2017.

The following presents activity of the fair value liability of price adjustable warrants determined by Level 3 inputs for the period ended June 30, 2017:

The fair value liability of price adjustable warrants for the six months ended June 30, 2017 was determined using the probability adjusted Black-Scholes option pricing model using exercise prices of $2.80 to $7.50, stock price of $2.80, volatility of 70% to 136%, contractual lives of 0.2 to 4.4 years, and risk-free rates of 0.62% to 1.93%.

The following presents activity of the derivative liability determined by Level 3 inputs for the period ended June 30, 2017:

The fair value liability of derivative liability for the six months ended June 30, 2017 was determined using the binomial pricing model using exercise prices of $2.80, stock price of $3.80, volatility of 44%, contractual life of 63 days, and a risk-free rate of 1.03%.

Impairment of Long-Lived Assets

We review all of our long-lived assets for impairment indicators throughout the year and perform detailed testing whenever impairment indicators are present. In addition, we perform detailed impairment testing for indefinite-lived intangible assets, at least annually, at December 31. When necessary, we record charges for impairments. Specifically:

Management determined that no impairment indicators were present and that no impairment charges were necessary as of June 30, 2017March 31, 2018 or December 31, 2016.2017.

Revenue Recognition

The Company has adopted the scope and in accordance with ASC 606,Revenue from Contracts with Customers(ASC 606) commencing the period under report.

The Company analyzes its contracts to assess that they are within the scope and in accordance with ASC 606,Revenue from Contracts with Customers(ASC 606). In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, whether for goods and services or licensing, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

In terms of licensing agreements entered into by the Company, they typically include payment of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply services; and royalties on net sales of licensed products. Each of these payments results in license, collaboration and other revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. The core principle of ASC 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services.

Amounts received prior to satisfying the revenue recognition criteria are recorded as contract liabilities in the Company’s consolidated balance sheets. If the related performance obligation is expected to be satisfied within the next twelve months this will be classified in current liabilities. Amounts recognized as revenue prior to receipt are recorded as contract assets in the Company’s consolidated balance sheets. If the Company expects to have an unconditional right to receive the consideration in the next twelve months, this will be classified in current assets. A net contract asset or liability is presented for each contract with a customer.

At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the performance obligation does not provide the customer with a material right.

The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling prices. The relative selling price for each deliverable is estimated using objective evidence if it is available. If objective evidence is not available, the Company uses its best estimate of the selling price for the deliverable.

Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used. The Company recognizes revenue over time by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input or output method based on the nature of the good or service promised to the customer.

After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception.

Management may be required to exercise considerable judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the stand-alone selling prices of identified performance obligations, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the provisions of ASU 2014-09, entities should recognize revenue in an amount that reflects the consideration to which they expect to be entitled to in exchange for goods and services provided. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017. The Company adopted the provisions of this standard effective January 1, 2018.

Net Income (Loss) per Common Share

Basic net income (loss) per common share (after giving effect of the one for ten reverse stock split) is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period.period, excluding any unvested restricted stock awards. Diluted net income (loss) per share includes the effect of common stock equivalents (stock options, unvested restricted stock, and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. Net income (loss) is adjusted for the dilutive effect of the change in fair value liability for price adjustable warrants, if applicable. The following number of shares have been excluded from diluted net income (loss) since such inclusion would be anti-dilutive:

Subsequent EventsReclassification of Prior Year Presentation

ExceptCertain prior year amounts have been reclassified for the event(s) discussed in Note 9, there were no subsequent events that required recognition or disclosure. The Company evaluated subsequent events through the date the financial statements were issued and filedconsistency with the Securities and Exchange Commission.current year presentation. These reclassifications had no effect on the reported results of operations or cash flows.

Note 2 – Intangible Assets

As part of the Merger, the Company allocated $3,502,829 to goodwill. Additionally, a substantial portion of the assets acquired were allocated to identifiable intangible assets. The fair value of the identifiable intangible asset is determined primarily using the “income approach,” which requires a forecast of all the expected future cash flows.

Acquisition of Assets from SymplmedPrestalia & Dyrct Axess

OnIn June 5, 2017, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Symplmed Pharmaceuticals LLC (“Symplmed”) pursuant to which we purchased from Symplmed, for aggregate consideration of approximately $620,000 (consisting of $300,000 in cash plus the assumption of certain liabilities of Symplmed in the amount of approximately $320,000), Symplmed’s assets relating to a single-pill fixed-dose combinationFDC of perindopril arginine and amlodipine besylate known as Prestalia,Prestalia® (“Prestalia”), that has been approved by the FDA for the treatment of hypertension. In addition, as part of the transactions contemplated by the Purchase Agreement: (i) Symplmed agreed to transfer to us, not later than 150 days following the closing date, the New Drug Applications for the approval of Prestalia as a new drug by the FDA; and (ii) Symplmed assigned to us all of its rights and obligations under that certain Amended and Restated License and Commercialization Agreement by and between Symplmed and Les Laboratoires Servier (“Servier”) dated January 11, 2012, pursuant to which Symplmed has an exclusive license from Servier to manufacture, have manufactured, develop, promote, market, distribute and sell Prestalia in the U.S. (and its territories and possessions) in consideration of regulatory and sales-based milestone payments and royalty payments based on net sales.

Further, we entered into Management has determined that this acquisition was deemed an offer letter with Erik Emerson, the President and Chief Executive Officer of Symplmed, pursuant to which we hired Mr. Emerson to serve as our Chief Commercial Officer, which appointment became effective on June 22, 2017. We also agreed in such offer letter to issue to Mr. Emerson 60,000 restricted shares of our common stockasset purchase under our 2014 Long-Term Incentive Plan, with all of such shares to vest on the six (6) month anniversary of the date of grant.FASB ASC 805.

In furtherance of the acquisition and commercialization of Prestalia, on July 21, 2017 we acquired from Symplmed and its wholly-owned subsidiary, Symplmed Technologies, LLC, certain of the intellectual property assets related to the patented technology platform known as DyrctAxess that offers enhanced efficiency, control and information to empower patients, physicians and manufacturers to help achieve optimal care.

The purchase price of $620,000 has been allocated based on a preliminary estimate of the fair value of the assets acquired and is included in intangible assets as of June 30,December 31, 2017 and is subject to change.

Further, we hired our current Chief Commercial Officer, who was the President and Chief Executive Officer of Symplmed, which appointment became effective in June 2017. We also agreed in such offer letter to issue 60,000 restricted shares of our common stock under our 2014 Long-Term Incentive Plan to our Chief Commercial Officer, with all of such shares vesting on the six (6) month anniversary of the date of grant. These shares were fully vested on December 31, 2017.

In furtherance of the acquisition and commercialization of Prestalia, in July 2017 we acquired from Symplmed and its wholly-owned subsidiary, Symplmed Technologies, LLC, certain of the intellectual property assets related to the patented technology platform known as DyrctAxess, also known as Total Care, that offers enhanced efficiency, control and information to empower patients, physicians and manufacturers to help achieve optimal care for $75,000 in cash.

The following table summarizes the estimated fair value of the identifiable intangible asset acquired, their useful life, and method of amortization:

The net intangible asset was $2,727,273,$2,432,713, net of accumulated amortization of $253,793,$623,353, as of June 30, 2017.March 31, 2018. Amortization expense was $204,604$123,261 and $0$98,378 for the sixthree months ended June 30,March 31, 2018 and 2017, and 2016, respectively.

Note 3 - Related Party Transactions

Due to Related Party

The Company and other related entities have a commonality of ownership and/or management control, and as a result, the reported operating results and /or financial position of the Company could significantly differ from what would have been obtained if such entities were autonomous.

The Company has a Master Services Agreement (“MSA”) with a related party that is partly-owned by the Company’s Executive Chairman and Interim CEO, Autotelic Inc., effective January 1, 2015.November 15, 2016. Autotelic Inc. currently owns less than 10%5% of the Company. The MSA states that Autotelic Inc. will provide business functions and services to the Company and allows Autotelic Inc. to charge the Company for these expenses paid on its behalf. The MSA includes personnel costs allocated based on amount of time incurred and other services such as consultant fees, clinical studies, conferences and other operating expenses incurred on behalf of the Company. The MSA between Marina and Autotelic Inc. was effective on the reverse merger date of November 15, 2016.

During the period commencing January 1, 2015November 15, 2016 (the “Effective Date”) and ending on the date that the Company has completed an equity offering of either common or preferred stock in which the gross proceeds therefrom areis no less than $10,000,000$10 million (the “Equity Financing Date”), the Company shall pay Autotelic the following compensation: cash in an amount equal to the actual labor cost (paid on a monthly basis), plus 100% markup in warrants for shares of the Company’s common stock with a strike price equal to the fair market value of the Company’s common stock at the time said warrants are issued. The Company shall also pay Autotelic for the services provided by third party contractors plus 20% mark up. The warrant price per share iswill be calculated based on the Black-Scholes model.

After the Equity Financing Date, the Company shall pay Autotelic Inc. a cash amount equal to the actual labor cost plus 100% mark up of provided services and 20% mark up of provided services by third party contractors or material used in connection with the performance of the contracts, including but not limited to clinical trial, non-clinical trial, Contract Manufacturing Organizations (“CMO”), FDA regulatory process, Contract Research Organizations (“CRO”) and Chemistry and Manufacturing Controls (“CMC”).

In accordance with the MSA, Autotelic Inc. billed the Company for personnel and service expenses Autotelic Inc. incurred on behalf of the Company. Personnel cost charged by Autotelic Inc. were $243,944 and $77,655 forFor the sixthree months ended on June 30,March 31, 2018 and 2017, and 2016, respectively. For the six months ended June 30, 2017 and 2016, Autotelic Inc. billed a total of $317,044$256,997 and $162,765,$213,103, including personnel costs (above),of $133,633 and $158,140, respectively. TheAn unpaid balance of $277,132$916,270 and $730,629 is recorded asincluded in due to related party in the accompanying balance sheet as of June 30, 2017.March 31, 2018 and December 31, 2017, respectively. The Company agreed to issue warrants at a future date for the remaining balance due of $291,735,$739,772, which is included in accrued expensesdue to related parties as of June 30, 2017.

Convertible Notes Payable

In July 2016, IThena issued convertible promissory notes with an aggregate principal balance of $50,000 to related-party investors. Borrowings under each of these convertible notes bore interest at 3% per annum and these notes mature on June 30,March 31, 2018. Upon the completion of certain funding events, IThena had the right to convert the outstanding principal amount of these notes into shares of the IThena’s common stock. The notes were assumed by Autotelic Inc. on November 15, 2016 as part of its acquisition of the technology asset (IT-101).

Convertible Notes Payable, Dr. Trieu

In connection with the Merger, Marina entered into the Line Letter dated November 15, 2016 with Dr. Trieu,a private placement of our Executive Chairman, for an unsecured line of credit in an amount not to exceed $540,000, to be used for current operating expenses, as described in Note 1 above. Dr. Trieu has advanced the full $540,000 under the Line Letter as of June 30, 2017. Accrued interest on the Line Letter was $12,714 as of June 30, 2017 and is included in convertible notes payable to related parties on the accompanying balance sheets.

Line Letter with Autotelic Inc.

On April 4, 2017, the Company entered into a Line Letter with Autotelic Inc.Series E Convertible Preferred Stock (Preferred Shares), a stockholder of IThenaPharma that became the holder of 5,255,354 shares of Marina common stock as a result of the Merger, and an entity of which Dr. Trieu serves as Chairman of the Board, for an unsecured line of credit in an amount not to exceed $500,000, to be used for current operating expenses. Autotelic Inc. will consider requests for advances under the Line Letter until September 1, 2017. Autotelic Inc. shall have the right at any time for any reason in its sole and absolute discretion to terminate the line of credit available under the Line Letter or to reduce the maximum amount available thereunder without notice; provided, that Autotelic, Inc. agreed thatto convert the entire unpaid balance due to it shall not demand the repayment of any advances that are made under the Line Letter prior to the earlier of: (i) October 4, 2017; and (ii) the date on which (x) we make a general assignment for the benefit of our creditors, (y) we apply for or consents to the appointment of a receiver, a custodian, a trustee or liquidator of all or a substantial part of our assets or (z) we cease operations. Advances made under the Line Letter shall bear interest at the rate of five percent (5%) per annum, shall be evidenced by the Demand Promissory Note issued to Autotelic Inc., and shall be due and payable upon demand by Autotelic, Inc.

The balance under the line was $80,410 as of June 30, 2017March 31, 2018 into shares of Series E Convertible Preferred Stock and is includedwarrants in notes to related parties onfull and complete satisfaction of the accompanying balance sheet.unpaid balance. Also see Note 9 – Subsequent Events below.

Note 4 – Notes Payable

Note Purchase AgreementFollowing is a breakdown of notes payable as of March 31, 2018 and AmendmentDecember 31, 2017:

On June 20, 2016, Marina entered into a Note Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”), pursuant to which Marina issued to the Purchasers unsecured promissory notes in the aggregate principal amount of $300,000 (the “Notes”). Interest shall accrue on the unpaid principal balance of the Notes at the rate of 12% per annum beginning on September 20, 2016. The Notes were due and payable on June 20, 2017, provided, that, upon the closing of a financing transaction that occurs while the Notes are outstanding, each Purchaser shall have the right to either: (i) accelerate the maturity date of the Note held by such Purchaser or (ii) convert the entire outstanding principal balance under the Note held by such Purchaser and accrued interest thereon into Marina’s securities that are issued and sold at the closing of such financing transaction.

As of June 30, 2017, the accrued interest expense on the Notes amounted to $28,300, with a total balance of principal and interest of $328,300.

Subsequent to June 30, 2017, this Purchase Agreement was amended (see Note 9 – Subsequent Events).

Note Payable – Service Provider

OnIn December 28, 2016, we entered into an Agreement and Promissory Note with a law firm for past services performed totaling $121,523. The note calls for monthly payments of $6,000 per month, beginning with an initial payment on March 31, 2017. The note is unsecured and non-interest bearing. The note will be considered paid in full if the Company pays $100,000 by December 31, 2017.2017, which was not paid. The balance due on the note was $109,523$97,523 as of March 31, 2018 and December 31, 2017, respectively.

Note Purchase Agreement and Amendment

In June 30,2016, Marina entered into a Note Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”), pursuant to which Marina issued to the Purchasers unsecured promissory notes in the aggregate principal amount of $300,000 (the “Notes”). Interest accrued on the unpaid principal balance of the Notes at the rate of 12% per annum beginning on September 20, 2016. The Notes were due and payable on June 20, 2017.

In July 2017, we entered into an amendment agreement (the “Amendment Agreement”) with respect to those Notes and the warrants to purchase shares of our common stock that are currently held by the Purchasers and that were originally issued pursuant to a certain Note and Warrant Purchase Agreement dated as of February 10, 2012 by and among Marina, MDRNA Research, Inc., Cequent Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto (as amended from time to time), to, among other things, extend the maturity date of the Notes to December 31, 2017, issuance of consideration securities at a cost of $375,000 (“Consideration Securities”) and to extend the price protection applicable to certain of the warrants held by the Purchasers with respect to dilutive offerings afforded thereunder to February 10, 2020. Refer to our Form 10-Q for the six months ended June 30, 2017 for a more detailed discussion and additional terms for these Notes.

As of March 31, 2018 and December 31, 2017, the accrued interest expense on the Notes amounted to $55,700 and $46,700, respectively, with a total balance of principal and interest of $355,700 and $346,700, respectively.

The unpaid principal balance of the Notes, together with accrued and unpaid interest thereon, as well as the $375,000 of Consideration Securities converted into shares of Series E Convertible Preferred Stock and warrants to purchase shares of common stock upon the closing of our private placement of Series E Convertible Preferred Stock and warrants in April 2018. As a result of the conversion of the Notes, all obligations of the Company to the Purchasers thereunder have been satisfied and the Notes are no longer outstanding. Also see Note 9 – Subsequent Events below .

Bridge Note Financing

OnIn June 1, 2017, we issued convertible promissory notes (the “Notes”) in the aggregate principal amount of $400,000 to 10 investors pursuant to a Note Purchase Agreement (the “Note Purchase Agreement”) that we entered into with such investors. The Notes bear interest at a rate of five percent (5%) per annum and are due and payable at any time on or after the earlier of (i) June 1, 2018 and (ii) the occurrence of an event of default (as defined in the Note Purchase Agreement). Our Executive Chairman and our Chief Science Officer were each investors in the Notes.

Upon written notice delivered to us by the holders of a majority in interest of the aggregate principal amount of Notes that are outstanding at the time of such calculation (the “Majority Holders”) not more than five (5) days following the maturity date of the Notes, the Majority Holders shall have the right, but not the obligation, on behalf of themselves and all other holders of Notes, upon written notice delivered to us, to elect to convert the entire unpaid principal amount of all, but not less than all, of the Notes and the accrued and unpaid interest thereon into such number of shares of our common stock as is equal to, with respect to each Note: (x) the entire unpaid principal amount of such Note and the accrued and unpaid interest thereon on the date of the delivery of such notice by (y) $3.50.

As of June 30,March 31, 2018 and December 31, 2017, the accrued interest expense on the Notes amounted to $1,283,$16,297 and $11,365, with a total balance of principal and interest of $401,283.$416,297 and $411,365, respectively, and is included in convertible notes payable – related parties on the accompanying balance sheet.

The unpaid principal balance of the Notes, together with accrued and unpaid interest thereon, converted into shares of Series E Convertible Preferred Stock and warrants to purchase shares of common stock upon the closing of our private placement of Series E Convertible Preferred Stock and warrants in April 2018. As a result of the conversion of the Notes, all obligations of the Company to the holders of the Notes thereunder have been satisfied and the Notes are no longer outstanding. Also see Note 9 – Subsequent Events below.

Convertible Notes Payable

In July 2016, IThena issued convertible promissory notes with an aggregate principal balance of $50,000 to certain related-party investors. Borrowings under each of these convertible notes bore interest at 3% per annum and these notes mature on June 30, 2018. Upon the completion of certain funding events, IThena had the right to convert the outstanding principal amount of these notes into shares of IThena’s common stock. The notes were assumed by Autotelic Inc. on November 15, 2016 as part of its acquisition of the technology asset (IT-101).

InNovember 2017, the Company issued a convertible promissory note with a related party for $500,000, with annual interest at 8%, maturing on March 31, 2018, and convertible at the price equal to any financing transaction involving the sale by the Company of its equity securities yielding aggregate gross proceeds to the Company of not less than $5 million. Total principal and interest was $514,137 and $504,274 as of March 31, 2018 and December 31, 2017, respectively, and is included in convertible notes to related parties on the accompanying balance sheet. The note included warrants to purchase 66,667 shares of the Company’s common stock, with a 5-year term and an exercise price of $0.75  . The note included a debt discount of $162,210 consisting of loan costs of $50,000 and the fair value of the warrants of $112,210. Total amortization of this debt discount was $113,171 for the quarter ended March 31, 2018, with a remaining unamortized value of $0. The net balance of the note of $514,137 is included in convertible notes to related parties on the accompanying balance sheet at March 31, 2018.

The unpaid principal balance of the related party note, together with accrued and unpaid interest thereon, automatically converted into shares of Series E Convertible Preferred Stock and Warrants to purchase shares of common stock upon the closing of our private placement of Series E Convertible Preferred Stock and warrants in April 2018. As a result of the conversion of the related party note, all obligations of the Company to the holder under such note have been satisfied and the note is no longer outstanding. Also see Note 9 – Subsequent Events below.

Convertible Notes Payable, Dr. Trieu

In connection with the Merger, Marina entered into a Line Letter dated November 15, 2016 with Dr. Trieu, our Executive Chairman and Interim CEO, for an unsecured line of credit in an amount not to exceed $540,000, to be used for current operating expenses. Dr. Trieu has advanced the full $540,000 under the Line Letter as of December 31, 2017. Accrued interest on the Line Letter was $32,568 and $25,836 as of March 31, 2018 and December 31, 2017, respectively, and is included in convertible notes payable to related parties on the accompanying balance sheets. The line of credit is currently convertible at any time into shares of the Company’s common stock at a price of $1.77 per share.

The unpaid principal balance of the line of credit, together with accrued and unpaid interest thereon, converted into shares of Series E Convertible Preferred Stock and Warrants to purchase shares of common stock upon the closing of our private placement of Series E Convertible Preferred Stock and warrants in April 2018, as discussed in the Note 9. As a result of the conversion of the line of credit, all obligations of the Company to Dr. Trieu thereunder have been satisfied and the line of credit is no longer outstanding.

Line Letter with Autotelic Inc.

InApril 2017, the Company entered into a Line Letter with Autotelic Inc for an unsecured line of credit in an amount not to exceed $500,000, to be used for current operating expenses. Autotelic Inc. is. a stockholder of IThenaPharma that became the holder of 525,535 shares of Marina common stock as a result of the Merger, and an entity of which Dr. Trieu serves as Chairman of the Board. Autotelic Inc. was to consider requests for advances under the Line Letter until September 1, 2017. Autotelic Inc. shall have the right at any time for any reason in its sole and absolute discretion to terminate the line of credit available under the Line Letter or to reduce the maximum amount available thereunder without notice. Advances made under the Line Letter bear interest at the rate of five percent (5%) per annum, are evidenced by the Demand Promissory Note issued to Autotelic Inc., and are due and payable upon demand by Autotelic, Inc. Autotelic Inc. advanced funds after September 1, 2017 but is no longer considering additional requests for advances as of December 31, 2017.

The balance under the line was $94,782, including accrued interest of $3,966 as of March 31, 2018, and is included in notes to related parties on the accompanying balance sheet. Since this line was not extended, no further funds are available under this line of credit.

The unpaid principal balance of the line of credit, together with accrued and unpaid interest thereon, converted into shares of Series E Convertible Preferred Stock and warrants to purchase shares of common stock upon the closing of our private placement of Series E Convertible Preferred Stock and warrants in April 2018, as discussed in the Note 9. As a result of the conversion of the line of credit, all obligations of the Company to Autotelic Inc. thereunder have been satisfied and the line of credit is no longer outstanding.

Note 5 – Stockholders’ Equity

Preferred Stock

Marina designated 1,000 shares as Series B Preferred Stock (“Series B Preferred”) and 90,000 shares as Series A Junior Participating Preferred Stock (“Series A Preferred”). No shares of Series B Preferred or Series A Preferred are outstanding. In March 2014, Marina designated 1,200 shares as Series C Convertible Preferred Stock (“Series C Preferred”). In August 2015, Marina designated 220 shares as Series D Convertible Preferred Stock (“Series D Preferred”).

In August 2015,April 2018, Marina entered into a Securities Purchase Agreement with certain investors pursuant to which Marina sold 220designated 3,500 shares of Series DE Convertible Preferred and warrants to purchase up to .344 million shares of Marina’s common stock at an initial exercise price of $4.00 per share before August 2021, for an aggregate purchase price of $1.1 million. Marina incurred $0.01 million of stock issuance costs in conjunction with the Stock,

Series DC Preferred which were netted against the proceeds. The warrants issued in connection with Series D Preferred contain an exercise price protection provision whereby the exercise price per share to purchase common stock covered by these warrants is subject to reduction in the event of certain dilutive stock issuances at any time within two years of the issuance date, but not to be reduced below $2.80 per share. Any such adjustment will not result in the issuance of any additional shares of Marina’s common stock. Each share of Series D Preferred has a stated value of $5,000 per share and is convertible into shares of common stock at a conversion price of $4.00 per share. The Series D Preferred is initially convertible into an aggregate of 275,000 shares of Marina’s common stock, subject to certain limitations and adjustments, has a 5% stated dividend rate, is not redeemable and has voting rights on an as-converted basis.

To account for the issuance of the Series D Preferred and warrants, Marina first assessed the terms of the warrants and determined that, due to the exercise price protection provision, they should be recorded as derivative liabilities. Marina determined the fair value of the warrants on the issuance date and recorded a liability and a discount of $0.6 million on the Series D Preferred resulting from the allocation of proceeds to the warrants. Marina then determined the effective conversion price of the Series D Preferred which resulted in a beneficial conversion feature of $0.7 million. The beneficial conversion feature was recorded as both a debit and a credit to additional paid-in capital and as a deemed dividend on the Series D Preferred in determining net income applicable to common stock holders in the consolidated statements of operations.

Each share of Series C Preferred has a stated value of $5,000 per share, has a $5,100 liquidation preference per share, has voting rights of 666.67 votes per share, and is convertible into shares of common stock at a conversion price of $7.50 per share. In June 2015, an investor converted 90 shares of Series C Preferred into 60,000 shares of common stock with a value of $5.40 per share. In November 2015, an investor converted an additional 90 shares of Series C Preferred into 60,000 shares of common stock with a value of $3.10 per share. Also inIn September 2017, an investor converted 270 shares of Series C Preferred stock into 180,000 shares of our common stock.

Series D Preferred

In August 2015, Marina entered into a Securities Purchase Agreement with certain investors pursuant to which Marina sold 220 shares of Series D Preferred and warrants to purchase up to 344,000 shares of Marina’s common stock at an initial exercise price of $4.00 per share before August 2021, for an aggregate purchase price of $1.1 million. Each share of Series D Preferred has a stated value of $5,000 per share, has a liquidation preference of $300 per share, has voting rights of 1,250 votes per share and is convertible into shares of common stock at a conversion price of $4.00 per share. The Series D Preferred is initially convertible into an aggregate of 275,000 shares of Marina’s common stock, subject to certain limitations and adjustments, has a 5% stated dividend rate, is not redeemable and has voting rights on an as-converted basis. In November 2015, an investor converted 50 shares of Series D Preferred into 62,500 shares of common stock with a value of $2.80 per share.

stock. In February 2016, an investor converted 110 shares of Series D Preferred into 137,500 shares of common stock with a value of $1.50 per share.stock.

Common StockSeries E Convertible Preferred Shares

Holders

In connection with a private placement, in April 2018 we created a new Series E Convertible Preferred Stock (Preferred Shares). Also see Note 9 – Subsequent Events below.

Each share of our common stock are entitled to one vote for eachSeries E Convertible Preferred Stock has a stated value of $5,000 per share held of record on all matters submitted to a vote of the holders of our common stock. Subject to the rights of the holders of any class of our capital stock having any preference or priority over our common stock, the holders of our common stock are entitled to receive dividends that are declared by our board of directors out of legally available funds. In the event of our liquidation, dissolution or winding-up, the holdersand is convertible into shares of common stock are entitled to share ratably in our net assets remaining after paymentat a conversion price of liabilities, subject to prior rights$0.50 per share. In connection with the private placement, we issued 3,500 Preferred Shares for cash and settlement of preferred stock, if any, then outstanding. Our common stock has no preemptive rights, conversion rights, redemption rights or sinking fund provisions,certain debt and there are no dividends in arrears or default. All shares of our common stock have equal distribution, liquidation and voting rights, and have no preferences or exchange rights. liabilities.

Common Stock

Our common stock currently trades on the OTCQB tier of the OTC Markets.Markets under the symbol “MRNA”.

Reverse Stock SplitIssuances

On August 1, 2017, we filed a Certificate of Amendment of our Amended and Restated Certificate of Incorporation to effect a one-for-ten reverse split of ourWe issued and outstandingno shares of common stock. Our common stock commenced trading on the OTCQB tier of the OTC Markets on a split-adjusted basis on Thursday, August 3, 2017. There will be no change to the authorized shares of our common stock as a result of the reverse split. No fractional shares shall be issued in connection with the reverse split; any fraction of a share of common stock that would otherwise have resulted from the reverse split shall be rounded up to the nearest whole share of common stock. Unless indicated otherwise, all share and per share information included in these financial statements give effect to the reverse split.

Stock Issuances

In February 2017, we entered into two privately negotiated transactions pursuant to which we issued an aggregate of 615,368 shares of our common stock for an effective price per share of $2.90 to settle aggregate liability of approximately $948,000, which is reflected in accrued expenses as of December 31, 2016.

In February 2017, we issued 30,000 shares of our common stock with a fair value of $1.80 per share to a consultant providing investment advisory services.

In February 2017, we issued 10,000 restricted shares of our common stock with a fair value of $1.40 per share to our CEO for services.

On February 6, 2017, we entered into a Stock Purchase Agreement with LipoMedics, a related party, pursuant to which we issued to LipoMedics an aggregate of 86,207 shares of our common stock for a total purchase price of $250,000.

On March 31, 2017, we entered into a Settlement Agreement, whereby a note receivable for $45,000 was settled with a cash payment by the note holder to the Company of $14,049, the surrender of 6,000 warrants, and the surrender of 8,725 shares of common stock held by the noteholder, which were cancelled effective March 31, 2017.

On April 13, 2017, the Company entered into a Compromise and Release Agreement to settle $36,047 due to a service provider for $15,957 in cash and $20,090 of the Company’s common stock at $2.90 per share (for a total issuance of 6,928 shares). The Company issued 6,928 shares toduring the service provider in May 2017.three months ended March 31, 2018.

We entered into an offer letter with Erik Emerson, the President and Chief Executive Officer of Symplmed, pursuant to which we hired Mr. Emerson to serve as our Chief Commercial Officer, which appointment became effective on June 22, 2017. We also agreed in such offer letter to issue to Mr. Emerson 60,000 restricted shares of our common stock under our 2014 Long-Term Incentive Plan, with all of such shares to vest on the six (6) month anniversary of the date of grant. These shares were issued in June 2017.

Warrants

As of June 30, 2017,March 31, 2018, there were 2,492,9452,548,481 warrants outstanding, with a weighted average exercise price of $4.40$3.95 per share, and annual expirations as follows:

On May 21,The above includes price adjustable warrants totaling 1,895,013 which are described more fully in our 2017 the holders of warrants to purchase 60,944 shares of our common stock at an exercise price of $2.80 per share exercised such warrants, yielding aggregate gross proceeds to us of $170,643.Annual Report on Form 10-K.

A total of 149,11111,131 warrants expired in May 2017.during the three months ended March 31, 2018.

Note 6 — Stock Incentive Plans

Stock Options

Stock option activity was as follows:

The following table summarizes additional information on Marina’s stock options outstanding at June 30, 2017:March 31, 2018:

Weighted-Average Exercisable Remaining Contractual Life (Years) 4.834.44

In January 2017,2018, the Company granted a total of 48,60019,000 stock options to directors and officers for services. One-half of the options vest immediately and one-half of the options vest on the one year anniversary of the grant date. The options have an exercise price of $1.70$1.56 and a five-year term.

In February 2017, the Company granted a totalAs of 16,000 stock options to key employees for services. The options vest on the one-year anniversary of the grant date, have an exercise price of $1.80, and have a five-year term.

At June 30, 2017,March 31, 2018, we had $36,573$830,621 of total unrecognized compensation expense related to unvested stock options. Total expense related to stock options was $59,568$118,879 for the sixthree months ended June 30, 2017.March 31, 2018.

At June 30, 2017,As ofMarch 31, 2018, the intrinsic value of options outstanding or exercisable was $201,100$5,600 as there were 101,80014,000 options outstanding with an exercise price less than $2.80,$1.40, the per share closing market price of our common stock at that date.

Note 7 — Intellectual Property and Collaborative Agreements

Novosom Agreements

In July 2010, Marina entered into an agreement with Novosom Verwaltungs GmbH (“Novosom”), pursuant to which Marina acquired intellectual property for Novosom’s SMARTICLES-based liposomal delivery system. In February 2016, Marina issued Novosom .021 million20,548 shares of common stock valued at $0.06 millionapproximately $58,000 as additional consideration under such agreement.

In March 2016, Marina entered into a license agreement covering certain of Marina’s platforms for the delivery of an undisclosed genome editing technology. Under the terms of the agreement, Marina received an upfront license fee of $0.25 million$250,000 and could receive up to $40 million in success-based milestones. In April 2016, Marina issued Novosom 0.047 million47,468 shares of common stock valued at $0.075 millionapproximately $75,000 for amounts due under this agreement.

In July 2016, Marina entered into a license agreement with an undisclosed licensee that grants such licensee rights to use Marina’s technology and intellectual property to develop and commercialize products combining certain molecules with Marina’s liposomal delivery technology known as NOV582. Under the terms of this agreement, the licensee agreed to pay to us an upfront license fee in the amount of $0.35 million$350,000 (to be paid in installments through the end of 2017), along with milestone payments on a per-licensed-product basis and royalty payments in the low single digit percentages. As of September 30, 2016, Marina had received $0.05 million$50,000 per the terms of this license agreement. In November 2016, we issued 0.012 million11,905 shares with a value of $0.015 million$15,000 to Novosom as the equity component owed under Marina’s July 2016 license agreement.

In May 2018, we issued to Novosom 51,988 shares of our common stock as additional consideration pursuant to the Asset Purchase Agreement, dated as of July 27, 2010, between our company and Novosom. Such shares were due to Novosom as a result of the receipt by our company of a license fee under the License Agreement that we entered into with Lipomedics Inc. in February 2017.

Arrangements with LipoMedics

OnIn February 6, 2017, we entered into a License Agreement (the “License Agreement”) with LipoMedics, Inc., a related party (“LipoMedics”), pursuant to which, among other things, we provided to LipoMedics a license to our SMARTICLES platform for further development of Lipomedics’s proprietary phospholipid nanoparticles that can deliver protein, small molecule drugs, and peptides. These are not currently being developed at Marina Biotech and Marina Biotech has no IP around these products. On the same date, we also entered into a Stock Purchase Agreement with LipoMedics pursuant to which we issued to LipoMedics an aggregate of 86,207 shares of our common stock for a total purchase price of $250,000.

Under the terms of the License Agreement, we could receive up to $90 million in success-based milestones based on commercial sales of licensed products. In addition, if LipoMedics determines to pursue further development and commercialization of products under the License Agreement, LipoMedics agreed, in connection therewith, to purchase shares of our common stock for an aggregate purchase price of $500,000, with the purchase price for each share of common stock being the greater of $2.90 or the volume weighted average price of our common stock for the thirty (30) trading days immediately preceding the date on which LipoMedics notifies us that it intends to pursue further development or commercialization of a licensed product.

If LipoMedics breaches the License Agreement, we shall have the right to terminate the License Agreement effective sixty (60) days following delivery of written notice to LipoMedics specifying the breach, if LipoMedics fails to cure such material breach within such sixty (60) day period. LipoMedics may terminate the License Agreement by giving thirty (30) days’ prior written notice to us.

Vuong Trieu, Ph.D., our Executive Chairman and Interim CEO, is the Chairman of the Board and Chief Operating Officer of LipoMedics.

In consideration Lipomedics agreed to the following fee schedule: 1) Evaluations License Fee. Simultaneous with the execution and delivery of the License Agreement, Lipomedics shall enter into a Stock Purchase Agreement in form and substance reasonably acceptable to Marina and Lipomedics, pursuant to which Marina will sell to Lipomedics shares of the common stock of Marina for an aggregate purchase price of $250,000,$0.25 million, with the purchase price for each share of Marina common stock being $2.90. 2) Commercial License Fee. Unless the License Agreement is earlier terminated, within thirty (30) days following Lipomedics’s delivery of an Evaluation Notice advising that it intends to pursue, or cause to be pursued, further development and commercialization of Licensed Products. 3) For up to and including three Licensed Products, Lipomedics shall pay to Marina a milestone (collectively the “Sales Milestones”) of Ten Million Dollars ($10,000,000)$10 million upon reaching Commercial Sales in the Territory in any given twelve month period equal to or greater than Five Hundred Million Dollars ($500,000,000)$500 million for a given Licensed Product and of Twenty Million Dollars ($20,000,000)$20 million upon reaching Commercial Sales in any given twelve month period equal to or greater than One Billion Dollars ($1,000,000,000)$1 million for such Licensed Product, such payments to be made within thirty (30) days following the month in which such Commercial Sale targets are met.

Arrangements with Oncotelic Inc.

In July 2017, we entered into a License Agreement (the “License Agreement”) with Oncotelic, Inc. (“Oncotelic”) pursuant to which, among other things, we provided to Oncotelic a license to our SMARTICLES platform for the delivery of antisense DNA therapeutics, as well as a license to our conformationally restricted nucleotide (“CRN”) technology with respect to TGF-Beta. Under the terms of the License Agreement, Oncotelic also agreed to purchase 49,019 shares of our common stock for an aggregate purchase price of $0.25 million ($5.10 per share), with such purchase and sale to be made pursuant to a Stock Purchase Agreement to be entered into between us and Oncotelic within thirty (30) days following the date of the License Agreement. Oncotelic has not completed the purchase of the stock and we have not been able to reach to a definitive agreement, as such we have terminated the agreement.

License of DiLA² Assets

On March 16, 2018, Marina entered into a Licensing Agreement, whereby Marina granted exclusive rights to the company’s DiLA²delivery system in exchange for an upfront payment of $200,000 and further potential future consideration dependent upon event and sales-based milestones. Under the terms of the agreement, Marina has agreed to assign ownership of the intellectual property associated with the DiLA² delivery system to the purchaser. The Company has yet to complete certain performance obligations under the agreement and accordingly has deferred the recognition of revenue from the sale of the asset until such obligations are fulfilled.   

Asset Purchase Agreement

In July 2017, Marina entered into an Asset Purchase Agreement with Symplmed Pharmaceuticals LLC and its wholly-owned subsidiary Symplmed Technologies, LLC pursuant to which the Company purchased from the Sellers, for an aggregate purchase price of $75,000 in cash, certain specified assets of the Sellers relating to the Sellers’ patented technology platform known as DyrctAxess that offers enhanced efficiency, control and information to empower patients, physicians and manufacturers to help achieve optimal care  (see Note 2).

Note 8 – Commitments and Contingencies

LitigationAmendment to Agreement with Windlas Healthcare Private Limited

On August 17, 2017, we entered into an amendment (the “Amendment”) of that certain Pharmaceutical Development Agreement dated as of March 30, 2017 by and between Windlas Healthcare Private Limited (“Windlas”) and our company (the “Development Agreement”), relating to the development by Windlas of certain pharmaceutical products to be used for conducting clinical trials or for regulatory submissions, as more fully described therein. Pursuant to the Amendment, we and Windlas agreed to amend the Development Agreement to reflect our agreement to issue to Windlas, and Windlas’ agreement to accept from us, in lieu of cash payments with respect to forty percent (40%) of the total amount reflected on invoices sent from time to time by Windlas to us, shares of our common stock having an aggregate value equal to forty percent (40%) of such invoiced amount (with the remaining portion of the invoiced amount being paid in cash). The maximum value of common stock that may be issued to Windlas pursuant to the Development Agreement (as modified by the Amendment) is $2 million. The parties also agreed that the foregoing payment arrangement would apply to any Contract Manufacturing and Supply Agreement (or similar agreement) relating to the manufacturing of commercial batches of the products covered by the Development Agreement that may be entered into between the parties.

Litigation

Because of the nature of the Company’sour activities, the Company iswe are subject to claims and/or threatened legal actions, which arise out of the normal course of business. Management is currentlyOther than the disclosure below, as of the date of this filing, we are not aware of any pending lawsuits.lawsuits against us, our officers or our directors.

We had been named on a complaint filed in New York State as a defendant in the matter entitledVaya Pharma, Inc. v. Symplmed Technologies, Inc., Symplmed Pharmaceuticals, Inc., Erik Emerson and Marina Biotech, Inc. While this complaint had been filed in the Supreme Court of the State of New York, we had not been legally served. The complaint alleged, in relevant part, that: (i) the sale by Symplmed Pharmaceuticals, Inc. of its assets related to its Prestalia product, and the sale by Symplmed Technologies, Inc. of its assets related to its DyrctAxess platform, should be set aside pursuant to New York law as they were consummated without fair consideration to the sellers (the “Symplmed Defendants”), and thereby had the effect of fraudulently depriving the creditors of the Symplmed Defendants, including Vaya Pharma, Inc., of funds that could have been used to pay their debts; and (ii) we were liable, as successor, for any and all claims by Vaya Pharma, Inc. against the Symplmed Defendants, though pursuant to the agreement we are only contractually responsible for liabilities that accrue after the parties entered into the agreement for Prestalia and any liabilities that existed prior to the agreement are contractually held by Symplmed. In April 2018, we entered into a Stipulation of Settlement requiring us to issue to Vaya Pharma shares of our common stock with a fair value of $250,000, which shares were issued in the second fiscal quarter of 2018. We accrued $250,000, as of March 31, 2018 and December 31, 2017, respectively, and such amount was included in accrued expenses on the accompanying consolidated balance sheets.

Note 9 - Subsequent Events

Amendment of NotesExcept for the event(s) discussed in this Note 9, there were no subsequent events that required recognition or disclosure. The Company evaluated subsequent events through the date the financial statements were issued and Warrantsfiled with the Securities and Exchange Commission.

Series E Convertible Preferred Share Private Placement Offering

On July 3, 2017,In April and May 2018, we entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 2,812shares of our Series E convertible preferred stock (the “Preferred Stock”), at a purchase price of $5,000 per share of Preferred Stock. Each share of Preferred Stock is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5-year warrant (the “Warrants”, and collectively with the Preferred Stock, the “Securities”) to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Preferred Stock purchased by such investor at an amendmentexercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. The Preferred Stock has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in April 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations.

We received proceeds of approximately $12 million from the sale of the Securities, after deducting placement agent fees and estimated expenses payable by us of approximately $2 million associated with such closing. We intend to use the proceeds of the offering for funding our commercial operations to the sale and promotion of our Prestalia product, working capital needs, capital expenditures, the repayment of certain liabilities and other general corporate purposes. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 2,958,460 shares of our common stock.

Stipulation of Settlement

As discussed in Note 8, in April 2018, we entered into a Stipulation of Settlement requiring us to issue Vaya Pharma shares of our common stock with a fair value of $250,000, which shares were issued in the second fiscal quarter of 2018. We accrued $250,000, as of March 31, 2018 and December 31, 2017, respectively, and such amount is included in accrued expenses on the accompanying consolidated balance sheets.

Resignation of Officer and Directors

In May 2018, the Board accepted the resignation of Joseph W. Ramelli, our Chief Executive Officer, whereby Mr. Ramelli resigned as an officer of our company, and as a director and/or officer of any and all subsidiaries of our company, effective immediately, to pursue other opportunities. In connection with his resignation, Mr. Ramelli released us from all claims arising prior to the date of his resignation and affirmed his obligations to be bound by the restrictive covenants contained in the employment agreement (the “Amendment Agreement”between Mr. Ramelli and our company dated February 2, 2017, and we: (i) agreed to make severance payments to Mr. Ramelli in the amount of $60,000 to be paid over a six (6) month period; and (ii) granted to Mr. Ramelli fully-vested options, exercisable for a period of five years from the grant date, to purchase up to 100,000 shares of our common stock at an exercise price equal to $0.98 per share of common stock. In May 2018, the Board appointed Vuong Trieu, our Executive Chairman, to serve as our Interim Chief Executive Officer, to replace Mr. Ramelli, effective immediately. In his capacity as Interim Chief Executive Officer, Dr. Trieu shall receive a salary in the amount of $20,000 per month.

In May 2018, each of Philip C. Ranker and Philippe P. Calais, Ph.D. resigned as members of the Board, and all committees thereof, effective immediately. In connection with their resignations: (i) each of Mr. Ranker and Dr. Calais released us from all claims arising prior to the date of his resignation; (ii) we granted to Mr. Ranker fully-vested options to purchase up to 200,000 shares of our common stock at an exercise price equal to $0.98 per share of common stock; and (iii) we granted to Dr. Calais fully-vested options to purchase up to 80,000 shares of our common stock at an exercise price equal to $0.98 per share of common stock. The foregoing options are exercisable for a period of five years from the grant date.

Issuance of Preferred Stock and Warrants to Directors

In April 2018, and in connection with the closing of our private placement on that date, we entered into Compromise and Settlement Agreements with four of the current members of our Board of Directors and one former member of our Board of Directors pursuant to which we agreed to issue to such directors an aggregate of 58.25 shares of Preferred Stock and Warrants to purchase up to 436,875 shares of common stock to satisfy accrued and unpaid fees owed to such directors for service as members of the Board of Directors during the period ending on December 31, 2017 in the aggregate amount of approximately $291,250. The Securities that were issued to the directors, which were issued upon the closing of our private placement described above, have the same terms and conditions as the Securities that were issued to investors in the offering.

Issuance of Securities to June 2016 Noteholders

In April 2018, and in connection with the closing of our private placement on that date, we issued to the holders (such holders, the “June 2016 Noteholders”) with respect toof those certain promissory notes in the aggregateoriginal principal amount of $300,000 (each a “Note” and collectively the “Notes”) that we issued to two accredited investors (the “Purchasers”) pursuant to that certain Note Purchase Agreement dated June 20, 2016 by and among usour company and the PurchasersJune 2016 Noteholders (the “Purchase Agreement”“2016 Notes”), an aggregate of 71.46 shares of Preferred Stock and those certain warrantsWarrants to purchase up to 535,950 shares of common stock as a result of the conversion of the 2016 Notes. As a result of the conversion of the 2016 Notes and the issuance of the Securities to the June 2016 Noteholders, the entire unpaid principal balance of the 2016 Notes, and the accrued and unpaid interest thereon, has been satisfied in full, and such notes are no longer outstanding.

In addition, in April 2018, and in connection with the closing of our private placement on that date, we issued to the June 2016 Noteholders an aggregate of 951,26375 shares of Preferred Stock and Warrants to purchase up to 562,500 shares of common stock in full and complete satisfaction of our obligations to issue $375,000 worth of “Consideration Securities” to the 2016 Noteholders pursuant to that certain amendment agreement dated July 3, 2017 by and among our company and the June 2016 Noteholders.

Issuance of Securities to June 2017 Noteholders

In April 2018, and in connection with the closing of our private placement on that date, we issued to the holders of those certain promissory notes in the original principal amount of $400,000 (the “2017 Notes”) that we issued to select accredited investors (the “June 2017 Noteholders”) pursuant to Note Purchase Agreements that we entered into with the June 2017 Noteholders during June 2017 an aggregate of 83.44 shares of Preferred Stock and Warrants to purchase up to 625,800 shares of common stock as full and complete satisfaction of the unpaid principal balance (and accrued but unpaid interest thereon) owed by us to the June 2017 Noteholders under the 2017 Notes. As a result of the conversion of the 2016 Notes and the issuance of the Securities to the June 2016 Noteholders, the entire unpaid principal balance of the 2016 Notes, and the accrued and unpaid interest thereon, has been satisfied in full, and such notes are no longer outstanding. The Securities that were issued to the June 2017 Noteholders have the same terms and conditions as the Securities that were issued to investors in the offering.

Issuance of Securities to Blech Trust

In April 2018, and in connection with the closing of our private placement on that date, we issued to a trust affiliated with Isaac Blech, a member of our Board of Directors, an aggregate of 103.18 shares of Preferred Stock and Warrants to purchase up to 777,750 shares of common stock as a result of the conversion of that certain secured convertible promissory note in the original principal amount of $500,000 that we issued to such investor on November 22, 2017 (the “Blech Note”). As a result of the conversion of the Blech Note and the issuance of the Securities to the holder thereof, the entire unpaid principal balance of the Blech Notes, and the accrued and unpaid interest thereon, has been satisfied in full, and the Blech Note is no longer outstanding. The Securities that were issued to the holder of the Blech Note have the same terms and conditions as the Securities that were issued to investors in the offering.

Issuance of Securities to Satisfy Lines of Credit

In April 2018, and in connection with the closing of our private placement on that date, we issued to Vuong Trieu, Ph.D., our Executive Chairman, 114.63 shares of Preferred Stock and Warrants to purchase up to 859,725 shares of common stock as full and complete satisfaction of the unpaid principal balance (and accrued but unpaid interest thereon) owed by us to Dr. Trieu under that certain line of credit in the amount of up to $540,000 that was provided by Dr. Trieu to us, all of which had been drawn down as of the date of the closing of our private placement. The line of credit was extended pursuant to a Line Letter dated November 15, 2016 by and between us and Dr. Trieu. The Securities that were issued to Dr. Trieu have the same terms and conditions as the Securities that were issued to investors in the offering.

In April 2018, and in connection with the closing of our private placement on that date, we issued to Autotelic Inc. 19 shares of Preferred Stock and Warrants to purchase up to 142,500 shares of common stock as full and complete satisfaction of the unpaid principal balance (and accrued but unpaid interest thereon) owed by us to Autotelic Inc. under that certain line of credit in the amount of up to $500,000 that was provided by Autotelic Inc. to us, of which $90,816 had been drawn down as of the date of the closing described above. The line of credit was extended pursuant to a Line Letter dated April 4, 2017 by and between us and Autotelic Inc. Vuong Trieu, our Executive Chairman and Interim CEO, serves as Chairman of the Board of Autotelic Inc. The Securities that were issued to Autotelic Inc. have the same terms and conditions as the Securities that were issued to investors in the offering.

Issuance of Securities for Payables

In April 2018, and in connection with the closing of our private placement on that date, we entered into a Compromise and Settlement Agreement with Autotelic Inc. pursuant to which we agreed to issue to Autotelic Inc. an aggregate of 162.59 shares of Preferred Stock and Warrants to purchase up to 2,564,465 shares of common stock to satisfy accrued and unpaid fees in the aggregate amount of approximately $812,967, and other liabilities, owed to Autotelic Inc. as of March 31, 2018 pursuant to that certain Master Services Agreement dated as of November 15, 2016 by and between our company and Autotelic Inc. Vuong Trieu, our Executive Chairman and Interim CEO, serves as Chairman of the Board of Autotelic Inc. The Securities that were issued to Autotelic Inc., which were issued upon the closing described above, have the same terms and conditions as the Securities that were issued to investors in the offering.

Stock Issuance to Novosom

In May 2018, we issued to Novosom Verwaltungs GmbH (“Novosom”) 51,988 shares of our common stock that were originally issuedas additional consideration pursuant to that certain Note and Warrant Purchase Agreement dated as of February 10, 2012 by and among Marina, MDRNA Research, Inc., Cequent Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto (as amended from time to time), that are currently held by the Purchasers, and that were amended concurrently with the Purchase Agreement to, among other things, extend the price protection with respect to dilutive offerings afforded thereunder to June 19, 2017 (such warrants, as so amended, the “Amended Prior Warrants”).

Pursuant to the Amendment Agreement, among other things:

Arrangements with Oncotelic Inc.

On July 17, 2017, we entered into a License Agreement (the “License Agreement”) with Oncotelic, Inc. (“Oncotelic”) pursuant to which, among other things, we provided to Oncotelic a license to our SMARTICLES platform for the delivery of antisense DNA therapeutics, as well as a license to our conformationally restricted nucleotide (“CRN”) technology with respect to TGF-Beta. Under the terms of the License Agreement, Oncotelic also agreed to purchase 49,019 shares of our common stock for an aggregate purchase price of $250,000 ($5.10 per share), with such purchase and sale to be made pursuant to a Stock Purchase Agreement to be entered into between us and Oncotelic within thirty (30) days following the date of the License Agreement.

Under the terms of the License Agreement, we could receive up to $90 million in success-based milestones based on commercial sales of licensed products. In addition, if Oncotelic determines to pursue further development and commercialization of products under the License Agreement, Oncotelic agreed, in connection therewith, to purchase shares of our common stock for an aggregate purchase price of $500,000, with the purchase price for each share of common stock being the greater of $5.10 or the volume weighted average price of our common stock for the thirty (30) trading days immediately preceding the date on which Oncotelic notifies us that it intends to pursue further development or commercialization of a licensed product.

If Oncotelic breaches the License Agreement, we shall have the right to terminate the License Agreement effective sixty (60) days following delivery of written notice to Oncotelic specifying the breach, if Oncotelic fails to cure such material breach within such sixty (60) day period. Oncotelic may terminate the License Agreement by giving thirty (30) days’ prior written notice to us.

Dr. Trieu, our Executive Chairman, is the principal stockholder and Chief Executive Officer of Oncotelic.

Sale of DiLA 2 Assets

On July 21, 2017, we entered into a binding term sheet with a third party purchaser (“Purchaser”) pursuant to which Purchaser will purchase from us the patents, know-how, agreements, records and certain other assets relating to our DiLA² delivery system. The consideration to be paid by Purchaser to us as a result of this transaction shall consist of: (i) an initial payment of $300,000 to be paid upon the closing of the asset sale; and (ii) an additional $1.2 million to be paid upon the first to occur of (x) a financing in which third party investors purchase equity and/or debt securities of Purchaser resulting in aggregate proceeds to Purchaser of not less than $15 million and (y) the twelve month anniversary of the closing.

The closing of the transaction is subject to the negotiation, execution and delivery of a definitive asset purchase agreement and Purchaser’s determination that its due diligence has been completed and has been found satisfactory, in Purchaser’s sole discretion.

In the term sheet, we agreed that we will negotiate exclusively with Purchaser with respect to the sale of the DiLA² assets for a period of ninety (90) days from the date of the term sheet.

Pursuant to the term sheet, at any time following the closing of the transaction and prior to the payment to us of the additional $1.2 million payment, Purchaser may elect to unwind the transaction by providing written notice to such effect to us. Within thirty (30) days of Purchaser’s issuance of such notice, Purchaser shall assign the DiLA² assets back to us.

We will retain an exclusive, fully paid and royalty free license to DiLA² outside of the field of gene editing as well as a the rights to license DiLA² outside of gene editing.

Asset Purchase Agreement

On July 21, 2017, Marina Biotech, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Symplmed Pharmaceuticals LLC (“Symplmed Pharma”) and its wholly-owned subsidiary Symplmed Technologies, LLC (“Symplmed Tech”, and together with Symplmed Pharma, each as “Seller” and together the “Sellers”) pursuant to which the Company purchased from the Sellers, for an aggregate purchase price of $75,000 in cash, certain specified assets of the Sellers relating to the Sellers’ patented technology platform known as DyrctAxess that offers enhanced efficiency, control and information to empower patients, physicians and manufacturers to help achieve optimal care. The parties entered into the Purchase Agreement in furtherance of the obligations of Symplmed Pharma pursuant to that certain Asset Purchase Agreement, dated as of June 5, 2017July 27, 2010, between our company and Novosom. Such shares were due to Novosom as a result of the Company and Symplmed Pharma pursuant to which, among other things,receipt by our company of a license fee under the Company acquired the assets of Symplmed Pharma a single-pill fixed dose combination of perindopril arginine and amlodipine besylate known as Prestalia.

License Agreement that we entered into with Lipomedics Inc. in February 2017.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report contains forward-looking statements. The following discussion should be read in conjunction with the financial statements and related notes contained in our Annual Report on Form 10-K, as filed with the Securities &and Exchange Commission (“SEC”) on March 31, 2017.April 17, 2018. Certain statements made in this discussion are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are projections in respect of future events or financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology.

Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, we can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from the results discussed in a quarterly reportthe forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements after the date of this Annual Report on Form 10-Q may include statements about:10-K or to conform them to actual results, new information, future events or otherwise, except as otherwise required by securities and other applicable laws.

The following factors, among others, could cause our or our industry’s future results to differ materially from historical results or those anticipated:

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in our Annual Report on Form 10-K for the year ended December 31, 2016,2017, as filed with the Securities & Exchange CommissionSEC on March 31, 2017,April 17, 2018, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks may cause the Company’s or its industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The Company isWe are under no duty to update any forward-looking statements after the date of this report to conform these statements to actual results.

As used in this quarterly report and unless otherwise indicated, the terms “we,” “us,” “our” or the “Company” refer to Marina Biotech, Inc., a Delaware corporation.corporation, and its wholly-owned subsidiaries, MDRNA Research, Inc., Cequent Pharmaceuticals, Inc., Atossa Healthcare, Inc., and IthenaPharma, Inc. Unless otherwise specified, all dollar amounts are expressed in United States dollars. Our common stock is currently listed on the OTC Market, OTCQB tier, under the symbol “MRNA”.“MRNA.”

Corporate Overview

We are a fully integrated, commercial stage biopharmaceutical company delivering proprietary drug therapeutics for significant unmet medical needs in the U.S., Europe and certain additional international markets. Our portfolio of products currently focuses on fixed dose combinations (“FDC”) in hypertension, arthritis, pain and oncology allowing for innovative solutions to such unmet medical needs. Our approachmission is meant to reduce clinical riskprovide effective and accelerate timepatient centric treatment for hypertension – including resistant hypertension. In this connection, we acquired from Symplmed and its wholly-owned subsidiary, Symplmed Technologies, LLC, certain of the intellectual property assets related to market by shortening the clinical development program through leveraging what is alreadypatented technology platform known or can be learnedas DyrctAxess, also called Total Care, that offers enhanced efficiency, control and information to empower patients, physicians and manufacturers to help achieve optimal care.

In doing so, we have created a universal platform for the effective treatment of hypertension as well as for the distribution of FDC hypertensive drugs, such as our FDA-approved product Prestalia, and the other products in our proprietary Patient Level Database.pipeline, devices for therapeutic drug monitoring, blood pressure, and other cardiac monitors, as well as services such as counseling and prescription reminders.

We currently have one commercial and three clinical development programs underway: (i) Prestalia® (Prestalia), a single-pill fixed dose combination of perindopril argenine, an angiotensin-converting-enzyme (“ACE”) inhibitor and amlodipine besylate, a calcium channel blocker (“CCB”), which has been approved by the U.S. Food and Drug Administration (“FDA”) and is actively marketed in the U.S.; (ii) our next generation celecoxib program drug candidates for the treatment of acute and chronic pain, IT-102 and IT-103, each of which is an FDC of celecoxib, a COX-2 selective nonsteroidal anti-inflammatory drug (“NSAID”) and either lisinopril (IT-102) or olmesartan (IT-103) – both Lisinopril and olmesartan are antihypertension drugs; (iii) CEQ508, an oral delivery of small interfering RNA (“siRNA”) against beta-catenin, combined with IT-102 to suppress polyps in the precancerous syndrome and orphan indication Familial Adenomatous Polyposis (“FAP”); and (iv) CEQ508 combined with IT-103 to treat Colorectal Cancer. Our current focus is

As reported in our Annual Report on Form 10-K, in April, 2018, we raised in excess of $10 million, net of fees and expenses, from a private placement of our newly created Series E Convertible Preferred Stock (See Recent Developments: Series E Convertible Preferred Share Private Placement Offering below). Further, in May 2018, we raised an additional $2 million, net of fees and expenses, from the private placement. The use of funds from the raise will primarily be on the commercialization of Prestalia, funding working capital, capital expenditure needs, payment of certain liabilities and other general corporate requirements. For the development of IT-102 and IT-103.IT-103, we will seek partners or raise additional funds to advance the development programs. We believe that by combining a COX-2 inhibitor with an antihypertensive in a single FDC oral tablet, IT-102 and IT-103 will each offer improved safety profiles as compared to currently available and previously marketed COX-2 inhibitors as well as address patients with chronic pain who are commonly taking antihypertension drugs concurrently. We further believe that the current opioid addiction epidemic in the U.S. has been driven in part by the withdrawal from the market of certain COX-2 inhibitors due to their associated risk of cardiovascular-related adverse events. We plan to license or divest our other assets since they no longer align with our focus on the treatment of hypertension.

We intend to create value through the continued commercialization of our FDA-approved product, Prestalia, while moving our FDC development programs forward to further strengthen our commercial presence. We intend to retain ownership and control of all of our product candidates, but in the interest of accelerated growth and market penetration, we will also consider partnerships with pharmaceutical or biotechnology companies in order to reduce time to market and to balance development risks, both clinically and financially.

As our strategy is to be a fully integrated biopharmaceutical company, we will drive a primary corporate focus on revenue generation through our commercial assets, with a secondary focus on advancing our FDC pipeline to further enhance our commercial presence.

Vuong Trieu, Ph.D., the Executive Chairman, has significant experience in drug development and commercialization. Dr. Trieu currently serves as Chairman of the Board for the Autotelic consortium of companies including Oncotelic, Stocosil, LipoMedics and Autotelic Inc. Previously he was President and CEO of Igdrasol, a developer of second generation Abraxane, where he pioneered the regulatory pathway for approval of paclitaxel nanomedicine through a single bioequivalence trial against Abraxane. When Igdrasol merged with Sorrento Therapeutics, he became Chief Scientific Officer and a member of the Board of Directors. At Stocosil, he again pioneered the regulatory pathway for taking Olostar, a rosuvastatin/olmesartan FDC into the U.S. as an NDA using only Korean data. He has also been a member of the Board of Directors of Cenomed, a company focusing on CNS drug development. Before that he was Director of Pharmacology, Pharmacokinetics, and Biology at Abraxis Bioscience, where he led the development of albumin encapsulated therapeutics along with building high throughput platform for small molecules, mirRNA, kinases. The Autotelic consortium of companies include the highly successful exit at Igdrasol where it was acquired for up to $1.2 billion by NantPharma and the $10 million equity stake in LipoMedics by Fangsheng Pharmaceuticals Co. Ltd. Dr. Trieu obtained his doctorate in Microbiology/Molecular Biology from the University of Oklahoma.

Background and Corporate Developments

Reverse Merger with IThenaPharma

On November 15, 2016, Marina entered into, and consummated the transactions contemplated by, an Agreement and Plan of Merger with IThenaPharma,between and among IthenaPharma, Inc., a Delaware corporation (“IThena” or “IThenaPharma”), IThena Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of IThenaMarina (“Merger Sub”), and Vuong Trieu Ph.D. as the IThena Representativerepresentative (the “Merger Agreement”), pursuant to which among other things,IThena merged into Merger Sub merged with and into IThena, with IThena surviving as a wholly owned subsidiary of Marina (such transaction, the(the “Merger”). AsFor a result ofmore detailed discussion on the Merger, the former holders of IThenaPharma common stock immediately priorreverse merger, refer to Note 2 – Intangible Assets in our Notes to the completion of the Merger owned approximately 65% of the issued and outstanding shares of Marina common stock immediately following the completion of the Merger.

Marina was incorporated under the laws of the State of Delaware under the name Nastech Pharmaceutical Company on September 23, 1983, and IThena was incorporated under the laws of the State of Delaware on September 3, 2014. IThena is deemed to be the accounting acquirer in the Merger, and thus the historical financial statements of IThena are treatedFinancial Statements as the historical financial statements ofwell as our company and are reflected in our quarterly and annual reports for periods ending after the effective time of the Merger, or November 15, 2016. Accordingly, beginning with our2017 Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as10K filed with the Securities & Exchange Commission on March 31, 2017, we reported the results of IThena and Marina and their respective subsidiaries on a consolidated basis.

Prior to the Merger, Marina’s pipeline consisted of oligonucleotide-based therapeutics. That pipeline included CEQ508, a product in clinical development for the treatment of FAP, for which Marina received both Orphan Drug Designation (“ODD”) and Fast Track Designation (“FTD”) from the U.S. Food and Drug Administration (“FDA”), as well as preclinical programs for the treatment of Type 1 Myotonic Dystrophy (“DM1”) and DMD. The IThena pipeline of celecoxib FDCs is now incorporated into the combined company. We currently plan to develop IT-102/IT-103 – next generation celecoxib – together with CEQ508, as a therapeutic enhancer for therapies against FAP and CRC. We are also developing IT-102/IT-103 for the treatment of combined arthritis/hypertension and the treatment of pain requiring a high dose of celecoxib.

Prior to the completion of the Merger, Marina acquired/in-licensed and further developed nucleic acid chemistry and delivery-related technologies in order to establish a novel and differentiated drug discovery platform. We believe that this platform, which we now control, allows us to distinguish ourselves from others in the nucleic acid therapeutics area in that we are the only company capable of creating a wide variety of therapeutics targeting coding and non-coding RNA via multiple mechanisms of action such as RNA interference (“RNAi”), messenger RNA translational inhibition, exon skipping, microRNA (“miRNA”) replacement, miRNA inhibition, and steric blocking in order to modulate gene expression either up or down depending on the specific mechanism of action.

The breadth of our discovery platform allows us to offer to our partners the most appropriate nucleic acid-based therapeutic approach necessary to effectively modulate targets for a specific disease indication, many of which are considered “undruggable” by traditional methodologies. Each approach, i.e. siRNA, miRNA or single-strand oligonucleotide, has its advantages and disadvantages, and we can screen across multiple mechanisms of action to identify the most effective therapeutic. Our licensees, namely ProNAi Therapeutics, Inc. (“ProNAi”), Mirna Therapeutics, Inc. (“Mirna”) and MiNA Therapeutics, Ltd. (“MiNA”), are focused on oncology and have clinical programs in recurrent or refractory non-Hodgkin’s lymphoma and unresectable primary liver cancer or solid cancers with liver involvement.SEC.

We believe that we possess a unique industry-leading nucleic acid-based drug discovery platform, which is protected by a strong intellectual property position and validated through: (i) licensing agreements for our SMARTICLES delivery technology with Mirna, ProNAi and MiNA for unique nucleic acid payloads – microRNA mimics, DNA interference oligonucleotides and small-activating RNA, respectively; (ii) Mirna and ProNAi’s respective clinical experience with SMARTICLES; (iii) a licensing agreement with Novartis Institutes for Biomedical Research, Inc. (“Novartis”) for our CRN technology; (iv) a licensing agreement with Protiva Biotherapeutics, Inc. (“Arbutus”), a wholly-owned subsidiaryAcquisition of Arbutus Biopharma Corporation (formerly Tekmira Pharmaceuticals Corporation), for our Unlocked Nucleobase Analog (“UNA”) technology; (v) licensing agreements with two large international companies (i.e., Novartis and Monsanto company (“Monsanto”)) for certain chemistry and delivery technologies; and (vi) the FAP phase 1b/2a clinical trial with ourTransKingdom RNA™ interference (“tkRNAi”) platform.

Following the Merger, we have reorganized the acquired Marina platform into a strong pipeline of preclinical and clinical drug candidates, which we believe will unlock their value. An example is the recent validation of thetkRNAi beta-catenin program against FAP following completion of our statistical analysis of our Phase I data showing the achievement of statistical significant proof of concept knockdown of beta-catenin without side effects. ThistkRNAi platform is now being developed further for IBD and other disease indications, as well as therapeutic microbiome.Prestalia

Subsequent to the Merger we executed on our strategy to become a commercial stage company with the acquisition of Prestalia from Symplmed. Specifically, and as described under “Acquisition of Assets from Symplmed” below, on June 6, 2017 we entered into an Asset Purchase Agreement with Symplmed for the purchase of Prestalia, (perindopril amlodipine/amlodipine besylate). Prestaliawhich is an FDA-approved and marketed anti-hypertensive drug. This is a FDC of perindopril arginine, which is an aceACE inhibitor, and amlodipine besylate, which is a calcium channel blocker (“CCB”), and is indicated as a first line therapy for hypertension control.

TheWe believe that the acquisition of Prestalia transitionstransforms our company from a clinical stage company to a commercial organization. Prestalia was approved in January 2015 and has been marketed in select U.S. states since then by Symplmed. Prestalia sales saw solid growth through September of 2016, via new patient acquisition and strong patient retention. Due to lack of funding, circumstances, further sales promotionrevenues and marketing of Prestalia was ceased by the end of calendar year 2016. In the near term our focus will be dedicated to re-acquiring prior Prestalia patients, with subsequent efforts dedicated to building a strong sales team to fully promotemarket the product. This includes our efforts to re-establish our relationships with our contract manufacturers to support marketing Prestalia.

We believe that the Prestalia acquisition will not only make us a revenue-stage company, but also that the marketing, distribution and sales network that we will build will pave a strong foundation for the promotion and commercialization of our two other hypertension pipeline products – namely IT-102 and IT-103.IT-103, as well as any other similar products that we internally develop or acquire.

Autotelic LLC License Agreement

In connectionLine Letters with the Merger Agreement and the closing of the Merger, on November 15, 2016, Marina entered into a License Agreement with Autotelic LLC (the “License Agreement”), a stockholder of IThenaPharma that became the holder of 2,312,356 shares of Marina common stock as a result of the Merger, and an entity of which Dr. Trieu, our Executive Chairman, serves as Chief Executive Officer, pursuant to which (i) Marina licensed to Autotelic LLC certain patent rights, data and know-how relating to FAP and nasal insulin, for human therapeutics other than for oncology-related therapies and indications, and (ii) Autotelic LLC licensed to Marina certain patent rights, data and know-how relating to IT-102 and IT-103, in connection with individualized therapy for pain using a non-steroidal anti-inflammatory drug and an anti-hypertensive without inducing intolerable edema, and treatment of certain aspects of proliferative disease, but not including rights to IT-102/IT-103 for TDM guided dosing for all indications using an Autotelic LLC TDM Device. Marina also granted a right of first refusal to Autotelic LLC with respect to any license by Marina of the rights licensed by or to Marina under the License Agreement in any cancer indication outside of gastrointestinal cancers.

The License Agreement shall immediately terminate, all rights granted by a licensor under the License Agreement shall immediately revert forthwith to the applicable licensor, all benefits which have accrued under the License Agreement shall automatically be transferred to the applicable licensor, and all rights, title and interest in the licensed intellectual property shall immediately revert back to the applicable licensor if: (i) the applicable licensee makes a general assignment for the benefit of its creditors prior to the two (2) year anniversary of the date of the License Agreement; (ii) the applicable licensee applies for or consents to the appointment of a receiver, a custodian, a trustee or liquidator of all or a substantial part of its intellectual property prior to the two (2) year anniversary of the date of the License Agreement; (iii) prior to the two (2) year anniversary of the date of the License Agreement, and without the consent of the applicable licensor, the applicable licensee effects a Change of Control Transaction (as defined in the License Agreement); (iv) the applicable licensee ceases operations; or (v) the applicable licensee fails to take any material steps, as reasonably determined by the applicable licensor, to develop the licensed intellectual property prior to the one (1) year anniversary of the date of the License Agreement (each of the foregoing items (i) through (v), a “Termination Event”). Upon the occurrence of any Termination Event, the applicable licensee shall immediately discontinue all use of the licensed intellectual property.

Master Services AgreementRelated Parties

In connection with the Merger, Agreement and the closing of the Merger, on November 15, 2016, Marina entered into a Master Services AgreementLine Letter dated November 15, 2016 with Dr. Trieu, our Executive Chairman and Interim CEO, for an unsecured line of credit in an amount not to exceed $540,000, to be used for current operating expenses. Dr. Trieu has advanced the full $540,000 under the Line Letter as of December 31, 2017. Accrued interest on the Line Letter was $32,568 and $25,836 as of March 31, 2018 and December 31, 2017, respectively, and is included in convertible notes payable to related parties on the accompanying balance sheets. The line of credit is currently convertible at any time into shares of the Company’s common stock at a price of $1.77 per share.

The unpaid principal balance of the line of credit, together with accrued and unpaid interest thereon, converted into shares of Series E Convertible Preferred Stock and warrants to purchase shares of common stock upon the closing of our private placement of Series E Convertible Preferred Stock and warrants in April 2018. As a result of the conversion of the line of credit, all of our obligations to Dr. Trieu thereunder have been satisfied and the line of credit is no longer outstanding.

InApril 2017, we entered into a Line Letter with Autotelic Inc for an unsecured line of credit in an amount not to exceed $500,000, to be used for current operating expenses. Autotelic Inc. (“Autotelic”),is. a stockholder of IThenaPharma that became the holder of 525,535 shares of Marina common stock as a result of the Merger, and an entity of which Dr. Trieu serves as Chairman of the Board, pursuant to which Autotelic agreed to provide certain business functions and services from time to time during regular business hours at Marina’s request (the “Master Services Agreement”). The Master Services Agreement has a term of ten years, though either party can terminate it by giving to the other party ninety (90) days’ prior written notice of such termination (provided that the final day of the term shall be on the last day of the calendar month in which the noticed termination date falls). The resources available to Marina through Autotelic include, without limitation, regulatory, clinical, preclinical, manufacturing, formulation, legal, accounting and IT.

As partial consideration in connection with the Merger Agreement and the consideration for the services to be performed byBoard. Autotelic Inc. under the Master Services Agreement, during the period priorwas to the date on which we have completed an equity offering of either common or preferred stock in which the gross proceeds therefrom is no less than $10 million, we shall issue to Autotelic Inc. warrants to purchase shares of our common stock (the “MSA Warrants”), with the exercise price for such MSA Warrants being based on the closing price of our common stock at the time the MSA Warrants are issued; provided, that in no event shall such price be lower than the lower of (x) $2.80 per share or (y) the lowest exercise price of any warrants that have been issued by us in a capital raising transaction (and that would otherwise reduce the exercise price of any other outstanding warrants issued by us) during the period beginning on November 15, 2016 and ending on the date of the issuance of the applicable MSA Warrants. The number of shares of common stock for which the MSA Warrants are exercisable shall be equal to the quotient obtained by dividing the actual costs to Autotelic Inc, of providing the services under the Master Services Agreement by the exercise price for the MSA Warrants.

Line Letter with Dr. Trieu

In connection with the Merger, Marina entered into a line of credit dated November 15, 2016 with Dr. Trieu, our Executive Chairman, for an unsecured line of credit in an amount not to exceed $540,000, to be used for current operating expenses (“Line Letter”). Dr. Trieu will consider requests for advances under the Line Letter until April 30, 2017. As of June 30, 2017, Dr. Trieu has advanced an aggregate of $540,000 under the Line Letter. Advances made under the Line Letter bear interest at the rate of five percent (5%) per annum, are evidenced by a demand promissory note issued to Dr. Trieu, and are due and payable upon demand by Dr. Trieu.

Recent Developments During the Three Months Ended June 30, 2017

Reverse Stock Split

On August 1, 2017, we filed a Certificate of Amendment of our Amended and Restated Certificate of Incorporation to effect a one-for-ten reverse split of our issued and outstanding shares of common stock. Our common stock commenced trading on the OTCQB tier of the OTC Markets on a split-adjusted basis on Thursday, August 3, 2017. There will be no change to the authorized shares of our common stock as a result of the reverse split. No fractional shares shall be issued in connection with the reverse split; any fraction of a share of common stock that would otherwise have resulted from the reverse split shall be rounded up to the nearest whole share of common stock. Unless indicated otherwise, all share and per share information included in this report give effect to the reverse split.

Appointment of Executive Chairman

On June 30, 2017, we appointed Dr. Trieu to serve as Executive Chairman of our company, effective immediately. In such capacity, Dr. Trieu shall have the authority to act in a management capacity on behalf of our company.

Acquisition of Assets from Symplmed Pharmaceuticals LLC

On June 5, 2017, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Symplmed Pharmaceuticals LLC (“Symplmed”) pursuant to which we purchased from Symplmed, for aggregate consideration consisting of $300,000 in cash and the assumption of certain liabilities of Symplmed in the aggregate amount of approximately $320,000, Symplmed’s assets relating to the fixed-dose combination of perindopril arginine and amlodipine besylate known as prestalia (“Prestalia”), that has been approved by the FDA for the treatment of hypertension.

In addition, as part of the transactions contemplated by the Purchase Agreement: (i) Symplmed agreed to transfer to us, not later than 150 days following the closing date, the New Drug Applications for the approval of Prestalia as a new drug by the FDA; and (ii) Symplmed assigned to us all of its rights and obligations under that certain Amended and Restated License and Commercialization Agreement by and between Symplmed and Les Laboratoires Servier (“Servier”) dated January 11, 2012, pursuant to which Symplmed has an exclusive license from Servier to manufacture, have manufactured, develop, promote, market, distribute and sell Prestalia in the United States (and its territories and possessions) in consideration of regulatory and sales-based milestone payments and royalty payments based on net sales.

In furtherance of the acquisition and commercialization of Prestalia, on July 21, 2017 we acquired from Symplmed and its wholly-owned subsidiary, Symplmed Technologies, LLC, certain of the intellectual property assets related to the patented technology platform known as DyrctAxess that offers enhanced efficiency, control and information to empower patients, physicians and manufacturers to help achieve optimal care.

Employment Agreement with Erik Emerson

Further, in connection with the transactions contemplated on June 21 by the Purchase Agreement with Symplmed, we entered into an offer letter, as amended, (“Offer Letter”) with Erik Emerson, the President and Chief Executive Officer of Symplmed, pursuant to which we hired Mr. Emerson to serve as our Chief Commercial Officer, effective immediately. As compensation for his services as Chief Commercial Officer, the Company shall pay to Mr. Emerson an annual base salary of $150,000, and he will be entitled to receive a discretionary bonus as determined by our Board of Directors of the Company (the “Board”) in an amount up to 40% of his base salary, with the payment of such bonus to be based on the achievement of such milestones as shall be determined by the Board following good faith consultation with Mr. Emerson. It is anticipated the Mr. Emerson will devote approximately 50% of his business time to the performance of his duties for the Company. In connection with the Offer Letter, the Company issued to Mr. Emerson 60,000 restricted shares of its common stock under its 2014 Long-Term Incentive Plan, with all of such shares to vest on the six (6) month anniversary of the date of grant.

Line Letter with Autotelic Inc.

On April 4, 2017, we entered into a Line Letter with Autotelic Inc., a stockholder of IThenaPharma that became the holder of 525,535 shares of Marina common stock as a result of the Merger, and an entity of which Dr. Trieu serves as Chairman of the Board, for an unsecured line of credit in an amount not to exceed $500,000, to be used for current operating expenses. Autotelic Inc. will consider requests for advances under the Line Letter until September 1, 2017. Autotelic Inc. shall have the right at any time for any reason in its sole and absolute discretion to terminate the line of credit available under the Line Letter or to reduce the maximum amount available thereunder without notice; provided, that Autotelic Inc. agreed that it shall not demand the repayment of any advances that are made under the Line Letter prior to the earlier of: (i) October 4, 2017; and (ii) the date on which (x) we make a general assignment for the benefit of our creditors, (y) we apply for or consents to the appointment of a receiver, a custodian, a trustee or liquidator of all or a substantial part of our assets or (z) we cease operations.notice. Advances made under the Line Letter shall bear interest at the rate of five percent (5%) per annum, shall beare evidenced by the Demand Promissory Note issued to Autotelic Inc., and shall beare due and payable upon demand by Autotelic, Inc. Autotelic Inc. advanced funds after September 1, 2017 but is no longer considering additional requests for advances as of December 31, 2017.

The balance under the line was $94,782, including accrued interest of $3,966 as of March 31, 2018, and is included in notes to related parties on the accompanying balance sheet. Since this line was not extended, no further funds are available under this line of credit.

The unpaid principal balance of the line of credit, together with accrued and unpaid interest thereon, converted into shares of Series E Convertible Preferred Stock and warrants to purchase shares of common stock upon the closing of our private placement of Series E Convertible Preferred Stock and warrants in April 2018. As a result of the conversion of the line of credit, all of our obligations to Autotelic Inc. thereunder have been satisfied and the line of credit is no longer outstanding.

ArrangementsRecent Developments During the Three Months Ended March 31, 2018

Agreement with Oncotelic Inc.Autotelic BIO

On July 17, 2017,January 11, 2018, we entered into a License Agreement (the “License Agreement”)binding agreement with Oncotelic, Inc.Autotelic BIO (“Oncotelic”ATB”) pursuant to which, among other things, and subject to the satisfaction of certain conditions on or prior to January 15, 2019, we providedshall grant to OncotelicATB a perpetual exclusive right of development and marketing of our IT-103 product candidate, which is a fixed dose combination of celecoxib and olmesartan medoxomil (the “Product”), at the currently approved dose/approved indications only for celecoxib (100 mg, 200mg and 400mg) for combined hypertension and arthritis only, with such right extending throughout the entire world (excluding the United States and Canada, and the territories of such countries) (the “Territory”). The grant of the license would be memorialized in a definitive license agreement to our SMARTICLES platform forbe entered into between the deliveryparties. The conditions to the grant of antisense DNA therapeutics, as well asthe license include, without limitation, that: (i) ATB shall obtain funding in a license to our conformationally restricted nucleotide (“CRN”certain specified amount (the “Fundraising”) technology; or (ii) ATB shall obtain a co-development and licensing deal with other third-party pharmaceutical companies with respect to TGF-Beta.the Product; or (iii) ATB shall obtain a government-sponsored research and development project in the Republic of Korea.

The agreement provides that, following the date on which the license is granted: (A) if ATB should sub-license the Product, we and ATB would share all proceeds of such sub-license equally; and (B) if ATB markets the Product on its own, ATB would provide us with a royalty equal to a percentage of net profits in the mid-single digits. The agreement also provides that ATB will make a payment to us in the amount of $100,000 upon the successful completion of the Fundraising, and a payment to us in the amount of $300,000 following the date on which we have provided certain specified technology and assistance regarding the manufacturing and production of the Product. We will be entitled to the clinical trial data and any enhancements and inventions developed by ATB during this process.

Autotelic LLC, an entity that owns approximately 22% of the issued and outstanding shares of our common stock and of which Dr. Trieu, our Executive Chairman and Interim CEO, serves as Chief Executive Officer, owns approximately 19% of the issued and outstanding shares of the common stock of ATB.

Sale of DiLA² Assets

On March 16, 2018, we entered into a Licensing Agreement, whereby we granted exclusive rights to our DiLA² delivery system in exchange for an upfront payment of $200,000 and further potential future consideration dependent upon event and sales-based milestones. Under the terms of the License Agreement, Oncotelic alsoagreement, we agreed to assign ownership of the intellectual property associated with the DiLA²delivery system. The Company has yet to complete certain performance obligations under the agreement and accordingly has deferred the recognition of revenue from the sale of the asset until such obligations are fulfilled.   

Series E Convertible Preferred Stock Private Placement

In April 2018, we entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 2,334 shares of our Series E convertible preferred stock (the “Preferred Stock”), at a purchase 49,019price of $5,000 per share of Preferred Stock. Further in May 2018, we sold 478 shares of our Preferred Stock. Each share of Preferred Stock is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5-year warrant (the “Warrants”, and collectively with the Preferred Stock, the “Securities”) to purchase 0.75 shares of our common stock for each share of common stock issuable upon the conversion of the Preferred Stock purchased by such investor at an aggregate purchaseexercise price equal to $0.55 per share of $250,000 ($5.10 per share),common stock, subject to adjustment thereunder. The Preferred Stock has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in April 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations.

We received total proceeds of approximately $12 million from the sale of the Securities, after deducting placement agent fees and estimated expenses payable by us associated with such closing. We intend to use the proceeds of the offering for funding our commercial operations to the sale and promotion of our Prestalia product, working capital needs, capital expenditures, the repayment of certain liabilities and other general corporate purposes. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase and sale to be made pursuant to a Stock Purchase Agreement to be2,958,460 shares of our common stock.

Stipulation of Settlement

As discussed in Note 8, in April 2018, we entered into betweena Stipulation of Settlement requiring us and Oncotelic within thirty (30) days following the date of the License Agreement.

Under the terms of the License Agreement, we could receive up to $90 million in success-based milestones based on commercial sales of licensed products. In addition, if Oncotelic determines to pursue further development and commercialization of products under the License Agreement, Oncotelic agreed, in connection therewith, to purchaseissue Vaya Pharma shares of our common stock with a fair value of $250,000, which shares were issued during the second fiscal quarter of 2018. We accrued $250,000, as of March 31, 2018 and December 31, 2017, respectively, and such amount is included in accrued expenses on the accompanying consolidated balance sheets.

Resignation of Officer and Directors

In May 2018, the Board accepted the resignation of Joseph W. Ramelli, our Chief Executive Officer, whereby Mr. Ramelli resigned as an officer of our company, and as a director and/or officer of any and all subsidiaries of our company, effective immediately, to pursue other opportunities. In connection with his resignation, Mr. Ramelli released us from all claims arising prior to the date of his resignation and affirmed his obligations to be bound by the restrictive covenants contained in the employment agreement between Mr. Ramelli and our company dated February 2, 2017, and we: (i) agreed to make severance payments to Mr. Ramelli in the amount of $60,000 to be paid over a six (6) month period; and (ii) granted to Mr. Ramelli fully-vested options, exercisable for an aggregatea period of five years from the grant date, to purchase price of $500,000, with the purchase price for each share of common stock being the greater of $5.10 or the volume weighted average priceup to 100,000 shares of our common stock forat an exercise price equal to $0.98 per share of common stock. In May 2018, the thirty (30) trading days immediately preceding the date on which Oncotelic notifies us that it intends to pursue further development or commercialization of a licensed product.

If Oncotelic breaches the License Agreement, we shall have the right to terminate the License Agreement effective sixty (60) days following delivery of written notice to Oncotelic specifying the breach, if Oncotelic fails to cure such material breach within such sixty (60) day period. Oncotelic may terminate the License Agreement by giving thirty (30) days’ prior written notice to us.

Dr.Board appointed Vuong Trieu, our Executive Chairman, is the principal stockholder andto serve as our Interim Chief Executive Officer, to replace Mr. Ramelli, effective immediately. In his capacity as Interim Chief Executive Officer, Dr. Trieu shall receive a salary in the amount of Oncotelic.$20,000 per month.

In May 2018, each of Philip C. Ranker and Philippe P. Calais, Ph.D. resigned as members of the Board, and all committees thereof, effective immediately. In connection with their resignations: (i) each of Mr. Ranker and Dr. Calais released us from all claims arising prior to the date of his resignation; (ii) we granted to Mr. Ranker fully-vested options to purchase up to 200,000 shares of our common stock at an exercise price equal to $0.98 per share of common stock; and (iii) we granted to Dr. Calais fully-vested options to purchase up to 80,000 shares of our common stock at an exercise price equal to $0.98 per share of common stock. The foregoing options are exercisable for a period of five years from the grant date.

Issuance of Preferred Stock and Warrants to Directors

In April 2018, and in connection with the closing of our private placement described above, we entered into Compromise and Settlement Agreements with four of the current members of our Board of Directors and one former member of our Board of Directors pursuant to which we agreed to issue to such directors an aggregate of 58.25 shares of Preferred Stock and Warrants to purchase up to 436,875 shares of common stock to satisfy accrued and unpaid fees owed to such directors for service as members of the Board of Directors during the period ending on December 31, 2017 in the aggregate amount of approximately $291,250. The Securities that were issued to the directors, which were issued upon the closing described above, have the same terms and conditions as the Securities that were issued to investors in the offering.

SaleIssuance of DiLA 2 AssetsSecurities to June 2016 Noteholders

On July 21, 2017,

In April 2018, and in connection with the closing of our private placement described above, we entered into a binding term sheet with a third-party purchaser (“Purchaser”issued to the holders (such holders, the “June 2016 Noteholders”) of those certain promissory notes in the original principal amount of $300,000 that we issued pursuant to which Purchaser willthat certain Note Purchase Agreement dated June 20, 2016 by and among our company and the June 2016 Noteholders (the “2016 Notes”) an aggregate of 71.46 shares of Preferred Stock and Warrants to purchase from us the patents, know-how, agreements, records and certain other assets relatingup to our DiLA² delivery system. The consideration to be paid by Purchaser to us535,950 shares of common stock as a result of this transaction shall consist of: (i) an initial payment of $300,000 to be paid upon the closingconversion of the asset sale; and (ii) an additional $1.2 million to be paid upon the first to occur of (x)2016 Notes. As a financing in which third party investors purchase equity and/or debt securities of Purchaser resulting in aggregate proceeds to Purchaser of not less than $15 million and (y) the twelve month anniversaryresult of the closing.

The closingconversion of the transaction is subject2016 Notes and the issuance of the Securities to the negotiation, execution and delivery of a definitive asset purchase agreement and Purchaser’s determination that its due diligence has been completed and has been found satisfactory, in Purchaser’s sole discretion.

In the term sheet, we agreed that we will negotiate exclusively with Purchaser with respect to the sale of the DiLA² assets for a period of ninety (90) days from the date of the term sheet.

Pursuant to the term sheet, at any time following the closing of the transaction and prior to the payment to us of the additional $1.2 million payment, Purchaser may elect to unwind the transaction by providing written notice to such effect to us. Within thirty (30) days of Purchaser’s issuance of such notice, Purchaser shall assign the DiLA² assets back to us.

We will retain an exclusive, fully paid and royalty free license to DiLA² outside of the field of gene editing as well as the rights to license DiLA² outside of gene editing.

Bridge Note Financing

On June 1, 2017, we issued convertible promissory notes (the “Notes”) in the aggregate principal amount of $400,000 to 10 investors pursuant to a Note Purchase Agreement (the “Note Purchase Agreement”) that we entered into with such investors. The Notes bear interest at a rate of five percent (5%) per annum and are due and payable at any time on or after the earlier of (i) June 1, 2018 and (ii) the occurrence of an event of default (as defined in the Note Purchase Agreement).

Upon written notice delivered to us by the holders of a majority in interest of the aggregate principal amount of Notes that are outstanding at the time of such calculation (the “Majority Holders”) not more than five (5) days following the maturity date of the Notes, the Majority Holders shall have the right, but not the obligation, on behalf of themselves and all other holders of Notes, upon written notice delivered to us, to elect to convert2016 Noteholders, the entire unpaid principal amountbalance of all, but not less than all, of the 2016 Notes, and the accrued and unpaid interest thereon, intohas been satisfied in full, and such numbernotes are no longer outstanding.

In addition, in April 2018, and in connection with the closing of our private placement described above, we issued to the June 2016 Noteholders an aggregate of 75 shares of Preferred Stock and Warrants to purchase up to 562,500 shares of common stock in full and complete satisfaction of our obligations to issue $375,000 worth of “Consideration Securities” to the 2016 Noteholders pursuant to that certain amendment agreement dated July 3, 2017 by and among our company and the June 2016 Noteholders.

Issuance of Securities to June 2017 Noteholders

In April 2018, and in connection with the closing of our private placement described above, we issued to the holders of those certain promissory notes in the original principal amount of $400,000 (the “2017 Notes”) that we issued to select accredited investors (the “June 2017 Noteholders”) pursuant to Note Purchase Agreements that we entered into with the June 2017 Noteholders during June 2017 an aggregate of 83.44 shares of Preferred Stock and Warrants to purchase up to 625,800 shares of common stock as is equalfull and complete satisfaction of the unpaid principal balance (and accrued but unpaid interest thereon) owed by us to with respectthe June 2017 Noteholders under the 2017 Notes. As a result of the conversion of the 2016 Notes and the issuance of the Securities to each Note: (x)the June 2016 Noteholders, the entire unpaid principal amountbalance of such Notethe 2016 Notes, and the accrued and unpaid interest thereon, has been satisfied in full, and such notes are no longer outstanding. The Securities that were issued to the June 2017 Noteholders have the same terms and conditions as the Securities that were issued to investors in the offering.

Issuance of Securities to Blech Trust

In April 2018, and in connection with the closing of our private placement described above, we issued to a trust affiliated with Isaac Blech, a member of our Board of Directors, an aggregate of 103.18 shares of Preferred Stock and Warrants to purchase up to 777,750 shares of common stock as a result of the conversion of that certain secured convertible promissory note in the original principal amount of $500,000 that we issued to such investor on November 22, 2017 (the “Blech Note”). As a result of the conversion of the Blech Note and the issuance of the Securities to the holder thereof, the entire unpaid principal balance of the Blech Notes, and the accrued and unpaid interest thereon, has been satisfied in full, and the Blech Note is no longer outstanding. The Securities that were issued to the holder of the Blech Note have the same terms and conditions as the Securities that were issued to investors in the offering.

Issuance of Securities to Satisfy Lines of Credit

In April 2018, and in connection with the closing of our private placement described above, we issued to Vuong Trieu, Ph.D., our Executive Chairman and Interim CEO, 114.63 shares of Preferred Stock and Warrants to purchase up to 859,725 shares of common stock as full and complete satisfaction of the unpaid principal balance (and accrued but unpaid interest thereon) owed by us to Dr. Trieu under that certain line of credit in the amount of up to $540,000 that was provided to us by Dr. Trieu, all of which had been drawn down as of the date of the deliveryclosing described above. The line of such noticecredit was extended pursuant to a Line Letter dated November 15, 2016 by (y) $3.50.and between our company and Dr. Trieu. The Securities that were issued to Dr. Trieu have the same terms and conditions as the Securities that were issued to investors in the offering.

AsIn April 2018, and in connection with the closing of June 30,our private placement described above, we issued to Autotelic Inc. 19 shares of Preferred Stock and Warrants to purchase up to 142,500 shares of common stock as full and complete satisfaction of the unpaid principal balance (and accrued but unpaid interest thereon) owed by us to Autotelic Inc. under that certain line of credit in the amount of up to $500,000 that was provided to us by Autotelic Inc., of which $90,816 had been drawn down as of the date of the closing described above. The line of credit was extended pursuant to a Line Letter dated April 4, 2017 by and between Autotelic Inc. and us. Vuong Trieu, our Executive Chairman and Interim CEO, serves as Chairman of the accrued interest expense onBoard of Autotelic Inc. The Securities that were issued to Autotelic Inc. have the Notes amountedsame terms and conditions as the Securities that were issued to $1,283, with a total balance of principal and interest of $401,283.investors in the offering.

Issuance of Securities for Payables

In April 2018, and in connection with the closing of our private placement described above, we entered into a Compromise and Settlement Agreement with Autotelic Inc. pursuant to which we agreed to issue to Autotelic Inc. an aggregate of 162.59 shares of Preferred Stock and Warrants to purchase up to 2,564,465 shares of common stock to satisfy accrued and unpaid fees in the aggregate amount of approximately $812,967, and other liabilities, owed to Autotelic Inc. as of March 31, 2018 pursuant to that certain Master Services Agreement dated as of November 15, 2016 by and between our company and Autotelic Inc. Vuong Trieu, our Executive Chairman and Interim CEO, serves as Chairman of the Board of Autotelic Inc. The Securities that were issued to Autotelic Inc., which were issued upon the closing described above, have the same terms and conditions as the Securities that were issued to investors in the offering.

Stock Issuance to Novosom

In May 2018, we issued to Novosom Verwaltungs GmbH (“Novosom”) 51,988 shares of our common stock as additional consideration pursuant to the Asset Purchase Agreement, dated as of July 27, 2010, between our company and Novosom. Such shares were due to Novosom as a result of the receipt by our company of a license fee under the License Agreement that we entered into with Lipomedics Inc. in February 2017.

Results of Operations

Comparison of the Three Months Ended June 30, 2017March 31, 2018 to the Three Months Ended June 30, 2016March 31, 2017

Our loss before income taxes for the three months ended June 30, 2017March 31, 2018 is summarized as follows in comparison to the three months ended June 30, 2016:March 31, 2017.