NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

Ardelyx, Inc., or “the Company,” is focused on enhancing the way patients with cardiorenal and gastrointestinal, or GI, diseases are treated by using the gut as the gateway to delivering medicines that matter. The Company has pioneered the development of small molecule therapeutics that act predominantly in the GI tract, thereby avoiding potentially negative side effects on the rest of the body. The Company’s strategy is to evolve from a research and development-focused company to an integrated biotechnology company, by building cardiorenal and GI portfolios in the United States, while exploring a variety of strategic commercial options outside the United States. The Company is developing several products and programs focused on underserved medical needs including the following:

Cardiorenal Portfolio

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Tenapanor: Phase 3 for treatment of end-stage renal disease, or ESRD, patients on dialysis suffering from elevated phosphate, or hyperphosphatemia

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RDX7675: Phase 3 to treat patients with hyperkalemia, common in patients with chronic kidney disease, or CKD, and/or heart failure

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Research Programs: The Company is evaluating small-molecule approaches to treat hyperkalemia in order to significantly reduce pill burden as well as leveraging its knowledge of phosphorus absorption to discover improved approaches.

Gastrointestinal Portfolio

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Tenapanor: Phase 3 for treatment of irritable bowel syndrome with constipation, or IBS-C, patients

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RDX8940: IND filed in late 2016; currently advancing towards Phase 1 development

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Research Programs: The Company is evaluating gut biased farnesoid X receptor, or FXR, agonists for the treatment of various GI diseases and disorders, and is leveraging its knowledge of the mechanisms of tenapanor in order to discover new agents that modulate transport of ions and other processes in the gut.

The Company operates in only one business segment, which is the development of biopharmaceutical products.

Basis of Presentation

These unaudited condensed consolidated financial statements and the related footnote information of the Company have been prepared pursuant to the requirements of the Securities and Exchange Commission, or the SEC, for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles, or U.S. GAAP, have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, the accompanying interim unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The results for the quarter ended March 31, 2017 are not necessarily indicative of results to be expected for the entire year ending December 31, 2017 or future operating periods.

The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2016, included in the Company’s Annual Report on Form 10-K filed with the SEC (the “2016 Form 10-K”). The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date, as filed with the 2016 Form 10-K.

The accompanying condensed consolidated financial statements include the accounts of Ardelyx, Inc. and its wholly-owned subsidiary, Ardelyx Cayman Islands, and have been prepared in accordance with US GAAP. Intercompany transactions and balances have been eliminated in consolidation.