Incorporated (&#x201C;Quest Diagnostics&#x201D;)</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. Pursuant to this agreement</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, &nbsp;</font><a name="_cp_text_1_40"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">all OVA1 U.S. testing services for </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Quest Diagnostics </font><a name="_cp_text_1_42"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">customers were transferred to</font><font style="display: inline;font-family:Times New Roman;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Vermillion&#x2019;s</font><font style="display: inline;font-family:Times New Roman;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">wholly-owned subsidiary, ASPiRA LABS,</font><font style="display: inline;font-family:Times New Roman;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">as of August 2015. Pursuant to this agreement, as amended as of March 1, 201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">8</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, Quest Diagnostics </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">is continuing</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> to provide </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">blood draw and logistics support by transporting specimens from its clients to ASPiRA LABS for testing through at least March 11, 201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">9</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> in exchange for a market value fee. Per the terms of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">the new commercial</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> agreement, the Company will not offer to existing or future Quest Diagnostics customers tests that Quest Diagnostics offers. </font> </p> <p><font size="1"> </font></p> </div> </div> 0.02 2026-04-15 P10Y 401000 370000 -0.09 -0.04 -0.09 -0.09 -0.04 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt 0pt 6pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">5.&nbsp;&nbsp; </font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">LOSS PER SHARE</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The Company calculates basic loss per share using the weighted ave</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">rage number of shares </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">of Vermillion common stock </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">outstanding during the period. Because the Company is in a net loss position, diluted loss per share is calculated using the </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">weighted average number of shares of Vermillion common stock outstanding and excludes the effects of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">7,572,134</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> an</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">d &nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">11,662,820</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> po</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">tential shares of</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> Vermillion</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> common stock as of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">June 30, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and 201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">7</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, respectively, that are anti-dilutive. Potential shares of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Vermillion </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">common stock include incremental shares of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Vermillion </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">common stock issuable upon the exercise of outstanding warrants, stock options and unvested restricted stock units.</font> </p> <p><font size="1"> </font></p> </div> </div> -4000 -10000 2648000 1241000 2613000 1299000 203000 204000 -254000 -100000 -504000 74000 -61000 2000 9000 8000 -218000 -136000 -22000 -10000 -19000 -7000 24000 23000 102000 110000 2019-01-31 596000 P5Y 4090000 4053000 7497000 16121000 2609000 2666000 4000000 2000000 1481000 1387000 5020000 13406000 -43000 -34000 -4191000 -4776000 -5033000 -2360000 -5899000 -5890000 -9000 -3049000 500000 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt 0pt 2.25pt;line-height:normal;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;text-decoration:underline;background-color: #FFFFFF;">Recent Accounting Pronouncements</font> </p> <p style="margin:0pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In March 2016, the Financial Accounting Standards Board (&#x201C;FASB&#x201D;) issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), Compensation - Stock Compensation (&#x201C;ASU 2016-09&#x201D;). The new guidance simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within that reporting period. The Company adopted this standard on January 1, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and the adoption did not have a material impact on the consolidated financial statements.&nbsp; In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Base Payment Accounting.&nbsp; This new guidance expands the scope of Topic 718 to include share-based payment transactions from acquiring goods and services from nonemployees, which was previously codified under Topic 505, where this change will modify the measurement requirements of nonemployee awards.&nbsp; &nbsp;&nbsp;This amendment is effective for annual periods after December 15, 2018.&nbsp; The Company is currently evaluating the impact of adoption of this standard.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In February 2016, the FASB issued ASU No. 2016-2, </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Leases (Topic 842</font><font style="display: inline;font-family:Times New Roman;font-style:italic;font-size:10pt;">)</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> (&#x201C;ASU 2016-2&#x201D;)</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. This guidance is intended to make leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">ASU 2016-2</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> will be effective for interim and annual periods beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption is permitted. The Company expects to adopt this standard beginning in 2019. The Company is still evaluating the effect adoption will have on our financial statements.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In May 2014, the FASB issued ASC 606, which superseded existing revenue recognition guidance. The standard&#x2019;s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 effective on January 1, 2018 using the modified retrospective method. Please see the above &#x201C;Revenue Recognition&#x201D; section for a discussion of the Company&#x2019;s revenue recognition under ASC 606.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font> </p> <p><font size="1"> </font></p> </div> </div> 5205000 2550000 5612000 2931000 -5002000 -2346000 -5866000 -5857000 -9000 -3031000 123000 62000 134000 67000 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt 0pt 6pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">1.&nbsp;&nbsp; </font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING AND REPORTING POLICIES</font> </p> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Organization </font> </p> <p style="margin:0pt;text-indent:36pt;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">Vermillion, Inc. (&#x201C;Vermillion&#x201D;; Vermillion and its wholly-owned subsidiaries are collectively referred to as the &#x201C;Company</font><a name="_cp_text_1_15"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,&#x201D; &#x201C;we&#x201D; or &#x201C;our</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#x201D;) is incorporated in the state of Delaware, and is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. The Company sells OVA1&#x2122; and Overa&#x2122; risk of malignancy tests for ovarian cancer (&#x201C;OVA1&#x201D; and &#x201C;Overa,&#x201D; respectively) through Vermillion&#x2019;s wholly-owned&nbsp;Clinical Laboratory Improvement Amendments of 1988 (&#x201C;CLIA&#x201D;) certified clinical laboratory, ASPiRA LABS, Inc. (&#x201C;ASPiRA LABS&#x201D;). </font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company also offers in-vitro diagnostic (&#x201C;IVD&#x201D;) trial services to third-party customers through its wholly-owned subsidiary, ASPiRA IVD, Inc. (&#x201C;ASPiRA IVD&#x201D;), which commenced operations in June 2016. </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">ASPiRA IVD is a specialized, CLIA certified, laboratory provider dedicated to meeting the unique testing needs of IVD manufacturers seeking to commercialize&nbsp;high-complexity&nbsp;assays. </font> </p> <p style="margin:9pt 0pt 3pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Liquidity</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The Company has incurred significant net losses and negative cash flows from operations since inception, and as a result has an accumulated deficit of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$401,452,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> at June 30, 2018. The Company also expects to incur a net loss and negative cash flows from operations for the remainder of 2018. </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">There can be no assurance that the Company will achieve or sustain profitability or positive cash flow from operations.&nbsp;&nbsp;However, management believes that the current working capital position will be sufficient to meet the Company&#x2019;s working capital needs for at least the next 12 months.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">As discussed in Note 4, on April 17, 2018, the Company completed two public offerings, pursuant to which certain investors purchased Vermillion common stock and Vermillion Series B convertible preferred stock for net proceeds of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$13,500,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> after deducting offering expenses. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">As discussed in Note 4, on August 31, 2017, certain investors exercised outstanding warrants to purchase shares of Vermillion common stock for net proceeds of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$3,577,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> after deducting offering expenses.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">As discussed in Note 4, on February 17, 2017, the Company completed a private placement pursuant to which certain investors purchased Vermillion common stock and warrants to purchase shares of Vermillion common stock for net proceeds of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$5,127,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> after deducting offering expenses.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:6pt 0pt 0pt;text-indent:36pt;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">As discussed in Note 3, in March 2016, the Company entered into an agreement (the &#x201C;Loan Agreement&#x201D;) pursuant to which it may borrow up to </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$4,000,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> from the State of Connecticut Department of Economic and Community Development (the &#x201C;DECD&#x201D;). An initial disbursement of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$2,000,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> was made to the Company on April 15, 2016 under the Loan Agreement.&nbsp;The remaining </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$2,000,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> will be advanced if and when the Company achieves certain future milestones. </font><a name="S163573625"></a><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The loan may be prepaid at any time without premium or penalty.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:5pt 0pt;text-indent:36pt;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Basis of Presentation </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201C;GAAP&#x201D;) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal year. The condensed consolidated balance sheet at December&nbsp;31,&nbsp;2017 included in this report has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2017 included in Vermillion&#x2019;s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 13, 2018 (the &#x201C;2017 Annual Report&#x201D;).</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated results.</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font> </p> <p style="margin:6pt 0pt 0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Significant Accounting and Reporting Policies </font> </p> <p style="margin:0pt 0pt 2.25pt 10pt;line-height:normal;text-indent:26pt;text-align:justify;text-justify:inter-ideograph;border-bottom:1pt none #D9D9D9 ;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;background-color: #FFFFFF;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 2.25pt 10pt;line-height:normal;text-indent: -10pt;text-align:justify;text-justify:inter-ideograph;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;background-color: #FFFFFF;">Revenue Recognition </font> </p> <p style="margin:0pt 0pt 2.25pt 10pt;line-height:normal;text-indent: -10pt;text-align:justify;text-justify:inter-ideograph;border-top:1pt none #D9D9D9 ;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;background-color: #FFFFFF;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company accounts for revenue in accordance with ASC Topic 606, </font><font style="display: inline;font-family:Times New Roman;font-style:italic;color:#000000;font-size:10pt;">Revenue from Contracts with Customers</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> (&#x201C;ASC 606&#x201D;)</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">, which it adopted on January 1, 2018 using the modified retrospective method. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;text-decoration:underline;">Product Revenue</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">Prior to January 1, 2018, the Company recognized product revenue in accordance with the provisions of ASC 954-605, Health Care Entities - Revenue Recognition. The Company's product revenue is generated by performing diagnostic services using its OVA1 and Overa tests, and the service is completed upon the delivery of the test result to the prescribing physician. The entire transaction price is allocated to the single performance obligation contained in a contract with a patient. Under the previous revenue recognition accounting methodology, certain product revenue was recognized upon the ultimate receipt of cash. Under ASC 606, all revenue is recognized upon completion of the OVA1 or Overa test based on estimates of amounts that will ultimately be realized. In determining the amount of revenue to be recognized for a delivered test result, the Company considers factors such as payment history and amount, payer coverage, whether there is a reimbursement contract between the payer and the Company, and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management as the collection cycle on some accounts can be as long as one year.&nbsp;&nbsp; </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company also reviewed its patient account population and determined an appropriate distribution of patient accounts by payer&nbsp;(</font><font style="display: inline;font-family:Times New Roman;font-style:italic;color:#000000;font-size:10pt;">i.e.</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">, Medicare, patient pay, other third-party payer, </font><font style="display: inline;font-family:Times New Roman;font-style:italic;color:#000000;font-size:10pt;">etc</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">.) into portfolios with similar collection experience. The Company has elected this practical expedient that, when evaluated for collectability, results in a materially consistent revenue amount for such portfolios as if each patient account were evaluated on an individual contract basis. </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">There were </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">no</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> impairment losses on accounts receivable recorded during the three</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> and six</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> months ended </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">June </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">3</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">0</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">, 2018.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Under the modified retrospective implementation method, the Company recorded a one-time cumulative effect adjustment at January 1, 2018 to reflect the aggregate effect of all open OVA1 and Overa tests performed prior to January 1, 2018 as if revenue had been recognized under ASC 606.&nbsp; </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">The cumulative effect adjustment was recorded increasing the opening balance of Accounts Receivable by </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$500,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> in the condensed consolidated balance sheets with an offsetting reduction to Accumulated Deficit. The Company&#x2019;s right to receive payment on this balance is contingent only on the passage of time.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The following tables show the impact of adoption to our consolidated statement of operations and balance sheet:</font> </p> <p style="margin:0pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 1pt"> <font style="display: inline;font-family:Times New Roman;font-size:1pt;">&#xFEFF;</font> </p> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td colspan="10" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Six Months Ended June 30, 2018</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="8" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Impact of changes in accounting policies</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">As Reported</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Balances without adoption of ASC 606</font></p> </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Effect of Change Higher/(Lower)</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Product revenue</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">1,240&nbsp; </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">1,249&nbsp; </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(9) </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Operating loss</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,866) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,857) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(9) </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Net loss</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,899) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,890) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(9) </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Net loss per share, basic and diluted</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(0.09) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(0.09) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 3.25pt 0.05pt 0pt;text-align:right;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> &nbsp;-</font></p> </td> </tr> </table></div> <p style="margin:0pt 0pt 8pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 1pt"> <font style="display: inline;font-family:Times New Roman;font-size:1pt;">&#xFEFF;</font> </p> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td colspan="10" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">June 30, 2018</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="8" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Impact of changes in accounting policies</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">As Reported</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Balances without adoption of ASC 606</font></p> </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Effect of Change Higher/(Lower)</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Assets:</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:14.74%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:16.00%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:12.42%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Accounts receivable</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">707&nbsp; </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">216&nbsp; </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">491&nbsp; </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Stockholders' equity:</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Accumulated deficit</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(401,452) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(401,943) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">491&nbsp; </td> </tr> </table></div> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:inherit;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:22.3pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:inherit;font-size:10pt;">ASC 606 did not have an aggregate impact on the Company&#x2019;s net cash provided by operating activities, but resulted in offsetting changes in certain assets and liabilities presented within net cash provided by operating activities in the Company&#x2019;s condensed consolidated statement of cash flows, as reflected in the above tables.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:22.3pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 1pt"> <font style="display: inline;font-family:Times New Roman;font-size:1pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-style:italic;color:#000000;font-size:10pt;">Other Practical Expedients</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp; &nbsp;</font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company does not adjust the transaction price for the effects of a significant financing component, as at contract inception, the Company expects the collection cycle to be one year or less. </font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp; &nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company expenses sales commissions when incurred because the amortization period would have been one year or less.&nbsp;&nbsp;These costs are recorded within sales and marketing expenses.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;text-decoration:underline;">Service Revenue</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company&#x2019;s service revenue is generated by performing IVD trial services for third-party customers. Application of the modified retrospective method did not impact amounts previously reported by the Company, nor did it require a cumulative effect adjustment upon adoption, as the Company&#x2019;s method of recognizing revenue under ASC 606 was analogous to the method utilized immediately prior to adoption.&nbsp;&nbsp;Accordingly, there is no need for the Company to disclose the amount by which each financial statement line item was affected as a result of applying the new standard and an explanation of significant changes. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Measurement of progress on contracts with customers will generally be based on the input measurement of cost incurred relative to the total expected costs to satisfy the performance obligation. </font><font style="display: inline;font-family:inherit;font-size:10pt;">The Company has not disclosed the value of unsatisfied performance obligations for all service revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adoption rules. The remainder are not material to the consolidated financial statements.</font> </p> <p style="margin:0pt 0pt 6pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 2.25pt;line-height:normal;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;text-decoration:underline;background-color: #FFFFFF;">Recent Accounting Pronouncements</font> </p> <p style="margin:0pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In March 2016, the Financial Accounting Standards Board (&#x201C;FASB&#x201D;) issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), Compensation - Stock Compensation (&#x201C;ASU 2016-09&#x201D;). The new guidance simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within that reporting period. The Company adopted this standard on January 1, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and the adoption did not have a material impact on the consolidated financial statements.&nbsp; In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Base Payment Accounting.&nbsp; This new guidance expands the scope of Topic 718 to include share-based payment transactions from acquiring goods and services from nonemployees, which was previously codified under Topic 505, where this change will modify the measurement requirements of nonemployee awards.&nbsp; &nbsp;&nbsp;This amendment is effective for annual periods after December 15, 2018.&nbsp; The Company is currently evaluating the impact of adoption of this standard.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In February 2016, the FASB issued ASU No. 2016-2, </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Leases (Topic 842</font><font style="display: inline;font-family:Times New Roman;font-style:italic;font-size:10pt;">)</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> (&#x201C;ASU 2016-2&#x201D;)</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. This guidance is intended to make leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">ASU 2016-2</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> will be effective for interim and annual periods beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption is permitted. The Company expects to adopt this standard beginning in 2019. The Company is still evaluating the effect adoption will have on our financial statements.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In May 2014, the FASB issued ASC 606, which superseded existing revenue recognition guidance. The standard&#x2019;s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 effective on January 1, 2018 using the modified retrospective method. Please see the above &#x201C;Revenue Recognition&#x201D; section for a discussion of the Company&#x2019;s revenue recognition under ASC 606.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font> </p> <p><font size="1"> </font></p> </div> </div> 11000 29000 10000 -9000 -4000 -14000 -11000 32000 86000 57500 125000 43000 34000 0.001 50000 459000 334000 8992000 4496000 5127000 5127000 5127000 3577000 3577000 13500000 8992000 4496000 2000000 29000 77000 1181000 835000 0 53925 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt 0pt 6pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">6.&nbsp;&nbsp; </font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">RELATED PARTY TRANSACTIONS</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">On December 18, 2017, the Company entered into a consulting agreement for a term of up to </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">five</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> months with the Company&#x2019;s former Senior Vice President, Finance and Chief Accounting Officer.&nbsp;&nbsp;Pursuant to the terms of the consulting agreement through May 15, 2018, the consultant provided&nbsp;accounting and finance services related to the transition of financial leadership</font><a name="_cp_text_1_91"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. The Company agreed to pay </font><a name="_cp_text_4_92"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$150</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> per hour</font><a name="_cp_text_1_93"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> for such consulting services.&nbsp;&nbsp;The consultant also </font><a name="_cp_text_1_95"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">remained eligible for payout under the </font><a name="_cp_text_1_96"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Company&#x2019;s 2017 Corporate Incentive Plan after he satisfactorily met certain performance obligations as outlined in the consulting agreement.&nbsp;During the six months ended June 30, 2018, the consultant was paid an aggregate of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$53,925</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;for services provided pursuant to the consulting agreement.&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p><font size="1"> </font></p> </div> </div> 15000 19000 92000 92000 493000 268000 296000 154000 -396053000 -401452000 -401943000 491000 1624000 1538000 86000 898000 860000 38000 1357000 1240000 117000 1249000 -9000 708000 627000 81000 63000 34000 49000 25000 <div> <div style="margin-left:0pt;margin-right:0pt;"> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="5" valign="bottom" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">Three Months Ended June 30,</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="5" valign="bottom" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">Six Months Ended June 30,</font></p> </td> </tr> <tr> <td valign="top" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;border-bottom:1pt solid #000000 ;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">(in thousands)</font></p> </td> <td valign="top" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">2018</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">2017</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">2018</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">2017</font></p> </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Cost of revenue</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">23&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">20&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">47&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">40&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Research and development </font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">1&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">2&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">2&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">5&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Sales and marketing </font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">34&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">38&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">81&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">70&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">General and administrative</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">355&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">283&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">494&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">414&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Total </font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">413&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">343&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">624&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">529&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> </table></div> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 11pt"> <font style="display: inline;">&#xFEFF;</font> </p> <p><font size="1"> </font></p> </div> </div> 2064000 1041000 2703000 1478000 671000 543000 0.25 0.25 0.25 0.5 1.11 0.90 6534 3213 398400 12122983 934000 125000 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt 0pt 6pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">4.&nbsp;&nbsp;&nbsp;STOCKHOLDERS&#x2019; EQUITY</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">201</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">8</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Offerings</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> &nbsp; &nbsp;</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">O</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">n &nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">April 13</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, 201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">8</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, &nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">the Company entered into two underwriting agreements </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">(each, an </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#x201C;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Underwriting Agreement</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#x201D;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">) with Piper Jaffray &amp; Co., as the sole underwriter (the &#x201C;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Underwriter</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#x201D;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">), in connection with separate but concurrent public offerings of the Company&#x2019;s securities. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Pursuant to the first Underwriting Agreement, the Company agreed to issue and sell an aggregate of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">10,000,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> shares of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Vermillion</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> common stock, par value </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$0.001</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> per share, offered by the Underwriter in a public offering at a price to the public of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$1.00</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> per share (the &#x201C;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Common Stock Offering</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#x201D;). Under </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">this</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> Underwriting Agreement, the Company granted the Underwriter an option to purchase up to an additional </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">1,500,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> shares of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Vermillion c</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">ommon </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">s</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">tock at the public offering price, less underwriting discounts and commissions, to cover over-allotments, if any. The Underwriter </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">did not</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> exercise this option. The Common Stock Offering closed on April 17, 2018 and resulted in proceeds</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">, net of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">7%</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> underwriting costs and other offering costs,</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> to the Company of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$8,992,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Pursuant to the second Underwriting Agreement, the Company agreed to issue and sell an aggregate of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">50,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> shares of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Vermillion</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> Series B Convertible Preferred Stock, par value </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$0.001</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> per share, offered by the Underwriter in a public offering at a price to the public of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$100.00</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> per share (the &#x201C;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Series B Offering</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#x201D;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">)</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">.&nbsp;&nbsp;The Series B Offering closed on April 17, 2018 and resulted in proceeds</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">, net of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">7%</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> underwriting costs and other offering costs,</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> to the Company of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$4,496,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Upon obtaining Company stockholder approval at the annual meeting of Company stockholders on June 21, 2018, each of the </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">50,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> shares of Vermillion Series B Convertible Preferred Stock was automatically converted into shares of Vermillion common stock, at a conversion rate of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">100</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> shares of Vermillion common stock per one share of Vermillion Series B Convertible Preferred Stock, including shares issuable pursuant to customary anti-dilution provisions.</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="text-indent:0pt;margin-left:0pt; padding-right:45.25pt;"></font><font style="text-indent:0pt;margin-left:0pt; padding-right:4pt;text-align:left"><font style="display: inline;font-family:Times New Roman;font-size:10pt;"></font></font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">2017</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;"> Warrant Repricing and Exercise</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font><a name="T3231985711"></a> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">In December 2014, the Company issued warrants to purchase </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">up to an aggregate of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">4,166,659</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> shares of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Vermillion</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> common stock at an exercise price of</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$2.00</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> per share </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">in </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">conjunction with </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">a December 2014 private placement</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> of Vermillion common stock</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">.&nbsp;&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">On August 31, 2017, certain holders </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">of these warrants </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">exercised warrants to purchase </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">3,796,818</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> shares of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Vermillion </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">common stock in consideration for the Company agreeing to reduce the exercise price to </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$1.00</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> per share of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Vermillion </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">common stock.</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> The remaining</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">369,841</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> unexercised </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">warrants expire</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">d</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> by their original terms on December 23, 2017.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company issued </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">3,796,818</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> shares of </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Vermillion </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">common stock and received</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">3,796,818</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> in aggregate gross proceeds (approximately </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$3,577,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> net of transaction costs</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">). </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> incremental non-cash fair value of approximately </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$942,000</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> from the modification of the warrants was </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">calculated using the Black-Scholes model and </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">recorded as a deemed dividend to the warrant holders within stockholders&#x2019; equity.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 10pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">2017 Private Placement</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">On February 17, 2017</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, the Company completed a private placement pursuant to which certain investors purchased </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">3,747,125</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> shares of Vermillion common stock at a price of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$1.40</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> per share. Vermillion also issued warrants to purchase shares of Vermillion common stock at a price of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$0.125</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> per warrant share in the private placement. Net proceeds of the private placement were approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$5,127,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> after deducting offering expenses. The warrants are exercisable for </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">2,810,338</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> shares of Vermillion common stock at </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$1.80</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> per share. </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The warrants expire on the fifth anniversary of the date of issuance </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">or, if earlier, five business days after Vermillion delivers notice that the closing price per share of its common stock exceeded the exercise price for 20 consecutive trading days during the exercise period</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The sale</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> of common stock and issuance of warrants qualified for equity treatment under GAAP. The respective values of the warrants and common stock were calculated using their relative fair values and classified under common stock and additional paid-in capital. The value ascribed to the warrants is </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$804,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and to the common stock is approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$4,296,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">.</font> </p> <p style="margin:0pt 0pt 3pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 3pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">2010 Stock Incentive Plan</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The Company&#x2019;s employees, directors, and consultants are eligible to receive awards under the Vermillion, Inc. </font><a name="_cp_text_4_18"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Second Amended and Restated </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">2010 Stock Incentive Plan (the &#x201C;2010 Plan&#x201D;). The 2010 Plan permits the granting of a variety of awards, including stock options, share appreciation rights, restricted shares, restricted share units, unrestricted shares, deferred share units, performance and cash-settled awards, and dividend equivalent rights. The 2010 Plan provides for issuance of up to </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">12,122,983</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> shares of Vermillion common stock, subject to adjustment as provided in the 2010 Plan.</font> </p> <p style="margin:0pt 0pt 3pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 3pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Stock-Based Compensation</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">During the </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">three </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">ended </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">June 30, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, &nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">the Company awarded Vermillion&#x2019;s non-employee directors </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">an aggregate of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">398,400</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> shares of restricted stock under the 2010 Plan having a fair value of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$442,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. &nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">The</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> vesting of the</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">se shares of restricted stock</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> is as follows:</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">50%</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> on June 1, 201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">8, </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">25%</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> on September 1, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">25%</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">on </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">December 1, 201</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">8</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">.</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> The Company also awarded certain consultants </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">6,534</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> shares of restricted stock under the 2010 Plan having a fair value of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$10,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. &nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">During the three months ended June 30, 2018</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">, the Company granted certain officers and employees options to purchase </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">an aggregate of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">934,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> shares of Vermillion common stock with an exercise price of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$1.11</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> per share</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">125,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> shares of Vermillion common stock with an exercise price of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$0.90</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> per share</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">.&nbsp;These stock options vest </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">25%</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> on each of the four&nbsp;anniversaries of the vesting commencement date for each such stock option.&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">During the three months ended June 30, 2018, the Company awarded a certain consultant </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">3,213</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">shares of restricted stock under the 2010 Plan having a fair value of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$4,500</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">. &nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The allocation of employee stock-based compensation expense by functional area for the three</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> and six</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> months ended </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">June 30, 2018 and 2017</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> was as follows:</font> </p> <p style="margin:0pt;font-family:Calibri;line-height:107.92%;font-size: 1pt"> <font style="display: inline;">&nbsp;</font> </p> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="5" valign="bottom" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">Three Months Ended June 30,</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="5" valign="bottom" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">Six Months Ended June 30,</font></p> </td> </tr> <tr> <td valign="top" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;border-bottom:1pt solid #000000 ;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">(in thousands)</font></p> </td> <td valign="top" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">2018</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">2017</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">2018</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;font-size:10pt;">2017</font></p> </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Cost of revenue</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">23&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">20&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">47&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">40&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Research and development </font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">1&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">2&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">2&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">5&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Sales and marketing </font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">34&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">38&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">81&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">70&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">General and administrative</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">355&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">283&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">494&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">414&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Total </font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">413&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">343&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">624&nbsp; </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:justify;text-justify:inter-ideograph;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.10%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;color:#000000;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">529&nbsp; </td> </tr> <tr> <td valign="bottom" style="width:38.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.82%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.36%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.10%;border-top:2pt double #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> </table></div> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 11pt"> <font style="display: inline;">&#xFEFF;</font> </p> <p style="margin:0pt;font-family:Calibri;line-height:107.92%;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font> </p> <p><font size="1"> </font></p> </div> </div> 1.40 185000 187000 3407000 12068000 942000 55123977 56113917 64721128 69353622 3796818 369841 P5Y 2000000 0.05 40 804000 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:9pt 0pt 3pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Liquidity</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The Company has incurred significant net losses and negative cash flows from operations since inception, and as a result has an accumulated deficit of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$401,452,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> at June 30, 2018. The Company also expects to incur a net loss and negative cash flows from operations for the remainder of 2018. </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">There can be no assurance that the Company will achieve or sustain profitability or positive cash flow from operations.&nbsp;&nbsp;However, management believes that the current working capital position will be sufficient to meet the Company&#x2019;s working capital needs for at least the next 12 months.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">As discussed in Note 4, on April 17, 2018, the Company completed two public offerings, pursuant to which certain investors purchased Vermillion common stock and Vermillion Series B convertible preferred stock for net proceeds of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$13,500,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> after deducting offering expenses. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">As discussed in Note 4, on August 31, 2017, certain investors exercised outstanding warrants to purchase shares of Vermillion common stock for net proceeds of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$3,577,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> after deducting offering expenses.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">As discussed in Note 4, on February 17, 2017, the Company completed a private placement pursuant to which certain investors purchased Vermillion common stock and warrants to purchase shares of Vermillion common stock for net proceeds of approximately </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$5,127,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> after deducting offering expenses.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:6pt 0pt 0pt;text-indent:36pt;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">As discussed in Note 3, in March 2016, the Company entered into an agreement (the &#x201C;Loan Agreement&#x201D;) pursuant to which it may borrow up to </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$4,000,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> from the State of Connecticut Department of Economic and Community Development (the &#x201C;DECD&#x201D;). An initial disbursement of </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$2,000,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> was made to the Company on April 15, 2016 under the Loan Agreement.&nbsp;The remaining </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$2,000,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> will be advanced if and when the Company achieves certain future milestones. </font><a name="S163573625"></a><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The loan may be prepaid at any time without premium or penalty.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:5pt 0pt;text-indent:36pt;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p><font size="1"> </font></p> </div> </div> 3796818 P5M P36M 1 95000 46000 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Organization </font> </p> <p style="margin:0pt;text-indent:36pt;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">Vermillion, Inc. (&#x201C;Vermillion&#x201D;; Vermillion and its wholly-owned subsidiaries are collectively referred to as the &#x201C;Company</font><a name="_cp_text_1_15"></a><font style="display: inline;font-family:Times New Roman;font-size:10pt;">,&#x201D; &#x201C;we&#x201D; or &#x201C;our</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#x201D;) is incorporated in the state of Delaware, and is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. The Company sells OVA1&#x2122; and Overa&#x2122; risk of malignancy tests for ovarian cancer (&#x201C;OVA1&#x201D; and &#x201C;Overa,&#x201D; respectively) through Vermillion&#x2019;s wholly-owned&nbsp;Clinical Laboratory Improvement Amendments of 1988 (&#x201C;CLIA&#x201D;) certified clinical laboratory, ASPiRA LABS, Inc. (&#x201C;ASPiRA LABS&#x201D;). </font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company also offers in-vitro diagnostic (&#x201C;IVD&#x201D;) trial services to third-party customers through its wholly-owned subsidiary, ASPiRA IVD, Inc. (&#x201C;ASPiRA IVD&#x201D;), which commenced operations in June 2016. </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">ASPiRA IVD is a specialized, CLIA certified, laboratory provider dedicated to meeting the unique testing needs of IVD manufacturers seeking to commercialize&nbsp;high-complexity&nbsp;assays. </font> </p> <p><font size="1"> </font></p> </div> </div> 150 0.04 0.07 0.07 0.125 <div> <div style="margin-left:0pt;margin-right:0pt;"> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td colspan="10" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Six Months Ended June 30, 2018</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="8" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Impact of changes in accounting policies</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">As Reported</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Balances without adoption of ASC 606</font></p> </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Effect of Change Higher/(Lower)</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Product revenue</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">1,240&nbsp; </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">1,249&nbsp; </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(9) </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Operating loss</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,866) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,857) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(9) </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Net loss</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,899) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,890) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(9) </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Net loss per share, basic and diluted</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(0.09) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(0.09) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 3.25pt 0.05pt 0pt;text-align:right;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> &nbsp;-</font></p> </td> </tr> </table></div> <p style="margin:0pt 0pt 8pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 1pt"> <font style="display: inline;font-family:Times New Roman;font-size:1pt;">&#xFEFF;</font> </p> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td colspan="10" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">June 30, 2018</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="8" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Impact of changes in accounting policies</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">As Reported</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Balances without adoption of ASC 606</font></p> </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Effect of Change Higher/(Lower)</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Assets:</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:14.74%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:16.00%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:12.42%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Accounts receivable</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">707&nbsp; </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">216&nbsp; </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">491&nbsp; </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Stockholders' equity:</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Accumulated deficit</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(401,452) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(401,943) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">491&nbsp; </td> </tr> </table></div> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 11pt"> <font style="display: inline;">&#xFEFF;</font> </p> <p><font size="1"> </font></p> </div> </div> 10000 442000 4500 442000 <div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:10pt;">Significant Accounting and Reporting Policies </font> </p> <p style="margin:0pt 0pt 2.25pt 10pt;line-height:normal;text-indent:26pt;text-align:justify;text-justify:inter-ideograph;border-bottom:1pt none #D9D9D9 ;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;background-color: #FFFFFF;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 2.25pt 10pt;line-height:normal;text-indent: -10pt;text-align:justify;text-justify:inter-ideograph;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;background-color: #FFFFFF;">Revenue Recognition </font> </p> <p style="margin:0pt 0pt 2.25pt 10pt;line-height:normal;text-indent: -10pt;text-align:justify;text-justify:inter-ideograph;border-top:1pt none #D9D9D9 ;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;background-color: #FFFFFF;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company accounts for revenue in accordance with ASC Topic 606, </font><font style="display: inline;font-family:Times New Roman;font-style:italic;color:#000000;font-size:10pt;">Revenue from Contracts with Customers</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> (&#x201C;ASC 606&#x201D;)</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">, which it adopted on January 1, 2018 using the modified retrospective method. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;text-decoration:underline;">Product Revenue</font> </p> <p style="margin:0pt;line-height:100%;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">Prior to January 1, 2018, the Company recognized product revenue in accordance with the provisions of ASC 954-605, Health Care Entities - Revenue Recognition. The Company's product revenue is generated by performing diagnostic services using its OVA1 and Overa tests, and the service is completed upon the delivery of the test result to the prescribing physician. The entire transaction price is allocated to the single performance obligation contained in a contract with a patient. Under the previous revenue recognition accounting methodology, certain product revenue was recognized upon the ultimate receipt of cash. Under ASC 606, all revenue is recognized upon completion of the OVA1 or Overa test based on estimates of amounts that will ultimately be realized. In determining the amount of revenue to be recognized for a delivered test result, the Company considers factors such as payment history and amount, payer coverage, whether there is a reimbursement contract between the payer and the Company, and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management as the collection cycle on some accounts can be as long as one year.&nbsp;&nbsp; </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company also reviewed its patient account population and determined an appropriate distribution of patient accounts by payer&nbsp;(</font><font style="display: inline;font-family:Times New Roman;font-style:italic;color:#000000;font-size:10pt;">i.e.</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">, Medicare, patient pay, other third-party payer, </font><font style="display: inline;font-family:Times New Roman;font-style:italic;color:#000000;font-size:10pt;">etc</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">.) into portfolios with similar collection experience. The Company has elected this practical expedient that, when evaluated for collectability, results in a materially consistent revenue amount for such portfolios as if each patient account were evaluated on an individual contract basis. </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">There were </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">no</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> impairment losses on accounts receivable recorded during the three</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> and six</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> months ended </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">June </font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">3</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">0</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">, 2018.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Under the modified retrospective implementation method, the Company recorded a one-time cumulative effect adjustment at January 1, 2018 to reflect the aggregate effect of all open OVA1 and Overa tests performed prior to January 1, 2018 as if revenue had been recognized under ASC 606.&nbsp; </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">The cumulative effect adjustment was recorded increasing the opening balance of Accounts Receivable by </font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">$500,000</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;"> in the condensed consolidated balance sheets with an offsetting reduction to Accumulated Deficit. The Company&#x2019;s right to receive payment on this balance is contingent only on the passage of time.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">The following tables show the impact of adoption to our consolidated statement of operations and balance sheet:</font> </p> <p style="margin:0pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 1pt"> <font style="display: inline;font-family:Times New Roman;font-size:1pt;">&#xFEFF;</font> </p> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td colspan="10" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Six Months Ended June 30, 2018</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="8" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Impact of changes in accounting policies</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">As Reported</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Balances without adoption of ASC 606</font></p> </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Effect of Change Higher/(Lower)</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Product revenue</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">1,240&nbsp; </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">1,249&nbsp; </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(9) </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Operating loss</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,866) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,857) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(9) </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Net loss</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,899) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(5,890) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(9) </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Net loss per share, basic and diluted</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(0.09) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(0.09) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 3.25pt 0.05pt 0pt;text-align:right;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;"> &nbsp;-</font></p> </td> </tr> </table></div> <p style="margin:0pt 0pt 8pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 1pt"> <font style="display: inline;font-family:Times New Roman;font-size:1pt;">&#xFEFF;</font> </p> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:1.00pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;color:#000000;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #auto;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td colspan="10" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">June 30, 2018</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="8" valign="middle" style="width:00.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Impact of changes in accounting policies</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">As Reported</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Balances without adoption of ASC 606</font></p> </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td colspan="2" valign="middle" style="width:00.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1.5pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #FFFFFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:center;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Effect of Change Higher/(Lower)</font></p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Assets:</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:14.74%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.18%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:16.00%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.20%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:12.42%;border-top:1pt solid #000000 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Accounts receivable</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">707&nbsp; </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">216&nbsp; </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">491&nbsp; </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-weight:bold;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-size:10pt;">Stockholders' equity:</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;text-align:right;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="middle" style="width:45.02%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-size:10pt;">&#xFEFF;</font><font style="display: inline;font-family:Times New Roman;font-size:10pt;">Accumulated deficit</font></p> </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:14.74%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(401,452) </td> <td valign="middle" style="width:02.18%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.66%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">(401,943) </td> <td valign="middle" style="width:02.20%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;overflow: hidden;font-size:0pt;"> &nbsp;</p> </td> <td valign="middle" style="width:01.96%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;padding:0pt;"> <p style="margin:0pt 0pt 0.05pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-size:10pt;">$</font></p> </td> <td valign="middle" style="width:12.42%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:12.75pt;font-family:Times New Roman;font-size:10pt;text-align:right;" nowrap="nowrap">491&nbsp; </td> </tr> </table></div> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:inherit;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:22.3pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:inherit;font-size:10pt;">ASC 606 did not have an aggregate impact on the Company&#x2019;s net cash provided by operating activities, but resulted in offsetting changes in certain assets and liabilities presented within net cash provided by operating activities in the Company&#x2019;s condensed consolidated statement of cash flows, as reflected in the above tables.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:22.3pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;font-family:Calibri;line-height:107.92%;font-size: 1pt"> <font style="display: inline;font-family:Times New Roman;font-size:1pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-indent:36pt;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-style:italic;color:#000000;font-size:10pt;">Other Practical Expedients</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp;</font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp; &nbsp;</font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company does not adjust the transaction price for the effects of a significant financing component, as at contract inception, the Company expects the collection cycle to be one year or less. </font> </p> <p style="margin:0pt;text-indent:36pt;border-top:1pt none #D9D9D9 ;line-height:100%;font-family:Arial Unicode MS;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&nbsp; &nbsp;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company expenses sales commissions when incurred because the amortization period would have been one year or less.&nbsp;&nbsp;These costs are recorded within sales and marketing expenses.</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt 0pt 8pt;font-family:Calibri;line-height:107.92%;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;font-size:10pt;text-decoration:underline;">Service Revenue</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">The Company&#x2019;s service revenue is generated by performing IVD trial services for third-party customers. Application of the modified retrospective method did not impact amounts previously reported by the Company, nor did it require a cumulative effect adjustment upon adoption, as the Company&#x2019;s method of recognizing revenue under ASC 606 was analogous to the method utilized immediately prior to adoption.&nbsp;&nbsp;Accordingly, there is no need for the Company to disclose the amount by which each financial statement line item was affected as a result of applying the new standard and an explanation of significant changes. </font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:100%;text-indent:36pt;font-family:Calibri;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;font-size:10pt;">Measurement of progress on contracts with customers will generally be based on the input measurement of cost incurred relative to the total expected costs to satisfy the performance obligation. </font><font style="display: inline;font-family:inherit;font-size:10pt;">The Company has not disclosed the value of unsatisfied performance obligations for all service revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adoption rules. The remainder are not material to the consolidated financial statements.</font> </p> <p><font size="1"> </font></p> </div> </div> 1.00 100.00 1500000 4166659 Cost of revenue $28, $40, $58, $79 General and administrative $304, $295, $412, $510 Research and development $1, $2, $2, $5 Sales and marketing $28, $40, $71, $77 EX-101.SCH 7 vrml-20180630.xsd EX-101.SCH 00100 - Statement - Condensed Consolidated Balance Sheets link:presentationLink link:calculationLink link:definitionLink 00200 - Statement - Condensed Consolidated Statements Of Operations link:presentationLink link:calculationLink link:definitionLink 00400 - Statement - Condensed Consolidated Statements Of Cash Flows link:presentationLink link:calculationLink link:definitionLink 00090 - Document - Document and Entity Information link:presentationLink link:calculationLink link:definitionLink 00105 - Statement - Condensed Consolidated Balance Sheets (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 00205 - Statement - Condensed Consolidated Statements Of Operations (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 00405 - Statement - Condensed Consolidated Statements Of Cash Flows (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 10101 - Disclosure - Organization, Basis Of Presentation And Significant Accounting And Reporting Policies link:presentationLink link:calculationLink link:definitionLink 10201 - Disclosure - Agreements With Quest Diagnostics Incorporated link:presentationLink link:calculationLink link:definitionLink 10301 - Disclosure - Commitments And Contingencies link:presentationLink link:calculationLink link:definitionLink 10401 - Disclosure - Stockholders' Equity link:presentationLink link:calculationLink link:definitionLink 10501 - Disclosure - Loss Per Share link:presentationLink link:calculationLink link:definitionLink 10601 - Disclosure - Related Party Transactions link:presentationLink link:calculationLink link:definitionLink 20102 - Disclosure - Organization, Basis Of Presentation And Significant Accounting And Reporting Policies (Policy) link:presentationLink link:calculationLink link:definitionLink 30103 - Disclosure - Organization, Basis Of Presentation And Significant Accounting And Reporting Policies (Tables) link:presentationLink link:calculationLink link:definitionLink 30403 - Disclosure - Stockholders' Equity (Tables) link:presentationLink link:calculationLink link:definitionLink 40101 - Disclosure - Organization, Basis Of Presentation And Significant Accounting And Reporting Policies (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 40102 - Disclosure - Organization, Basis Of Presentation And Significant Accounting And Reporting Policies (Summary Of The Impact Of Adoption ASC 606 On Financials) (Details) link:presentationLink link:calculationLink link:definitionLink 40301 - Disclosure - Commitments And Contingencies (Details) link:presentationLink link:calculationLink link:definitionLink 40401 - Disclosure - Stockholders' Equity (Narrative) (Details) link:presentationLink link:calculationLink link:definitionLink 40402 - Disclosure - Stockholders' Equity (Allocation of Employee Stock-Based Compensation Expense By Functional Area) (Details) link:presentationLink link:calculationLink link:definitionLink 40501 - Disclosure - Loss Per Share (Details) link:presentationLink link:calculationLink link:definitionLink 40601 - Disclosure - Related Party Transactions (Details) link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 8 vrml-20180630_cal.xml EX-101.CAL EX-101.DEF 9 vrml-20180630_def.xml EX-101.DEF EX-101.LAB 10 vrml-20180630_lab.xml EX-101.LAB EX-101.PRE 11 vrml-20180630_pre.xml EX-101.PRE XML 12 R1.htm IDEA: XBRL DOCUMENT v3.10.0.1
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2018
Jul. 31, 2018
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q2  
Entity Registrant Name VERMILLION, INC.  
Entity Central Index Key 0000926617  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Trading Symbol vrml  
Entity Common Stock, Shares Outstanding   75,274,251
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Current assets:    
Cash and cash equivalents $ 14,135,000 $ 5,539,000
Accounts receivable, net 707,000 205,000
Prepaid expenses and other current assets 334,000 459,000
Inventories 110,000 102,000
Total current assets 15,286,000 6,305,000
Property and equipment, net 835,000 1,181,000
Other assets   11,000
Total assets 16,121,000 7,497,000
Current liabilities:    
Accounts payable 783,000 745,000
Accrued liabilities 1,686,000 1,650,000
Short-term debt 187,000 185,000
Other current liabilities 10,000 29,000
Total current liabilities 2,666,000 2,609,000
Non-current liabilities:    
Long-term debt 1,387,000 1,481,000
Total liabilities 4,053,000 4,090,000
Commitments and contingencies (Note 3)
Stockholders' equity:    
Common stock, par value $0.001 per share, 150,000,000 shares authorized at June 30, 2018 and December 31, 2017; 75,274,251 and 60,036,017 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively 75,000 60,000
Additional paid-in capital 413,445,000 399,400,000
Accumulated deficit (401,452,000) (396,053,000)
Total stockholders' equity 12,068,000 3,407,000
Total liabilities and stockholders' equity $ 16,121,000 $ 7,497,000
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2018
Dec. 31, 2017
Condensed Consolidated Balance Sheets [Abstract]    
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 150,000,000 150,000,000
Common stock, shares issued 75,274,251 60,036,017
Common stock, shares outstanding 75,274,251 60,036,017
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements Of Operations - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Revenue:        
Revenue $ 708 $ 898 $ 1,357 $ 1,624
Cost of revenue:        
Cost of revenue [1] 808 694 1,611 1,421
Gross profit (loss) (100) 204 (254) 203
Operating expenses:        
Research and development [2] 154 268 296 493
Sales and marketing [3] 1,478 1,041 2,703 2,064
General and administrative [4] 1,299 1,241 2,613 2,648
Total operating expenses 2,931 2,550 5,612 5,205
Loss from operations (3,031) (2,346) (5,866) (5,002)
Interest income (expense), net (7) (10) (19) (22)
Other income (expense), net (11) (4) (14) (9)
Net loss $ (3,049) $ (2,360) $ (5,899) $ (5,033)
Net loss per share - basic and diluted $ (0.04) $ (0.04) $ (0.09) $ (0.09)
Weighted average common shares used to compute basic and diluted net loss per common share 69,353,622 56,113,917 64,721,128 55,123,977
Product [Member]        
Revenue:        
Revenue $ 627 $ 860 $ 1,240 $ 1,538
Cost of revenue:        
Cost of revenue [1] 528 428 1,061 850
Service [Member]        
Revenue:        
Revenue 81 38 117 86
Cost of revenue:        
Cost of revenue [1] $ 280 $ 266 $ 550 $ 571
[1] Cost of revenue $28, $40, $58, $79
[2] Research and development $1, $2, $2, $5
[3] Sales and marketing $28, $40, $71, $77
[4] General and administrative $304, $295, $412, $510
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements Of Operations (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Cost Of Revenue [Member]        
Stock-based compensation expense $ 28 $ 40 $ 58 $ 79
Research And Development [Member]        
Stock-based compensation expense 1 2 2 5
Sales And Marketing [Member]        
Stock-based compensation expense 28 40 71 77
General And Administrative [Member]        
Stock-based compensation expense $ 304 $ 295 $ 412 $ 510
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements Of Cash Flows - USD ($)
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Net loss $ (5,899,000) $ (5,033,000)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 370,000 401,000
Stock-based compensation expense 543,000 671,000
Loss on sale and disposal of property and equipment 10,000 4,000
Changes in operating assets and liabilities:    
Accounts receivable (2,000) 61,000
Prepaid expenses and other assets 136,000 218,000
Inventories (8,000) (9,000)
Accounts payable, accrued liabilities and other liabilities 74,000 (504,000)
Net cash used in operating activities (4,776,000) (4,191,000)
Cash flows from investing activities:    
Purchase of property and equipment (34,000) (43,000)
Net cash used in investing activities (34,000) (43,000)
Cash flows from financing activities:    
Proceeds from private placement offering of common stock, net of issuance costs   5,127,000
Proceeds from public offering of preferred stock, net of issuance costs 4,496,000  
Proceeds from public offering of common stock, net of issuance costs 8,992,000  
Principal repayment of DECD loan (92,000) (92,000)
Repayment of capital lease obligations (19,000) (15,000)
Proceeds from issuance of common stock from exercise of stock options 29,000  
Net cash provided by financing activities 13,406,000 5,020,000
Net increase in cash and cash equivalents 8,596,000 786,000
Cash and cash equivalents, beginning of period 5,539,000 5,242,000
Cash and cash equivalents, end of period 14,135,000 6,028,000
Supplemental disclosure of cash flow information:    
Cash paid during the period for interest 23,000 $ 24,000
Noncash Investing and Financing Items [Abstract]    
50,000 shares of convertible preferred stock converted to 5,000,000 shares of common stock, net of issuance costs $ 4,496,000  
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements Of Cash Flows (Parenthetical)
6 Months Ended
Jun. 30, 2018
shares
Condensed Consolidated Statements Of Cash Flows [Abstract]  
Shares converted 50,000
Conversion of new shares 5,000,000
XML 19 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies
6 Months Ended
Jun. 30, 2018
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies [Abstract]  
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies

1.   ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Organization

Vermillion, Inc. (“Vermillion”; Vermillion and its wholly-owned subsidiaries are collectively referred to as the “Company,” “we” or “our”) is incorporated in the state of Delaware, and is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. The Company sells OVA1™ and Overa™ risk of malignancy tests for ovarian cancer (“OVA1” and “Overa,” respectively) through Vermillion’s wholly-owned Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) certified clinical laboratory, ASPiRA LABS, Inc. (“ASPiRA LABS”).



The Company also offers in-vitro diagnostic (“IVD”) trial services to third-party customers through its wholly-owned subsidiary, ASPiRA IVD, Inc. (“ASPiRA IVD”), which commenced operations in June 2016. ASPiRA IVD is a specialized, CLIA certified, laboratory provider dedicated to meeting the unique testing needs of IVD manufacturers seeking to commercialize high-complexity assays.

Liquidity

The Company has incurred significant net losses and negative cash flows from operations since inception, and as a result has an accumulated deficit of approximately $401,452,000 at June 30, 2018. The Company also expects to incur a net loss and negative cash flows from operations for the remainder of 2018. There can be no assurance that the Company will achieve or sustain profitability or positive cash flow from operations.  However, management believes that the current working capital position will be sufficient to meet the Company’s working capital needs for at least the next 12 months.



As discussed in Note 4, on April 17, 2018, the Company completed two public offerings, pursuant to which certain investors purchased Vermillion common stock and Vermillion Series B convertible preferred stock for net proceeds of approximately $13,500,000 after deducting offering expenses.

 

As discussed in Note 4, on August 31, 2017, certain investors exercised outstanding warrants to purchase shares of Vermillion common stock for net proceeds of approximately $3,577,000 after deducting offering expenses.



As discussed in Note 4, on February 17, 2017, the Company completed a private placement pursuant to which certain investors purchased Vermillion common stock and warrants to purchase shares of Vermillion common stock for net proceeds of approximately $5,127,000 after deducting offering expenses.



As discussed in Note 3, in March 2016, the Company entered into an agreement (the “Loan Agreement”) pursuant to which it may borrow up to $4,000,000 from the State of Connecticut Department of Economic and Community Development (the “DECD”). An initial disbursement of $2,000,000 was made to the Company on April 15, 2016 under the Loan Agreement. The remaining $2,000,000 will be advanced if and when the Company achieves certain future milestones. The loan may be prepaid at any time without premium or penalty.





Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period.



The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal year. The condensed consolidated balance sheet at December 31, 2017 included in this report has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2017 included in Vermillion’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 13, 2018 (the “2017 Annual Report”).



The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated results. 



Significant Accounting and Reporting Policies



Revenue Recognition



The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), which it adopted on January 1, 2018 using the modified retrospective method.



In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services.



Product Revenue



Prior to January 1, 2018, the Company recognized product revenue in accordance with the provisions of ASC 954-605, Health Care Entities - Revenue Recognition. The Company's product revenue is generated by performing diagnostic services using its OVA1 and Overa tests, and the service is completed upon the delivery of the test result to the prescribing physician. The entire transaction price is allocated to the single performance obligation contained in a contract with a patient. Under the previous revenue recognition accounting methodology, certain product revenue was recognized upon the ultimate receipt of cash. Under ASC 606, all revenue is recognized upon completion of the OVA1 or Overa test based on estimates of amounts that will ultimately be realized. In determining the amount of revenue to be recognized for a delivered test result, the Company considers factors such as payment history and amount, payer coverage, whether there is a reimbursement contract between the payer and the Company, and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management as the collection cycle on some accounts can be as long as one year.    

 

The Company also reviewed its patient account population and determined an appropriate distribution of patient accounts by payer (i.e., Medicare, patient pay, other third-party payer, etc.) into portfolios with similar collection experience. The Company has elected this practical expedient that, when evaluated for collectability, results in a materially consistent revenue amount for such portfolios as if each patient account were evaluated on an individual contract basis. There were no impairment losses on accounts receivable recorded during the three and six months ended June 30, 2018.



Under the modified retrospective implementation method, the Company recorded a one-time cumulative effect adjustment at January 1, 2018 to reflect the aggregate effect of all open OVA1 and Overa tests performed prior to January 1, 2018 as if revenue had been recognized under ASC 606.  The cumulative effect adjustment was recorded increasing the opening balance of Accounts Receivable by $500,000 in the condensed consolidated balance sheets with an offsetting reduction to Accumulated Deficit. The Company’s right to receive payment on this balance is contingent only on the passage of time.



The following tables show the impact of adoption to our consolidated statement of operations and balance sheet:





 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2018



 

Impact of changes in accounting policies



 

As Reported

 

Balances without adoption of ASC 606

 

Effect of Change Higher/(Lower)

Product revenue

 

$

1,240 

 

$

1,249 

 

$

(9)

Operating loss

 

$

(5,866)

 

$

(5,857)

 

$

(9)

Net loss

 

$

(5,899)

 

$

(5,890)

 

$

(9)

Net loss per share, basic and diluted

 

$

(0.09)

 

$

(0.09)

 

$

 -







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

June 30, 2018



 

Impact of changes in accounting policies



 

As Reported

 

Balances without adoption of ASC 606

 

Effect of Change Higher/(Lower)

Assets:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

707 

 

$

216 

 

$

491 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

Accumulated deficit

 

$

(401,452)

 

$

(401,943)

 

$

491 



ASC 606 did not have an aggregate impact on the Company’s net cash provided by operating activities, but resulted in offsetting changes in certain assets and liabilities presented within net cash provided by operating activities in the Company’s condensed consolidated statement of cash flows, as reflected in the above tables.





Other Practical Expedients 

   

The Company does not adjust the transaction price for the effects of a significant financing component, as at contract inception, the Company expects the collection cycle to be one year or less.

   

The Company expenses sales commissions when incurred because the amortization period would have been one year or less.  These costs are recorded within sales and marketing expenses.



Service Revenue

The Company’s service revenue is generated by performing IVD trial services for third-party customers. Application of the modified retrospective method did not impact amounts previously reported by the Company, nor did it require a cumulative effect adjustment upon adoption, as the Company’s method of recognizing revenue under ASC 606 was analogous to the method utilized immediately prior to adoption.  Accordingly, there is no need for the Company to disclose the amount by which each financial statement line item was affected as a result of applying the new standard and an explanation of significant changes.



Measurement of progress on contracts with customers will generally be based on the input measurement of cost incurred relative to the total expected costs to satisfy the performance obligation. The Company has not disclosed the value of unsatisfied performance obligations for all service revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adoption rules. The remainder are not material to the consolidated financial statements.



Recent Accounting Pronouncements



In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), Compensation - Stock Compensation (“ASU 2016-09”). The new guidance simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within that reporting period. The Company adopted this standard on January 1, 2018, and the adoption did not have a material impact on the consolidated financial statements.  In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Base Payment Accounting.  This new guidance expands the scope of Topic 718 to include share-based payment transactions from acquiring goods and services from nonemployees, which was previously codified under Topic 505, where this change will modify the measurement requirements of nonemployee awards.    This amendment is effective for annual periods after December 15, 2018.  The Company is currently evaluating the impact of adoption of this standard.



In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) (“ASU 2016-2”). This guidance is intended to make leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. ASU 2016-2 will be effective for interim and annual periods beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption is permitted. The Company expects to adopt this standard beginning in 2019. The Company is still evaluating the effect adoption will have on our financial statements.



In May 2014, the FASB issued ASC 606, which superseded existing revenue recognition guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 effective on January 1, 2018 using the modified retrospective method. Please see the above “Revenue Recognition” section for a discussion of the Company’s revenue recognition under ASC 606.

 

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Agreements With Quest Diagnostics Incorporated
6 Months Ended
Jun. 30, 2018
Agreements With Quest Diagnostics Incorporated [Abstract]  
Agreements With Quest Diagnostics Incorporated

2.   AGREEMENTS WITH QUEST DIAGNOSTICS INCORPORATED



In March 2015, the Company entered into a commercial agreement with Quest Diagnostics, Incorporated (“Quest Diagnostics”). Pursuant to this agreement,  all OVA1 U.S. testing services for Quest Diagnostics customers were transferred to Vermillion’s wholly-owned subsidiary, ASPiRA LABS, as of August 2015. Pursuant to this agreement, as amended as of March 1, 2018, Quest Diagnostics is continuing to provide blood draw and logistics support by transporting specimens from its clients to ASPiRA LABS for testing through at least March 11, 2019 in exchange for a market value fee. Per the terms of the new commercial agreement, the Company will not offer to existing or future Quest Diagnostics customers tests that Quest Diagnostics offers.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments And Contingencies
6 Months Ended
Jun. 30, 2018
Commitments And Contingencies [Abstract]  
Commitments And Contingencies

3.   COMMITMENTS AND CONTINGENCIES



Development Loan



On March 22, 2016, the Company entered into the Loan Agreement with the DECD, pursuant to which the Company may borrow up to $4,000,000 from the DECD.  Proceeds from the loan were utilized primarily to fund the build-out, information technology infrastructure and other costs related to the Company’s Trumbull, Connecticut facility and operations.  The loan bears interest at a fixed rate of 2.0% per annum and requires equal monthly payments of principal and interest until maturity, which occurs on April 15, 2026.  As security for the loan, the Company has granted the DECD a blanket security interest in the Company’s personal and intellectual property.  The DECD’s security interest in the Company’s intellectual property may be subordinated to a qualified institutional lender.  Under the terms of the Loan Agreement, as amended, the Company may be eligible for forgiveness of up to $2,000,000 of the principal amount of the loan if the Company achieves certain job creation and retention milestones by March 1, 2021 (the “Measurement Date”).  Conversely, if the Company is either unable to meet these job creation and retention milestones, namely, hiring and retaining for a consecutive two-year period 40 full-time employees with a specified average annual salary by the Measurement Date,  or does not maintain the Company’s Connecticut operations for a period of 10 years, the DECD may require early repayment of a portion or all of the loan depending on job attainment as compared to the required amount plus a penalty of 5% of the total funded loan.  



An initial disbursement of $2,000,000 was made to the Company on April 15, 2016 under the Loan Agreement.  The remaining $2,000,000 will be advanced if and when the Company achieves certain other future milestones. The loan may be prepaid at any time without premium or penalty.



Operating Leases



The Company leases facilities to support its business of discovering, developing and commercializing diagnostic tests in the fields of gynecologic disease. The Company’s principal facility, including the CLIA laboratory used by ASPiRA LABS, is located in Austin, Texas, and the CLIA laboratory used by ASPiRA IVD is located in Trumbull, Connecticut. The Austin, Texas lease includes an aggregate annual base rent of $86,000 and annual estimated common area charges, taxes and insurance of $46,000 and expires on January 31, 2019.    



In October 2015, the Company entered into a lease agreement for a facility in Trumbull, Connecticut. The lease required initial payments for the buildout of leasehold improvements to the office space, which were approximately $596,000. The term of the lease is five years beginning after the initial date of occupancy in January 2016 and a rent abatement period of five months. The lease includes an aggregate annual base rent of $32,000 and annual estimated common area charges, taxes and insurance of $95,000.  



Building rent for the three months ended June 30, 2018 and 2017 totaled $67,000 and $62,000, respectively. Building rent for the six months ended June 30, 2018 and 2017 totaled $134,000 and $123,000, respectively.



Capital Lease



In April 2015, the Company leased a laboratory instrument for a total initial payment of $125,000 and ongoing payments of approximately $3,500 per month for 36 months after delivery. The agreement also requires minimum annual purchases of reagents from the manufacturer of the equipment. The laboratory instrument was placed into service on July 1, 2015.



The accumulated amortization of assets under capital lease obligations was $232,000 and $155,000 as of June 30, 2018 and 2017, respectively. The net book value of assets under capital lease obligations was $0 and $77,000 as of June 30, 2018 and 2017, respectively. 



Non-cancelable Royalty Obligations



The Company is a party to an amended research collaboration agreement with The Johns Hopkins University School of Medicine under which the Company licenses certain of its intellectual property. Under the terms of the amended research collaboration agreement, Vermillion is required to pay the greater of 4% royalties on net sales of diagnostic tests using the assigned patents or annual minimum royalties of $57,500. Royalty expense for the three months ended June 30, 2018 and 2017 totalled $25,000 and $34,000, respectively. Royalty expense for the six months ended June 30, 2018 and 2017 totalled $49,000 and $63,000, respectively.

  

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity
6 Months Ended
Jun. 30, 2018
Stockholders' equity:  
Stockholders' Equity

4.   STOCKHOLDERS’ EQUITY

2018 Offerings    



On  April 13, 2018,  the Company entered into two underwriting agreements (each, an Underwriting Agreement) with Piper Jaffray & Co., as the sole underwriter (the “Underwriter), in connection with separate but concurrent public offerings of the Company’s securities.



Pursuant to the first Underwriting Agreement, the Company agreed to issue and sell an aggregate of 10,000,000 shares of Vermillion common stock, par value $0.001 per share, offered by the Underwriter in a public offering at a price to the public of $1.00 per share (the “Common Stock Offering”). Under this Underwriting Agreement, the Company granted the Underwriter an option to purchase up to an additional 1,500,000 shares of Vermillion common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments, if any. The Underwriter did not exercise this option. The Common Stock Offering closed on April 17, 2018 and resulted in proceeds, net of 7% underwriting costs and other offering costs, to the Company of $8,992,000.



Pursuant to the second Underwriting Agreement, the Company agreed to issue and sell an aggregate of 50,000 shares of Vermillion Series B Convertible Preferred Stock, par value $0.001 per share, offered by the Underwriter in a public offering at a price to the public of $100.00 per share (the “Series B Offering).  The Series B Offering closed on April 17, 2018 and resulted in proceeds, net of 7% underwriting costs and other offering costs, to the Company of $4,496,000.



Upon obtaining Company stockholder approval at the annual meeting of Company stockholders on June 21, 2018, each of the 50,000 shares of Vermillion Series B Convertible Preferred Stock was automatically converted into shares of Vermillion common stock, at a conversion rate of 100 shares of Vermillion common stock per one share of Vermillion Series B Convertible Preferred Stock, including shares issuable pursuant to customary anti-dilution provisions.

2017 Warrant Repricing and Exercise      



In December 2014, the Company issued warrants to purchase up to an aggregate of 4,166,659 shares of Vermillion common stock at an exercise price of $2.00 per share in conjunction with a December 2014 private placement of Vermillion common stock.  



On August 31, 2017, certain holders of these warrants exercised warrants to purchase 3,796,818 shares of Vermillion common stock in consideration for the Company agreeing to reduce the exercise price to $1.00 per share of Vermillion common stock. The remaining 369,841 unexercised warrants expired by their original terms on December 23, 2017.



 The Company issued 3,796,818 shares of Vermillion common stock and received $3,796,818 in aggregate gross proceeds (approximately $3,577,000 net of transaction costs). The incremental non-cash fair value of approximately $942,000 from the modification of the warrants was calculated using the Black-Scholes model and recorded as a deemed dividend to the warrant holders within stockholders’ equity.



2017 Private Placement       

On February 17, 2017, the Company completed a private placement pursuant to which certain investors purchased 3,747,125 shares of Vermillion common stock at a price of $1.40 per share. Vermillion also issued warrants to purchase shares of Vermillion common stock at a price of $0.125 per warrant share in the private placement. Net proceeds of the private placement were approximately $5,127,000 after deducting offering expenses. The warrants are exercisable for 2,810,338 shares of Vermillion common stock at $1.80 per share. The warrants expire on the fifth anniversary of the date of issuance or, if earlier, five business days after Vermillion delivers notice that the closing price per share of its common stock exceeded the exercise price for 20 consecutive trading days during the exercise period.



The sale of common stock and issuance of warrants qualified for equity treatment under GAAP. The respective values of the warrants and common stock were calculated using their relative fair values and classified under common stock and additional paid-in capital. The value ascribed to the warrants is $804,000 and to the common stock is approximately $4,296,000.



2010 Stock Incentive Plan

The Company’s employees, directors, and consultants are eligible to receive awards under the Vermillion, Inc. Second Amended and Restated 2010 Stock Incentive Plan (the “2010 Plan”). The 2010 Plan permits the granting of a variety of awards, including stock options, share appreciation rights, restricted shares, restricted share units, unrestricted shares, deferred share units, performance and cash-settled awards, and dividend equivalent rights. The 2010 Plan provides for issuance of up to 12,122,983 shares of Vermillion common stock, subject to adjustment as provided in the 2010 Plan.



Stock-Based Compensation



During the three ended June 30, 2018,  the Company awarded Vermillion’s non-employee directors an aggregate of 398,400 shares of restricted stock under the 2010 Plan having a fair value of approximately $442,000.  The vesting of these shares of restricted stock is as follows: 50% on June 1, 2018, 25% on September 1, 2018, and 25% on December 1, 2018. The Company also awarded certain consultants 6,534 shares of restricted stock under the 2010 Plan having a fair value of approximately $10,000.  



During the three months ended June 30, 2018, the Company granted certain officers and employees options to purchase an aggregate of 934,000 shares of Vermillion common stock with an exercise price of $1.11 per share and 125,000 shares of Vermillion common stock with an exercise price of $0.90 per share. These stock options vest 25% on each of the four anniversaries of the vesting commencement date for each such stock option. 



During the three months ended June 30, 2018, the Company awarded a certain consultant 3,213 shares of restricted stock under the 2010 Plan having a fair value of approximately $4,500.  



The allocation of employee stock-based compensation expense by functional area for the three and six months ended June 30, 2018 and 2017 was as follows:

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands)

 

2018

 

2017

 

2018

 

2017

Cost of revenue

 

$

23 

 

$

20 

 

$

47 

 

$

40 

Research and development

 

 

 

 

 

 

 

 

Sales and marketing

 

 

34 

 

 

38 

 

 

81 

 

 

70 

General and administrative

 

 

355 

 

 

283 

 

 

494 

 

 

414 

Total

 

$

413 

 

$

343 

 

$

624 

 

$

529 



 

 

 

 

 

 

 

 

 

 

 

 





XML 23 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Loss Per Share
6 Months Ended
Jun. 30, 2018
Loss Per Share [Abstract]  
Loss Per Share

5.   LOSS PER SHARE

The Company calculates basic loss per share using the weighted average number of shares of Vermillion common stock outstanding during the period. Because the Company is in a net loss position, diluted loss per share is calculated using the weighted average number of shares of Vermillion common stock outstanding and excludes the effects of 7,572,134 and  11,662,820 potential shares of Vermillion common stock as of June 30, 2018 and 2017, respectively, that are anti-dilutive. Potential shares of Vermillion common stock include incremental shares of Vermillion common stock issuable upon the exercise of outstanding warrants, stock options and unvested restricted stock units.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions
6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

6.   RELATED PARTY TRANSACTIONS

On December 18, 2017, the Company entered into a consulting agreement for a term of up to five months with the Company’s former Senior Vice President, Finance and Chief Accounting Officer.  Pursuant to the terms of the consulting agreement through May 15, 2018, the consultant provided accounting and finance services related to the transition of financial leadership. The Company agreed to pay $150 per hour for such consulting services.  The consultant also remained eligible for payout under the Company’s 2017 Corporate Incentive Plan after he satisfactorily met certain performance obligations as outlined in the consulting agreement. During the six months ended June 30, 2018, the consultant was paid an aggregate of $53,925 for services provided pursuant to the consulting agreement. 



XML 25 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies (Policy)
6 Months Ended
Jun. 30, 2018
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies [Abstract]  
Organization

Organization

Vermillion, Inc. (“Vermillion”; Vermillion and its wholly-owned subsidiaries are collectively referred to as the “Company,” “we” or “our”) is incorporated in the state of Delaware, and is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. The Company sells OVA1™ and Overa™ risk of malignancy tests for ovarian cancer (“OVA1” and “Overa,” respectively) through Vermillion’s wholly-owned Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) certified clinical laboratory, ASPiRA LABS, Inc. (“ASPiRA LABS”).



The Company also offers in-vitro diagnostic (“IVD”) trial services to third-party customers through its wholly-owned subsidiary, ASPiRA IVD, Inc. (“ASPiRA IVD”), which commenced operations in June 2016. ASPiRA IVD is a specialized, CLIA certified, laboratory provider dedicated to meeting the unique testing needs of IVD manufacturers seeking to commercialize high-complexity assays.

Liquidity

Liquidity

The Company has incurred significant net losses and negative cash flows from operations since inception, and as a result has an accumulated deficit of approximately $401,452,000 at June 30, 2018. The Company also expects to incur a net loss and negative cash flows from operations for the remainder of 2018. There can be no assurance that the Company will achieve or sustain profitability or positive cash flow from operations.  However, management believes that the current working capital position will be sufficient to meet the Company’s working capital needs for at least the next 12 months.



As discussed in Note 4, on April 17, 2018, the Company completed two public offerings, pursuant to which certain investors purchased Vermillion common stock and Vermillion Series B convertible preferred stock for net proceeds of approximately $13,500,000 after deducting offering expenses.

 

As discussed in Note 4, on August 31, 2017, certain investors exercised outstanding warrants to purchase shares of Vermillion common stock for net proceeds of approximately $3,577,000 after deducting offering expenses.



As discussed in Note 4, on February 17, 2017, the Company completed a private placement pursuant to which certain investors purchased Vermillion common stock and warrants to purchase shares of Vermillion common stock for net proceeds of approximately $5,127,000 after deducting offering expenses.



As discussed in Note 3, in March 2016, the Company entered into an agreement (the “Loan Agreement”) pursuant to which it may borrow up to $4,000,000 from the State of Connecticut Department of Economic and Community Development (the “DECD”). An initial disbursement of $2,000,000 was made to the Company on April 15, 2016 under the Loan Agreement. The remaining $2,000,000 will be advanced if and when the Company achieves certain future milestones. The loan may be prepaid at any time without premium or penalty.





Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period.



The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal year. The condensed consolidated balance sheet at December 31, 2017 included in this report has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2017 included in Vermillion’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 13, 2018 (the “2017 Annual Report”).



The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated results. 

Significant Accounting and Reporting Policies

Significant Accounting and Reporting Policies



Revenue Recognition



The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), which it adopted on January 1, 2018 using the modified retrospective method.



In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services.



Product Revenue



Prior to January 1, 2018, the Company recognized product revenue in accordance with the provisions of ASC 954-605, Health Care Entities - Revenue Recognition. The Company's product revenue is generated by performing diagnostic services using its OVA1 and Overa tests, and the service is completed upon the delivery of the test result to the prescribing physician. The entire transaction price is allocated to the single performance obligation contained in a contract with a patient. Under the previous revenue recognition accounting methodology, certain product revenue was recognized upon the ultimate receipt of cash. Under ASC 606, all revenue is recognized upon completion of the OVA1 or Overa test based on estimates of amounts that will ultimately be realized. In determining the amount of revenue to be recognized for a delivered test result, the Company considers factors such as payment history and amount, payer coverage, whether there is a reimbursement contract between the payer and the Company, and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management as the collection cycle on some accounts can be as long as one year.    

 

The Company also reviewed its patient account population and determined an appropriate distribution of patient accounts by payer (i.e., Medicare, patient pay, other third-party payer, etc.) into portfolios with similar collection experience. The Company has elected this practical expedient that, when evaluated for collectability, results in a materially consistent revenue amount for such portfolios as if each patient account were evaluated on an individual contract basis. There were no impairment losses on accounts receivable recorded during the three and six months ended June 30, 2018.



Under the modified retrospective implementation method, the Company recorded a one-time cumulative effect adjustment at January 1, 2018 to reflect the aggregate effect of all open OVA1 and Overa tests performed prior to January 1, 2018 as if revenue had been recognized under ASC 606.  The cumulative effect adjustment was recorded increasing the opening balance of Accounts Receivable by $500,000 in the condensed consolidated balance sheets with an offsetting reduction to Accumulated Deficit. The Company’s right to receive payment on this balance is contingent only on the passage of time.



The following tables show the impact of adoption to our consolidated statement of operations and balance sheet:





 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2018



 

Impact of changes in accounting policies



 

As Reported

 

Balances without adoption of ASC 606

 

Effect of Change Higher/(Lower)

Product revenue

 

$

1,240 

 

$

1,249 

 

$

(9)

Operating loss

 

$

(5,866)

 

$

(5,857)

 

$

(9)

Net loss

 

$

(5,899)

 

$

(5,890)

 

$

(9)

Net loss per share, basic and diluted

 

$

(0.09)

 

$

(0.09)

 

$

 -







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

June 30, 2018



 

Impact of changes in accounting policies



 

As Reported

 

Balances without adoption of ASC 606

 

Effect of Change Higher/(Lower)

Assets:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

707 

 

$

216 

 

$

491 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

Accumulated deficit

 

$

(401,452)

 

$

(401,943)

 

$

491 



ASC 606 did not have an aggregate impact on the Company’s net cash provided by operating activities, but resulted in offsetting changes in certain assets and liabilities presented within net cash provided by operating activities in the Company’s condensed consolidated statement of cash flows, as reflected in the above tables.





Other Practical Expedients 

   

The Company does not adjust the transaction price for the effects of a significant financing component, as at contract inception, the Company expects the collection cycle to be one year or less.

   

The Company expenses sales commissions when incurred because the amortization period would have been one year or less.  These costs are recorded within sales and marketing expenses.



Service Revenue

The Company’s service revenue is generated by performing IVD trial services for third-party customers. Application of the modified retrospective method did not impact amounts previously reported by the Company, nor did it require a cumulative effect adjustment upon adoption, as the Company’s method of recognizing revenue under ASC 606 was analogous to the method utilized immediately prior to adoption.  Accordingly, there is no need for the Company to disclose the amount by which each financial statement line item was affected as a result of applying the new standard and an explanation of significant changes.



Measurement of progress on contracts with customers will generally be based on the input measurement of cost incurred relative to the total expected costs to satisfy the performance obligation. The Company has not disclosed the value of unsatisfied performance obligations for all service revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adoption rules. The remainder are not material to the consolidated financial statements.

Recent Accounting Pronouncements

Recent Accounting Pronouncements



In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), Compensation - Stock Compensation (“ASU 2016-09”). The new guidance simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within that reporting period. The Company adopted this standard on January 1, 2018, and the adoption did not have a material impact on the consolidated financial statements.  In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Base Payment Accounting.  This new guidance expands the scope of Topic 718 to include share-based payment transactions from acquiring goods and services from nonemployees, which was previously codified under Topic 505, where this change will modify the measurement requirements of nonemployee awards.    This amendment is effective for annual periods after December 15, 2018.  The Company is currently evaluating the impact of adoption of this standard.



In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) (“ASU 2016-2”). This guidance is intended to make leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. ASU 2016-2 will be effective for interim and annual periods beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption is permitted. The Company expects to adopt this standard beginning in 2019. The Company is still evaluating the effect adoption will have on our financial statements.



In May 2014, the FASB issued ASC 606, which superseded existing revenue recognition guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 effective on January 1, 2018 using the modified retrospective method. Please see the above “Revenue Recognition” section for a discussion of the Company’s revenue recognition under ASC 606.

 

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies (Tables)
6 Months Ended
Jun. 30, 2018
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies [Abstract]  
Summary Of The Impact Of Adoption ASC 606 On Financials



 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2018



 

Impact of changes in accounting policies



 

As Reported

 

Balances without adoption of ASC 606

 

Effect of Change Higher/(Lower)

Product revenue

 

$

1,240 

 

$

1,249 

 

$

(9)

Operating loss

 

$

(5,866)

 

$

(5,857)

 

$

(9)

Net loss

 

$

(5,899)

 

$

(5,890)

 

$

(9)

Net loss per share, basic and diluted

 

$

(0.09)

 

$

(0.09)

 

$

 -







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

June 30, 2018



 

Impact of changes in accounting policies



 

As Reported

 

Balances without adoption of ASC 606

 

Effect of Change Higher/(Lower)

Assets:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

707 

 

$

216 

 

$

491 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

Accumulated deficit

 

$

(401,452)

 

$

(401,943)

 

$

491 



XML 27 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity (Tables)
6 Months Ended
Jun. 30, 2018
Stockholders' equity:  
Allocation of Stock-Based Compensation Expense by Functional Area



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands)

 

2018

 

2017

 

2018

 

2017

Cost of revenue

 

$

23 

 

$

20 

 

$

47 

 

$

40 

Research and development

 

 

 

 

 

 

 

 

Sales and marketing

 

 

34 

 

 

38 

 

 

81 

 

 

70 

General and administrative

 

 

355 

 

 

283 

 

 

494 

 

 

414 

Total

 

$

413 

 

$

343 

 

$

624 

 

$

529 



 

 

 

 

 

 

 

 

 

 

 

 



XML 28 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended
Apr. 17, 2018
Aug. 31, 2017
Feb. 17, 2017
Apr. 15, 2016
Jun. 30, 2018
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Mar. 22, 2016
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]                  
Accumulated deficit         $ (401,452,000) $ (401,452,000)   $ (396,053,000)  
Proceeds from exercise of common stock warrants, net of issuance costs   $ 3,577,000              
Proceeds from public offering $ 13,500,000                
Proceeds from issuance of private placement     $ 5,127,000       $ 5,127,000    
Impairment losses         0 0      
DECD [Member]                  
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]                  
DECD maximum borrowing capacity                 $ 4,000,000
DECD initial disbursement       $ 2,000,000          
DECD remaining borrowing capacity                 $ 2,000,000
Accounting Standards Update 2014-09 [Member]                  
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]                  
One time adjustment         $ 500,000 $ 500,000      
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization, Basis Of Presentation And Significant Accounting And Reporting Policies (Summary Of The Impact Of Adoption ASC 606 On Financials) (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Revenue $ 708,000 $ 898,000 $ 1,357,000 $ 1,624,000  
Operating loss (3,031,000) (2,346,000) (5,866,000) (5,002,000)  
Net loss $ (3,049,000) $ (2,360,000) $ (5,899,000) $ (5,033,000)  
Net loss per share, basic and diluted $ (0.04) $ (0.04) $ (0.09) $ (0.09)  
Assets          
Accounts receivable $ 707,000   $ 707,000   $ 205,000
Stockholders' equity:          
Accumulated deficit (401,452,000)   (401,452,000)   $ (396,053,000)
Balances Without Adoption of ASC 606 [Member]          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Operating loss     (5,857,000)    
Net loss     $ (5,890,000)    
Net loss per share, basic and diluted     $ (0.09)    
Assets          
Accounts receivable 216,000   $ 216,000    
Stockholders' equity:          
Accumulated deficit (401,943,000)   (401,943,000)    
Effect of Change Higher/(Lower) [Member]          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Operating loss     (9,000)    
Net loss     (9,000)    
Assets          
Accounts receivable 491,000   491,000    
Stockholders' equity:          
Accumulated deficit 491,000   491,000    
Product [Member]          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Revenue $ 627,000 $ 860,000 1,240,000 $ 1,538,000  
Product [Member] | Balances Without Adoption of ASC 606 [Member]          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Revenue     1,249,000    
Product [Member] | Effect of Change Higher/(Lower) [Member]          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Revenue     $ (9,000)    
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments And Contingencies (Details)
1 Months Ended 3 Months Ended 6 Months Ended
Apr. 15, 2016
USD ($)
Mar. 22, 2016
USD ($)
Oct. 31, 2015
USD ($)
Apr. 30, 2015
USD ($)
item
Jun. 30, 2018
USD ($)
Jun. 30, 2017
USD ($)
Jun. 30, 2018
USD ($)
employee
Jun. 30, 2017
USD ($)
Dec. 31, 2017
USD ($)
Commitments And Contingencies [Line Items]                  
Operating leases rental expense         $ 67,000 $ 62,000 $ 134,000 $ 123,000  
Net book value         835,000   $ 835,000   $ 1,181,000
Percent of royalty paid             4.00%    
Minimum royalty payment             $ 57,500    
Royalty expense         25,000 34,000 49,000 63,000  
Austin, Texas facility [Member]                  
Commitments And Contingencies [Line Items]                  
Annual base rent             86,000    
Annual estimated common area charges, taxes and insurance             $ 46,000    
Lease expiration date             Jan. 31, 2019    
Trumbull, Connecticut Facility [Member]                  
Commitments And Contingencies [Line Items]                  
Annual base rent     $ 32,000            
Annual estimated common area charges, taxes and insurance     95,000            
Leasehold improvements     $ 596,000            
Lease term             5 years    
Rent abatement period             5 months    
DECD [Member]                  
Commitments And Contingencies [Line Items]                  
DECD maximum borrowing capacity   $ 4,000,000              
Fixed rate per annum   2.00%              
Maturity date   Apr. 15, 2026              
Amount eligible for forgiveness   $ 2,000,000              
Job creation, number of employees | employee             40    
Debt, maturity term             10 years    
Debt penalty percentage             5.00%    
DECD initial disbursement $ 2,000,000                
DECD remaining borrowing capacity   $ 2,000,000              
Assets Under Capital Leases [Member]                  
Commitments And Contingencies [Line Items]                  
Number of purchased laboratory instruments | item       1          
Initial payment of laboratory equipment       $ 125,000          
Monthly payment for acquisition for equipment       $ 3,500          
Number of payments for purchase production of assets             36 months    
Accumulated amortization         232,000 155,000 $ 232,000 155,000  
Net book value         $ 0 $ 77,000 $ 0 $ 77,000  
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity (Narrative) (Details) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended
Jun. 21, 2018
Apr. 17, 2018
Dec. 23, 2017
Aug. 31, 2017
Feb. 17, 2017
Dec. 31, 2014
Jun. 30, 2018
Jun. 30, 2018
Jun. 30, 2017
Apr. 13, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Common stock, shares issued             75,274,251 75,274,251     60,036,017
Warrants exercised       3,796,818              
Warrants unexercised     369,841                
Par value             $ 0.001 $ 0.001     $ 0.001
Proceeds from issuance of private placement         $ 5,127,000       $ 5,127,000    
Proceeds from public offering   $ 13,500,000                  
Exercise price of warrants       $ 1.00              
Fair value of warrants issued         $ 804,000            
Common stock value             $ 75,000 $ 75,000     $ 60,000
Common stock issuable per preferred share 100                    
Shares converted               50,000      
2010 Stock Incentive Plan [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares available for grant             12,122,983 12,122,983      
2010 Stock Incentive Plan [Member] | Non-Employee Directors [Member] | Restricted Stock [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Restricted shares awarded             398,400        
Fair value of restricted shares awarded             $ 442,000 $ 442,000      
2010 Stock Incentive Plan [Member] | Non-Employee Directors [Member] | Restricted Stock [Member] | June 1, 2018 [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage               50.00%      
2010 Stock Incentive Plan [Member] | Non-Employee Directors [Member] | Restricted Stock [Member] | September 1, 2018 [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage               25.00%      
2010 Stock Incentive Plan [Member] | Non-Employee Directors [Member] | Restricted Stock [Member] | December 1, 2018 [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage               25.00%      
2010 Stock Incentive Plan [Member] | Certain Consultants [Member] | Restricted Stock [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Restricted shares awarded             3,213 6,534      
Fair value of restricted shares awarded             $ 4,500 $ 10,000      
2010 Stock Incentive Plan [Member] | Certain Officers And Employees [Member] | Stock Option [Member] | Share-based Compensation Award, Tranche One [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage               25.00%      
2010 Stock Incentive Plan [Member] | Certain Officers And Employees [Member] | $1.11 [Member] | Stock Option [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Granted               934,000      
Stock options granted, average exercise price             $ 1.11 $ 1.11      
2010 Stock Incentive Plan [Member] | Certain Officers And Employees [Member] | $0.90 [Member] | Stock Option [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Granted               125,000      
Stock options granted, average exercise price             $ 0.90 $ 0.90      
Common Stock [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Common stock, shares issued       3,796,818 3,747,125         10,000,000  
Warrants issued in connection with private placement           4,166,659          
Par value                   $ 0.001  
Price per share         $ 1.40            
Issued a warrant to purchase common stock with a cost         $ 0.125            
Underwriting agreement, per share                   $ 1.00  
Underwriting agreement                   1,500,000  
Proceeds from issuance of private placement       $ 3,577,000 $ 5,127,000            
Proceeds from public offering   8,992,000                  
Incremental non-cash fair value of warrants       942,000              
Warrants outstanding to purchase shares         2,810,338            
Exercise price of warrants         $ 1.80 $ 2.00          
Common stock value         $ 4,296,000            
Gross proceeds from issuance of private placement       $ 3,796,818              
Percent of net proceeds of underwriting costs and other offering costs               7.00%      
Series B Convertible Preferred Stock [Member]                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Underwriting agreement, per share                   $ 100.00  
Proceeds from public offering   $ 4,496,000                  
Preferred stock, shares issued                   50,000  
Preferred stock, par value                   $ 0.001  
Percent of net proceeds of underwriting costs and other offering costs               7.00%      
Shares converted 50,000                    
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity (Allocation of Employee Stock-Based Compensation Expense By Functional Area) (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Cost Of Revenue [Member]        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Stock-based compensation expense $ 28 $ 40 $ 58 $ 79
Research And Development [Member]        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Stock-based compensation expense 1 2 2 5
Sales And Marketing [Member]        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Stock-based compensation expense 28 40 71 77
General And Administrative [Member]        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Stock-based compensation expense 304 295 412 510
Employee Stock-Based Compensation [Member]        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Stock-based compensation expense 413 343 624 529
Employee Stock-Based Compensation [Member] | Cost Of Revenue [Member]        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Stock-based compensation expense 23 20 47 40
Employee Stock-Based Compensation [Member] | Research And Development [Member]        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Stock-based compensation expense 1 2 2 5
Employee Stock-Based Compensation [Member] | Sales And Marketing [Member]        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Stock-based compensation expense 34 38 81 70
Employee Stock-Based Compensation [Member] | General And Administrative [Member]        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Stock-based compensation expense $ 355 $ 283 $ 494 $ 414
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Loss Per Share (Details) - shares
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Loss Per Share [Abstract]    
Antidilutive securities excluded from computation of earnings per share 7,572,134 11,662,820
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions (Details) - Former Senior Vice President, Finance And Chief Accounting Officer [Member]
6 Months Ended
Jun. 30, 2018
USD ($)
Related Party Transaction [Line Items]  
Term of consulting agreement 5 years
Payment per hour $ 150
Payments to related party $ 53,925
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