Note 9 — Effects of Adopting ASC Topic 606

The following tables summarize the effects of adopting this standard on our unaudited consolidated financial statements:

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	As of March 31, 2018 Pre-606			As of March 31, 2018 Effects of ASC Topic 606			As of March 31, 2018 (as reported)
ASSETS
Current assets:
Cash and cash equivalents	$	5,544		$	—		$	5,544
Investments available for sale		583			—			583
Prepaid expenses and other current assets		870			—			870
Accounts receivables		6			—			6
Total current assets		7,003			—			7,003
Prepaid expenses, non-current		1,907			—			1,907
Property and equipment, net		1			—			1
Total assets	$	8,911		$	—		$	8,911
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	3,745		$	—		$	3,745
Accounts payable related party		258			—			258
Accrued payroll and related expenses		201			—			201
Income tax liability		398			—			398
Deferred revenue, current portion		1,502			(1,500	)		2
Total current liabilities		6,104			(1,500	)		4,604

Deferred revenue, non-current portion		625			(625	)		—
Other liabilities		140			—			140
Total liabilities	$	6,869		$	(2,125	)	$	4,744

Commitments and contingencies (Note 5)		—			—			—

Stockholders’ equity:
Preferred stock, par value $0.0001 per share Authorized: 10,000,000 shares at March 31, 2018 and December 31, 2017, Issued and outstanding: 0 shares at March 31, 2018 and December 31, 2017		—			—			—
Common stock, par value $0.0001 per share
Authorized: 100,000,000 shares at March 31, 2018 and December 31, 2017, Issued and outstanding: 60,823,667 shares and 59,051,978 shares, at March 31, 2018 and December 31, 2017, respectively		6			—			6
Additional paid-in capital		184,793			—			184,793
Accumulated deficit		(182,745	)		2,125			(180,620	)
Accumulated other comprehensive loss		(12	)		—			(12	)
Total stockholders’ equity		2,042			2,125			4,167
Total liabilities and stockholders’ equity	$	8,911		$	—		$	8,911

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share amounts)

	Three Months Ended March 31, 2018 Pre-606			Three Months Ended Effects of ASC Topic 606			Three Months Ended March 31, 2018 (as reported)
Revenue	$	381		$	(375	)	$	6
Operating expense:
Research and development		1,005			—			1,005
Selling, general and administrative		6,609			—			6,609
Total operating expense		7,614			—			7,614
Loss from operations		(7,233	)		(375	)		(7,608	)
Interest income, net		8			—			8
Loss before taxes		(7,225	)		(375	)		(7,600	)
Provision for income taxes		(5	)		—			(5	)
Net loss	$	(7,230	)	$	(375	)	$	(7,605	)
Basic and diluted loss per share	$	(0.12	)	$	—		$	(0.13	)
Weighted average shares outstanding basic and diluted		60,150			—			60,150

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(in thousands)


	Three Months Ended March 31, 2018 Pre-606			Three Months Ended Effects of ASC Topic 606			Three Months Ended March 31, 2018 (as reported)
Net loss	$	(7,230	)	$	(375	)	$	(7,605	)
Other comprehensive (loss), net of tax:
Change in equity adjustment from foreign currency translation, net of tax		—			—			—
Change in unrealized gain (loss) on investments, net of tax		1			—			1
Total other comprehensive gain, net of tax		1			—			1
Comprehensive loss	$	(7,229	)	$	(375	)	$	(7,604	)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

Cash flows from operating activities:	Three Months Ended March 31, 2018 Pre-606			Three Months Ended Effects of ASC Topic 606			Three Months Ended March 31, 2018 (as reported)
Net loss	$	(7,230	)	$	(375	)	$	(7,605	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		6			—			6
Stock-based compensation		887			—			887
Changes in assets and liabilities:
Accounts receivables		(6	)		—			(6	)
Prepaid expenses and other current assets		(279	)		—			(279	)
Prepaid expense – Non-current		82			—			82
Accounts payable		3,331			—			3,331
Related party payable		258			—			258
Accrued payroll and related expenses		(1,970	)		—			(1,970	)
Income tax liability		5			—			5
Deferred revenue		(373	)		375			2
Net cash used in operating activities		(5,289	)		—			(5,289	)
Cash flows from investing activities:
Purchase of investments		(282	)		—			(282	)
Proceeds from sale or maturity of investments		1,154			—			1,154
Net cash provided by investing activities		872			—			872
Cash flows from financing activities:
Proceeds from sale of common stock		6,830			—			6,830
Payments of taxes on restricted stock units		(4	)		—			(4	)
Net cash provided by financing activities		6,826			—			6,826
Net increase (decrease) in cash and cash equivalents		2,409			—			2,409
Cash and cash equivalents, beginning of period		3,135			—			3,135
Cash and cash equivalents, end of period	$	5,544		$	—		$	5,544