Company”) is a clinical-stage specialty pharmaceutical company engaged in the discovery and development of proprietary prodrugs. Through the use of its Ligand Activated Therapy (“LAT”) platform technology, the Company is able to initiate and pursue the development of improved versions of widely prescribed, approved drugs. The Company was formed on   and incorporated in Iowa, and reorganized in Delaware on

operations and negative operating cash flows due to its ongoing research and development of its potential product candidates. The Company also has an accumulated deficit at  Various internal and external factors will affect whether and when the candidates become approved drugs and how significant their market share will be. The length of time and cost of developing and commercializing these candidates and/or failure of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations.

April

2,

2015,

1

7.5

troactively to give effect to the -for- reverse stock split.

April

2015,

5,090,909

$11.00

May

2015,

763,636

$11.00

s’ exercise of their option to purchase additional shares, were million, after deducting underwriting discounts and commissions of million. In addition, offering expenses totaled million. Upon completion of the IPO, all outstanding shares of the Company’s redeemable convertible preferred stock were converted or reclassified into shares of common stock and all outstanding warrants to acquire shares of the Company’s redeemable convertible preferred stock became warrants to acquire the Company’s common stock. In connection with the IPO, the Company amended and restated its Amended and Restated Certificate of Incorporation to change the authorized capital stock to shares, designated as common stock, and shares, designated as preferred stock, each with a par value of per share.

October

3,

2016,

ATM Agreement”) with Cowen and Company (“Cowen”) under which the Company offer and sell, from time to time, in its sole discretion, shares of common stock having an aggregate offering price of up to through Cowen as the Company's sales agent. The registration statement on Form S- included a prospectus covering the offering up to of shares of common stock in accordance with the ATM Agreement.

’s registration statement on Form S- contemplated under the ATM Agreement was declared effective by the SEC on

may

 ATM Agreement by any method permitted by law deemed to be an “at the market offering” as defined in Rule of the Securities Act, including without limitation sales made by means of ordinary brokers’ transactions on The NASDAQ Global Market or otherwise at market prices prevailing at the time of sale, in block transactions, or as otherwise directed by the Company. Cowen will use commercially reasonable efforts to sell the common stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company impose). The Company will pay Cowen a commission of up to percent of the gross sales proceeds of any common stock sold through Cowen under the ATM Agreement, and also has provided Cowen with customary indemnification rights.

 ATM Agreement. The offering of shares of common stock pursuant to the ATM Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the ATM Agreement, or (ii) termination of the ATM Agreement in accordance with its terms.

  the Company had deferred offering costs recorded within other long-term assets in the amount of million.

first

2016

, the Company adopted Accounting Standards Update (“ASU”) - (“ASU - which requires the debt issuance costs related to a recognized debt liability be presented in the balance sheet as direct deduction from the carrying amount of that debt liability, consistent with the presentation of debt discounts. The adoption of ASU - reduced the Company’s assets and liabilities by the amount of the debt issuance costs, which was million at This reclassification had no effect on reported net loss or cash flows.