What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-12 compared with 2020-08-05 · 201 added, 105 removed, 614 unchanged (33% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30,

2020 December 31,

20 unchanged sentences

Stockholders’ equity:

Preferred stock, $ 0.01 par value;

5,000,000 shares authorized;

0 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

Common stock, $ 0.01 par value;

100,000,000 shares authorized;

53,077,348 and 34,861,876 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

57,074,478 and 34,861,876 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital 208,616 183,574

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

11 unchanged sentences

Net loss ( 5,494 ) ( 11,230 ) ( 19,973 ) ( 31,755 )

Change in unrealized gain on investments — 9 — 14

Change in unrealized gain (loss) on investments — ( 8 ) — 6

Comprehensive loss $ ( 5,494 ) $ ( 11,238 ) $ ( 19,973 ) $ ( 31,749 )

25 unchanged sentences

Balance at June 30, 2020 53,077,348 531 203,291 — ( 182,651 ) 21,171

Issuance costs related to the issuance of common stock and warrants in a public offering — — 3 — — 3

Issuance of common stock pursuant to a 2019 stock purchase agreement, net of issuance costs 3,982,806 40 4,697 — — 4,737

Issuance of common stock for cash under employee stock purchase plan 14,324 — 10 — — 10

Share-based compensation expense — — 615 — — 615

Net loss — — — — ( 5,494 ) ( 5,494 )

Balance at September 30, 2020 57,074,478 $ 571 $ 208,616 $ — $ ( 188,145 ) $ 21,042

MIRAGEN THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (continued)

(in thousands, except share data)

Common Stock Additional

16 unchanged sentences

Balance as of June 30, 2019 31,037,363 310 179,937 11 ( 146,821 ) 33,437

Shares issued for cash upon the exercise of stock options 122,300 1 69 — — 70

Issuance of common stock for cash under employee stock purchase plan 22,086 1 25 — — 26

Share-based compensation expense — — 874 — — 874

Change in unrealized loss on investments — — — ( 8 ) — ( 8 )

Net loss — — — — ( 11,230 ) ( 11,230 )

Balance at September 30, 2019 31,181,749 $ 312 $ 180,905 $ 3 $ ( 158,051 ) $ 23,169

See accompanying notes to these condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

3 unchanged sentences

Amortization of financing issuance costs 281 —

Non-cash interest expense 138 266

Depreciation and amortization 189 215

Other 131 ( 139 )

Amortization of premiums and discounts on available-for-sale securities ( 1 ) ( 410 )

Changes in operating assets and liabilities:

6 unchanged sentences

Maturities of short-term investments 2,000 54,000

Purchases of property and equipment ( 53 ) ( 84 )

Proceeds from sale of property and equipment 1 —

Purchases of short-term investments — ( 32,690 )

Purchases of property and equipment — ( 69 )

Net cash provided by investing activities 1,948 21,226

6 unchanged sentences

Proceeds from the exercise of stock options 13 85

Net cash provided by financing activities 18,983 179

Net cash provided by (used in) financing activities 23,628 ( 725 )

Net increase (decrease) in cash and cash equivalents 5,233 ( 7,749 )

5 unchanged sentences

Amortization of public offering costs $ 32 $ 1

Unpaid common stock issuance costs included in current liabilities $ 19 $ —

Change in unrealized gain on investments

3 unchanged sentences

DESCRIPTION OF BUSINESS

Miragen Therapeutics, Inc., a Delaware corporation (the “Company” or “miRagen”), is a clinical-stage biopharmaceutical company discovering and developing proprietary RNA-targeted therapies with a specific focus on microRNAs and their role in diseases where there is a high unmet medical need.

The Company has three clinical stage product candidates:

cobomarsen, remlarsen, and MRG-110.

The Company is developing cobomarsen for the treatment of patients with certain cancers that have elevated microRNA-155, including cutaneous T-cell lymphoma and adult T-cell leukemia/lymphoma.

Cobomarsen is an inhibitor of microRNA-155, which is found at abnormally high levels in malignant cells of several blood cancers.

The Company is also developing remlarsen and MRG-229 for the treatment of patients with pathological fibrosis.

Both remlarsen and MRG-229 are replacements for microRNA-29 (“miR-29”), which is found at abnormally low levels in a number of pathological fibrotic conditions, including cutaneous, cardiac, renal, hepatic, pulmonary and ocular fibrosis, as well as in systemic sclerosis.

Remlarsen is a product candidate for local administration in cutaneous fibrosis and ocular fibrosis, while MRG-229 is the Company’s lead preclinical state compound for the potential systemic treatment of pulmonary, renal, and hepatic fibrosis.

Finally, MRG-110, an inhibitor of microRNA-92, is the Company’s product candidate for the treatment of heart failure, wound healing, and other ischemic disease.

The Company believes its experience in microRNA biology and chemistry, drug discovery, bioinformatics, translational medicine, and drug development allows it to identify and develop microRNA-targeted drugs that are designed to regulate gene pathways to return diseased tissues to a healthy state.

The Company believes its drug discovery and development strategy will enable it to progress its product candidates from preclinical discovery to confirmation of mechanism of action in humans quickly and efficiently.

The elements of this strategy include identification of mechanistic biomarkers, in early-stage clinical trials to assess target engagement in humans, as well as monitoring outcomes in these early-stage clinical trials to help guide later clinical development.

The Company has funded its operations to date principally through proceeds received from the sale of the Company’s common stock (“Common Stock”) and other equity securities, debt financings, up-front milestones, and reimbursements received under a prior license and collaboration agreement.

Since its inception and through June 30, 2020, the Company has generated an accumulated deficit of $ 182.7 million.

As of June 30, 2020, the Company had approximately $ 30.6 million in cash and cash equivalents.

Based on its current operating plans, management believes that the Company’s cash and cash equivalents will be sufficient to fund the Company’s operations into the third quarter of 2021.

In March 2020, the World Health Organization declared the outbreak of COVID-19, a novel strain of Coronavirus, a global pandemic.

This outbreak is causing major disruptions to businesses and markets worldwide as the virus spreads.

The Company cannot predict what the long-term effects of this pandemic and the resulting economic disruptions may have on the Company’s liquidity and results of operations.

The extent of the effect of the COVID-19 pandemic on the Company’s liquidity and results of operations will depend on a number future developments, including the duration, spread and intensity of the pandemic, and governmental, regulatory and private sector responses, all of which are uncertain and difficult to predict.

The COVID-19 pandemic may make it more difficult for the Company to enroll patients in any future clinical trials or cause the Company to further delay enrollment or announcement of results from its ongoing clinical trials.

The economic uncertainty surrounding the COVID-19 pandemic may also dramatically reduce the Company’s ability to secure debt or equity financing necessary to support the Company’s operations.

The Company is unable to currently estimate the financial effect of the pandemic.

If the pandemic continues to be a severe worldwide crisis, it could have a material adverse effect on the Company’s business, results of operations, financial condition, and cash flows.

Miragen Therapeutics, Inc., a Delaware corporation (the “Company” or “miRagen”), is a biotechnology company advancing new treatments for patients with diseases that are underserved by current therapies.

The Company’s most advanced program, VRDN-001, is an anti-IGF-1R monoclonal antibody for thyroid eye disease, a debilitating condition that can cause bulging eyes, or proptosis, as well as double vision and potential blindness.

On October 27, 2020, miRagen entered into a merger agreement with Viridian Therapeutics, Inc.

(“Viridian”), as described in Note 13.

Subsequent Events .

Concurrent with the acquisition of Viridian, on October 27, 2020, the Company agreed to sell an aggregate of approximately 195,290 shares of the Company’s Series A Non-Voting Convertible Preferred Stock, par value $ 0.01 per share (the “Series A Preferred Stock”), for an aggregate purchase price of approximately $ 91.0 million.

Subject to satisfaction of specified conditions, each share of Series A Preferred Stock is convertible into 1,000 shares of the Company’s common stock.

The accompanying condensed consolidated financial statements have been prepared on a basis which assumes the Company is a going concern, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from any uncertainty related to its ability to continue as a going concern.

The Company has funded its operations to date principally through proceeds received from the sale of the Company’s common stock (“Common Stock”), its Series A Preferred Stock, and other equity securities, debt financings, up-front milestones, and reimbursements received under a prior license and collaboration agreement.

Since its inception and through September 30, 2020, the Company has generated an accumulated deficit of $ 188.1 million.

The Company expects to continue to generate operating losses in the foreseeable future.

The Company has no products approved for commercial sale, has not generated any revenue from product sales, and cannot guarantee when or if it will generate any revenue from product sales.

Since its inception and through June 30, 2020, the Company has generated an accumulated deficit of $ 182.7 million.

Substantially all of the Company’s operating losses resulted from expenses incurred in connection with its research and development programs and from general and administrative costs associated with its operations.

1 unchanged sentence

It is expected that operating losses will fluctuate significantly from quarter to quarter and year to year due to timing of clinical development programs and efforts to achieve regulatory approval.

The Company will continue to require additional capital beyond its current cash runway guidance of into the third quarter of 2021 to continue its operations.

As of September 30, 2020, the Company had approximately $ 30.1 million in cash and cash equivalents.

As of the issuance date of the interim condensed consolidated financial statements, the Company expects that its cash and cash equivalents, including approximately $ 91.0 million in gross proceeds the company received on October 30, 2020 from the sale of its Series A Preferred Stock in a private placement and the cash held by Viridian at the time of the acquisition, will be sufficient to fund its operating expenses and capital expenditure requirements through the end of 2023.

If the Company’s stockholders do not timely approve the conversion of its Series A Preferred Stock, then the holders of the Company’s Series A Preferred Stock may elect to require the Company to settle their shares of Series A Preferred Stock for cash at a price per share equal to the fair value of the Series A Preferred Stock, as described in the Company’s certificate of designation relating to the Series A Preferred Stock.

If the Company is required to settle a significant amount of the Series A Preferred Stock, the Company expects it would not have sufficient liquidity to settle the Series A Preferred Stock.

The Company will continue to require additional capital in order to continue to finance its operations.

The amount and timing of future funding requirements will depend on many factors, including the pace and results of the Company’s clinical development efforts, equity financings, entering into license and collaboration agreements, and issuing debt or other financing vehicles.

1 unchanged sentence

Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on the Company’s financial condition and its ability to develop its product candidates.

Changing circumstances may cause the Company to consume capital significantly faster or slower than currently anticipated.

Changing circumstances may cause the Company to

consume capital significantly faster or slower than currently anticipated.

If the Company is unable to acquire additional capital or resources, it will be required to modify its operational plans.

14 unchanged sentences

The Company’s management performed an evaluation of its activities through the date of filing of these financial statements and concluded that there are no subsequent events requiring disclosure, other than as disclosed.

Risk and Uncertainties – Impact of the COVID-19 Coronavirus

The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic.

The virus continues to spread globally, has been declared a pandemic by the World Health Organization and has spread to over 100 countries, including the United States.

The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

The spread of COVID-19 has caused the Company to modify its business practices, including implementing a work-from-home policy for all employees who are able to perform their duties remotely and restricting all nonessential travel, and it expects to continue to take actions as may be required or recommended by government authorities or as the Company determines are in the best interests of its employees, the patients it serves and other business partners in light of COVID-19.

Potential impacts to the Company’s business include temporary closures of its facilities or those of its vendors, disruptions or restrictions on its employees’ ability to travel, disruptions to or delays in ongoing laboratory experiments and operations and the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, and its ability to raise capital.

As of September 30, 2020, there have been no material impacts to the Company as a result of the COVID-19 pandemic.

As the impacts of COVID-19 continue to unfold, the Company will continually assess the impacts, as the extent to which the COVID-19 pandemic may materially impact the Company’s financial condition, liquidity or results of operations in the future is uncertain.

Going Concern

39 unchanged sentences

The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract.

The Company utilizes key assumptions to determine the stand-alone selling price, which may include other

comparable transactions, pricing considered in negotiating the transaction, and the estimated costs.

The Company utilizes key assumptions to determine the stand-alone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction, and the estimated costs.

Variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated are consistent with the amounts the Company would expect to receive for the satisfaction of each performance obligation.

22 unchanged sentences

A business restructuring is defined as an exit or disposal activity that includes, but is not limited to, a program that is planned and controlled by management and materially changes either the scope of a business or the manner in which that business is conducted.

Business restructuring charges include (i) one-time termination benefits related to employee separations, (ii) contract termination costs, and (iii) other related costs associated with exit or disposal activities including.

Business restructuring charges include (i) one-time termination benefits related to employee

separations, (ii) contract termination costs, and (iii) other related costs associated with exit or disposal activities including.

In 2020 and 2019, t he Company implemented two phases of a restructuring plan to streamline the organization, reduce costs, and direct resources to advance the Company’s primary operating goals.

1 unchanged sentence

(i) management commits to a plan of termination, (ii) the plan identifies the number of employees to be terminated and their job classifications or functions, locations and the expected completion date, (iii) the plan establishes the terms of the benefit arrangement, and (iv) it is unlikely that significant changes to the plan will be made or the plan will be withdrawn.

For one-time termination benefits for

which future service is required, a liability is measured at the communication date based on its value as of the termination date and recognized ratably over the future service period.

For one-time termination benefits for which future service is required, a liability is measured at the communication date based on its value as of the termination date and recognized ratably over the future service period.

The Company recognizes and measures a liability for other related costs in the period in which the liability is incurred.

17 unchanged sentences

An impairment charge would occur when a decline in the fair value of the investments below the cost basis is judged to be other-than-temporary.

As of June 30, 2020, the Company did not have any balances associated with available-for-sale securities.

As of September 30, 2020, the Company did not have any balances associated with available-for-sale securities.

As of December 31, 2019, the Company’s short-term available-for-sale securities had an amortized cost of $ 2.0 million, fair value of $ 2.0 million, and no associated unrealized gain or loss.

The Company had no long-term investments as of June 30, 2020 or December 31, 2019.

The Company had no long-term investments as of September 30, 2020 or December 31, 2019.

Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities that have been measured at fair value and indicate the fair value of the hierarchy of the valuation inputs utilized to determine such fair value.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities.

In general, fair

values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities.

Fair value determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices, for similar assets or liabilities, quoted market prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Level 1 Level 3 Level 1 Level 3

27 unchanged sentences

Going forward the Company’s operating lease assets and liabilities will be recognized at the commencement date of the lease based upon the present value of lease payments over the lease term.

The lease payments used to determine the Company’s operating lease assets may include lease incentives, stated rent increases, and escalation clauses and are recognized in the Company’s operating lease assets in the Company’s condensed consolidated balance sheets.

The lease payments used to determine the Company’s operating

lease assets may include lease incentives, stated rent increases, and escalation clauses and are recognized in the Company’s operating lease assets in the Company’s condensed consolidated balance sheets.

The Company’s operating leases are reflected in operating lease right-of-use asset and operating lease liability within accrued and other liabilities in the Company’s condensed consolidated balance sheets.

5 unchanged sentences

The Company assesses the carrying amount of its property and equipment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable.

No impairment charges were recorded during the three and six months ended June 30, 2020 and 2019.

No impairment charges were recorded during the three and nine months ended September 30, 2020 and 2019.

Net Loss per Share

4 unchanged sentences

Unrealized accumulated comprehensive gains or losses are reflected as a separate component in the condensed consolidated statements of stockholders’ equity.

The Company had no realized or unrealized gains or losses during the three and six months ended June 30, 2020.

The Company had unrealized gains of $ 9 thousand and $ 14 thousand during the three and six months ended June 30, 2019, respectively, and no realized gains or losses during the same corresponding periods.

The Company had no realized or unrealized gains or losses during the three and nine months ended September 30, 2020.

The Company had an unrealized loss of $ 8 thousand and unrealized gain of $ 6 thousand during the three and nine months ended September 30, 2019, respectively, and no realized gains or losses during the same corresponding periods.

The Company accounts for income taxes by using an asset and liability method of accounting for deferred income taxes.

7 unchanged sentences

The Company classifies interest and penalties arising from the underpayment of income taxes in the condensed consolidated statements of operations and comprehensive loss as general and administrative expenses.

No such expenses have been recognized during the three and six months ended June 30, 2020 and 2019.

No such expenses have been recognized during the three and nine months ended September 30, 2020 and 2019.

The legislation informally titled the Tax Cuts and Jobs Act of 2017 (“Tax Act”) was signed into law on December 22, 2017.

8 unchanged sentences

international taxation from a worldwide tax system to a territorial tax system.

Under the Tax Act as modified by the recently enacted Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), federal NOLs incurred in tax years beginning after December 31, 2017 and before January 1, 2021 may be carried back to each of the five tax years preceding such loss, and NOLs arising in tax years beginning after December 31, 2020 may not be carried back.

Because we have had no taxable income in prior years, we do not anticipate carrying back any of our net operating losses.

years beginning after December 31, 2020 may not be carried back.

Because the Company has had no taxable income in prior years, we do not anticipate carrying back any of our net operating losses.

Moreover, federal net operating losses generated in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs may be limited to 80% of current year taxable income for tax years beginning after January 1, 2021.

17 unchanged sentences

The eliminated positions were primarily related to research and development and corresponding project, general, and administrative support.

From the inception of the restructuring plan in August 2019 and through June 30, 2020, the Company had recorded cumulative restructuring expense of $ 2.3 million and expects to incur approximately $ 0.1 million in additional restructuring expense, primarily related to retention, during the remainder of 2020.

The Company recorded $ 0.1 million and $ 0.2 million in restructuring charges during the three and six months ended June 30, 2020, respectively, which was primarily related to retention transactions and recorded in research and development expenses on the condensed consolidated statements of operations and comprehensive loss.

No restructuring charges were recorded during the three and six months ended June 30, 2019.

From the inception of the restructuring plan in August 2019 and through September 30, 2020, the Company had recorded cumulative restructuring expense of $ 2.4 million and expects to incur approximately $ 0.1 million in additional restructuring expense, related to this restructuring plan during the remainder of 2020.

The Company recorded $ 0.1 million and $ 0.3 million in restructuring charges during the three and nine months ended September 30, 2020, respectively, which was primarily related to retention transactions and recorded in research and development expenses on the condensed consolidated statements of operations and comprehensive loss.

No restructuring charges were recorded during the three and nine months ended September 30, 2019.

The following table summarizes the Company’s accrued restructuring liability balance and associated activity (in thousands):

December 31, 2019 Additions Adjustments Cash Payments June 30, 2020

December 31, 2019 Additions Adjustments Cash Payments September 30, 2020

Retention $ 935 $ 275 $ 37 $ ( 972 ) $ 275

5 unchanged sentences

In August 2019, Servier terminated the Servier Collaboration Agreement effective in February 2020.

During the period from receipt of notice from Servier in August 2019 and termination in February 2020, the Company completed certain activities under its development plan with Servier, which included finalizing the two Phase 1 clinical trials of MRG-110.

The activities for which the Company is eligible for reimbursement under the Servier Collaboration Agreement are considered a research and development performance obligation and revenue are recognized in accordance with ASC 606 through the termination date.

During the period from receipt of notice from Servier in August 2019 and termination in February 2020, the Company completed certain activities under its development plan with Servier, which

included finalizing the two Phase 1 clinical trials of MRG-110.

The activities for which the Company is eligible for reimbursement under the Servier Collaboration Agreement were considered a research and development performance obligation and revenue was recognized in accordance with ASC 606 through the termination date.

Accounting Analysis

7 unchanged sentences

Amounts incurred and billable, but not billed to Servier, for research and related intellectual property activities totaled $ 0.3 million as of December 31, 2019, which are included in prepaid expenses and other current assets in the Company’s condensed consolidated balance sheets.

No amounts were incurred and billable, but not billed to Servier, for research and related intellectual property activities as of June 30, 2020.

As of June 30, 2020 and December 31, 2019, the Company had no accounts receivable balances outstanding for Servier research and related intellectual property activities.

No amounts were incurred and billable, but not billed to Servier, for research and related intellectual property activities as of September 30, 2020.

As of September 30, 2020 and December 31, 2019, the Company had no accounts receivable balances outstanding for Servier research and related intellectual property activities.

Collaboration revenue under the Servier Collaboration Agreement consisted of the following:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

3 unchanged sentences

Property and equipment, net, consisted of the following:

September 30,

2020 December 31,

7 unchanged sentences

Property and equipment, net $ 370 $ 523

During the three and six months ended June 30, 2020 and 2019, depreciation and amortization expense was $ 0.1 million.

During the three months ended September 30, 2020 and 2019, depreciation and amortization expense was $ 0.1 million.

During the nine months ended September 30, 2020 and 2019, depreciation and amortization expense was $ 0.2 million.

Depreciation and amortization expense is recorded primarily in research and development expense on the condensed consolidated statements of operations and comprehensive loss.

1 unchanged sentence

Accrued liabilities consisted of the following:

September 30,

2020 December 31,

15 unchanged sentences

In April 2020, the 2017 Loan Agreement was amended to extend the interest-only payment period and extended maturity date by an additional six months .

Amounts outstanding bear interest at the prime rate ( 3.25 % and 4.75 % at June 30, 2020 and December 31, 2019, respectively), with a final payment fee equal to $ 0.9 million due upon maturity.

As of June 30, 2020, no additional amounts are available under the 2017 SVB Loan Agreement.

Amounts outstanding bear interest at the prime rate ( 3.25 % and 4.75 % at September 30, 2020 and December 31, 2019, respectively), with a final payment fee equal to $ 0.9 million due upon maturity.

As of September 30, 2020, no additional amounts are available under the 2017 SVB Loan Agreement.

The Company may elect to prepay prior to maturity all or any portion of the outstanding principal amounts under the 2017 SVB Loan Agreement, subject to a prepayment charge, depending on the date of prepayment or upon the occurrence of an event of default in which the Company’s obligations to repay the outstanding principal is accelerated.

24 unchanged sentences

Amounts outstanding under the 2017 SVB Loan Agreement were as follows (in thousands):

September 30,

2020 December 31,

5 unchanged sentences

Note payable, net of current portion $ 3,456 $ 4,328

Future annual minimum principal payments under the 2017 SVB Loan Agreement as of June 30, 2020 for the respective calendar years are as follows (in thousands):

Future annual minimum principal payments under the 2017 SVB Loan Agreement as of September 30, 2020 for the respective calendar years are as follows (in thousands):

Total $ 6,333

8 unchanged sentences

The CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount borrowed.

Under the PPP, the Company may apply for and be granted forgiveness for all or part of the PPP Loan.

In October 2020, the Company applied for forgiveness for the full amount of the PPP Loan, of which all or a portion may be forgiven.

The amount of loan proceeds eligible for forgiveness is based on a formula that takes into account a number of factors, including the amount of loan proceeds used by the Company during the eight-week period after the loan origination for certain purposes, including payroll costs, interest on certain mortgage obligations, rent payments on certain leases, and certain qualified utility payments, provided that at least 75% of the loan amount is used for eligible payroll costs.

Subject to the other requirements and limitations on loan forgiveness, only loan proceeds spent on payroll and other eligible costs during the covered eight-week period will qualify for forgiveness.

The Company intends to use the PPP Loan for qualifying and other related expenses.

The Company used the PPP Loan for qualifying and other related expenses.

The Company can provide no assurance that it will obtain forgiveness of the PPP Loan in whole or in part.

4 unchanged sentences

Amounts outstanding under the PPP Loan were as follows (in thousands):

September 30,

Principal amount outstanding $ 1,726

1 unchanged sentence

Note payable, net of current portion $ 671

Future annual minimum principal payments under the PPP Loan as of June 30, 2020 for the respective calendar years are as follows (in thousands):

Future annual minimum principal payments under the PPP Loan as of September 30, 2020 for the respective calendar years are as follows (in thousands):

Total $ 1,726

8 unchanged sentences

Yale is responsible for filing, prosecuting, and maintaining foreign and domestic patent applications and patents on all inventions jointly developed by the parties under the Yale Agreements.

Through June 30, 2020, the Company has received $ 1.0 million under the Yale Agreements.

Through September 30, 2020, the Company has received $ 1.2 million under the Yale Agreements.

The Yale Agreements terminate automatically on the date that Yale delivers its final research report to the NIH under the terms of the grant underlying the Yale Agreements.

5 unchanged sentences

The lease term was amended in April 2020, which extended the lease term.

As of June 30, 2020, the lease was scheduled to mature on December 31, 2021.

As of September 30, 2020, the lease was scheduled to mature on December 31, 2021.

Upon adoption, the Company recognized a right-of-use asset and corresponding lease liability for the lease agreement of $ 0.4 million as of January 1, 2020, by calculating the present value of lease payments, discounted at 6 %, the Company’s estimated incremental borrowing rate, over the 12 months expected remaining term.

As a result of the transition to ASC 842 , the Company recorded an immaterial prior-period adjustment, as a cumulative-effect adjustment, at January 1, 2020.

In April 2020,

2020, when the lease was amended, the Company accounted for the amendment as a lease modification in accordance with ASC 842, which resulted in an immaterial adjustment to the right-of-use asset and corresponding lease liability.

1 unchanged sentence

This is an internally developed rate that would be incurred to borrow, with similar collateral, over the term of the lease.

Amortization of the operating lease right-of-use asset, and corresponding reduction of operating lease obligation, amounted to $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2020, respectively, and was included in operating expense in the condensed consolidated statement of operations and comprehensive loss.

During the three and six months ended June 30, 2019, lease rental expense, and the corresponding cash outflow, was approximately $ 0.1 million and $ 0.2 million, respectively.

As of June 30, 2020, the remaining lease term was 1.5 years.

Future minimum payments as of June 30, 2020 were approximately $ 0.6 million through December 31, 2021.

As of June 30, 2020, the Company’s operating lease obligations were reflected as operating lease liabilities of $ 0.4 million as accrued liabilities and $ 0.2 million as other liabilities in the Company’s condensed consolidated balance sheets.

The Company is also required to pay for operating expenses related to the leased space, which were $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2020 and 2019, respectively.

Amortization of the operating lease right-of-use asset, and corresponding reduction of operating lease obligation, amounted to $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2020, respectively, and was included in operating expense in the condensed consolidated statement of operations and comprehensive loss.

During the three and nine months ended September 30, 2019, lease rental expense, and the corresponding cash outflow, was approximately $ 0.1 million and $ 0.2 million, respectively.

As of September 30, 2020, the remaining lease term was 1.3 years.

Future minimum payments as of September 30, 2020 were approximately $ 0.5 million through December 31, 2021.

As of September 30, 2020, the Company’s operating lease obligations were reflected as operating lease liabilities of $ 0.4 million as accrued liabilities and $ 0.1 million as other liabilities in the Company’s condensed consolidated balance sheets.

The Company is also required to pay for operating expenses related to the leased space, which were $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2020, respectively, and $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2019, respectively.

The operating expenses are incurred separately and were not included in the present value of lease payments.

7 unchanged sentences

Upon execution of the Aspire Stock Purchase Agreement, the Company sold to Aspire Capital 1,598,465 shares of Common Stock at $ 0.63 per share for proceeds of $ 1.0 million (the “Initial Purchase Shares”).

As consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement and the Initial Purchase Shares, the Company issued to 959,079 shares of Common Stock to Aspire Capital as a non-refundable commitment fee, for a total issuance of 2,557,544 shares.

In January 2020, the Company sold to Aspire Capital 2,200,000 shares of Common Stock at a weighted-average price of $ 1.84 per share for proceeds of $ 4.1 million.

In July 2020, the Company sold to Aspire Capital an additional 3,532,806 shares of Common Stock at a weighted-average price of $ 1.25 for proceeds of $ 4.4 million.

As of August 5, 2020, the Company may sell an additional $ 10.5 million of shares of Common Stock to Aspire Capital.

As consideration for entering into the Aspire Stock Purchase Agreement, concurrently with the execution of the Aspire Stock Purchase Agreement and the Initial Purchase Shares, the Company issued to 959,079 shares of Common Stock to Aspire Capital as a non-refundable commitment fee, for a total issuance of 2,557,544 shares.

During the three months ended September 30, 2020, the Company sold to Aspire Capital 3,982,806 shares of Common Stock at a weighted-average price of $ 1.19 per share for aggregate net proceeds of $ 4.7 million.

During the nine months ended September 30, 2020, the Company sold to Aspire Capital 6,182,806 shares of Common Stock at a weighted-average price of $ 1.42 per share for aggregate net proceeds of $ 8.8 million.

As of September 30, 2020, the Company may sell an additional $ 10.2 million of shares of Common Stock to Aspire Capital.

Under the Aspire Stock Purchase Agreement, the Company has the right, in its sole discretion, on any trading day selected by it, and within certain specified limitations, to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 200,000 shares of Common Stock per business day at a per share price equal to the lesser of (i) the lowest sale price of Common Stock on the purchase date or (ii) the average of the three lowest closing sale prices for the Common Stock during the 10 consecutive business days ending on the business day immediately preceding the purchase date.

1 unchanged sentence

(i) the closing sale price of the shares on the purchase date, or (ii) ninety-seven percent ( 97 %) of the next business day’s volume weighted average price (each such purchase, a “VWAP Purchase”).

The Company shall have the right, in its sole discretion, to determine a maximum number of shares and set a minimum market price threshold for each VWAP Purchase.

The Company shall have the right, in its sole discretion, to determine a maximum number of shares and set a minimum market price threshold for each VWAP

The Company can only require a VWAP Purchase if the Company has also submitted a regular purchase on the notice date for the VWAP Purchase.

12 unchanged sentences

Each closing is subject to the Company’s achievement of specified operational milestones under the LLS Stock Purchase Agreement and other customary closing conditions, provided, however, that each such closing must be completed prior to December 31, 2021.

Based on the modifications to its Phase 2 clinical trial of cobomarsen in CTCL in December 2019, the Company does not anticipate it will achieve any of the remaining milestones under the LLS Stock Purchase Agreement.

The Company does not anticipate it will achieve any of the remaining milestones under the LLS Stock Purchase Agreement.

Common Stock Sales Agreement

7 unchanged sentences

(i) the sale of all Common Stock subject to the ATM Agreement or (ii) termination of the ATM Agreement in accordance with its terms.

During the six months ended June 30, 2020, the Company sold, pursuant to the terms of the ATM Agreement, 975,063 shares of Common Stock, at a weighted average price of $ 0.72 per share, for aggregate net proceeds of approximately $ 0.7 million, including commissions to Cowen as sales agent.

Since March 2017 and through June 30, 2020, the Company sold, pursuant to the terms of the ATM Agreement, an aggregate of 2,846,449 shares of Common Stock, at a weighted average price of $ 4.25 per share, for aggregate net proceeds of approximately $ 11.6 million, including initial expenses for executing the “at the market offering” and commissions to Cowen as sales agent.

During the nine months ended September 30, 2020, the Company sold, pursuant to the terms of the ATM Agreement, 975,063 shares of Common Stock, at a weighted average price of $ 0.72 per share, for aggregate net proceeds of approximately $ 0.7 million, including commissions to Cowen as sales agent.

Since March 2017 and through September 30, 2020, the Company sold, pursuant to the terms of the ATM Agreement, an aggregate of 2,846,449 shares of Common Stock, at a weighted average price of $ 4.25 per share, for aggregate net proceeds of approximately $ 11.6 million, including initial expenses for executing the “at the market offering” and commissions to Cowen as sales agent.

Common Stock Public Offering

2 unchanged sentences

Each whole warrant has an exercise price of $ 1.10 per share and expires on the fifth anniversary of the date of issuance.

The shares of common stock and warrants were sold together as a fixed combination, each consisting of one share of Common Stock and one-half warrant, with each whole warrant

exercisable to purchase one whole share of Common Stock but were issued separately and were immediately separable upon issuance.

The shares of common stock and warrants were sold

together as a fixed combination, each consisting of one share of Common Stock and one-half warrant, with each whole warrant exercisable to purchase one whole share of Common Stock but were issued separately and were immediately separable upon issuance.

The combined price to the public in the offering for each share of Common Stock and accompanying half warrant was $ 1.00 , which resulted in approximately $ 13.9 million of net proceeds to the Company after deducting underwriting commissions and discounts and other estimated offering expenses payable by the Company and excluding the proceeds, if any, from the exercise of the warrants.

Series Preferred

As of June 30, 2020, the Company had no shares of preferred stock outstanding and had not designated any class or series of preferred stock.

As of September 30, 2020, the Company had no shares of preferred stock outstanding and had not designated any class or series of preferred stock.

Under the Company’s amended and restated certificate of incorporation, the Company’s board of directors has the authority to designate and issue up to 5,000,000 shares of preferred stock, at its discretion, in one or more classes or series and to fix the powers, preferences and rights, and the qualifications, limitations, or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, and liquidation preferences, without further vote or action by the Company’s stockholders.

Refer to Note 1.

Description of Business regarding the issuance of Series A Preferred Stock in October 2020.

Upon the issuance of warrants to purchase shares of common stock, the Company evaluates the terms of the warrant issue to determine the appropriate accounting and classification of the warrant issue pursuant to FASB ASC Topic 480, Distinguishing Liabilities from Equity , FASB ASC Topic 505, Equity , FASB ASC 815, Derivatives and Hedging, and ASC 718, Compensation - Stock Compensation .

1 unchanged sentence

Liability-classified warrants are valued at fair value at the date of issue and at each reporting date pursuant to FASB ASC 820, Fair Value Measurement , and are reflected as a warrant liability on the Company’s condensed consolidated balance sheets with the change in the warrant liability during each reporting period reflected as a gain (loss) from change in fair value of warrant liability in the condensed consolidated statement of operations and comprehensive loss.

Number of Underlying Shares (1) Weighted Average Exercise Price at June 30, 2020 Remaining Contractual Life at June 30, 2020

June 30, 2020 December 31, 2019

Number of Underlying Shares (1) Weighted Average Exercise Price at September 30, 2020 Remaining Contractual Life at September 30, 2020

September 30, 2020 December 31, 2019

Liability-classified warrants

10 unchanged sentences

(2) Subject to specified conditions, the Company may voluntarily reduce the warrant exercise price of the warrants issued in February 2020.

A summary of the Company’s warrant activity during the six months ended June 30, 2020 is as follows:

A summary of the Company’s warrant activity during the nine months ended September 30, 2020 is as follows:

Common Stock Warrants

3 unchanged sentences

Expired ( 10,707 ) $ 52.50

Outstanding at June 30, 2020 7,535,815 $ 1.13

Outstanding at September 30, 2020 7,535,815 $ 1.13

Liability-Classified Warrants

10 unchanged sentences

The terms of the warrants include certain provisions related to fundamental transactions, a cashless exercise provision in the event registered shares are not available, and do not include any mandatory redemption provisions.

Therefore, the warrants have been classified as equity with no subsequent remeasurement as long as the warrants continue to be classified as equity.

Therefore, as of September 30, 2020, the warrants have been classified as equity with no subsequent remeasurement as long as the warrants continue to be classified as equity.

On November 6, 2020, warrants were exercised to purchase 500,000 shares of Common Stock for proceeds of approximately $ 0.6 million.

In connection with the 2017 merger, the Company assumed 13,534 outstanding warrants to purchase shares of Common Stock at an exercise price of $ 52.50 per share.

6 unchanged sentences

Equity Incentive Plans

As of June 30, 2020, there were 1,063,002 options outstanding and no remaining equity awards available for future issuances under the 2008 Plan.

As of September 30, 2020, there were options exercisable for up to 1,050,991 shares of Common Stock outstanding and no remaining equity awards available for future issuances under the 2008 Plan.

All awards granted under the 2008 Plan that, after February 13, 2017, expire or terminate for any reason prior to exercise or settlement, are forfeited, or are reacquired, withheld, or not issued to satisfy a tax withholding obligation or to satisfy the exercise price of a stock award, will become available for grant under the 2016 Plan in accordance with its terms.

The 2016 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other stock awards, and performance awards that may be settled in cash, stock, or other property.

All employees and non-employee directors are eligible to participate in the 2016 Plan and may receive all types of awards other than incentive stock options.

All employees and non-employee directors are eligible to participate in the 2016 Plan and may receive all types

of awards other than incentive stock options.

Incentive stock options may be granted under the 2016 Plan only to employees (including officers) and employees of the Company’s affiliates.

5 unchanged sentences

Cumulative increases to the share reserve through January 1, 2020 consisted of 3,530,773 shares.

As of June 30, 2020, there were outstanding stock options to purchase 4,095,970 shares of Common Stock and 1,541,083 shares of Common Stock available for issuance pursuant to the terms under the 2016 Plan.

As of September 30, 2020, there were outstanding stock options to purchase 4,859,851 shares of Common Stock and 789,213 shares of Common Stock available for issuance pursuant to the terms under the 2016 Plan.

Options granted under the 2008 Plan and the 2016 Plan have an exercise price equal to the market value of the Common Stock at the date of grant and expire ten years from the date of grant.

10 unchanged sentences

Forfeited or expired ( 974 ) $ 4.95

Outstanding at June 30, 2020 5,159 $ 3.17 6.86 $ 633,352

Vested or expected to vest at June 30, 2020 5,159 $ 3.17 6.86 $ 633,352

Exercisable as of June 30, 2020 2,328 $ 4.70 5.28 $ 34,819

Vested as of June 30, 2020 2,328 $ 4.70 5.28 $ 34,819

Outstanding at September 30, 2020 5,911 $ 2.77 7.20 $ 50,011

Vested or expected to vest at September 30, 2020 5,911 $ 2.77 7.20 $ 50,011

Exercisable as of September 30, 2020 2,383 $ 4.59 5.43 $ 3,758

Vested as of September 30, 2020 2,383 $ 4.59 5.43 $ 3,758

Fair Value Assumptions

9 unchanged sentences

Stock Options Granted

The weighted-average grant-date fair value of options granted to the Company’s employees and members of its board of directors during the six months ended June 30, 2020 and 2019 was $ 0.65 and $ 2.33 , respectively.

The weighted-average grant-date fair value of options granted to the Company’s employees and members of its board of directors during the nine months ended September 30, 2020 and 2019 was $ 0.69 and $ 2.31 , respectively.

The fair value was determined by the Black-Scholes option pricing model using the following weighted-average assumptions:

Six Months Ended

Nine Months Ended

September 30,

Expected term, in years 5.10 6.35

6 unchanged sentences

(i) the closing price at the beginning of the offering period or (ii) the closing price at the end of the offering period.

The Company expects that a new 6 -month offering period will begin each August 22 and February 22.

As of June 30, 2020, the Company had 947,793 shares available for issuance and 145,061 cumulative shares had been issued under the ESPP.

New six-month offering periods begin each August 22 and February 22.

As of September 30, 2020, the Company had 933,469 shares available for issuance and 159,385 cumulative shares had been issued under the ESPP.

Share-Based Compensation Expense

Share-based compensation related to all equity awards issued pursuant to the 2008 Plan and 2016 Plan and for estimated shares to be issued under the ESPP for the purchase periods active during each respective period is included in the condensed consolidated statements of operations and comprehensive loss as follows:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

2 unchanged sentences

Total share-based compensation expense $ 1,902 $ 2,967

As of June 30, 2020, the Company had $ 3.9 million of total unrecognized employee and non-employee share-based compensation costs, which the Company expects to recognize over a weighted-average remaining period of 2.36 years.

As of September 30, 2020, the Company had $ 3.9 million of total unrecognized employee and non-employee share-based compensation costs, which the Company expects to recognize over a weighted-average remaining period of 2.11 years.

NET LOSS PER SHARE

3 unchanged sentences

Potentially dilutive securities include the following:

September 30,

(in thousands)

2 unchanged sentences

Total 13,447 4,081

SUBSEQUENT EVENTS

Nasdaq Minimum Bid Price

On October 8, 2020, the Company received a deficiency letter from the Listing Qualifications Department of the Nasdaq Stock Market notifying it that, for the last 30 consecutive business days, the bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Global Select Market (“Minimum Bid Price Requirement”).

In accordance with Nasdaq Listing Rules, the Company has an initial period of 180 calendar days to regain compliance with the minimum bid price rule.

If the Company does not regain compliance with the Minimum Bid Price Requirement by April 6, 2021, then the Company may be eligible for an additional 180 calendar day compliance period.

The Company is actively monitoring its stock price and will consider any and all options available to regain compliance with the Minimum Bid Price Requirement.

Agreement and Plan of Merger

On October 27, 2020, the Company acquired Viridian in accordance with the terms of the Agreement and Plan of Merger, dated October 27, 2020 (the “Merger Agreement”), by and among the Company, Oculus Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“First Merger Sub”), Oculus Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Second Merger Sub”), and Viridian.

Pursuant to the Merger Agreement, First Merger Sub merged with and into Viridian, pursuant to which Viridian was the surviving corporation and became a wholly owned subsidiary of the Company (the “First Merger”).

Immediately following the First Merger, Viridian merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity (together with the First Merger, the “Merger”).

The Merger is intended to qualify as a tax-free reorganization for U.S.

federal income tax purposes.

Under the terms of the Merger Agreement, at the closing of the Merger, the Company issued or reserved for the issuance of an aggregate of 11,409,188 shares of the Company’s Common Stock and 203,202 shares of Series A Preferred Stock (as described below) to securityholders of Viridian.

Each share of Series A Preferred Stock is convertible into 1,000 shares of Common Stock, subject to certain conditions described below.

Certain shares of Common Stock outstanding immediately after the Merger are held by stockholders subject to lock-up restrictions, pursuant to which such stockholders have agreed, except in limited circumstances, not to sell or transfer, or engage in swap or similar transactions with respect to, shares of the Common Stock, including, as applicable, shares received in the Merger and issuable upon exercise of certain options, for a period of 180 days following the closing of the Merger.

Pursuant to the Merger Agreement, the Company has agreed to hold a stockholders’ meeting to submit the following matters to its stockholders for their consideration:

(i) the approval of the conversion of the Series A Preferred Stock into shares of Common Stock in accordance with the Nasdaq Listing Rule 5635(a) (the “Conversion Proposal”), and (ii) if necessary, the approval of an amendment to the certificate of incorporation of the Company to authorize sufficient shares of Common Stock for the conversion of the Series A Preferred Stock issued pursuant to the Merger Agreement and the Securities Purchase Agreement (as described below) (the “Charter Amendment Proposal”) (and together with the Conversion Proposal, the “Meeting Proposals”).

In connection with these matters, the Company intends to file with the SEC a proxy statement and other relevant materials.

Additionally, if the Company’s stockholders do not timely approve the conversion of the Series A Preferred Stock, then the holders of the Series A Preferred Stock may be entitled to require the Company to settle their shares of Series A Preferred Stock for cash at a price per share equal to the fair value of the Series A Preferred Stock, as described in the Company’s certificate of designation relating to the Series A Preferred Stock.

If the Company is forced to settle any shares of Series A Preferred Stock, it could materially affect the Company’s results of operations.

The Company’s board of directors approved the Merger Agreement and the related transactions, and the consummation of the Merger was not subject to approval of the Company’s stockholders.

Support Agreements

In connection with the execution of the Merger Agreement, the Company and Viridian entered into stockholder support agreements (the “Support Agreements”) with the Company’s directors and officers.

The Support Agreements provide that, among other things, each of the stockholders has agreed to vote or cause to be voted all of the shares of Common Stock owned

by such stockholder in favor of the Meeting Proposals at the Company stockholders’ meeting to be held in connection therewith.

Lock-up Agreements

Concurrently and in connection with the execution of the Merger Agreement, certain Viridian securityholders as of immediately prior to the Merger, and the Company’s directors and officers as of immediately following the Merger entered into lock-up agreements with the Company and Viridian, pursuant to which each such stockholder will be subject to a 180-day lockup on the sale or transfer of shares of Common Stock held by each such stockholder at the closing of the Merger (the “Closing”), including those shares received by Viridian securityholders in the Merger (the “Lock-up Agreements”).

Contingent Value Rights Agreement

The Merger Agreement contemplates that within 30 days following the Closing, the Company and the Rights Agent (as defined therein) will execute and deliver a contingent value rights agreement (the “CVR Agreement”), pursuant to which each holder of Common Stock as of November 6, 2020, other than former stockholders of Viridian, shall be entitled to one contractual contingent value right issued by the Company, subject to and in accordance with the terms and conditions of the CVR Agreement, for each share of Common Stock held by such holder.

Each contingent value right shall entitle the holder thereof to receive certain cash payments from the net proceeds, if any, related to the disposition of the Company’s legacy programs to develop product candidates that modulate microRNAs within five years following the Closing.

The contingent value rights are not transferable, except in certain limited circumstances as will be provided in the CVR Agreement, will not be certificated or evidenced by any instrument and will not be registered with the SEC or listed for trading on any exchange.

Private Placement and Securities Purchase Agreement

On October 27, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchasers named therein (the “Investors”).

Pursuant to the Purchase Agreement, the Company agreed to sell an aggregate of approximately 195,290 shares of Series A Preferred Stock for an aggregate purchase price of approximately $ 91.0 million (collectively, the “Financing”).

Each share of Series A Preferred Stock is convertible into 1,000 shares of Common Stock, as described below.

The powers, preferences, rights, qualifications, limitations, and restrictions applicable to the Series A Preferred Stock are set forth in the Certificate of Designation filed in connection with the Financing.

Holders of Series A Preferred Stock are entitled to receive dividends on shares of Series A Preferred Stock equal, on an as-if-converted-to-Common-Stock basis, and in the same form as dividends actually paid on shares of the Common Stock.

Except as otherwise required by law, the Series A Preferred Stock does not have voting rights.

However, as long as any shares of Series A Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock, (b) alter or amend the Certificate of Designation, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Preferred Stock, (d) increase the number of authorized shares of Series A Preferred Stock, (e) prior to the stockholder approval of the Conversion Proposal or at any time while at least 40 % of the originally issued Series A Preferred Stock remains issued and outstanding, consummate a Fundamental Transaction (as defined in the Certificate of Designation) or (f) enter into any agreement with respect to any of the foregoing.

The Series A Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

Following stockholder approval of the Conversion Proposal, each share of Series A Preferred Stock is convertible into shares of Common Stock at any time at the option of the holder thereof, into 1,000 shares of Common Stock, subject to certain limitations, including that a holder of Series A Preferred Stock is prohibited from converting shares of Series A Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.99 % and 19.99 %) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion.

Registration Rights Agreement

On the October 30, 2020, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Investors.

Pursuant to the Registration Rights Agreement, the Company will prepare and file a resale registration statement with the SEC within 90 calendar days following October 30, 2020 (the “Filing Deadline”).

The Company will use its reasonable best efforts to cause this registration statement to be declared effective by the SEC within 30 calendar days of the Filing Deadline (or within 60 calendar days if the SEC reviews the registration statement).

The Company has also agreed to, among other things, indemnify the Investors, their officers, directors, members, employees and agents, successors and assigns under the registration statement from certain liabilities and pay all fees and expenses (excluding any legal fees of the selling holder(s), and any underwriting discounts and selling commissions) incident to the Company’s obligations under the Registration Rights Agreement.

Assumption of Stock Option Plan

Upon closing of the Merger, the Company assumed all the outstanding options issued under Viridian’s 2020 Equity Incentive Plan.

The terms and conditions for each assumed option are substantially the same as prior to the Merger, including that the assumed options remain subject to the terms and conditions of Viridian’s 2020 Equity Incentive Plan, provided that each assumed option shall now be exercisable for shares of the Company’s common stock and the number of shares issuable upon exercise of, and the exercise price per share for, each assumed option has been appropriately adjusted to give effect to the Merger.

In connection with the Company’s public offering of its Common Stock and warrants that closed in February 2020, the Company issued warrants to purchase 7,500,000 shares of its common stock at a price of $ 1.10 per share (the “Warrants”).

Pursuant to the terms of the Warrants, the Merger constitutes a fundamental transaction resulting in the potential cash settlement of the Warrants.

Reverse Stock Split

The Company plans to effect a reverse stock split of its shares of common stock at a ratio of 1-for-15.

The Company anticipates the stock split will be effective as of November 12, 2020, and trading of the Common Stock will begin on a split-adjusted basis on November 13, 2020.

The Common Stock will continue to trade on the Nasdaq Capital Market under the ticker symbol "MGEN," although a new CUSIP number (60463E 202) has been assigned.

The Company’s stockholders approved the reverse stock split, and granted the Company’s board of directors the authority to effect a reverse stock split, at the Company’s annual meeting of shareholders held on May 21, 2020.

As a result of the reverse stock split, every 15 shares of the Company’s pre-reverse split Common Stock will be combined and reclassified into one share of Common Stock.

No fractional shares will be issued in connection with the reverse stock split, and if the stock split results in any stockholders owning a fractional share, then such stockholders will receive a cash payment in lieu of such fractional share.

The reverse stock split will not modify any rights of the Company’s Common Stock.

The reverse stock split will reduce the number of shares of Common Stock issuable upon the conversion of the Company’s outstanding shares of Series A Preferred Stock to a ratio of 66.67 and the exercise or vesting of its outstanding stock options and warrants in proportion to the ratio of the reverse stock split, and cause a proportionate increase in the conversion and exercise prices of such preferred stock, stock options and warrants.

The Company’s transfer agent, VStock Transfer, LLC, will act as exchange agent for the reverse stock split.

FORWARD-LOOKING STATEMENTS

16 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements