Note 2 – Liquidity and Plan of Operations

The Company has experienced net losses and negative cash flows from operations each period since its inception. Through December 31, 2018, the Company had an accumulated deficit of approximately $65.9 million. The Company’s net losses for the years ended December 31, 2018 and 2017 were approximately $14.1 million and $15.5 million, respectively.

The Company has been engaged in developing its lipid nano-crystal (“LNC”) platform delivery technology and a pipeline of product candidates since 2011. To date, the Company has not obtained regulatory approval for any of its product candidates nor generated any revenue from product sales and the Company expects to incur significant expenses to complete development of its product candidates. The Company may never be able to obtain regulatory approval for the marketing of any of its product candidates in any indication in the United States or internationally and there can be no assurance that the Company will generate revenues or ever achieve profitability.

Assuming the Company obtains FDA approval for one or more of its product candidates, which the Company does not expect to receive until 2023 at the earliest, the Company expects that its expenses will continue to increase once the Company reaches commercial launch. The Company also expects that its research and development expenses will continue to increase as it moves forward with additional clinical studies for its current product candidates and development of additional product candidates. As a result, the Company expects to continue to incur substantial losses for the foreseeable future, and that these losses will be increasing.

To continue to fund operations, on June 21, 2018, the Company completed a Series B Preferred Stock offering which raised $7.1 million after deducting issuance costs (see Footnote 9). In addition, during the year the Company utilized its Controlled Equity Offering^SM Sales Agreement (“Sales Agreement”) with Cantor Fitzgerald & Co. to sell approximately 12.3 million shares of common stock, raising $9.2 million, net of fees. The Sales Agreement was entered into on January 13, 2017, and allows the Company, subject to certain restrictions and daily sales limits, to sell shares of common stock having an aggregate offering price of up to $30 million. As of December 31, 2018, the Company has sold approximately 13.2 million shares of common stock pursuant to the Sales Agreement generating gross proceeds of approximately $10.7 million.

As of December 31, 2018, the Company had cash and cash equivalents of approximately $12.4 million and restricted cash of $0.6 million. On March 19, 2019, the Company completed an underwritten public offering of common stock, generating gross cash proceeds of $30.5 million and net proceeds of approximately $28.2 million. On March 28, 2019, additional shares were sold pursuant to an over-allotment option granted to the underwriters of the public offering, resulting in additional net proceeds to the Company of approximately $2.3 million (see Footnote 11). The Company believes the cash and cash equivalents on hand, along with net proceeds from the recently completed common stock offering, are sufficient to fund planned operations through April 2020.