UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
DC 20549



Form
10-K/A

(Amendment
No. 1)



ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE
ACT OF 1934



For
the fiscal year ended December 31, 2017



Commission
File Number 000-13789



MARINA
BIOTECH, INC.

(Exact
name of registrant as specified in its charter)





|Delaware                            |  | 11-2658569             
|----------------------------------- |  | -----------------------
|(State
    or other jurisdiction of |  | (I.R.S.
    Employer   
|incorporation
    or organization)  |  | Identification
    No.)



|17870
    Castleton Street, Suite 250        |  |               
|-------------------------------------------- |  | --------------
|City
    of Industry, California             |  | 91748         
|(Address
    of principal executive offices) |  | (Zip
    Code)





Registrant’s
telephone number, including area code:



(626)
964-5788



Securities
registered pursuant to Section 12(b) of the Act: None



Securities
registered pursuant to Section 12(g) of the Act:



Common
Stock, $0.006 par value



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ]
No [X]



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes
[  ] No [X]



Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





|Large
    accelerated filer                       | [  ]                        | Accelerated
    filer         | [  ]
|------------------------------------------------- | --------------------------- | ----------------------------- | ----
|Non-accelerated
    filer                         | [  ]                        | Smaller
    reporting company | [X] 
|(Do
    not check if a smaller reporting company) | Emerging
    Growth Company | [  ]                         





If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No
[X].



The
aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $19.5 million as of June
30, 2017 based upon the closing price of $3.80 per share on the OTCQB tier of the OTC Markets on June 30, 2017.





As
of April 16, 2018, there were 10,521,278 shares of the registrant’s $0.006 par value common stock outstanding.





DOCUMENTS
INCORPORATED BY REFERENCE



None.
























EXPLANATORY NOTE



This
Amendment No. 1 on Form 10-K/A (this “Amendment”) amends our Annual Report on Form 10-K for the year ended December
31, 2017, as filed with the Securities and Exchange Commission on April 17, 2018 (the “2017 Annual Report”). We are
filing this Amendment to: (i) include information that was to be incorporated by reference from our definitive proxy statement
in connection with our annual meeting pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), since we will not file our definitive proxy statement in connection with such annual meeting within 120 days of our
fiscal year ended December 31, 2017; (ii) fix a typographical error contained in the Report of Independent Registered Public Accounting
Firm, so that the date of such report would properly be reflected as April 17, 2018; and (iii) add the consent of our independent
registered public accounting firm as Exhibit 23.1. In addition, as required by Rule 12b-15 under the Exchange Act, new certifications
by our principal executive officer and principal financial officer are filed as exhibits to this Amendment.



Except
as described above, no other changes are being made to the 2017 Annual Report. Except as described above, the 2017 Annual Report
continues to speak as of the date of filing, and we have not updated the disclosures contained therein to reflect any events which
occurred at a date subsequent to the filing of the 2017 Annual Report other than as expressly indicated in this Amendment. Accordingly,
this Amendment should be read in conjunction with the 2017 Annual Report on Form 10-K and the registrant’s other filings
with the Securities and Exchange Commission.





















MARINA
BIOTECH, INC.



Table
of Contents





|                  | Page                                                                                                            
|----------------- | ----------------------------------------------------------------------------------------------------------------
|PART
    I        |                                                                                                                 
|Item
    1.       | Business                                                                                                        
|Item
    1A.      | Risk
    Factors                                                                                                
|Item
    1B.      | Unresolved
    Staff Comments                                                                                   
|Item
    2.       | Properties                                                                                                      
|Item
    3.       | Legal
    Proceedings                                                                                           
|Item
    4.       | Mine
    Safety Disclosures                                                                                     
|                  |                                                                                                                 
|PART
    II       |                                                                                                                 
|Item
    5.       | Market
    for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|Item
    6.       | Selected
    Financial Data                                                                                     
|Item
    7.       | Management’s
    Discussion and Analysis of Financial Condition and Results of Operations                       
|Item
    7A.      | Quantitative
    and Qualitative Disclosures About Market Risk                                                  
|Item
    8.       | Financial
    Statements and Supplementary Data                                                                 
|Item
    9.       | Changes
    In and Disagreements With Accountants on Accounting and Financial Disclosure                        
|Item
    9A.      | Controls
    and Procedures                                                                                     
|Item
    9B.      | Other
    Information                                                                                           
|                  |                                                                                                                 
|PART
    III      |                                                                                                                 
|Item
    10.      | Directors,
    Executive Officers and Corporate Governance                                                      
|Item
    11.      | Executive
    Compensation                                                                                      
|Item
    12.      | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters              
|Item
    13.      | Certain
    Relationships and Related Transactions, and Director Independence                                   
|Item
    14.      | Principal
    Accounting Fees and Services                                                                      
|                  |                                                                                                                 
|PART
    IV       |                                                                                                                 
|Item
    15.      | Exhibits,
    Financial Statement Schedules                                                                     
|Signatures        | 87                                                                                                              
|Exhibit
    Index | 81                                                                                                              





2







FORWARD-LOOKING
STATEMENTS







This
Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995 and regulations promulgated thereunder. These forward-looking statements reflect our current views with respect to
future events or our financial performance, and involve certain known and unknown risks, uncertainties and other factors, including
those identified below, those discussed in Item 1A of this report under the heading “Risk Factors,” and those discussed
in our other filings with the Securities and Exchange Commission, which may cause our or our industry’s actual or future
results, levels of activity, performance or achievements to differ materially from those expressed or implied by any forward-looking
statements or from historical results. We intend such forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform Act. Forward-looking statements include information
concerning our possible or assumed future results of operations and statements preceded by, followed by, or that include the words
“may,” “will,” “could,” “would,” “should,” “believe,”
“expect,” “plan,” “anticipate,” “intend,” “estimate,” “predict,”
“potential” or similar expressions.







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 the 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-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:





| | ● | our
    ability to obtain additional and substantial funding for our company on an immediate basis, whether pursuant to a capital
    raising transaction arising from the sale of our securities, a strategic transaction or otherwise;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                         
| | ● | our
    ability to attract and/or maintain research, development, commercialization and manufacturing partners;                                                                                                                         
| |   |                                                                                                                                                                                                                                         
| | ● | the
    ability of our company and/or a partner to successfully complete product research and development, including pre-clinical
    and clinical studies and commercialization;                                                       
| |   |                                                                                                                                                                                                                                         
| | ● | the
    ability of our company and/or a partner to obtain required governmental approvals, including product and patent approvals;                                                                                                      
| |   |                                                                                                                                                                                                                                         
| | ● | the
    ability of our company and/or a partner to develop and commercialize products that can compete favorably with those of our
    competitors;                                                                                     
| |   |                                                                                                                                                                                                                                         
| | ● | the
    timing of costs and expenses related to the research and development programs of our company and/or our partners;                                                                                                               
| |   |                                                                                                                                                                                                                                         
| | ● | the
    timing and recognition of revenue from milestone payments and other sources not related to product sales;                                                                                                                       
| |   |                                                                                                                                                                                                                                         
| | ● | our
    ability to obtain suitable facilities in which to conduct our planned business operations on acceptable terms and on a timely
    basis;                                                                                        
| |   |                                                                                                                                                                                                                                         
| | ● | our
    ability to satisfy our disclosure obligations under the Securities Exchange Act of 1934, as amended, and to maintain the registration
    of our common stock thereunder;                                                       
| |   |                                                                                                                                                                                                                                         
| | ● | our
    ability to attract and retain qualified officers, employees and consultants as necessary; and                                                                                                                                   
| |   |                                                                                                                                                                                                                                         
| | ● | costs
    associated with any product liability claims, patent prosecution, patent infringement lawsuits and other lawsuits.                                                                                                            







3







These
factors are the important factors of which we are currently aware that could cause actual results, performance or achievements
to differ materially from those expressed in any of our forward-looking statements. We operate in a continually changing business
environment, and new risk factors emerge from time to time. Other unknown or unpredictable factors also could have material adverse
effects on our future results, performance or achievements. We cannot assure you that projected results or events will be achieved
or will occur.



PART
I



ITEM
1. BUSINESS



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 mission is to provide effective and patient centric treatment for hypertension – including
resistant hypertension – through our patented total care platform. In this connection, we acquired from Symplmed Pharmaceuticals
LLC and its wholly-owned subsidiary, Symplmed Technologies, LLC, certain of the intellectual property assets related to the patented
technology platform known as 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 pipeline, devices for Therapeutic
Drug Monitoring (TDM), Blood Pressure (BP), 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®, a single-pill FDC of perindopril
argentine (“perindopril”), an angiotensin-converting-enzyme (“ACE”) inhibitor and amlodipine besylate
(“amlodipine”), 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.



On April 16, 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). The use of funds from
the raise will primarily be on the commercialization of Prestalia, funding working capital and capex needs and other general corporate
requirements. For the development of IT-102 and 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.







4













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.



Background



As
further described below under “Merger with IThenaPharma”, on November 15, 2016, Marina entered into an Agreement and
Plan of Merger with IThenaPharma, Inc., a Delaware corporation (“IThena” or “IThenaPharma”), IThena Acquisition
Corporation, a Delaware corporation and a wholly owned subsidiary of IThena (“Merger Sub”), and Vuong Trieu, Ph.D.
as the IThena Representative (the “Merger Agreement”), pursuant to which, among other things, Merger Sub merged with
and into IThena, with IThena surviving as a wholly owned subsidiary of Marina (such transaction, the “Merger”). As
a result of the Merger, the former holders of IThena common stock immediately prior 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 will be treated as the historical financial statements
of our company and will be reflected in our quarterly and annual reports for periods ending after the effective time of the Merger.
Accordingly, beginning with our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, we started to report the
results of IThena and Marina and their respective subsidiaries on a consolidated basis. The December 31, 2017 statement of operations
include the full year for Marina, Ithena and their subsidiaries whereas the December 31, 2016 statement of operations include
the results of Ithena alone from January 1, 2016 to November 15, 2016 and combined with Marina and its subsidiaries from November
16, 2016 through December 31, 2016. As such, the statements of operations may not be comparable for the two years ended December
31, 2017.



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 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
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.







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. We plan to divest this asset as soon as reasonably practicable. At the same time, we
have divested the SMARTICLES asset as it is no longer a strategic fit, as described under “Recent Developments – Sale
of Smarticles Assets” below.



On
March 16, 2018, Marina entered into an Licensing Agreement with Agenovir Corporation, whereby Marina granted Agenovir exclusive
rights to the company’s 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 agreement, Marina has agreed to assign ownership
of the intellectual property associated with the DiLA2 delivery system to Agenovir Corporation.







Subsequent
to the Merger, we executed on our strategy to become a commercial stage company by acquiring 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. Prestalia is an FDA-approved and marketed anti-hypertensive drug. Prestalia
is an FDC of perindopril arginine, which is an ACE inhibitor, and amlodipine besylate, which is a CCB, and is indicated as a first
line therapy for hypertension control.







The
acquisition of Prestalia transitions our company from a clinical stage company to a commercial organization. Prestalia was approved
by the FDA 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 funding circumstances, further sales
promotion 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 promote the product.





5







We
believe that the Prestalia acquisition will make us a revenue-stage company. We also believe 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.









Recent Developments





Series
E Convertible Preferred Share Private Placement Offering



On
April 16, 2018, we entered into Subscription Agreements (the “Purchase Agreements”) with certain accredited investors
and conducted a closing pursuant to which we sold 2,334 shares of our Series E convertible preferred stock, par value of $0.01
per share (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, par value $0.006 per share (the “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 exercise price equal to $0.55
per share of Common Stock, subject to adjustment thereunder. The closing is the initial closing (the “Initial Closing”)
of our private placement (the “Private Placement”) of up to $10,000,000 of Securities, which amount may be increased
to $15,000,000 at the discretion of our company and its placement agent in the Private Placement (the “Maximum Offering
Amount”). 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. The Warrants
have full-ratchet anti-dilution protection, are exercisable for a period of five years following the final closing of the Private
Placement and contain customary exercise limitations.



We received total gross proceeds of
approximately $11.7 million from the Initial Closing, prior to deducting placement agent fees and estimated expenses payable
by us associated with the Initial Closing of $1.25 million. We intend to use the proceeds of the Private Placement 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.





The
outstanding balance related to the notes that we issued in June 2016 in the amount of $357,300 (plus certain additional “consideration
securities” in the amount of $375,000 that we committed to issue to the holders of such notes pursuant to amendments that
we entered into with such noteholders), the outstanding balance related to the notes that we issued in June 2017 in the amount
of $417,173, the outstanding balance related to the lines of credit from our Executive Chairman and from Autotelic Inc. in the
amounts of $573,174 and $94,981, respectively, the outstanding balance related to the note that we issued to a trust affiliated
with Isaac Blech in November 2017 in the amount of $510,740, in each case inclusive of accrued but unpaid interest, as well as
payables due to Autotelic Inc. in the amount of $812,967 pursuant to our Master Services Agreement with Autotelic Inc., have all
been converted into our Series E Preferred Stock and Warrants, at the same terms mentioned above with respect to investors in
the Private Placement, in full and complete satisfaction of the outstanding debt and as such the notes, lines of credit or payables
are no longer outstanding. In addition, $291,250 of accrued and unpaid Board of Director fees due to four current and one former
Board member for services rendered during the period prior to January 1, 2018 have also been converted into our Series E Preferred
Stock and Warrants, at the same terms mentioned above with respect to investors in the Private Placement, in full and complete
satisfaction of the outstanding fees owed to such directors, and as such the accrual is no longer outstanding.







Binding
Term Sheet Agreement with Autotelic BIO



On
January 11, 2018, we entered into a binding term sheet agreement with Autotelic BIO (“ATB”), as described below, pursuant
to which, among other things, and subject to the satisfaction of certain conditions on or prior to January 15, 2019 (the “Termination
Date”), we shall grant to ATB 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 their territories) (the “Territory”).
The grant of the license would be memorialized in a definitive license agreement to be entered into between the parties following
the satisfaction of the applicable conditions.



The
conditions to the grant of the license include, without limitation, that prior to the Termination Date, ATB shall satisfy one
of the following conditions: (i) ATB shall obtain funding in a certain specified amount to perform thirteen (13) weeks of repeated
toxicity testing with rats and to obtain Investigational New Drug Application approval in the Republic of Korea (the “Fundraising”);
(ii) ATB shall obtain a co-development and licensing deal with other third-party pharmaceutical companies with respect to the
Product; and (iii) ATB shall obtain a government-sponsored research and development project in the Republic of Korea with respect
to the Product. There can be no assurance that all or any of the foregoing conditions to the grant of the license will be satisfied
on or prior to the Termination Date, or at all. Such failure will cause the term sheet agreement to expire, and will result in
a definitive agreement with respect to the grant of the license not being entered into, in which event we will retain full rights
to the Product and full responsibility for its development and commercialization.



The
term sheet 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 term sheet 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 transferred certain specified technology and provided certain assistance
regarding the manufacturing and production of the Product. ATB will have the right to provide us with the Product at the price
of Cost of Goods +30% in the event ATB can meet current good manufacturing practices, including obligations to obtain marketing
approval in the United States, so long as ATB is able to meet our timeline as to production. Once we have initiated tech transfer
for commercial production, if ATB is not providing us with Product, the term sheet provision under which 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, is null and void.
We will be entitled to the clinical trial data and any enhancements and inventions developed by ATB during this process. ATB will
have intellectual property rights and bear the cost of the Product worldwide, excluding the United States and Canada and their
territories. We will have intellectual property rights and bear the cost of the Product in the United States and Canada and their
territories. ATB is to conduct clinical trials in full gene therapy medicinal product / good clinical practice compliance with
full consultation and approval of our company to be submissible to the U.S. FDA.



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







6









Isaac
Blech Investment / Board Appointment / Option Grant



On
November 22, 2017, we entered into a Note Purchase Agreement (the “Purchase Agreement”) with a trust affiliated with
Mr. Isaac Blech (the “Purchaser”) pursuant to which we issued to the Purchaser a secured convertible promissory note
in the aggregate principal amount of $500,000 ( “Note”). The Note became due and payable on March 31, 2018. The unpaid
principal balance of the Note, together with accrued and unpaid interest thereon, automatically converted into 103.7 shares
of Preferred Stock and Warrants to purchase up to 777,750 shares of Common Stock upon the Initial Closing of the Private Placement
described above. As a result of the conversion of the Note, all obligations of the Company to the Purchaser under the Note have
been satisfied and the Note is no longer outstanding.



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 were no changes to the authorized shares of our common
stock as a result of the reverse split. No fractional shares were issued in connection with the reverse split; any fraction of
a share of common stock that would otherwise have resulted from the reverse split was 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.



Acquisition
of Prestalia and DyrctAxess from Symplmed



On
June 5, 2017, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with 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
FDC of perindopril arginine and amlodipine besylate known as 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 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,
which shares vested in December 2017.







7











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. This acquisition is the basis for our opportunity to build out the total care platform through patient
support, management and counseling.







Amendment
of Notes and Warrants







On
July 3, 2017, we entered into an amendment agreement (the “Amendment Agreement”) with respect to those certain promissory
notes in the aggregate 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 us and the Purchasers (the “Purchase Agreement”), and those certain warrants to purchase up
to an aggregate of 951,263 shares of our common stock that were originally issued pursuant to that certain Note and Warrant Purchase
Agreement dated as of February 10, 2012 by and among Marina, certain of its wholly-owned subsidiaries 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:





| | (i)    | the
    maturity date of the Notes was extended from June 20, 2017 to December 31, 2017;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (ii)   | the
    Purchasers agreed, upon the closing of any financing transaction yielding aggregate gross proceeds to us of not less than
    $3 million that occurs while the Notes are outstanding (any such financing transaction, the “Qualifying Financing Transaction”),
    to convert the outstanding principal balance and any accrued interest thereon into the securities of our company to be issued
    and sold at the closing of the Qualifying Financing Transaction at the most favorable price and terms at which our securities
    are sold to investors in the Qualifying Financing Transaction;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (iii)  | the
    parties agreed to extend the price protection with respect to the Amended Prior Warrants resulting from dilutive issuances
    until the expiration of the term of the Amended Prior Warrants (currently February 10, 2020); provided, that such protection
    shall not apply to the Qualifying Financing Transaction;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (iv)   | we
    agreed to issue to the Purchasers, on a pro rata basis, such number of our securities as are being issued to investors in
    the Qualifying Financing Transaction as have an aggregate purchase price equal to $375,000 (such securities, the “Consideration
    Securities”);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (v)    | the
    Purchasers agreed to waive any claim that the exercise price of the Amended Prior Warrants should be reduced to an amount
    less than $2.80 as a result of any issuance of securities that occurred while the Amended Prior Warrants were outstanding
    and prior to the date of the Amendment Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (vi)   | the
    Purchasers agreed that they shall not, for a period of 90 days after the closing of the Qualifying Financing Transaction,
    sell any Consideration Securities (or any securities issuable upon exercise or conversion of the Consideration Securities)
    without the prior written consent of the placement agent with respect to such financing transaction;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (vii)  | the
    Purchasers agreed that they shall not, beginning ninety (90) days following the closing of the Qualifying Financing Transaction,
    sell, in the aggregate, on any given trading day: (x) for so long as the closing price of our common stock is less than or
    equal to 200% of the per share purchase price of the Consideration Securities in the Qualifying Financing Transaction on the
    immediately preceding trading day, such number of Consideration Securities (or shares of common stock issuable upon exercise
    or conversion of the Consideration Securities) as is equal to more than 5% of the total number of shares of common stock traded
    on such trading day; and (y) for so long as the closing price of our common stock is greater than 200% of the per share purchase
    price of the Consideration Securities in the Qualifying Financing Transaction on the immediately preceding trading day, such
    number of Consideration Securities (or shares of common stock issuable upon exercise or conversion of the Consideration Securities)
    as is equal to more than 10% of the total number of shares of common stock traded on such trading day; and
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (viii) | each
    Purchaser agreed that, prior to one year before the termination date of the Prior Amended Warrants, such Purchaser shall not
    exercise any of the Prior Amended Warrants at such time as such Purchaser holds any Consideration Securities (or any securities
    issued upon the exercise or conversion of any Consideration Securities).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    





The
unpaid principal balance of the Notes, together with accrued and unpaid interest thereon, automatically converted into 71.46 shares
of Preferred Stock and Warrants to purchase up to 535,950 shares of common stock upon the Initial Closing of the Private Placement
described above. As a result of the conversion of the Notes, all obligations of the Company to the Purchasers under the Notes
have been satisfied and the Notes are no longer outstanding. Also, upon the issuance by us to the Purchasers of 75 shares of Preferred
Stock and Warrants to purchase up to 562,500 shares of our common stock upon the Initial Closing of the Private Placement described
above, our obligations to issue the Consideration Securities to the Purchasers has been satisfied in full.









8







Merger
with IThenaPharma







On
November 15, 2016, Marina entered into the Merger Agreement with IThenaPharma, Merger Sub and Vuong Trieu, as the IThena representative,
pursuant to which, among other things, Merger Sub merged with and into IThenaPharma, with IThenaPharma surviving as a wholly owned
subsidiary of Marina.







Pursuant
to the Merger Agreement, at the effective time of the Merger, without any action on the part of any shareholder, each issued and
outstanding share of IThenaPharma’s common stock, other than shares to be cancelled pursuant to the Merger Agreement, was
converted into the right to receive shares of Marina common stock at the exchange ratio set forth therein (the “Exchange
Ratio”). In addition, each outstanding IThenaPharma warrant was assumed by Marina and converted into a warrant representing
the right to purchase shares of Marina common stock, with the number of shares underlying such warrant and the exercise price
thereof being adjusted by the Exchange Ratio, with any fractional shares rounded down to the next lowest number of whole shares.







As
a result of the Merger, the former holders of IThenaPharma common stock immediately prior 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.



Sale
of DiLA2 Assets



On March 16, 2018, Marina entered into an
Licensing Agreement with Agenovir Corporation, an unrelated entity, whereby Marina granted Agenovir exclusive rights to the company’s
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 agreement, Marina has agreed to assign ownership of the intellectual
property associated with the DiLA2 delivery system to Agenovir Corporation.



Liquidity



We have sustained recurring losses and negative
cash flows from operations. At December 31, 2017, we had an accumulated deficit of approximately $8.0 million, negative
working capital of approximately $5.6 million, and $106,378 in cash. We have been funded primarily through a combination
of licensing payments and debt and equity offerings.



On April 16, 2018, we raised in excess of $10
million from a private placement of our recently created Series E, Convertible Preferred Shares. The funds from this raise will
be used primarily to commercialize our FDA approved product Prestalia, fund operations, working capital and capex needs and fund
general corporate needs. For the development of our pipeline products, we will seek partners or raise additional funds to advance
the development programs.



The volatility in our stock price, as well
as market conditions in general, could make it difficult for us to raise capital on favorable terms, or at all. If we fail to obtain
additional capital when required, we may have to modify, delay or abandon some or all of our planned activities, or terminate our
operations. There can be no assurance that we will be successful in any such endeavors. The accompanying consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.







9









Our
Strategy



Our
mission is to provide effective and patient centric treatment for hypertension – including resistant hypertension. In doing
so we plan to create a universal platform for the effective treatment of hypertension as well as for the distribution of FDC hypertensive
drugs, such as our approved product Prestalia and the other products in our pipeline, devices for TDM, BP, and other cardiac monitors,
as well as services such as counseling and prescription reminders.



Total
Care Platform for Hypertension



Despite
the availability of highly effective, safe and cheap generics, hypertension and especially resistant hypertension is still an
unmet medical need. These are some of the fact about hypertension in the US (https://www.cdc.gov/bloodpressure/facts.htm). About
75 million American adults (29%) have high blood pressure. Only about half (54%) of people with high blood pressure have their
condition under control. High blood pressure costs the nation $46 billion each year. This total includes the cost of health care
services, medications to treat high blood pressure, and missed days of work. Worldwide, more than 1 billion hypertensive patients
remain with uncontrolled BP. Even among hypertensive patients who receive treatment, in most countries at least half of them fail
to reach currently recommended BP targets [Wolf-Maier K et al., Hypertension Treatment and control in five European countries,
Canada, and the United States. Hypertension. 2004;43:10 –17].



As
defined by the American Heart Association Scientific Statement on Resistant Hypertension in 2008, resistant hypertension refers
to patients having uncontrolled BP (>140/90mmHg) despite use of three or more antihypertensive medications, including a diuretic.
The prevalence of resistant hypertension from various cohorts is estimated to be around 10–20% of patients being treated
for hypertension [Mohammed Siddiqui and David A. Calhoun. Refractory versus resistant hypertension. Curr Opin Nephrol Hypertens
2017, 26:14–19]. As would be expected with a history of poorly controlled, often severe hypertension, patients with resistant
hypertension have a worse cardiovascular disease prognosis, including coronary heart disease, stroke, congestive heart failure,
and peripheral artery disease, compared with patients with more easily controlled hypertension. Similarly, patients with resistant
hypertension are more likely to develop chronic kidney disease. Not surprisingly, given this increased cardiovascular risk, having
resistant hypertension is associated with an overall higher mortality compared with nonresistant hypertension [Mohammed Siddiqui
and David A. Calhoun. Refractory versus resistant hypertension. Curr Opin Nephrol Hypertens 2017, 26:14–19].



Hypertension
(HTN) affects approximately 1 billion people worldwide and the number of patients is projected to increase to 1.56 billion people
by 2025 [http://www.world-heart-federation.org/cardiovascular-health/cardiovascular-disease-risk-factors/hypertension/]. While
HTN can be controlled with drugs and lifestyle changes in the majority of patients, uncontrolled or resistant HTN is a significant
unmet clinical need in 22% of the HTN population [Persell, S. D. (2011). Prevalence of Resistant Hypertension in the United States,
2003-2008. Hypertension, 57: 1076-108]. Resistant HTN is defined as the failure to reach controlled BP with at least a three drug
regimen at optimal dosage, including at least one diuretic [The Seventh Report of the Joint National Committee on Prevention,
Detection, Evaluation, and Treatment of High Blood Pressure: The JNC 7 report. JAMA. 2003;289:2560–72.]. Approximately 22%
of the 1 billion HTN patients worldwide are affected by resistant HTN. Assuming a 4% penetration rate and an estimated price of
$100 per 30 pills, there is over a $1 billion resistant HTN market. The recent clinical failure of renal denervation means limited
competition “Despite meeting primary safety endpoints, SYMPLICITY HTN-3 – the pivotal U.S. trial examining renal denervation
for treatment-resistant hypertension – has fallen short of its secondary efficacy goals, and failed to reach its primary
efficacy endpoint as announced earlier this year by the study’s sponsor.” [SYMPLICITY HTN-3: Renal Artery Denervation
Fails for Resistant HTN. March 29, 2014]. Without renal denervation, there are limited treatment options for resistant HTN except
for potentially adding chlorthalidone and spironolactone if there is an underlying fluid retention problem.



Adherence
to medications is a major challenge clinicians often face in treating hypertension. An increasing number of studies show TDM is
reliable for detecting medication nonadherence in patients who seem to have resistant hypertension (RH) [Jung O, Gechter JL, Wunder
C, et al. Resistant hypertension? Assessment of adherence by toxicological urine analysis. J Hypertens. 2013; 31:766–774;
Ceral J, Habrdova V, Vorisek V, Bima M, Pelouch R, Solar M. Difficult-to-control arterial hypertension or uncooperative patients?
The assessment of serum antihypertensive drug levels to differentiate non-responsiveness from non-adherence to recommended therapy.
Hypertens Res. 2011; 34:87–90.]. Strauch et al. [Strauch B, Petrak O, Zelinka T, et al. Precise assessment of noncompliance
with the antihypertensive therapy in patients with resistant hypertension using toxicological serum analysis. J Hypertens 2013;
31:2455–2461] found medication nonadherence among a cohort of patients with resistant hypertension to be 47%, also having
directly measured drug or appropriate metabolite levels by liquid chromatography–mass spectrometry. In fact Brinker et al
[Stephanie Brinker et al., Therapeutic Drug Monitoring Facilitates Blood Pressure Control in Resistant Hypertension. J Am Coll
Cardiol. 2014 March 4; 63(8): 834–835] found that over one-half (54%) of patients who underwent TDM were found to be nonadherent
to treatment and when patients were informed of their undetectable serum drug levels and provided additional counseling, BP control
was markedly improved without increasing treatment intensity.



10















To
this effect, we have developed a total care program consisting of four pillars to achieve improved compliance and therefore targeted
BP: 1) FDCs. Hypertension is most effectively treated with combination therapy. Furthermore, hypertensive patients frequently
suffer from other diseases such as hypercholesterolemia, arthritis, diabetes, dementia, Alzheimer, etc. Their pill burden can
be upward of 10-15 pills per day. Any reduction in pill burden would increase compliance. 2) Monitoring- TDM as well as BP monitoring
has been shown to improve compliance. With our current bpCareConnect, patients are provided with a BP monitoring system which
allows both patients and health care provider to track treatment progress. We plan to upgrade the system to include a point of
care TDM device developed by Autotelic Inc. and other cardiac monitoring devices as we further refine and enhance our platform.
3) Our current DyrctAxess platform reminds patients to take their medication through various mechanisms, including texting. More
importantly, our call office center will call the patients and remind them to refill their prescriptions. This results in a refill
rate of 80%, which is higher than the industry standard of 50%. This low turnover of patients allows us to build prescription
rapidly during our launch of Prestalia. 4) As shown by Brinker et al, counseling coupled with monitoring effectively treats resistant
hypertension. This arm of the total care program will be implemented using our current call center staff in conjunction with our
medical and scientific team. Together this total care platform will transform care not only for hypertension but possibly for
other chronic diseases such as diabetes and hypercholesterolemia. Below is the summary of our total care program, which focus
on patient compliance to achieve target BP control.



11

















The
demand for improved adherence will continue to drive the development of FDCs, which is one of the pillars for our total care program.
The need for FDCs in total care program for hypertensive patients is shown below. Combination therapy administered as an FDC has
superior efficacy and better tolerance, which is supplemented by higher adherence. Therefore, healthcare providers should not
be reluctant and prioritize the use of FDCs over uptitration and switching strategies for addressing efficacy-related issues,
particularly if a patient has a history of poor adherence. Compared with free-drug combinations, the use of FDCs of hypertensive
agents is associated with a significant improvement in compliance and persistence with therapy and with possible beneficial trends
on BP levels and reported adverse effects [Gupta AK et al., Compliance, Safety, and Effectiveness of Fixed-Dose Combinations of
antihypertensive agents. A meta-analysis. Hypertension 2010; 55:399-407]. A recent meta-analysis showed that BP reduction by using
two drugs in combination is approximately five times greater than doubling the dose of one drug [Krousel-Wood M et al., Medication
adherence: a key factor in achieving blood pressure control and good clinical outcomes in hypertensive patients. Curr Opin Cardiol.
2004;19:357–362]. In this context, Prestalia is ideally suited to the total care program: 1) it is approved for 1st line
therapy; 2) clinical data has shown that it can achieve rapid and sustained BP reduction; and 3) it is approved only in three
strengths – therefore simplifying dose titration versus complicated dose titration scheme of single agent and then double
agent.



12











To
further expand our pipeline of FDCs, we will continue to acquire, inlicense, or internally develop FDCs that lend themselves to
the total care program. A list of therapeutic agents in our pipeline is shown below.





|a. | Perindopril-
    ACEON (Perindopril) NDA- Ready to relaunch
|-- | -----------------------------------------------------------
|   | i.                                                         
|   | ii.                                                        
|   | iii.                                                       
|b. | Prestalia-
    Ready to relaunch.                          
|   | i.                                                         
|   | ii.                                                        
|   | iii.                                                       
|c. | Atorvastatin/Perindopril                                   
|   | i.                                                         
|   | ii.                                                        
|d. | Pipeline
    drug                                          
|   | i.                                                         
|   | ii.                                                        
|   | iii.                                                       
|   | iv.                                                        





We
intend to initially advance sales of Prestalia in the U.S. through the total care platform. Of secondary priority, we plan push
forward with the approval and launch of IT-102 and IT-103.



In
our effort to focus and revitalize our company as well as increase shareholder value we intend to explore appropriate opportunities
to divest our oligotherapeutics assets through either a spin off to our shareholders or the sale of, or the grant of licenses
to, our assets related to these technologies. This will allow us to focus exclusively on Prestalia, as well as IT-102 and IT-103.
We also intend to be opportunistic in acquiring assets/asset classes that further complement our product offering.



13









Prestalia



Acquired
in June 2017, Prestalia is a commercially available product. Following the Initial Closing, we plan to integrate the distribution,
marketing and sales platform of the acquired assets into our company. This will be concurrent with efforts to mobilize a sales
force and build on the existing patient/prescription base of Prestalia and build a strong revenue base. The non-U.S. market for
FDCs of ACE inhibitor and CCB is over $300 million and we believe that this market is underplayed in the U.S.



Prestalia
was developed in conjunction with Les Laboratories, Servier. It was launched in October of 2015, driven to 1615 prescriptions
per month with only 10 sales representatives. It is available in three doses: 3.5/2.5, 7/5 and 14/10 and is promoted worldwide
ex-US as Coveram and/or Viacoram by Servier with >$1billion turnover in 2016 from perindopril franchise, WW, for Servier.



Prestalia
is a unique FDC drug that simplified dose titration to only three dose strengths. Prestalia is approved for fist line hypertension
and titration can be done with just Prestalia with only three dose levels to adjust unlike performing titration of each drug alone
where there are at least three strengths for each drug requiring titrating through at least six different strengths and strength
combinations. Lisinopril alone has six dose strengths. Per package insert information: Initiate treatment at 3.5/2.5 mg, once
daily. Adjust dose according to blood pressure goals waiting 1 to 2 weeks between titration steps. DOSAGE FORMS AND STRENGTHS:
Tablets (perindopril arginine/amlodipine): 3.5/2.5 mg, 7/5 mg and14/10 mg.



Prestalia
is the only product with an active component to demonstrate event reduction across the CV continuum. In aggregate there was reduction
in cardiovascular morbidity-mortality in randomised clinical trials with more than 54,000 patients. Various clinical trials have
shown that despite lowering blood pressure not all drugs effectively reduce heart attack, stroke and death. In the CAMELOT trial,
which compared amlodipine vs. enalapril – another ACEI – for 24 months, there was 31% vs 15% fewer events with amlodipine.
In the EUROPA trial, using perindopril, compared to placebo in12,000 ACS (64% had previous MI) reduced CV events by 20%. Post-hoc
analysis of EUROPA showed subjects on any CCB for 4.2 yrs. and either on perindopril or placebo, the event rate was 46% less for
patients on perindopril and CCB than for patients on a CCB and placebo.



Key
Prestalia messages: 1) Rapid and sustained blood pressure control - patients achieve better blood pressure reduction at day 21
on combination than at day 42 on monotherapy. 2) One pill, one time per day. 3) No out of pocket expense for patients with commercial
insurance. Six out of 10 patients have unrestricted access to Prestalia with 100% coverage by Express Scripts PBM, 55% coverage
by CVS Caremark RX, and 90% coverage by Anthem Inc. And finally as shown below, Prestalia combination reduced total mortality
by 46%.



14











Hypertension
Market



Approximately
one in three adults, or roughly 75 million people, in the U.S. have high blood pressure, and only about half (54%) have their
blood pressure under control. The population of hypertensive patients will continue to increase through 2050 as the current population
ages and advances in treatment allow patients already diagnosed to live longer. Although many products within the market will
become generic, the focus on combination therapies will prevent a significant decline in the market. Moreover, the launch of new
disease-modifying therapies is expected to bolster the growth prospects of the market during the forecast period. The rise in
the prevalence of hypertension, from a population of 181 million to 190 million, combined with the anticipated launches of FDCs
will continue to create a valuable market opportunity.



In
the U.S., 37 of the 50 states have a hypertension rate of greater than 30% of their residents. According to JNC VII (Joint national
committee on hypertension), only 1/3 of patients will be controlled by a single product, meaning that 2/3 of all patients will
require more than one class of medication to control their high blood pressure (reference https://www.ncbi.nlm.nih.gov/books/NBK9626/).
First line therapy, initial treatment, for all hypertension patients should include either a CCB, angiotensin converting enzyme
inhibitor (“ACEi”), Angiotensin receptor blocker or diuretic. According to a market share study on hypertension therapies
from 2009 to 2019, it was estimated that market share of combination therapies of Renin Angiotensin Aldosterone System inhibitors
(RAASi) (of which ACEi is a type) and CCBs would increase from 6% in 2009 to 27% in 2019 (Decision Resources).



In
a national prescription audit conducted by IMS health in 2011, it was reported that ACEi were the most prescribed anti-hypertensive
category at 163 million prescriptions and CCBs were the third most prescribed antihypertensive category with 98.1 million prescriptions.
Ultimately, the market of hypertension patients will continue to expand, but with the proliferation of generics, the pharmaceutical
participation in sales and promotion has declined. For our company, the opportunity exists to promote a branded combination, comprised
of the two highest prescribed categories in hypertension. Only one product of a similar type, an ACEi and Amlodipine (the CCB
that controls over 90% of the CCB market) has ever been promoted and sold in the U.S. That product, Lotrel®, had peak sales
of $1.3 billion in the U.S. alone. This level of sales was experienced by Novartis in 2008, and achieved when there were over
15 large pharmaceutical companies, including Wyeth, Novartis, AstraZeneca, King, Forrest, Takeda, Merck, Sanofi and multiple others
fighting for share of voice and positioning with patients and physicians. Currently, only two companies other than us compete
in the hypertension market - Actavis, selling a beta blocker, Bystolic, with over $500 million in sales in 2015, and Arbor, selling
an Angiotensin Receptor Blocker, Edarbi and EdarbiChlor – an FDC of Edarbi and chlortahlidone. The edarbi franchise is selling
in excess of $100 million annually.



15











The
benchmark for our hypertension product, Prestalia, is Lotrel. Lotrel is the only FDC of an ACEi and amlodipine, and is currently
responsible as a brand and generic combined for a total prescription volume in excess of 11 million annually. The product is not
promoted, and through analysis of the Prestalia clinical data in market research, Prestalia has been termed by physicians as ‘better
than Lotrel’. The success of the Lotrel brand was driven by the combination of two classes of medication that had not only
shown the ability to reduce blood pressure but, via the Camelot study for amlodipine and the HOPE and Europa study for ramipril
and perindopril, the ability to lower cardiovascular events beyond the effect of lowering blood pressure. The potential success
of Prestalia in the U.S. is further supported by the data outside the U.S., which has shown that our worldwide partner, Servier,
has produced in excess of €400 million in annual sales of perindopriil and amlodipine as an FDC.



In
summary, as one looks at the opportunity for our Prestalia product, there are four key concepts:



|1) | The
                                         market of patient opportunity continues to grow and the top two dispensed categories
                                         are ACEi and Amlodipine;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2) | The
                                         competitive landscape regarding promotion to physicians leaves us as the only active
                                         promoter;
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3) | As
                                         a branded, patent-protected product, there is no generic alternative to Prestalia; and
|-- | ----------------------------------------------------------------------------------------------------------------------------------



|4) | The
                                         category of ACEi/CCB combination has been proven through the success of Lotrel with $1.3
                                         billion in peak sales, and further validated for Prestalia with sales by Servier in excess
                                         of €400 million outside the U.S.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Commercialization
Plan



The
two main challenges to the uptake of a drug are getting physicians to prescribe it and getting insurance to reimburse for its
use. Prestalia has an existing patient base of 1,500 patients and 400 prescribers that was achieved over a year. It has established
unrestricted access to 60% of all commercial plans in the U.S. It has Medicaid coverage nationwide (with the exception of Oregon)
and is preferred without step edits and prior authorizations in a few states. With the demonstrated history of physician acceptance
and growing acceptance by insurers, combined with the fact that combination of ACEi and CCB are well characterized and understood,
we believe that our ability to penetrate the market is dictated by the number of people we are able to engage to assist in our
commercialization efforts.



16









In
terms of execution, we plan to take a targeted approach looking to capitalize on geographies with a strong reimbursement position
for Prestalia, along with a high degree of hypertension within the territory. Our targeting efforts from the physician perspective
will be focused on identifying high prescribers of FDC therapy that includes ACEi and CCB use, along with those physicians writing
ACE/Diuretic combinations. An additional key to our targeting will be high prescribers of each of these as concomitant monotherapy,
or individual use. This approach will allow us to focus our message on physicians that are already committed to the components,
and do not require a clinical communication to convert them from use of other classes of medications.



These
targeting approaches will be supplemented by a distribution program, “Prestalia Direct”, which will be operated through
the patented DyrctAxess platform that we acquired from Symplmed. The concepts here revolve around fulfillment via mail through
our partner pharmacies, and support through a patient engagement call center that drives an emphasis on compliance, persistence
and high conversion of initial prescriptions. This marketing platform is what was previously used in the execution of Prestalia
fulfillment and led to patient retention greater than 80% after one year. As we execute our commercialization plan in this manner,
and drive new prescription volume in a supported and focused fashion, we believe that our ability to maintain our existing patients
will create a strong growth of patient accounts as each new patient will be incremental to our growing total. Furthermore as we
continue to demonstrate value through the total care program for the effective treatment of hypertension we expect to gain traction
and market share within the hypertension space.



Finally,
to ensure that we convert the highest percentage of prescriptions generated to new patients, along with keeping our existing patients
on medication, we plan to run an expansive patient co-pay support program through our pharmacy partners. This program will be
specifically dedicated to ensuring all patients receive medication, covered or not, so that we can ensure patients and physicians
are satisfied, as well as put us in a position to continue expanding insurance coverage through continued demand growth.



The
final piece to our promotional strategy will be the implementation of our sales team. We plan to have approximately 20 sales people
promoting Prestalia in key geographies by the end of the second quarter of 2018 and increasing to 35 by end of the second quarter
of 2019. It is intended that these representatives will be trained and implemented by management, and that many of them will be
young business-to-business professionals that are looking to get a start in the pharmaceutical industry.



Summary
of Follow on Products



To
build on commercialization capabilities of Prestalia, we plan to further increase the menu of product offerings through acquisition
or internal development. We will be opportunistic in acquiring products/ product lines that complement Prestalia and align with
our goal to become a strong player in the hypertension space. We believe we have assembled a strong team with in-depth domain
knowledge in drug development and commercialization to have a substantial internal product development program. However, our internal
program would be secondary to the primary goal of total care platform and marketing of Prestalia through that platform. With respect
to the programs in our internal pipeline described below, items 2 through 5 are part of the therapeutic microbiome program which
we are actively discussing to either outlicensing or spin off:



|1) | IT-102
    and IT013 as our next generation celecoxib for management of arthritis pain. IT-102 targets a population requiring angiotensin
    converting enzyme (“ACE”) inhibitors such as lisinopril and IT-103 targets a population requiring olmesartan.
    The initial approval based on pivotal bioequivalence (“BE”) trial and a small phase III trial will be for combined
    arthritis pain and hypertension for patients already taking both drugs. Exploiting the suppression of celecoxib induced edema,
    we anticipate that these FDCs can eventually replace all of celecoxib prescriptions with or without hypertension once our
    phase III trial is completed with positive demonstration of edema suppression. This trial will be conducted post approval
    for label change and will target the highest edema risk patients- the elderly patients whose pill burden is greater than five
    per day. The inherent lower risk of gastrointestinal (“GI”) bleeding with celecoxib makes it likely that IT-102
    and IT-103 can also capture market shares of other pain medications such as ibuprofen and indomethacin.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2) | M101
    as beta-catenin short-hairpin RNA (“shRNA”) combination against FAP. This is a combination of IT-102 and CEQ508
    (tkRNAi beta-catenin shRNA). Celecoxib was originally approved for FAP, however, it was removed from the market due to fear
    of cardiovascular risks during the VIOXX withdrawal. But with the PRECISION trial showing that celecoxib is as safe as ibuprofen
    and naproxen, we anticipate more acceptance of celecoxib. Furthermore, having lisinopril on board to control edema and hypertension,
    we anticipate that high doses of celecoxib would be safe and effective against FAP. Additionally, the systemic suppression
    of COX-2 directly and beta-catenin indirectly with celecoxib will be augmented by targeted and local suppression of beta-catenin
    by beta-catenin shRNA (CEQ508). Together we anticipate a synergistic, safe and effective suppression of polyps in FAP. Since
    we have completed the phase I proof of concept study for CEQ508, we will move forward to registration phase III trial once
    we have FDA acceptance of Special Protocol Assessment (“SPA”).      





17







|3) | M102
    as beta-catenin shRNA combination against CRC. This is a combination of IT-103 and CEQ508 (tkRNAi beta-catenin shRNA). Olmesartan
    has been shown to improve overall survival (“OS”) among various cancer types, the combination of systemic suppression
    of ARB/COX-2/Catenin by IT-103 augmented by targeted and local suppression of beta-catenin by CEQ508 is expected to significantly
    improve the outcome for CRC patients. Additionally, the potential of using CEQ508 to manipulate the microbiome such that it
    is therapeutic will be investigated. We have termed this “therapeutic microbiome”.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4) | M300
    series as IL-6Ra/ Claudin-2/ MIP3a as specific tkRNA/shRNAs against IBD. We evaluated live attenuated bacterial delivery of
    shRNAs against selected IBD gene targets to achieve specificity, efficacy, and safety. The in vitro efficacy was assessed
    by an invasion assay using the CMT-93 mouse colon epithelial cells (or RAW264.7 macrophages for TNF-a) and qRT-PCR measurement
    of mRNA reduction vs. b-actin control. Three gene targets (IL-6Ra, Claudin-2, and MIP3a) and two tkRNAi delivery strains were
    tested in vivo using an oxazolone or dextran sulfate sodium (DSS) acute murine colitis model. Oral delivery of IL-6Ra tkRNAi
    strains (CEQ608 and CEQ609) led to a significant reduction in colon length and abolished IL-6Rα message in proximal
    ileum in DSS exposed groups. Claudin-2 strains (CEQ621 and CEQ626) caused a significant reduction in Claudin-2 mRNA expression
    and protein levels in the colon as well as attenuation of the disease phenotype and enhanced survival. Treatment with MIP3a
    therapeutic strains CEQ631 and CEQ632 also resulted in a significant reduction in sum pathology scores and reduction in MIP3a
    mRNA expression. These findings suggest that tkRNAi-mediated gene silencing of pro-inflammatory targets represents a potential
    therapeutic development avenue for IBD therapy.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|5) | M400
    series as surviving/PLK1 as specific DiLA2 (Di-Alkylated Amino Acid)/siRNA against bladder cancer  . This program
    was originally licensed to Debiopharm. A range of RNA interference (“RNAi”) triggers against the cancer-related
    genes polo-like kinase 1 (PLK1) and survivin were able to knockdown efficacies with IC50 values in the 10 to 30 pM range in
    cell based assays. This triggered widespread apoptosis and, in the case of PLK1, a strong reduction in cell viability. The
    selected siRNAs were formulated into positively charged multilamellar liposomes of around 100nm. Due to the negatively charged
    proteoglycan-rich urothelium, a formulation with a lipid containing a guanidinium group was deemed particularly promising
    in being able to penetrate the 6-7 cell-layered urothelium. Accordingly, these formulations, when instilled into the bladder,
    were able to very efficiently suppress the growth of nonmuscle invasive bladder cancers in mouse models of the disease. Highly
    efficient in vivo knockdowns were found, 90-95% with 1mg/kg dose level.                                                                                                                                                                                                                                                             







Product
Candidates



We
currently have two late stage arthritis pain/hypertension drug candidates, IT-102 and IT-103. These programs will be conducted
secondary to the launch of Prestalia and are dependent on partnering with other entities or fund raising for their development.



Clinical
Program for M101: Combination of celecoxib and CEQ508



We
believe that the effectiveness of CEQ508 and celecoxib justify the combination as M101. We plan to meet with the FDA to discuss
an SPA with a clearly defined clinical design and endpoints for regulatory approval. Depending on being able to partner with other
entities or raise additional funding, we plan to meet the FDA sometime in 2018 and the trial may start in 2019. If successful,
we could anticipate a potential launch of the product in 2024.



The
oncology programs targeting beta-catenin against FAP and CRC will progress along their developmental timeline following a meeting
with the FDA to obtain concurrence on trial design and endpoints. Additionally we have programs for IBD and bladder cancer with
completed animal proof of concept.



These
programs will be developed as resources allow. In subsequent sections we will discuss in detail our three leading clinical programs
(IT-102, IT-103, and M101). The M101 program no longer aligns with our focus and we are actively engaged in efforts to outlicense
or spin off the therapeutic microbiome asset.



18















The
potential market size of IT-102 and IT-103 was projected to be $170 million and $250 million, respectively. With the FAP potential
market size of $400 million, we are projecting the total addressable market for these product candidates to be approximately $820
million annually.



IT-102/IT-103



IT-102
is a FDC formulation of celecoxib, a cyclooxygenase (COX) - 2 selective inhibitor, and lisinopril, an ACE inhibitor, indicated
in patients for whom treatment with both celecoxib and lisinopril is appropriate. IT-103 is the same as IT-102, except lisinopril
was replaced by olmesartan- an Angiotensin II receptor blockers (“ARB”). IT-103 is for patients for whom treatment
with both celecoxib and olmesartan is appropriate. These FDCs will allow rapid access to market through a short clinical program.
The initial approval based on pivotal BE trial and a small phase III trial will be for combined arthritis pain and hypertension
for patients already taking both drugs. Exploiting the suppression of celecoxib induced edema, we anticipate that they can eventually
replace all of celecoxib prescriptions with or without hypertension once our phase III trial is completed with positive demonstration
of edema suppression. This trial will be conducted post approval for label change and will target the highest edema risk patients-
the elderly patients whose pill burden is greater than five per day. The inherent lower risk of GI bleeding with celecoxib can
push IT-102 and IT-103 to also capture market shares of other pain medications such as ibuprofen and indomethacin.



The
rationale for IT-102/IT-103 drug development is based on the coexistence of arthritis pain and hypertension in populations, as
well as association of hypertension and edema with celecoxib treatment. Additionally, the preference for and improved compliance
with a single tablet makes the proposed FDC formulation a very useful drug for treatment of two common conditions of increasing
frequency in the aging population.



Arthritis/Hypertension



Arthritis
and hypertension often coexist due to common risk factors. Firstly, both conditions are age related. The risk of developing osteoarthritis
(“OA”) increases from the age of 40 onwards, with 25% of the population over the age of 45 presenting with clinical
symptoms (Hunter et al, 2006). It has been reported that approximately 50% of patients with OA suffer from hypertension. Data
from the 2009 Behavioral Risk Factor Surveillance System indicated that the top 2 most prevalent conditions in those over 70 years
of age were hypertension (60.7%) and arthritis (55%) (Hunter et al, 2011). The prevalence of hypertension in rheumatoid arthritis
(“RA”) in most large studies lies between 52% and 73%, with the age ranging from 51 to 66 years (Fernandes et al,
2015).



19









Hypertension
is one of the most important modifiable risk factors for the development of cardiovascular disease in the general population (Yusuf
et al, 2004). It affects about 1 billion individuals worldwide (Kearney et al, 2005) and about 30% of the adult population in
the United States (Nwankwo et al, 2013). Despite its high prevalence and the impact of its complications, control of hypertension
is far from adequate both in the general population (Chobanian et al, 2003; Oliveria et al, 2002; Primatesta et al, 2006; Luepker
et al, 2006) and in arthritis patients (Panoulas et al, 2007). The poor control rates in the general population, where only a
third of the people with hypertension have their blood pressure under control (Wang et al, 2005), is attributed to poor access
to health care and medications, as well as a lack of adherence to long-term therapy for a usually asymptomatic condition. In the
general population, anti-hypertensive therapy has been associated with a reduction of 40% in strokes, 20% in myocardial infarction
and >50% in heart failure (Neal et al, 2000), which emphasizes the importance of optimal blood pressure control in any population,
including arthritis patients.



Effective
simultaneous control of arthritis and hypertension is greatly facilitated by FDC, as most hypertension patients require multiple
medications for effective management. However, adherence to concomitant hypertension therapy decreases as the number of medications
increases. As the pill burden increases from 1 to ≥10, patient adherence rapidly decreases from 58.8% to 24.5%, respectively
(Resnic et al., 2006). A single FDC tablet results in 20% higher patient adherence than observed with a 2-tablet combination therapy
(Dezii et al, 2009). In addition, coupling the treatment for asymptomatic hypertension with painful arthritis will not only improve
compliance to the long-term therapy of hypertension, but also reduce the renal adverse events associated with NSAIDs/celecoxib
treatment. So far, there is no such FDC available in the U.S. Therefore, there is an urgent need for a celecoxib/anti-hypertensive
FDC such as IT-102.



Celecoxib
side effects



Hypertension
and other cardiovascular risks are associated with celecoxib treatment. Clinical trials and observational studies have shown that
nonselective and COX-2 selective NSAIDs are associated with increased cardiovascular risks and events (Cheng et al, 2002; Boers
et al, 2001; Mukherjee et al, 2001; Solomon et al, 2005). That is why cardiovascular thrombotic events, hypertension, congestive
heart failure and edema are listed in the warnings and precautions of the CELEBREXÒ package insert (CELEBREX® Package
Insert, 2016). Two randomized, placebo-controlled trials, Adenoma Prevention with Celecoxib (APC) trial and Prevention of Spontaneous
Adenomatous Polyps (PreSAP) trial, showed a nearly 2-fold-increased cardiovascular risk in celecoxib treatment groups compared
with the control group. Both dose groups in APC trial, celecoxib at 200 or 400mg twice daily, showed significant systolic blood
pressure (SBP) elevations at 1 and 3 years from 2 to 5.2 mmHg; however, no significant elevation of SBP was observed in the 400
mg once daily group in the PreSAP trial (Solomon et al, 2006). This trend for a dose-related increase in cardiovascular events
and blood pressure raises the possibility that lower doses or other dose intervals may be associated with less cardiovascular
risk.



Celecoxib
has been intensively evaluated on its blood pressure effects. A post hoc analysis on the renal safety of celecoxib with data from
more than 50 clinical studies involving more than 13,000 subjects showed that celecoxib had no clinically detectable effect on
blood pressure (Whelton 2000). In the Celecoxib Long-term Arthritis Safety Study (CLASS) with more than 8000 OA and RA patients,
there were 2.7% of patients in the celecoxib group (400 mg, b.i.d, N=3987) that showed either new-onset or aggravated hypertension
(Whelton 2006). A meta-analysis on the adverse events of celecoxib in OA and RA patients, which included data from 39,605 randomized
patients in 31 trials, showed that the proportion of any patient having hypertension or aggregated hypertension was only 1-2%
with celecoxib and there was no significant difference between celecoxib and placebo group (Moore 2005).



The
large meta-analysis of 31 randomized controlled trials in patients with OA or RA found that celecoxib was associated with a significantly
higher incidence of edema (at any site) than placebo (2.6% vs 1.4%: RR 1.9, 95% CI 1.4, 2.7) (Moore et al, 2005). Similarly, a
pooled analysis of renal adverse event data from seven 12-week North American trials involving 9,666 patients with OA or RA found
that the overall incidence of renal adverse events with celecoxib (4.3%) was greater than that with placebo (2.5%; p<0.05)
and was not significantly different from that with NSAIDs (4.1%) (Whelton et al, 2000). The most common renal adverse events with
celecoxib were peripheral edema (2.1%), hypertension (0.8%) and aggravated hypertension (0.6%) (Whelton et al, 2000).



20









Proprietary
Patient Level Data Analyses



We
have also compared the edema in patient populations receiving celecoxib alone and celecoxib in combination with a variety of antihypertensives.
To support this study a proprietary database was created which contains: 1) Claims data from Symphony pertaining to anti-hypertensives,
Statins, COX-2 inhibitors, and NSAIDs. The data span the most recent 36 months and 2) registry data from the ACC reporting blood
pressure (systolic/diastolic), peripheral edema flags (yes, no, missing), heart rate, LDL, glucose level, ejection fraction, glomerular
filtration rate, height, weight, body mass index, and the like.



Symphony
dataset is True Patient Level data - All Data Sources be it RX or MX claims is tied back to individual patients which is tracked
and then encrypted based on first name, last name, gender, date of birth and zip code to give an accurate picture of patient level
informatics year over year regardless of insurance changes. The source of Managed Markets prescription claims data comes from
various providers, including Intelligent network services (Switch Data) as well as direct data feeds from pharmacies that do not
use Switches so it does not create payer biases.



The
definition of the Symphony database is as follow: 1) Takes Celebrex, Anti-hypertensive (“AH”), Statin or NSAID or
have OA, RA or some other form of arthritis for 36 months, 2) Time Frame of Jan 1, 2012 – Dec 31, 2014 (3 years), 3) Number
of files: 201, 4) File Size: 561 GB zipped (~ 2.5 TB), 5) Unique Patients: 162 million, 6) Patients on Celebrex: 4.3 million,
7) Patients that have OA 16.3 million (15.4 million only OA), 8) Patients that have RA :2.3 million (1.4 million only RA).



The
definition for the ACC registry is as follow: 1) Have 3+ BP readings, 2) Time Frame: Jan 1, 2012 – Dec 31, 2014 (3 years),
3) Number of files: 2, 4) Size: 590 MB, 51 MB, 5) Unique Patients: 1.58 million, 6) Patients with BP readings: 1.58 million, 7)
Patients with Edema Flag True:870K.



The
analysis also showed that there was no impact of celecoxib consumed on the change in blood pressure readings, even at a dose of
400 mg/day (Qazi 2017). Therefore, we confirmed that celecoxib has minimum impact on blood pressure at doses in treatment of arthritis
pain. However, the effect of celecoxib on edema is higher than reported in controlled clinical trials. Incidence of edema increased
from 20-25% for celecoxib alone to 25-35% when celecoxib was combined with any drug suggestive of drug induced edema. Coadministration
with either ACE (i.e. lisinopril) or ARB (i.e. olmesartan) reduced the edema to 10-15%. The edema rate was then measured in the
aforementioned database. The incidence of edema was higher for OA patients than RA, other arthritis, or arthritis free patients.
The incidence of edema increased when patients were taking Celebrex for all groups except for RA and no arthritis free patients.
Overall OA seems to be susceptible to Celebrex induced edema- the frequency of which is higher among patients on the ACC registry
which would have prior cardiovascular history.



21











Manufacturing



Formulation
work up for IT-102 is completed. The formulation was designed by considering the following characteristics: 1) Single free dose
of individual drugs is already marketed in form of hard capsule and tablet, 2) Reference Listed Drug of Celecoxib (Celecoxib®)
is hard capsule in High Density Polyethylene (“HDPE”) bottles, 3) Reference Listed Drug of Lisinopril (Zestril®)
is uncoated tablet in HDPE bottles. Based on these characteristics, an oral dosage form suitable for administration to the adult
was favored. Tablets were preferred to capsules in order to increase the quantity of drug substance available per unit. Celecoxib/Lisinopril
FDC tablets are white circular biconvex bi-layered tablets of different size. Consequently, the size and weight increase with
dosage strength. Celecoxib/Lisinopril FDC tablet drug products are supplied as 100/2.5 mg, 100/5.0 mg, 100/10.0 mg, 100/20.0 mg,
200/2.5 mg, 200/5.0 mg, 200/10.0 mg, and 200/20.0 mg tablets in HDPE bottles. The constituents were chosen to achieve the following
objectives: 1) using well-known and compatible excipients, which allow a world-wide registration of the product, 2) satisfactory
chemical stability of the active substance, 3) satisfactory dissolution rate. The objective was to obtain a mean upper than 75%
at 30 minutes with slight variation inter and intra batches, and 4) a quantity of excipients as low as possible to obtain a tablet
as small as possible.



Pilot
scale manufacturing at 10,000 tablets per batch was performed. The dissolution profiles of RLDs and pilot product (200/20 mg FDC
bi-layer tablet) were similar with the results of celecoxib and lisinopril. Additionally, the dissolution profiles were considered
similar using the similarity factor (f2) following the guidance for industry “Dissolution testing of immediate release solid
oral dosage forms”, FDA, CDER, August 1997. With similarity in dissolution we are expecting to have similarity in BE trial.



IT-102
manufacturing has been transferred to an FDA inspected current good manufacturing practices (“cGMP”) contract manufacturing
organization and the exhibit batches and the clinical trial materials batches are being manufactured for clinical trial. This
would complete the manufacturing portion of the NDA dossier to be submitted to the FDA to support the marketing approval of IT-102.
IT-103 is at the beginning of this process.



22









Clinical
Study Plan for IT-102 (Celebrex/lisinopril)



One
BE study is planned to compare and assess the safety and pharmacokinetic characteristics between co-administered 200 mg celecoxib
and 20 mg or 2.5 mg lisinopril and IT-102 (200/20 mg or 200/2.5 mg celecoxib/lisinopril) monotherapy in healthy volunteers aged
between 20 and 50 years. The study could be completed in six months.



This
is going to be a single-dose, cross-over study of 60 subjects divided into two cohorts and treated over four periods. One tablet
of IT-102 at the highest dose (FDC tablet of 200 mg celecoxib/20 mg lisinopril) or the lowest dose (FDC tablet of 200 mg celecoxib/2.5
mg lisinopril) will be administered once orally as the test drug. Co-administration once daily of one tablet each of 200 mg celecoxib
and 20 mg lisinopril or one tablet each of 200 mg celecoxib and 2.5 mg lisinopril will be used as the comparator for the highest
and lowest dose of the FDC, respectively.



For
comparison of IT-102 with the comparator (co-administration of dose matched celecoxib and lisinopril), the 90% confidence intervals
of the geometric mean ratios for the primary pharmacokinetic parameters (AUC and Cmax) will be used for determination of BE according
to the FDA’s criteria. Adverse events (AEs) will also be assessed and compared between IT-102 and the comparator.



Phase
III Safety and Efficacy Study Plan. The purpose of this study is to evaluate the effect of celecoxib on the efficacy and safety
of lisinopril in subjects with OA and hypertension requiring antihypertensive therapy. One multi-site, randomized, double-blind,
placebo-controlled, 4-arm, 2-week phase 3 clinical study is planned to demonstrate the efficacy and safety of IT-102. It is planned
to recruit 150 to 250 patients with OA and hypertension randomized into four arms, which are IT-102 (200 mg celecoxib/20 mg lisinopril),
celecoxib (200 mg), lisinopril (20 mg) and placebo. The primary endpoint is demonstration that the reduction in blood pressure
by IT-102 (200 mg celecoxib/20 mg lisinopril) is at least 50% of the reduction by lisinopril (20 mg) alone in the patients with
OA and hypertension. The study is not planned to demonstrate pain reduction. AEs will also be assessed and compared among IT-102
and the comparator groups. The study could be completed in 12 months.



Both
BE and phase III studies are to be conducted concurrently and followed by NDA submission of IT-102 for FDA approval by the 505(b)2
pathway.



IT-103
will undergo the same clinical developmental plan as IT-102, as summarized below:







23









M101-
Outlicensing or spin off asset



M101
is being developed as beta-catenin siRNA/celecoxib combination against FAP. This is a combination of IT-102 and CEQ508 (tkRNAi
beta-catenin shRNA). Celecoxib was originally approved for FAP, however, it was removed from the market due to fear of cardiovascular
risks during the VIOXX withdrawal. But with the PRECISION trial showing that celecoxib is as safe as ibuprofen and naproxen, we
anticipate higher acceptance of celecoxib. Furthermore, with the addition of lisinopril to control edema and hypertension, we
anticipate that high doses of celecoxib would be safe and effective against FAP. Additionally, the systemic suppression of COX-2
directly and beta-catenin indirectly with celecoxib will be augmented by targeted and local suppression of beta-catenin by beta-catenin
shRNA (CEQ508). Together we anticipate a synergistic and safe and effective suppression of polyps in FAP.



FAP
is an autosomal dominant disorder with an estimated incidence of approximately 1:10,000 persons and is a well described form of
hereditary colorectal cancer (Bisgaard 1994, Neklason 2008, Steinbach 2000). FAP is caused by a heterozygous mutation in the Adenomatous
Polyposis Coli (APC) gene located on chromosome 5, which results in low levels of functional APC protein required to regulate
intracellular levels of beta-catenin. This dysregulation and accumulation of beta-catenin initiates an activation of downstream
target genes, resulting in uncontrolled cellular proliferation, hyperplasia, adenoma formation, and an increased risk of colon
cancer development (Kinzler 1996). In addition, the APC gene also plays a role in chromosome segregation through microtubule binding
and cell polarity. Almost all of the cancer- causing mutations in the APC gene create a truncated gene devoid of its C-terminal
region. Loss of the C-terminal region leads to chromosome instability, a hallmark of cancer (Kinzler 1996, Hanahan 2000). Typically,
FAP results in the formation of hundreds to thousands of polyps in the large and small intestine. While these polyps start out
benign, malignant transformation into colon cancer occurs 100% of the time when untreated. When the frequency of polyp formation
exceeds the criteria for polypectomy as assessed by the physician, surgical intervention including a partial or complete colectomy
is performed. Colectomies are typically performed in the late teenage years or early twenties. By age 35, 95% of individuals with
FAP have developed polyps. Without surgical intervention, the mean age of colon cancer onset is 39 years of age (range of 34-43
years) (Trimbath 2002). In Attenuated FAP, the APC mutation resides in the 3’UTR (untranslated region) of the APC gene,
resulting in a less severe phenotype of FAP. Patients usually develop fewer (<100) polyps, and the age at which polyp formation
occurs is later than FAP. Colon cancer develops in these individuals as well but at a slower rate, typically after 40 years of
age.



Duodenal/periampullary
adenocarcinoma is the next leading cause of death in FAP patients following colorectal cancer (Vasen 2008). FAP patients are also
at increased risk of developing other malignancies, including hepatoblastoma, pancreatic, thyroid, biliary tree, and brain tumors.
Additionally, the risk of cancer forming in the remaining stump of the rectum and small intestine, after colectomy, remains high
(Trimbath 2002, Vasen 2008).



Celecoxib
for treatment of FAP



Cyclooxygenase
(COX) inhibiting NSAIDs has been thoroughly investigated as a potential chemopreventive drug. Overexpression of COX-2 has been
identified in colorectal adenomas and carcinomas. This overexpression was linked with reduced apoptosis, enhanced cell growth,
tumor angiogenesis, tissue invasion and metastasis. This is likely attributed to the mechanism of COX-2, whereby expression of
COX-2 prevents degradation of β-catenin protein increasing proliferation and survival. As such, the COX-2 specific inhibitor,
celecoxib, has been utilized for the treatment of FAP patients.



In
a randomized, double-blind, placebo-controlled study, treatment of celecoxib at 100 mg or 400 mg twice daily was compared against
placebo for six months. Significant reduction in mean number of colorectal polyps (28% vs 4.5%, p = 0.003) and polyp burden assessed
as the sum of polyp diameters (30.7% vs 4.9%, p = 0.001) was observed in patients treated with 400 mg twice daily compared with
placebo (Steinbach et al. 2000). No significant reduction was observed in patients treated with 100 mg twice daily in terms of
mean number of colorectal polyps (11.9%, p = 0.33) and polyp burden (14.6%, p = 0.09). In a similar study, 400 mg twice daily
treatment of celecoxib showed significant reduction in area of duodenal polyposis (30.8% vs 8.3%, p = 0.049) of patients with
>5% coverage at baseline compared to placebo (Phillips et al. 2002). No significant reduction was observed from treatment at
100 mg (26.6%, p = 0.252).



24











Evaluation
of celecoxib for treatment of FAP was also evaluated in children with APC gene mutations and/or adenomas with a family history
of FAP. Children were evaluated in a phase I, dose-escalation trial in three successive cohorts of six children (Lynch et al.
2010). Random assignment of subjects in a 2:1 placebo ratio was conducted for cohort 1 (4 mg/kg/day) to cohort 2 (8 mg/kg/day)
to cohort 3 (16 mg/kg/day). Colonoscopies were performed at baseline and month 3. At month 3, a 39.1% increase in number of polyps
was observed in placebo patients whereas a 44.2% reduction was seen in the highest dose celecoxib group (p = 0.01). This corresponds
with the adult dose of 400 mg BID and was shown to be safe and well tolerated. Reduction in number of polyps was also observed
in the 8 mg/kg/day group (adult dose of 200 mg BID), with a 44.2% decrease. However, an increase of 69.7% was observed in patients
treated at 4 mg/kg/day (adult dose 100 mg BID). In line with results observed in adult patients, high dose of celecoxib is most
effective in treating patients with FAP.



Together,
these studies have shown that celecoxib is effective in treating FAP at high doses (400 mg twice daily). However, although therapeutically
effective, the high dose of celecoxib results in higher risk of cardiovascular adverse events. The increased risk has lowered
the attractiveness of celecoxib as an effective treatment for FAP. However, should the risk be diminished, a novel and previously
FDA approved drug would be available for treatment of a disease that currently has no effective treatment. This gap can be filled
by IT-102.



IT-102
is a FDC of celecoxib, a COX-2 selective inhibitor, and lisinopril, an ACE inhibitor. The combination of an antihypertensive agent,
e.g. lisinopril, with celecoxib is intended to suppress the cardiovascular side effects associated with high dose of celecoxib
to offer a safe and tolerable therapeutic option for the medical management of FAP patients. Coupled with local and target suppression
of beta-catenin by CEQ508 – we believe that M101 should be a safe and effective agent against FAP.



CEQ508
for treatment of FAP



TransKingdom
RNATM interference (tkRNAi) platform. tkRNAi is a broad-reaching platform that can be used to develop highly specific
drug products for a diverse set of diseases. The tkRNAi platform involves the modification of bacteria to deliver shRNA
to cells of the gastrointestinal tract. A significant advantage of the tkRNAi platform is oral (by mouth) delivery making
this platform extremely patient friendly while harnessing the full potential of the RNAi process. The tkRNAi platform has
demonstrated in vivo mRNA down-regulation of both inflammatory and cancer targets, thus providing a unique opportunity to develop
RNAi-based therapeutics against inflammation and oncology diseases such as Crohn’s Disease, ulcerative colitis and colon
cancer. For our own clinical pipeline, we have used the tkRNAi platform to discover and develop CEQ508 for the treatment
of FAP as a beta-catenin siRNA knockdown.



25









Phase
I proof of concept (“POC”) was conducted and the trial closed at meeting both its primary and secondary endpoints.
START-FAP is a phase I dose-escalating study to evaluate safety and tolerability of single daily doses of CEQ508 in adult patients
with FAP. Six patients with FAP were orally administered (3 each in Cohort 1 and 2) with CEQ-508 (108 and 109 colony forming units
[CFU]/day for 28 days). The primary objective was to establish general safety for orally administered CEQ508 and to determine
the maximum tolerated dose. The secondary objective was the effectiveness of CEQ508 on the gene expression of the target gene
beta-catenin. Gene expression was evaluated in GI tissues (duodenum, ileum, right and left colon, antrum) taken during endoscopy
examinations at baseline and at end-of-treatment (EOT). Expression levels were measured using qPCR and analyzed with ViiATM
7 Real-Time system (Life Technologies, Carlsbad, CA). Ct values of β-catenin were normalized to two of three housekeeping
genes (EIF2B1, HPRT1, GUSβ). A mixed Nested-ANOVA model was used to evaluate beta-catenin knockdown in normal mucosa and
polyps. This phase I trial of bacterial delivery of RNAi investigational agent CEQ508 in FAP patients demonstrated an acceptable
safety profile and was well-tolerated at the two bacterial dose levels tested, with no MTD having been identified. Without hitting
MTD, START-FAP achieved both primary endpoint of safety and secondary endpoint of beta-catenin knockdown.







Analysis
of Ct values stratifying by tissue type showed a decrease in β-catenin expression moving down the gastrointestinal tract
(Duodenum > Ileum > Colon > Antrum). A Mixed nested-ANOVA model was developed to compare the levels of β-catenin
in the normal mucosa and polyps taken at baseline and EOT.



A
statistical model was generated to test whether CEQ508 was successful in suppressing beta-catenin expression. The model developed
by pooling data from both cohorts for normal mucosa samples explained a significant proportion of variation (R-squared = 0.64,
P<0.0001; Patient to patient variation accounted for 48% of the total variation). No significant reduction in overall β-catenin
expression was observed in EOT samples. Modeling of pooled data for polyp samples explained a significant proportion of variation
(R-squared = 0.54, P<0.0001; Patient to patient variation accounted for 6% of the total variation). Significant reduction was
observed in overall β-catenin expression in EOT samples (F1,113.1 = 6.87, P=0.01). Furthermore, significant reduction of
β-catenin expression in the Duodenum was observed in EOT samples (Linear Contrast, Effect size = 0.363, 22.2% decrease, T
= 2.75, P=0.007).



26









Evaluation
of individual cohorts was also examined. The model for cohort 1 in normal mucosa explained a significant proportion of variation
(R-squared = 0.84, P<0.0001; Patient to patient variation accounted for 80% of the total variation). Nonstatistical significant
reduction was observed in overall β-catenin expression in EOT samples (F1,46 = 6.03, P=0.018). Therefore, component analyses
were deemed irrelevant and cohort 1 was declared not effective. The model for cohort 2 in polyps explained a significant proportion
of variation (R-squared = 0.69, P<0.0001; Patient to patient variation accounted for 8.2% of the total variation). Significant
reduction was observed in overall β-catenin expression at EOT (; F1,86.06 = 13.13, P=0.0005). There was a significant reduction
of β-catenin expression in the Duodenum (Linear Contrast, Effect size = 0.72, 39.3% decrease, T = 5.3, P<0.0001) and Ileum
(Effect size = 0.49, 28.8% decrease, T = 2.57, P=0.012).







Together,
the data indicate a higher expression of β-catenin in the small intestine (duodenum, ileum) compared to the large intestine
(colon, antrum). Additionally, the mixed nest-ANOVA model shows effective decrease in β-catenin mRNA from treatment of CEQ508.
The models indicate that treatment at 108 CFU/day may not be effective enough at lowering β-catenin expression. However,
significant effects were observed within the Duodenum and Ileum after treatment of 109 CFU/day of CEQ508. Furthermore, decrease
in β-catenin was observed only in the polyps while insignificant effects were observed within the normal mucosa. This shows
that CEQ508 is a therapeutically effective and specifically targeted novel treatment for patients with FAP. In addition, CEQ508
was granted orphan drug designation and fast track designation by the FDA.



Clinical
Program for M101: Combination of celecoxib and CEQ508



We
believe that the effectiveness of CEQ508 and celecoxib justify the combination as M101. We plan to meet with the FDA to discuss
an SPA with a clearly defined clinical design and endpoints for regulatory approval. The meeting is planned for 2018 and the trial
may start in 2019. If successful, we anticipate a potential launch of the product in 2024.



27









Partnering
and Licensing Agreements



Oncotelic
Inc.



On
July 17, 2017, we entered into a License Agreement with Oncotelic, Inc. 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. As of the date of this filing, Oncotelic has not yet completed its obligations to purchase the stock and Oncotelic, and
we are still in discussions to complete such purchase. Dr. Trieu, our Executive Chairman, is the principal stockholder and Chief
Executive Officer of Oncotelic.



LipoMedics
Inc.



On
February 6, 2017, we entered into a License Agreement with LipoMedics, Inc. pursuant to which, among other things, we provided
to LipoMedics a license to our SMARTICLES platform for the delivery of nanoparticles including small molecules, peptides, proteins
and biologics. On the same date, we also entered into a Stock Purchase Agreement with LipoMedics pursuant to which we issued to
LipoMedics an aggregate of 86,206 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. Dr. Trieu, our Executive Chairman, is the Chairman of the Board and Chief
Operating Officer of LipoMedics.



Autotelic
LLC



In
connection with the Merger Agreement and the closing of the Merger, on November 15, 2016, Marina entered into a License Agreement
with Autotelic LLC, a stockholder of IThenaPharma that became the holder of 2,312,355 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
(A) 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 (B) Autotelic LLC licensed to Marina certain patent rights, data
and know-how relating to IT-102 and IT-103, in connection with individualized therapy of 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 Therapeutic Drug Monitoring (TDM) guided dosing for all indications using an Autotelic
Inc. 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.



28









Hongene
Biotechnology



In
September 2015, Marina entered into a license agreement with Hongene, a leader in process development and analytical method development
of oligonucleotide therapeutics, regarding the development and supply of certain oligonucleotide constructs using our CRN technology.
We could receive double digit percentage royalties on the sales of research reagents using our CRN technology.



MiNA



On
December 17, 2014, Marina entered into a license agreement with MiNA Therapeutics, Inc. (“MiNA”) regarding the development
and commercialization of small activating RNA-based therapeutics utilizing MiNA’s proprietary oligonucleotides and our SMARTICLES
nucleic acid delivery technology. MiNA will have full responsibility for the development and commercialization of any products
arising under the agreement. MiNA paid an upfront fee of $0.5 million in January 2015 and an accelerated milestone payment of
$200,000 in November 2015. We could receive up to an additional $49 million in clinical and commercialization milestone payments,
as well as royalties on sales, based on the successful development of MiNA’s potential product candidates.



Rosetta



On
April 1, 2014, Marina entered into a strategic alliance with Rosetta to identify and develop microRNA- (“miRNA”) based
products designed to diagnose and treat various neuromuscular diseases and dystrophies. Under the terms of the alliance, Rosetta
will apply its industry leading miRNA discovery expertise for the identification of miRNAs involved in the various dystrophy diseases.
If the miRNA is determined to be correlative to the disease, Rosetta may further develop the miRNA into a diagnostic for patient
identification and stratification. If the miRNA is determined to be involved in the disease pathology and represents a potential
therapeutic target, Marina may develop the resulting miRNA-based therapeutic for clinical development. The alliance is exclusive
as it relates to neuromuscular diseases and dystrophies, with both companies free to develop and collaborate outside this field
both during and after the terms of the alliance.



Novartis



On
August 2, 2012, Marina and Novartis entered into a worldwide, non-exclusive License Agreement for the CRN technology for the development
of both single and double-stranded oligonucleotide therapeutics. Novartis made a $1.0 million one-time payment for the non-exclusive
license. In addition, in March 2009, Marina granted to Novartis a worldwide, non-exclusive, irrevocable, perpetual, royalty-free,
fully paid-up license, with the right to grant sublicenses, to the DiLA2-based siRNA delivery platform in consideration of a one-time,
non-refundable fee of $7.25 million. Novartis may terminate this agreement immediately upon written notice.



Monsanto



On
May 3, 2012, Marina and Monsanto entered into a worldwide exclusive Intellectual Property License Agreement for Marina’s
delivery and chemistry technologies. Marina and Monsanto also entered into a Security Agreement pursuant to which Marina granted
to Monsanto a security interest in that portion of its IP that is the subject of the License Agreement in order to secure the
performance of Marina’s obligations under the License Agreement. Monsanto paid $1.5 million in initiation fees, and may
be required to pay royalties on product sales in the low single digit percentages. Monsanto may terminate the License Agreement
at any time in whole or as to any rights granted thereunder upon three months’ prior written notice.



ProNAi



On
March 13, 2012, Marina entered into an Exclusive License Agreement with ProNAi therapeutics, Inc. (“ProNAi”) regarding
the development and commercialization of ProNAi’s proprietary DNAi-based therapeutics utilizing SMARTICLES. The License
Agreement provided that ProNAi would have full responsibility for the development and commercialization of any products arising
under the License Agreement. ProNAi’s clinical compound utilizing SMARTICLES, PNT2258, is a first-in-class, 24-base, single-stranded,
chemically-unmodified DNA oligonucleotide drug targeting BCL2, which proceeded to a phase 2 clinical study. In June 2016, ProNAi
suspended the development of PNT2258 based on its review of the interim results from a phase 2 trial of PNT2258. Thereafter, the
License Agreement has been terminated.



29







Novosom



On
July 27, 2010, Marina acquired the intellectual property of Novosom for SMARTICLES. As per the terms of the acquisition agreement
(the “Original Purchase Agreement”), Marina was required to pay to Novosom an amount equal to 30% of the value of
each upfront (or combined) payment actually received in respect of the license of liposomal-based delivery technology or related
product or disposition of the liposomal-based delivery technology by Marina, up to $3.3 million, which amount was to be paid in
shares of common stock, or a combination of cash and shares of common stock, at Marina’s discretion. On September 8, 2017,
we entered into an Intellectual Property Purchase Agreement (the “IP Purchase Agreement”) with Novosom pursuant to
which we sold to Novosom substantially all of our intellectual property estate relating to SMARTICLES (the “Smarticles IP”),
including that acquired pursuant to the Original Purchase Agreement, for an aggregate purchase price of $1.00. As per the IP Purchase
Agreement, we will retain rights to any future payments that may be due to us pursuant to those agreements that we entered into
with third parties pursuant to which we provided to such third parties certain licenses and rights with respect to the Smarticles
IP, including milestone and royalty payments, if any, and Novosom relinquished any rights that it may have under the Original
Purchase Agreement to any portion of such payments.



Valeant
Pharmaceuticals



On
March 23, 2010, Marina acquired intellectual property related to the CRN chemistry from Valeant Pharmaceuticals North America
(“Valeant”). Subject to meeting certain milestones triggering the obligation to make any such payments, we may be
obligated to make a product development milestone payment of $5.0 million and $2.0 million within 180 days of FDA approval of
a NDA for our first and second CRN related product, respectively. To date, we had not made any such milestone payments but have
milestone obligations of $0.1 million based on CRN licenses to date. Valeant is entitled to receive earn-outs based upon a percentage
in the low single digits of future commercial sales and earn-outs based upon a percentage in the low double digits of future revenue
from sublicensing. We are required to pay Valeant an annual amount equal to $50,000 per assigned patent which shall be creditable
against other payment obligations. The term of our financial obligations under the agreement shall end, on a country-by-country
basis, when there no longer exists any valid claim in such country. We may terminate the agreement upon 30-day notice, or upon
10-day notice in the event of adverse results from clinical studies.



Proprietary
Rights and Intellectual Property



We
rely primarily on patents and contractual obligations with employees and third parties to protect our proprietary rights. We have
sought, and intend to continue to seek, appropriate patent protection for important and strategic components of our proprietary
technologies by filing patent applications in the U.S. and certain foreign countries. There can be no assurance that any of our
patents will guarantee protection or market exclusivity for our products and product candidates. We also use license agreements
both to access external technologies and to convey certain intellectual property rights to others. Our financial success will
be dependent in part on our ability to obtain commercially valuable patent claims and to protect our intellectual property rights
and to operate without infringing upon the proprietary rights of others. As of December 31, 2017, we owned or controlled the issued
or allowed patents, and the U.S. and foreign patent applications, to protect our proprietary technologies, as set forth in the
table below (which table does not include the intellectual property relating to our DiLA2 delivery system, which we
are seeking to divest).



|Estimated
    Expiration |  | No.
    of Issued/Allowed Patents |  | Jurisdiction                             |  | No.
    of Pending Patents |  | Jurisdiction                                                           
|------------------------ |  | --------------------------------- |  | ---------------------------------------- |  | -------------------------- |  | -----------------------------------------------------------------------
|2019                     |  | 3                                 |  | U.S.                                     |  |                            |  |                                                                        
|2020                     |  | 1                                 |  | Germany                                  |  |                            |  |                                                                        
|2021                     |  | 1                                 |  | U.S.                                     |  |                            |  |                                                                        
|2023                     |  | 1                                 |  | U.S.                                     |  |                            |  |                                                                        
|2024                     |  | 1                                 |  | China                                    |  |                            |  |                                                                        
|                         |  | 3                                 |  | U.S.                                     |  |                            |  |                                                                        
|2025                     |  | 2                                 |  | U.S.                                     |  | 1                          |  | U.S.                                                                   
|2026                     |  | 1
    each                        |  | China,
    Japan                         |  | 1                          |  | Europe                                                                 
|2027                     |  | 2                                 |  | U.S.                                     |  | 1                          |  | U.S.                                                                   
|2028                     |  | 1
    each                        |  | New
    Zealand, China, Japan, Australia |  | 1
    each                 |  | China,
    U.S. Europe                                                 
|                         |  | 2                                 |  | Europe                                   |  |                            |  |                                                                        
|                         |  | 4                                 |  | U.S.                                     |  |                            |  |                                                                        
|                         |  |                                   |  |                                          |  |                            |  |                                                                        
|2029                     |  | 1                                 |  | U.S.                                     |  |                            |  |                                                                        
|2031                     |  | 2                                 |  | U.S.                                     |  | 1                          |  | Europe                                                                 
|2032                     |  | 1
    each                        |  | Singapore,
    Australia, Europe, U.S.   |  | 1
    each                 |  | Hong
    Kong, India                                                   
|2035                     |  |                                   |  |                                          |  | 1
    each                 |  | Taiwan,
    Korea, India, Europe, Australia, Canada, China, Japan, U.S.



30









The
patents listed in the table above will expire generally between 2019 and 2035, subject to any potential patent term extensions
and/or supplemental protection certificates that would extend the terms of the patents in countries where such extensions may
become available.



Competition



The
biopharmaceutical industry is characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary
products. The key competitive factors affecting the success of all of our products and product candidates are their efficacy,
safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party
payors. While we believe that our technology, knowledge, experience and scientific resources provide us with certain competitive
advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical
and biotechnology companies, academic institutions, governmental agencies, and public and private research institutions. Our products,
and any product candidates that we successfully develop and commercialize, will compete with existing therapies and new therapies
that may become available in the future.



Many
of the companies against which we are competing or against which we may compete in the future have significantly greater financial
and other resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials,
obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the biopharmaceutical industry
may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies
may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
These competitors also compete, or may compete, with us in recruiting and retaining qualified scientific and management personnel
and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary
to, or that may be necessary for, our programs.



The
commercial opportunity for our product candidates could be reduced or eliminated if our competitors develop and commercialize
drugs that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any
drugs that we may develop. Our competitors also may obtain FDA or other regulatory approval for their product candidates more
rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before
we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-party
payors seeking to encourage the use of generic drugs.



Government
Regulation



Government
authorities in the U.S. and other countries extensively regulate the research, development, testing, manufacture, labeling, promotion,
advertising, distribution and marketing, among other things, of drugs and biologic products. Our Prestalia product is, and all
of our foreseeable product candidates are expected to be, regulated as drug products.





31







In
the U.S., the FDA regulates drug products under the Federal Food, Drug and Cosmetic Act (the “FDCA”), and other laws
within the Public Health Service Act. Failure to comply with applicable U.S. requirements, both before and after approval, may
subject us to administrative and judicial sanctions, such as a delay in approving or refusal by the FDA to approve pending applications,
warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, and/or
criminal prosecutions. Before our drug products are marketed they must be approved by the FDA. The steps required before a novel
drug product is approved by the FDA include: (1) pre-clinical laboratory, animal, and formulation tests; (2) submission to the
FDA of an Investigational New Drug Application (“IND”) for human clinical testing, which must become effective before
human clinical trials may begin; (3) adequate and well-controlled clinical trials to establish the safety and effectiveness of
the product for each indication for which approval is sought; (4) submission to the FDA of a New Drug Application (“NDA”);
(5) satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug product is produced
to assess compliance with cGMP and FDA review; and finally (6) approval of an NDA.



Pre-clinical
tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies. The results of
the pre-clinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND,
which must become effective before human clinical trials may begin. An IND will automatically become effective 30 days after receipt
by the FDA, unless before that time the FDA raises concerns or questions, such as the conduct of the trials as outlined in the
IND. In such a case, the IND sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical trials
can proceed. There can be no assurance that submission of an IND will result in FDA authorization to commence clinical trials.
Once an IND is in effect, each clinical trial to be conducted under the IND must be submitted to the FDA, which may or may not
allow the trial to proceed.



Clinical
trials involve the administration of the investigational drug to human subjects under the supervision of qualified physician-investigators
and healthcare personnel. Clinical trials are typically conducted in three defined phases, but the phases may overlap or be combined.
Phase 1 usually involves the initial administration of the investigational drug or biologic product to healthy individuals to
evaluate its safety, dosage tolerance and pharmacodynamics. Phase 2 usually involves trials in a limited patient population, with
the disease or condition for which the test material is being developed, to evaluate dosage tolerance and appropriate dosage;
identify possible adverse side effects and safety risks; and preliminarily evaluate the effectiveness of the drug or biologic
for specific indications. Phase 3 trials usually further evaluate effectiveness and test further for safety by administering the
drug or biologic candidate in its final form in an expanded patient population. Our product development partners, the FDA, or
we may suspend clinical trials, if any, at any time on various grounds, including any situation where we or our partners believe
that patients are being exposed to an unacceptable health risk or are obtaining no medical benefit from the test material.



Assuming
successful completion of the required clinical testing, the results of the pre-clinical trials and the clinical trials, together
with other detailed information, including information on the manufacture and composition of the product, are submitted to the
FDA in the form of an NDA requesting approval to market the product for one or more indications. Before approving an application,
the FDA will usually inspect the facilities where the product is manufactured, and will not approve the product unless cGMP compliance
is satisfactory. If the FDA determines the NDA is not acceptable, the FDA may outline the deficiencies in the NDA and often will
request additional information. If the FDA approves the NDA, certain changes to the approved product, such as adding new indications,
manufacturing changes or additional labeling claims are subject to further FDA review and approval. The testing and approval process
requires substantial time, effort and financial resources, and we cannot be sure that any approval will be granted on a timely
basis, if at all.



Under
the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which
is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals
in the U.S. and for which there is no reasonable expectation that the cost of developing and making available in the U.S. a drug
for this type of disease or condition will be recovered from sales in the U.S. for that drug. Orphan drug designation must be
requested before submitting an NDA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its
potential orphan use are disclosed publicly by the FDA. If a product that has orphan drug designation subsequently receives the
first FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which
means that the FDA may not approve any other applications, including a full BLA, to market the same drug for the same indication,
except in very limited circumstances, for seven years. The FDA granted orphan drug designation to CEQ508 for the treatment of
FAP in December 2010.





32







In
addition, regardless of the type of approval, we and our partners are required to comply with a number of FDA requirements both
before and after approval. For example, we and our partners are required to report certain adverse reactions and production problems,
if any, to the FDA, and to comply with certain requirements concerning advertising and promotion for products. In addition, quality
control and manufacturing procedures must continue to conform to cGMP after approval, and the FDA periodically inspects manufacturing
facilities to assess compliance with cGMP. Accordingly, manufacturers must continue to expend time, money and effort in all areas
of regulatory compliance, including production and quality control to comply with cGMP. In addition, discovery of problems, such
as safety problems, may result in changes in labeling or restrictions on a product manufacturer or NDA holder, including removal
of the product from the market.



Product
Liability



We
currently do not carry product liability insurance as no patients are currently being treated with our products. However, we intend
to obtain product liability insurance in connection with our commercialization efforts for Prestalia and our clinical efforts
for our other product candidates.



Environmental
Compliance



Our
research and development activities involve the controlled use of potentially harmful biological materials as well as hazardous
materials, chemicals and various radioactive compounds. We are subject to federal, state and local laws and regulations governing
the use, storage, handling and disposal of these materials and specific waste products. We are also subject to numerous environmental,
health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens
and the handling of bio-hazardous materials. The cost of compliance with these laws and regulations could be significant and may
adversely affect capital expenditures to the extent we are required to procure expensive capital equipment to meet regulatory
requirements. At this time, we are not conducting any R&D activities that require compliance with federal, state or local
laws.



Employees
and Business Services



As
of the date of this report, we have seven employees, all of whom are officers of our company, and all of whom – other than
Mr. Ramelli, our Chief Executive Officer – spend a portion of their time working for other entities. To the extent that
compensation is currently being paid to certain of our employees, such compensation is being paid with respect to work performed
for our company by Autotelic Inc. as per the terms of the Master Services Agreement (as described below). None of our employees
are covered by collective bargaining agreements.



In
connection with the closing of the Merger, on November 15, 2016, Marina entered into a Master Services Agreement (the “MSA”)
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, pursuant to which Autotelic Inc. agreed to provide
certain business functions and services from time to time at Marina’s request. The MSA has a term of ten years, though it
can be terminated by either party upon ninety (90) days’ prior written notice to the other party. The resources available
to us through Autotelic Inc. include, without limitation, regulatory, clinical, preclinical, manufacturing, formulation, legal,
accounting and IT.



As
partial consideration for the services to be performed by Autotelic Inc. under the MSA, during the period prior 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 MSA
by the exercise price for the MSA Warrants.





33







Company
Information



We
are a reporting company and are required to file annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy these reports, proxy statements and other information at the SEC’s Public Reference
Room at 100 F Street N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or e-mail the SEC at publicinfo@sec.gov
for more information on the operation of the public reference room. Our SEC filings are also available at the SEC’s website
at http://www.sec.gov. Our Internet address is http://www.marinabio.com. There we make available, free of charge, our Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, as soon as reasonably
practicable after we electronically file such material with, or furnish such material to, the SEC.



ITEM
1A. Risk Factors.



Risks
Relating to Our Financial Condition and Business Operations



Our
current cash and other sources of liquidity are not sufficient to fund our intended operations. We will require substantial additional
funding to continue our operations beyond that date. If additional capital is not available, we may have to curtail or cease operations,
or take other actions that could adversely impact our shareholders.



Our
business does not generate the cash necessary to finance our operations. We incurred net operating losses of approximately $6.2
million and $0.84 million in the years ended December 31, 2017 and 2016, respectively. We will require significant additional
capital to:



| | ● | ramp
    up commercialization efforts with respect to our FDA-approved Prestalia product;                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                    
| | ● | fund
    research and development activities relating to the development of our product candidates, including clinical and pre-clinical
    trials;
| |   |                                                                                                                                                    
| | ● | obtain
    regulatory approval for our product candidates;                                                                                         
| |   |                                                                                                                                                    
| | ● | pursue
    licensing opportunities for our technologies, products and product candidates;                                                          
| |   |                                                                                                                                                    
| | ● | protect
    our intellectual property;                                                                                                             
| |   |                                                                                                                                                    
| | ● | attract
    and retain highly-qualified personnel;                                                                                                 
| |   |                                                                                                                                                    
| | ● | respond
    effectively to competitive pressures; and                                                                                              
| |   |                                                                                                                                                    
| | ● | acquire
    complementary businesses or technologies.                                                                                              



Our
future capital needs depend on many factors, including:



| | ● | the
    scope, duration and expenditures associated with our research, development and commercialization efforts (including the costs
    of clinical and pre-clinical trials);
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                
| | ● | continued
    scientific progress in our programs;                                                                                                                             
| |   |                                                                                                                                                                                
| | ● | the
    outcome of potential partnering or licensing transactions, if any;                                                                                                     
| |   |                                                                                                                                                                                
| | ● | competing
    technological developments;                                                                                                                                      
| |   |                                                                                                                                                                                
| | ● | our
    proprietary patent position, if any, in our products; and                                                                                                              
| |   |                                                                                                                                                                                
| | ● | the
    regulatory approval process for our products.                                                                                                                          





34







We
believe that our currently available cash resources (including the remaining amount available to us under our Line Letter with
Autotelic Inc.) will not be sufficient to fund our intended operations. We will need to raise additional funds through public
or private equity offerings, debt financings or additional strategic alliances and licensing arrangements to continue our operations
past the foregoing dates. We may not be able to obtain additional financing on terms favorable to us, if at all. General market
conditions, as well as market conditions for companies at our stage of development, may make it difficult for us to seek financing
from the capital markets, and the terms of any financing may adversely affect the holdings or the rights of our stockholders.
For example, if we raise additional funds by issuing equity securities, further dilution to our stockholders will result, which
may substantially dilute the value of their investment. In addition, as a condition to providing additional funds to us, future
investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, may
involve restrictive covenants that could limit our flexibility to conduct future business activities and, in the event of insolvency,
could be paid before holders of equity securities received any distribution of corporate assets. We may be required to relinquish
rights to our technologies or drug candidates, or grant licenses through alliance, joint venture or agreements on terms that are
not favorable to us, in order to raise additional funds. If adequate funds are not available, we may have to further delay, reduce
or eliminate one or more of our planned activities with respect to our business, or terminate our operations. These actions would
likely reduce the market price of our common stock.





We
have no history of profitability and there is a potential for fluctuation in operating results.



We
have experienced significant operating losses since inception. We currently have no revenues from product sales, and although
we anticipate generating revenues from the sale of our Prestalia product and such other products that may obtain regulatory approval,
the amount of such revenues is uncertain. We expect that the continued operation of our business will cause us to continue to
experience losses in the near term as we pursue our plans to commercialize Prestalia and continue our development plans
with respect to our product candidates. See the sections entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Cautionary Statement Regarding Forward-Looking Statements” contained
elsewhere in this report.



We
and our partners are engaged in the business of developing and commercializing novel therapeutic products. The process of developing
such products requires significant research and development efforts, including basic research, pre-clinical and clinical development,
and regulatory approval. These activities, together with our sales, marketing, general and administrative expenses, have resulted
in operating losses in the past, and there can be no assurance that we can achieve profitability in the future. Our ability to
achieve profitability depends on our ability, alone or with our partners, to commercialize and develop drug candidates,
conduct pre-clinical development and clinical trials, obtain necessary regulatory approvals, and manufacture, distribute, market
and sell drug products. We cannot assure you of the success of any of these activities or predict if or when we will ever become
profitable.



There
is substantial doubt about our ability to continue as a going concern, which may affect our ability to obtain future financing
or engage in strategic transactions, and may require us to curtail our operations.



Our
financial statements as of December 31, 2017 were prepared under the assumption that we will continue as a going concern. The
independent registered public accounting firm that audited our 2017 consolidated financial statements, in their report, included
an explanatory paragraph referring to our recurring losses and expressing substantial doubt in our ability to continue as a going
concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our ability
to continue as a going concern depends on our ability to raise substantial additional funds through public or private equity offerings,
debt financings or additional strategic alliances and licensing arrangements. There can be no assurance that we will be successful
in any such endeavors.



On April 16, 2018, we held the initial
closing of our private placement of shares of our Series E Convertible Preferred Stock, and warrants to purchase shares of our
common stock, as a result of which we raised over $10 million in net proceeds to our company.









35







If
we are unable to raise sufficient additional capital, we may seek to merge with or be acquired by another entity, or to sell our
assets to another entity, and that transaction may adversely affect our business and the value of our securities.



If
we are unable to raise sufficient additional capital to continue our business or to execute on our business plan, we may seek
to merge or combine with, or otherwise be acquired by, another entity with a stronger cash position, complementary work force,
or product candidate portfolio or for other reasons. There are numerous risks associated with merging, combining or otherwise
being acquired, whether in whole or in part. These risks include, among others, incorrectly assessing the quality of a prospective
acquirer or merger-partner, encountering greater than anticipated costs in integrating businesses, facing resistance from employees
and being unable to profitably deploy the assets of the new entity. The operations, financial condition, and prospects of the
post-transaction entity depend in part on our and our acquirer/merger-partner’s ability to successfully integrate the operations
related to our products, product candidates, business and technologies. We may be unable to integrate operations successfully
or to achieve expected cost savings, and any cost savings that are realized may be offset by losses in revenues or other charges
to operations. As a result, our stockholders may not realize the full value of their investment.



We
are dependent on our key personnel, and if we are unable to retain such personnel, or to attract and retain other highly qualified
personnel, then we may be unable to successfully develop our business.



Our
ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and
retain highly qualified personnel. We are dependent on our management and scientific personnel, including Vuong Trieu, Ph.D.,
our Executive Chairman, Joseph W. Ramelli, our Chief Executive Officer, Larn Hwang, Ph.D., our Chief Scientific Officer, Mihir
Munsif, our Chief Operating Officer, Erik Emerson, our Chief Commercial Officer, Amit Shah, our Chief Financial Officer, and Peter
Weinstein, our Chief Legal Officer. There can be no assurance that we will be able to retain the services of any of the foregoing
persons, or of any of our other current and future personnel, regardless of whether or not we have entered into employment agreements
with such persons.



If
we are unable to attract or retain qualified personnel, or if we are unable to adequately replace such personnel if we lose their
services for any reason, our business could be seriously harmed. In addition, if we have to replace any of these individuals,
we may not be able to replace the knowledge that they have about our operations.



If
we make strategic acquisitions, we will incur a variety of costs and might never realize the anticipated benefits.



We
have limited experience in independently identifying acquisition candidates and integrating the operations of acquisition candidates
with our company. If appropriate opportunities become available, and we have sufficient resources to do so, we might attempt to
acquire approved products, additional drug candidates, technologies or businesses that we believe are a strategic fit with our
business, such as our acquisition of Prestalia from Symplmed. If we pursue any transaction of that sort, the process of negotiating
the acquisition and integrating an acquired product, drug candidate, technology or business might result in operating difficulties
and expenditures and might require significant management attention that would otherwise be available for ongoing development
of our business, whether or not any such transaction is ever consummated. Moreover, we might never realize the anticipated benefits
of any acquisition. Future acquisitions could result in, among other things, dilutive issuances of equity securities, the incurrence
of debt, contingent liabilities, or impairment expenses related to goodwill, and impairment or amortization expenses related to
other intangible assets, which could harm our financial condition.



Failure
of our internal control over financial reporting could harm our business and financial results.



Our
management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control
over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting for external
purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting
includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance
that transactions are recorded as necessary for preparation of the financial statements; providing reasonable assurance that receipts
and expenditures of our assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized
acquisition, use or disposition of our assets that could have a material effect on the financial statements would be prevented
or detected on a timely basis. Any failure to maintain an effective system of internal control over financial reporting could
limit our ability to report our financial results accurately and timely or to detect and prevent fraud.





36







In
connection with the evaluation of our internal control over financial reporting as of December 31, 2016 that was undertaken by
management in connection with the preparation of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, management
determined that our lack of a sufficient complement of personnel with an appropriate level of knowledge and experience in the
performance of an audit of a public company that is commensurate with our financial reporting requirements constituted a material
weakness as of December 31, 2016. To remediate the foregoing material weakness, we hired additional experienced accounting and
other personnel to assist with filings and financial record keeping, and took additional steps to improve our financial reporting
systems and enhance our existing policies, procedures and controls, which efforts included the hiring of Amit Shah in October
2017 to serve as our Chief Financial Officer. Despite these remedial measures undertaken during 2017, we were not be able to adequately
address the weaknesses that we identified , and thus management determined that the same weaknesses existed as of December
31, 2017.



We
depend on our information technology and infrastructure.



We
rely on the efficient and uninterrupted operation of information technology systems to manage our operations, to process, transmit
and store electronic and financial information, and to comply with regulatory, legal and tax requirements. We also depend on our
information technology infrastructure for electronic communications among our personnel, contractors, consultants and vendors.
System failures or outages could compromise our ability to perform these functions in a timely manner, or could result in the
loss of information, which could harm our ability to conduct business or delay our financial reporting. Such failures could materially
adversely affect our operating results and financial condition.



In
addition, we depend on third parties and applications on virtualized (cloud) infrastructure to operate and support our information
systems. These third parties vary from multi-disciplined to boutique providers. Failure by these providers to adequately deliver
the contracted services could have an adverse effect on our business, which in turn may materially adversely affect our operating
results and financial condition. All information systems, despite implementation of security measures, are vulnerable to disability,
failures or unauthorized access. If our information systems were to fail or be breached, such failure or breach could materially
adversely affect our ability to perform critical business functions and sensitive and confidential data could be compromised.



Our
business and operations could suffer in the event of system failures.



Our
internal computer systems and those of our contractors, consultants and partners are vulnerable to damage from computer viruses,
unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Such events could cause
interruption of our operations, and could result in a material disruption of our development programs and commercialization efforts.
For example, the loss of pre-clinical trial data or data from completed or ongoing clinical trials for our product candidates,
if any, could result in delays in our regulatory filings and development efforts and significantly increase our costs. To the
extent that any disruption or security breach were to result in a loss of or damage to our data, or inappropriate disclosure of
confidential or proprietary information, we could incur liability and our business operations could be delayed.



We
may be unable to adequately protect our information technology systems from cyber-attacks, which could result in the disclosure
of confidential information, damage our reputation, and subject us to significant financial and legal exposure.



Cyber-attacks
are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect. Cyber-attacks
could include wrongful conduct by hostile foreign governments, industrial espionage, the deployment of harmful malware, denial-of-service,
and other means to threaten data confidentiality, integrity and availability. A successful cyber-attack could cause serious negative
consequences for our company, including the disruption of operations, the misappropriation of confidential information (including
patient information) and trade secrets, and the disclosure of corporate strategic plans and results. To date, we have not experienced
threats to our data and information technology systems. However, although we devote resources to protect our information technology
systems, we realize that cyber-attacks are a threat, and there can be no assurance that our efforts will prevent information security
breaches that would result in business, legal or reputational harm to us, or would have a material adverse effect on our operating
results and financial condition.





37







Risks
Related to the Development and Regulatory Approval of Our Drug Candidates



The
development of pharmaceutical products is uncertain and may never lead to marketable products.



The
future success of our operations will depend on the successful development, by us or our partners, of products based on our proprietary
technologies. Our product candidates may not demonstrate in patients the chemical and pharmacological properties ascribed to them
in laboratory studies, and they may interact with human biological systems in unforeseen, ineffective or harmful ways. We may
make significant expenditures developing product candidates without success, and thus may never develop a marketable product utilizing
our technologies. If neither we nor any of our partners develops and commercializes drugs based upon our technologies, we may
be required to change the scope and direction of, or cease pursuing, our product candidates based on such technologies.



If
we or our partners are unable to develop and commercialize product candidates utilizing our technologies, our business will be
adversely affected.



A
key element of our business strategy is to discover, develop and commercialize a portfolio of new products through internal efforts
and through those of our partners. Whether or not any product candidates are ultimately identified, research programs to identify
new disease targets and product candidates require substantial technical, financial and human resources. These research programs
may initially show promise in identifying potential product candidates, yet fail to yield a successful commercial product for
many reasons, including the following:



| | ● | Partner
    with other entities or raise additional funds to advance the development of new products ;                                                                 
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | competitors
    may develop alternatives that render our product candidates (or those of our partners) obsolete;                                                       
| | ● | a
    product candidate may not have a sustainable intellectual property position in major markets;                                                                    
| | ● | a
    product candidate may, after additional studies, be shown to have harmful side effects or other characteristics that indicate
    it is unlikely to be effective;
| | ● | a
    product candidate may not receive regulatory approval;                                                                                                           
| | ● | a
    product candidate may not be capable of production in commercial quantities at an acceptable cost, or at all; or                                                 
| | ● | a
    product candidate may not be accepted by patients, the medical community or third-party payors.                                                                  



Clinical
trials of product candidates utilizing our technologies would be expensive and time-consuming, and the results of any of these
trials would be uncertain.



Before
obtaining regulatory approval for the sale of any product candidates, we and our partners must conduct expensive and extensive
pre-clinical tests and clinical trials to demonstrate the safety and efficacy of such product candidates. Pre-clinical and clinical
testing is a long, expensive and uncertain process, and the historical failure rate for product candidates is high. The length
of time generally varies substantially according to the type of drug, complexity of clinical trial design, regulatory compliance
requirements, intended use of the drug candidate and rate of patient enrollment for the clinical trials.



A
failure of one or more pre-clinical studies or clinical trials can occur at any stage of testing. We and our partners may experience
numerous unforeseen events during, or as a result of, the pre-clinical testing and the clinical trial process that could delay
or prevent the receipt of regulatory approval or the commercialization of our product candidates, or that could render such process
substantially more expensive, including:



| | ● | regulators
    may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site;                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                     
| | ● | pre-clinical
    tests or clinical trials may produce negative or inconclusive results, and we or a partner may decide, or a regulator may
    require us, to conduct additional pre-clinical testing or clinical trials, or we or a partner may abandon projects that were
    previously expected to be promising;





38







| | ● | enrollment
    in clinical trials may be slower than anticipated or participants may drop out of clinical trials at a higher rate than anticipated,
    in each case for a variety of reasons, resulting in significant delays;                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                 
| | ● | third
    party contractors may fail to comply with regulatory requirements or meet their contractual obligations in a timely manner;                                                                                                                           
| |   |                                                                                                                                                                                                                                                                 
| | ● | product
    candidates may have very different chemical and pharmacological properties in humans than in laboratory testing and may interact
    with human biological systems in unforeseen, ineffective or harmful ways;                                      
| |   |                                                                                                                                                                                                                                                                 
| | ● | the
    suspension or termination of clinical trials for a variety of reasons, including if the participants are being exposed to
    unacceptable health risks or if such trials are not being conducted in accordance with applicable regulatory requirements;



| | ● | regulators,
    including the FDA, may require that clinical research be held, suspended or terminated for various reasons, including noncompliance
    with regulatory requirements;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                      
| | ● | the
    costs of clinical trials (or the components thereof) may be greater than anticipated;                                                                                        
| |   |                                                                                                                                                                                      
| | ● | the
    supply or quality of drug candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate;
    and                                      
| |   |                                                                                                                                                                                      
| | ● | product
    candidates may not have the desired effects or may include undesirable side effects or the product candidates may have other
    unexpected characteristics.             



Further,
even if the results of pre-clinical studies or clinical trials are initially positive, it is possible that different results will
be obtained in the later stages of drug development or that results seen in clinical trials will not continue with longer term
treatment. Drugs in late stages of clinical development may fail to show the desired safety and efficacy traits despite having
progressed through initial clinical testing. For example, positive results in early phase 1 or phase 2 clinical trials may not
be repeated in larger phase 2 or phase 3 clinical trials. It is expected that all of the drug candidates that may be developed
by us or our partners based on our technologies will be prone to the risks of failure inherent in drug development. The clinical
trials of any or all of the drug candidates of us or our partners could be unsuccessful, which would prevent the commercialization
of these drugs. The FDA conducts its own independent analysis of some or all of the pre-clinical and clinical trial data submitted
in a regulatory filing and often comes to different and potentially more negative conclusions than the analysis performed by the
drug sponsor. The failure to develop safe, commercially viable drugs approved by the FDA or another applicable regulatory body
would substantially impair our ability to generate product sales and sustain our operations and would materially harm our business
and adversely affect our stock price. In addition, significant delays in pre-clinical studies and clinical trials will impede
the regulatory approval process, the commercialization of drug candidates and the generation of revenue, as well as substantially
increase development costs.



Our
product candidates may cause undesirable side effects or have other properties that could halt their development, prevent their
regulatory approval, limit their commercial potential or result in significant negative consequences.



It
is possible that the FDA or foreign regulatory authorities may not agree with any future assessment of the safety profile of our
product candidates. Undesirable side effects caused by any of our product candidates could cause us or our partners to interrupt,
delay or discontinue development of our product candidates, could result in a clinical hold on any clinical trial, or could result
in the denial of regulatory approval of our product candidates by the FDA or foreign regulatory authorities. This, in turn, could
prevent us from commercializing our product candidates and generating revenues from their sale. In addition, if any of our products
cause serious or unexpected side effects or are associated with other safety risks after receiving marketing approval, a number
of potential significant negative consequences could result, including: (i) regulatory authorities may withdraw their approval
of the product; (ii) we may be required to recall the product, change the way it is administered, conduct additional clinical
trials or change the labeling of the product; (iii) the product may be rendered less competitive and sales may decrease; (iv)
our reputation may suffer generally both among clinicians and patients; (v) regulatory authorities may require certain labeling
statements, such as warnings or contraindications or limitations on the indications for use, or impose restrictions on distribution
in connection with approval, if any; or (vi) we may be required to change the way the product is administered or conduct additional
preclinical studies or clinical trials.





39







If
preliminary data demonstrate that any of our product candidates has an unfavorable safety profile and is unlikely to receive regulatory
approval or be successfully commercialized, we may voluntarily suspend or terminate future development of such product candidate.



Any
one or a combination of these events could prevent us from obtaining approval and achieving or maintaining market acceptance of
the affected product or could substantially increase the costs and expenses of commercializing the product candidate, which in
turn could delay or prevent us from generating significant revenues from the sale of the product.



Even
if regulatory approvals are obtained for our products, including our approved Prestalia product, such products will be subject
to ongoing regulatory obligations and continued regulatory review. If we or a partner fail to comply with continuing U.S. and
foreign regulations, the approvals to market drugs could be lost and our business would be materially adversely affected.



Following
any initial FDA or foreign regulatory approval of any drugs we or a partner may develop, such drugs will continue to be subject
to extensive and ongoing regulatory review, including the review of adverse drug experiences and clinical results that are reported
after such drugs are made available to patients. This would include results from any post marketing studies or vigilance required
as a condition of approval. The manufacturer and manufacturing facilities used to make any drug candidates will also be subject
to periodic review and inspection by regulatory authorities, including the FDA. The discovery of any new or previously unknown
problems with the product, manufacturer or facility may result in restrictions on the drug or manufacturer or facility, including
withdrawal of the drug from the market. Marketing, advertising and labeling also will be subject to regulatory requirements and
continuing regulatory review. The failure to comply with applicable continuing regulatory requirements may result in fines, suspension
or withdrawal of regulatory approval, product recalls and seizures, operating restrictions and other adverse consequences.



We
and our partners are subject to extensive U.S. and foreign government regulation, including the requirement of approval before
products may be marketed.



We,
our present and future collaborators, and the drug product candidates developed by us or in collaboration with partners are subject
to extensive regulation by governmental authorities in the U.S. and other countries. Failure to comply with applicable requirements
could result in, among other things, any of the following actions: warning letters, fines and other civil penalties, unanticipated
expenditures, delays in approving or refusal to approve a product candidate, product recall or seizure, interruption of manufacturing
or clinical trials, operating restrictions, injunctions and criminal prosecution.



Our
product candidates and those of our partners cannot be marketed in the U.S. without FDA approval or clearance, and they cannot
be marketed in foreign countries without applicable regulatory approval. Neither the FDA nor any foreign regulatory authority
has approved any of the product candidates being developed by us or of our partners based on our technologies, other than our
Prestalia product. These product candidates (other than Prestalia) are in pre-clinical and clinical development and will have
to be approved by the FDA or applicable foreign regulatory authorities before they can be marketed in the U.S. or abroad. Obtaining
regulatory approval requires substantial time, effort and financial resources, and may be subject to both expected and unforeseen
delays, including, without limitation, citizen’s petitions or other filings with the FDA or applicable foreign regulatory
authority, and there can be no assurance that any approval will be granted on a timely basis, if at all, or that delays will be
resolved favorably or in a timely manner. If our product candidates are not approved in a timely fashion, or are not approved
at all, our business and financial condition may be adversely affected.



In
addition, both before and after regulatory approval, we, our collaborators and our product candidates are subject to numerous
requirements by the FDA and foreign regulatory authorities covering, among other things, testing, manufacturing, quality control,
labeling, advertising, promotion, distribution and export. These requirements may change and additional government regulations
may be promulgated that could affect us, our collaborators or our product candidates. We cannot predict the likelihood, nature
or extent of government regulation that may arise from future legislation or administrative action, either in the U.S. or abroad.
There can be no assurance that neither we nor any of our partners will be required to incur significant costs to comply with such
laws and regulations in the future or that such laws or regulations will not have a material adverse effect upon our business
and prospects.





40







We
may use hazardous chemicals and biological materials in our business. Any disputes relating to improper use, handling, storage
or disposal of these materials could be time-consuming and costly.



Our
research and development operations may involve the use of hazardous and biological, potentially infectious, materials. Such use
subjects us to the risk of accidental contamination or discharge or any resultant injury from these materials. Federal, state
and local laws and regulations govern the use, manufacture, storage, handling and disposal of these materials and specific waste
products. We could be subject to damages, fines or penalties in the event of an improper or unauthorized release of, or exposure
of individuals to, these hazardous materials, and our liability could be substantial. The costs of complying with these current
and future environmental laws and regulations may be significant, thereby impairing our business.



We
are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory
procedures, exposure to blood-borne pathogens and the handling of biohazardous materials. We do not maintain insurance for environmental
liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous
or radioactive materials. Additional federal, state and local laws and regulations affecting our operations may be adopted in
the future. We may incur substantial costs to comply with, and substantial fines or penalties if we violate, any of these laws
or regulations.



Failure
to comply with foreign regulatory requirements governing human clinical trials and marketing approval for drugs could prevent
the sale of drug candidates based on our technologies in foreign markets, which may adversely affect our operating results and
financial condition.



The
requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement for marketing drug candidates
based on our technologies outside the U.S. vary greatly from country to country. We have, and our partners may have, limited experience
in obtaining foreign regulatory approvals. The time required to obtain approvals outside the U.S. may differ from that required
to obtain FDA approval. We may not be able to obtain foreign regulatory approvals on a timely basis, if at all. Approval by the
FDA does not ensure approval by regulatory authorities in other countries, and approval by one foreign regulatory authority does
not ensure approval by regulatory authorities in other countries or by the FDA. Failure to comply with these regulatory requirements
or obtain required approvals could restrict the development of foreign markets for our drug candidates and may have a material
adverse effect on our financial condition or results of operations.



Risks
Related to our Dependence on Third Parties



We
may become dependent on our collaborative arrangements with third parties for a substantial portion of our revenue, and our development
and commercialization activities may be delayed or reduced if we fail to initiate, negotiate or maintain successful collaborative
arrangements.



We
are, in part, dependent on partners to develop and commercialize products based on our technologies and to provide the regulatory
compliance, sales, marketing and distribution capabilities required for the success of our business. If we fail to secure or maintain
successful collaborative arrangements, our development and commercialization activities will be delayed, reduced or terminated,
and our revenues could be materially and adversely impacted.



The
potential future milestone and royalty payments and cost reimbursements from collaboration agreements could provide an important
source of financing for our research and development programs, thereby facilitating the application of our technology to the development
and commercialization of our products. These collaborative agreements might be terminated either by us or by our partners upon
the satisfaction of certain notice requirements. Our partners may not be precluded from independently pursuing competing products
and drug delivery approaches or technologies. Even if our partners continue their contributions to our collaborative arrangements,
of which there can be no assurance, they may nevertheless determine not to actively pursue the development or commercialization
of any resulting products. Our partners may fail to perform their obligations under the collaborative arrangements or may be slow
in performing their obligations. In addition, our partners may experience financial difficulties at any time that could prevent
them from having available funds to contribute to these collaborations. If our collaborators fail to conduct their commercialization,
regulatory compliance, sales and marketing or distribution activities successfully and in a timely manner, or if they terminate
or materially modify their agreements with us, the development and commercialization of one or more product candidates could be
delayed, curtailed or terminated because we may not have sufficient financial resources or capabilities to continue such development
and commercialization on our own.





41







An
interruption in the supply of raw and bulk materials needed for the development of our product candidates, or the manufacture
of our approved products, could cause product development and/or sales to be slowed or stopped.



We
and our partners may obtain supplies of critical raw and bulk materials used in research and development efforts from several
suppliers, and long-term contracts may not be in place with any or all of these suppliers. There can be no assurance that sufficient
quantities of product candidates or approved products could be manufactured if our suppliers are unable or unwilling to supply
such materials. Any delay or disruption in the availability of raw or bulk materials could slow or stop research and development,
or sales, of the relevant product.



We
rely on third parties to conduct clinical trials, and those third parties may not perform satisfactorily, including failing to
meet established timelines for the completion of such clinical trials.



We
are, and anticipate that we and certain of our partners will continue to be, dependent on contract research organizations, third-party
vendors and investigators for performing or managing pre-clinical testing and clinical trials related to drug discovery and development
efforts. These parties are not employed by us or our partners, and neither we nor our partners can control the amount or timing
of resources that they devote to our programs. If they fail to devote sufficient time and resources to our drug development programs
or if their performance is substandard, it will delay, and potentially materially adversely affect, the development and commercialization
of our product candidates. Moreover, these parties also may have relationships with other commercial entities, some of which may
compete with us and our partners. If they assist our competitors, it could harm our competitive position.



If
we or our partners lose our relationship with any one or more of these parties, there could be a significant delay in both identifying
another comparable provider and then contracting for its services. An alternative provider may not be available on reasonable
terms, if at all. Even if we locate an alternative provider, is it likely that this provider may need additional time to respond
to our needs and may not provide the same type or level of service as the original provider. In addition, any alternative provider
will be subject to current Good Laboratory Practices (“cGLP”) and similar foreign standards and neither we nor our
partners have control over compliance with these regulations by these providers. Consequently, if these providers do not adhere
to these practices and standards, the development and commercialization of our product candidates could be delayed.



We
have limited manufacturing experience or resources, and we must incur significant costs to develop this expertise or rely on third
parties to manufacture our products.



We
have limited manufacturing experience. Some of our products and product candidates utilize specialized formulations whose scale-up
and manufacturing could be very difficult. We also have limited experience in such scale-up and manufacturing, requiring us to
depend on a limited number of third parties, who might not be able to deliver in a timely manner, on acceptable terms, or at all.
In order to develop products, apply for regulatory approvals and commercialize our products, we will need to develop, contract
for, or otherwise arrange for the necessary manufacturing capabilities.



There
are a limited number of manufacturers that supply the materials needed for the development of our products and product candidates.
There are risks inherent in pharmaceutical manufacturing that could affect the ability of our contract manufacturers to meet our
delivery requirements or provide adequate amounts of material to meet our needs. Included in these risks are synthesis and purification
failures and contamination during the manufacturing process, which could result in unusable product and cause delays in our development
process, as well as additional expense to us. To fulfill our supply requirements, we may also need to secure alternative suppliers.
In addition to the manufacture of the materials necessary to develop our products, we may have additional manufacturing requirements
related to the technology required to deliver certain of our product candidates to the relevant cell or tissue type. In some cases,
the delivery technology we utilize is highly specialized or proprietary, and for technical and legal reasons, we may have access
to only one or a limited number of potential manufacturers for such delivery technology. Failure by these manufacturers to properly
formulate our product candidates for delivery could also result in unusable product and cause delays in our discovery and development
process, as well as additional expense to us.





42







The
manufacturing process for any products based on our technologies that we or our partners may develop is subject to the FDA and
foreign regulatory authority approval process, and we or our partners will need to contract with manufacturers who can meet all
applicable FDA and foreign regulatory authority requirements on an ongoing basis. If we are unable to obtain or maintain contract
manufacturing for these product candidates or approved products, or to do so on commercially reasonable terms, we may not be able
to successfully develop and commercialize our products.



To
the extent that we enter into manufacturing arrangements with third parties, we will depend on these third parties to perform
their obligations in a timely manner and consistent with regulatory requirements, including those related to quality control and
quality assurance. The failure of a third-party manufacturer to perform its obligations as expected could adversely affect our
business in a number of ways.



If
a third-party manufacturer with whom we contract fails to perform its obligations, we may be forced to manufacture the materials
ourselves, for which we may not have the capabilities or resources, or enter into an agreement with a different third-party manufacturer,
which we may not be able to do on acceptable terms, if at all. In addition, if we are required to change manufacturers for any
reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards
and with all applicable regulations and guidelines. The delays associated with the verification of a new manufacturer could negatively
affect our ability to develop product candidates in a timely manner or within budget, or to sell approved products in sufficient
quantities. Furthermore, a manufacturer may possess technology related to the manufacture of our product candidates or approved
products that such manufacturer owns independently. This would increase our reliance on such manufacturer or require us to obtain
a license from such manufacturer in order to have another third party manufacture our products.



Risks
Related to our Intellectual Property and Other Legal Matters



If
we are unable to adequately protect our proprietary technology from legal challenges, infringement or alternative technologies,
our competitive position may be hurt and our operating results may be negatively impacted.



Our
business is based upon the development and delivery of novel therapeutics, and we rely on the issuance of patents, both in the
U.S. and internationally, for protection against competitive technologies. Although we believe we exercise the necessary due diligence
in our patent filings, our proprietary position is not established until the appropriate regulatory authorities actually issue
a patent, which may take several years from initial filing or may never occur.



Moreover,
even the established patent positions of pharmaceutical companies are generally uncertain and involve complex legal and factual
issues. Although we believe our issued patents are valid, third parties may infringe our patents or may initiate proceedings challenging
the validity or enforceability of our patents. The issuance of a patent is not conclusive as to its claim scope, validity or enforceability.
Challenges raised in patent infringement litigation we initiate or in proceedings initiated by third parties may result in determinations
that our patents have not been infringed or that they are invalid, unenforceable or otherwise subject to limitations. In the event
of any such determinations, third parties may be able to use the discoveries or technologies claimed in our patents without paying
us licensing fees or royalties, which could significantly diminish the value of these discoveries or technologies. As a result
of such determinations, we may be enjoined from pursuing commercialization of potential products or may be required to obtain
licenses, if available, to the third party patents or to develop or obtain alternative technology. Responding to challenges initiated
by third parties may require significant expenditures and divert the attention of our management and key personnel from other
business concerns.



Furthermore,
it is possible that others will infringe or otherwise circumvent our issued patents and that we will be unable to fund the cost
of litigation against them or that we would elect not to pursue litigation. In addition, enforcing our patents against third parties
may require significant expenditures regardless of the outcome of such efforts. We also cannot assure you that others have not
filed patent applications for technology covered by our pending applications or that we were the first to invent the technology.
There may also exist third party patents or patent applications relevant to our potential products that may block or compete with
the technologies covered by our patent applications and third parties may independently develop IP similar to our patented IP,
which could result in, among other things, interference proceedings in the U.S. Patent and Trademark Office to determine priority
of invention.





43







In
addition, we may not be able to protect our established and pending patent positions from competitive technologies, which may
provide more effective therapeutic benefit to patients and which may therefore make our products, technology and proprietary position
obsolete.



We
also rely on copyright and trademark protection, trade secrets, know-how, continuing technological innovation and licensing opportunities.
In an effort to maintain the confidentiality and ownership of our trade secrets and proprietary information, we have typically
required our employees, consultants, advisors and others to whom we disclose confidential information to execute confidentiality
and proprietary information agreements. However, it is possible that these agreements may be breached, invalidated or rendered
unenforceable, and if so, there may not be an adequate corrective remedy available. Furthermore, like many companies in our industry,
we may from time to time hire scientific personnel formerly employed by other companies involved in one or more areas similar
to the activities we conduct. In some situations, our confidentiality and proprietary information agreements may conflict with,
or be subject to, the rights of third parties with whom our employees, consultants or advisors have prior employment or consulting
relationships. Although we have typically required our employees and consultants to maintain the confidentiality of all confidential
information of previous employers, we or these individuals may be subject to allegations of trade secret misappropriation or other
similar claims as a result of their prior affiliations. Finally, others may independently develop substantially equivalent proprietary
information and techniques, or otherwise gain access to our trade secrets. Our failure to protect our proprietary information
and techniques may inhibit or limit our ability to exclude certain competitors from the market and execute our business strategies.



If
we are unable to adequately protect our proprietary intellectual property from legal challenges, infringement or alternative technologies,
we will not be able to compete effectively in the drug discovery, development and commercialization business.



Because
intellectual property rights are of limited duration, expiration of intellectual property rights and licenses will negatively
impact our operating results.



Intellectual
property rights, such as patents and license agreements based on those patents, generally are of limited duration. Therefore,
the expiration or other loss of rights associated with IP and IP licenses can negatively impact our business, and the future sales
of our approved products, if any.



Our
patent applications may be inadequate in terms of priority, scope or commercial value.



We
apply for patents covering our discoveries and technologies as we deem appropriate and as our resources permit. However, we or
our partners may fail to apply for patents on important discoveries or technologies in a timely fashion or at all. Also, our pending
patent applications may not result in the issuance of any patents. These applications may not be sufficient to meet the statutory
requirements for patentability, and therefore we may be unable to obtain enforceable patents covering the related discoveries
or technologies we may want to commercialize. In addition, because patent applications are maintained in secrecy for approximately
18 months after filing, other parties may have filed patent applications relating to inventions before our applications covering
the same or similar inventions. In addition, foreign patent applications are often published initially in local languages, and
until an English language translation is available it can be impossible to determine the significance of a third party invention.
Any patent applications filed by third parties may prevail over our patent applications or may result in patents that issue alongside
patents issued to us, leading to uncertainty over the scope of the patents or the freedom to practice the claimed inventions.



Although
we have acquired and in-licensed a number of issued patents, the discoveries or technologies covered by these patents may not
have any therapeutic or commercial value. Also, issued patents may not provide commercially meaningful protection against competitors.
Other parties may be able to design around our issued patents or independently develop products having effects similar or identical
to our patented product candidates or approved products. In addition, the scope of our patents is subject to considerable uncertainty
and competitors or other parties may obtain similar patents of uncertain scope.





44







We
have depended on technologies we license, and if we lose the right to license such technologies or we fail to license new technologies
in the future, our ability to develop or commercialize new or existing products would be harmed.



We
have depended on licenses from third parties for certain of our key technologies, products and product candidates. Our licenses
impose various development, funding, royalty, diligence, sublicensing, insurance and other obligations on us. If our license with
respect to any of these technologies or products is terminated for any reason, the development and/or commercialization of the
products contemplated by the licenses would be delayed, or suspended altogether, while we seek to license similar products or
technology (which licenses may not be available on commercially acceptable terms or at all) or develop new non-infringing products
or technology. If our existing license is terminated, the development and/or commercialization of the products contemplated by
the licenses could be delayed or terminated and we may not be able to negotiate additional licenses on acceptable terms, if at
all, which would have a material adverse effect on our business.



We
may be required to defend lawsuits or pay damages for product liability claims.



Our
business inherently exposes us to potential product liability claims. We may face substantial product liability exposure in human
clinical trials that we may initiate and for products that we sell, or manufacture for others to sell, after regulatory approval.
The risk exists even with respect to those drugs that are approved by regulatory agencies for commercial distribution and sale
and are manufactured in facilities licensed and regulated by regulatory agencies. Any product liability claims, regardless of
their merits, could be costly, divert management’s attention, delay or prevent completion of our clinical development programs,
and adversely affect our reputation, the demand for our products and our stock price. We currently do not have product liability
insurance. We intend to obtain such insurance as we deem appropriate as we move forward with the commercialization of our Prestalia
product and with further clinical development of our product candidates. Any product liability insurance we have or may obtain
may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance
is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect
us against losses caused by product liability claims that could have a material adverse effect on our business.



An
unfavorable outcome in the pending legal action filed by Vaya Pharma, Inc. in which we are a named defendant could have a material
adverse effect on our company.



We have been named in a complaint filed in
the Supreme Court of the State of New York as a defendant in the matter entitled Vaya Pharma, Inc. v. Symplmed Technologies,
Inc., Symplmed Pharmaceuticals, Inc., Erik Emerson and Marina Biotech, Inc.Although the complaint has been filed, we have
not been legally served. The complaint alleges, 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 are 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. If and when we are legally served, we intend to dispute jurisdiction, the sufficiency
of the pleading and the claims set forth in this complaint, and to defend this matter, vigorously. However, due to the inherent
uncertainties of litigation, the ultimate outcome of this matter is uncertain. The Company reached a tentative settlement
agreement and, although such settlement has not been finalized, the Company accrued a total provision of $250,000 for this
complaint, which is included in accrued expenses on the accompanying consolidated balance sheet.





Our
Prestalia product is currently involved in a paragraph IV challenge. Our failure to resolve the challenge in the manner currently
proposed, or to expand our product offerings prior to the date before the challenger launches a generic version of Prestalia to
derive meaningful revenues from such additional product offerings, could materially adversely affect us and our business operations.







45







Our
Prestalia product is currently involved in a paragraph IV challenge regarding patents issued to perindopril arginine. This challenge,
which is currently pending in the United States District Court for the District of Delaware (No. 1:17-cv-00276), is captioned
Apotex Inc. and Apotex Corp. v. Symplmed Pharmaceuticals, LLC and Les Laboratoires Servier. The challengers (Apotex Inc.
and Apotex Corp. (“Apotex”)) have filed an Abbreviated New Drug Application seeking FDA approval to market a generic
version of Prestalia and included a Paragraph (IV) certification. In the litigation, Apotex seeks a declaratory judgment that
no valid claims of the two patents Symplmed listed in the FDA Orange Book as having claims covering Prestalia, U.S. Patent No.
6,696,481 and 7,846,961, will be infringed by the Apotex proposed generic version of Prestalia and that the claims of those patents
are invalid. The challenge is designed to provide Apotex with an opportunity to enter the market with a generic version of Prestalia,
ahead of the expiration of the patents with claims covering that product. Apotex entered into negotiations with Symplmed Pharmaceuticals,
LLC (which entity sold its assets relating to Prestalia to us in June 2017, including its License and Commercialization Agreement
with Les Laboratories Servier) and Les Laboratories Servier (which entity owns or controls intellectual property rights relating
to pharmaceutical products containing as an active pharmaceutical ingredient perindopril in combination with other active pharmaceutical
ingredients, which rights have been licensed to Symplmed Pharmaceuticals) to resolve the challenge in the second quarter of 2017,
and such parties, along with us, have come to a general agreement on terms that will result in a delay to the challengers’
ability to enter the market with a generic version of Prestalia, while still providing the challenger with the right to enter
the market prior to the expiration of the patent covering such product. The term sheet memorializing such terms is pending execution
in a final settlement agreement. In the meantime, the District Court has entered an order extending the time for the defendants
to respond to Apotex’s Complaint until January 9, 2018 .



We
do not anticipate that the proposed settlement terms – which would provide us with the ability to exclusively market Prestalia
for a specified period of time without incurring the risks or costs of litigation – will have a material adverse impact
on our long term business as a whole. We hold this expectation because it is our intention that Prestalia will be a building block
toward the development of our company into a larger organization, which we hope will include the commercial launch by us of Prestalia
and the expansion of our commercial capabilities in connection with such activities, followed by the launch of products that we
license for commercialization purposes from our partners and the commercial launch of products that we develop internally. We
anticipate that the aforementioned steps to expand and strengthen our commercial capabilities and diversify our product offerings
so as to generate meaningful revenues in excess of those revenues generated by sales of Prestalia will occur during our exclusivity
period with respect to Prestalia (i.e., prior to the date on which Apotex enters the market with a generic version of Prestalia).
If we are able to achieve this growth, the overall economic impact that would result to us even if Apotex markets a generic version
of Prestalia and captures a significant percentage of the market for that drug following our exclusivity period would be reduced.



However,
there can be no assurance that the paragraph IV challenge will be resolved without litigation or resolved on the terms currently
proposed. There also cannot be any assurance that our plans to commercialize Prestalia (or any of the products that it may license
from its partners or that it may develop internally) and expand our product offerings and the revenue generated therefrom so as
to lessen our reliance on sales of Prestalia will be achieved. Any failure of our expectations regarding the resolution of the
paragraph IV challenge and the expansion of our commercial activities (and the revenues to be derived therefrom) could have a
material adverse effect on us, our prospects and our results of operations.



Risks
Related to the Commercialization of our Product Candidates



Our
product development efforts may not result in commercial products.



The
results of our operations depend, to a significant degree, upon the ability of us and our collaborators to successfully develop
and commercialize pharmaceutical products. The development and commercialization process for pharmaceutical products is both time
consuming and costly and involves a high degree of business risk. Successful product development in the pharmaceutical industry
is highly uncertain, and very few research and development projects result in a commercial product. Product candidates that appear
promising in the early phases of development, such as in preclinical testing or in early human clinical trials, may fail to reach
the market for a number of reasons, such as:





46







| | ● | a
    product candidate may not perform as expected in later or broader trials in humans and limit marketability of such product
    candidate;                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                          
| | ● | necessary
    regulatory approvals may not be obtained in a timely or cost-effective manner, if at all;                                                                                  
| |   |                                                                                                                                                                                          
| | ● | a
    product candidate may not be able to be successfully and profitably produced and marketed;                                                                                         
| |   |                                                                                                                                                                                          
| | ● | third
    parties may have proprietary rights to a product candidate, and do not allow sale on reasonable terms; or                                                                      
| |   |                                                                                                                                                                                          
| | ● | a
    product candidate may not be financially successful because of existing therapeutics or treatments that offer, or that are
    perceived to offer, equivalent or better treatments.



There
can be no assurance that any of our products or product candidates will ever be successfully commercialized by us or by one of
our partners, and delays or additional expenses in any part of the process or the inability to obtain regulatory approval in a
timely or cost-effective manner could adversely affect our operating results by restricting introduction of new products by us
and/or our partners.



It
is possible that the commercial opportunity for our products and product candidates will be limited.



Our
products and product candidates are based on novel technologies and therapeutic approaches. Key participants in pharmaceutical
marketplaces, such as physicians, third-party payors and consumers, may not accept such products. Accordingly, while we believe
there will be a commercial market for our products and product candidates, there can be no assurance that this will be the case.



Risks
Related to our Industry



If
we or any of our independent contractors, consultants, collaborators, manufacturers, vendors or service providers fail to comply
with healthcare laws and regulations, we or they could be subject to enforcement actions, which could result in penalties and
affect our ability to develop, market and sell our products and product candidates and may harm our reputation.



We
are or may in the future be subject to federal, state and foreign healthcare laws and regulations pertaining to, among other things,
fraud and abuse and patients’ rights. These laws and regulations include:



| | ● | the
    U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from soliciting, receiving or
    providing remuneration, directly or indirectly, to induce either the referral of an individual for a healthcare item or service,
    or the purchasing or ordering of an item or service, for which payment may be made under a federal healthcare program such
    as Medicare or Medicaid;                                  
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ● | the
    U.S. federal false claims and civil monetary penalties laws, including the federal civil False Claims Act, which prohibit,
    among other things, individuals or entities from knowingly presenting or causing to be presented, claims for payment by government
    funded programs such as Medicare or Medicaid that are false or fraudulent, and which may apply to us by virtue of statements
    and representations made to customers or third parties;
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ● | the
    U.S. federal Health Insurance Portability and Accountability Act (HIPAA), which created additional federal criminal statutes
    that prohibit, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud healthcare
    programs;                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ● | HIPAA,
    as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), which imposes requirements
    on certain types of people and entities relating to the privacy, security, and transmission of individually identifiable health
    information, and requires notification to affected individuals and regulatory authorities of certain breaches of security
    of individually identifiable health information;           





47







| | ● | the
    federal Physician Payment Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies
    for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, to report annually
    to the Centers for Medicare & Medicaid Services  information related to payments and other transfers of value
    to physicians, other healthcare providers and teaching hospitals, and ownership and investment interests held by physicians
    and other healthcare providers and their immediate family members, which is published in a searchable form on an annual basis;
    and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | state
    laws comparable to each of the above federal laws, such as, for example, anti-kickback and false claims laws that may be broader
    in scope and also apply to commercial insurers and other non-federal payors, requirements for mandatory corporate regulatory
    compliance programs, and laws relating to patient data privacy and security. Other state laws require pharmaceutical companies
    to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated
    by the federal government; require drug manufacturers to report information related to payments and other transfers of value
    to physicians and other healthcare providers or marketing expenditures; and state and foreign laws govern the privacy and
    security of health information in some circumstances, many of which differ from each other in significant ways and often are
    not preempted by HIPAA, thus complicating compliance efforts.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



If
our operations are found to be in violation of any such health care laws and regulations, we may be subject to penalties, including
administrative, civil and criminal penalties, monetary damages, disgorgement, imprisonment, the curtailment or restructuring of
our operations, loss of eligibility to obtain approvals from the FDA or foreign regulatory authorities, or exclusion from participation
in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, any of which
could adversely affect our financial results. Although effective compliance programs can mitigate the risk of investigation and
prosecution for violations of these laws, these risks cannot be entirely eliminated. Any action against us for an alleged or suspected
violation could cause us to incur significant legal expenses and could divert our management’s attention from the operation
of our business, even if our defense is successful. In addition, achieving and sustaining compliance with applicable laws and
regulations may be costly to us in terms of money, time and resources.



Any
drugs based on our technologies that we or any of our partners develop may become subject to unfavorable pricing regulations,
third-party reimbursement practices or healthcare reform initiatives, which could have a material adverse effect on our business
and financial results.



Our
ability to commercialize any products successfully also will depend in part on the extent to which coverage and adequate reimbursement
for these products and related treatments will be available from government health administration authorities, private health
insurers and other third-party payors. In many jurisdictions, a product candidate must be approved for reimbursement before it
can be approved for sale in that jurisdiction. Obtaining coverage and reimbursement approval of a product from a government or
other third-party payor is a time-consuming and costly process that could require us to provide to the payor supporting scientific,
clinical and cost-effectiveness data for the use of our products. If we are not currently capturing the scientific and clinical
data that will be required for reimbursement approval, we may be required to conduct additional trials, which may delay or suspend
reimbursement approval. Additionally, in the United States, no uniform policy of coverage and reimbursement for products exists
among third-party payors. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As
a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific
and clinical support for the use of our product candidates and approved products to each payor separately, with no assurance that
coverage and adequate reimbursement will be obtained.



It
is possible that our approved products and any other product candidates that we bring to the market may not be considered cost-effective,
and the amount reimbursed for any products may be insufficient to allow us to sell our products on a competitive basis. Because
many of our programs are in the early stages of development, we are unable at this time to determine their cost effectiveness
or the likely level or method of reimbursement. Increasingly, the third-party payors, such as government and private insurance
plans, who reimburse patients or healthcare providers, are requiring that drug companies provide them with predetermined discounts
from list prices, and are seeking to reduce the prices charged or the amounts reimbursed for pharmaceutical products. If the coverage
provided for any products we develop or commercialize is inadequate in light of our development and other costs, our return on
investment could be adversely affected.





48







It
is possible that certain of the drugs based on our technologies that we or a partner develop may need to be administered under
the supervision of a physician on an outpatient basis. Under currently applicable law, drugs that are not usually self-administered
may be eligible for coverage by Medicare if they:





| | ● | are
    “incidental” to a physician’s services;                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                    
| | ● | are
    “reasonable and necessary” for the diagnosis or treatment of the illness or injury for which they are administered
    according to accepted standards of medical practice;
| |   |                                                                                                                                                                                    
| | ● | are
    not excluded as immunizations; and                                                                                                                                         
| |   |                                                                                                                                                                                    
| | ● | have
    been approved by the FDA.                                                                                                                                                 



There
may be significant delays in obtaining coverage for newly-approved products, and coverage may be more limited than the purposes
for which the drug is approved by the FDA or foreign regulatory authorities. Moreover, eligibility for coverage does not imply
that any drug will be reimbursed in all cases or at a rate that covers our costs, including research, development, manufacture,
sale and distribution. Interim payments for new drugs, if applicable, may also not be sufficient to cover our costs and may not
be made permanent.



Reimbursement
may be based on payments allowed for lower-cost products that are already reimbursed, may be incorporated into existing payments
for other services and may reflect budgetary constraints or imperfections in Medicare data. Net prices for products may be reduced
by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of
laws that presently restrict imports of products from countries where they may be sold at lower prices than in the United States.
Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates.
However, no uniform policy requirement for coverage and reimbursement for products exists among third-party payors in the United
States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage
determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support
for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied
consistently or obtained in the first instance. Our inability to promptly obtain coverage and adequate reimbursement rates from
both government-funded and private payors for new drugs that we develop, for which we obtain regulatory approval and/or that we
seek to commercialize could have a material adverse effect on our operating results, our ability to raise capital and our financial
condition.



We
believe that the efforts of governments and third-party payors to contain or reduce the cost of healthcare and legislative and
regulatory proposals to broaden the availability of healthcare will continue to affect the business and financial condition of
pharmaceutical and biopharmaceutical companies. A number of legislative and regulatory changes in the healthcare system in the
United States and other major healthcare markets have been proposed in recent years, and such efforts have expanded substantially
in recent years. These developments have included prescription drug benefit legislation that was enacted and took effect in January
2006, healthcare reform legislation recently enacted by certain states, and major healthcare reform legislation that was passed
by Congress and enacted into law in the United States in 2010. The U.S. Congress and the Trump administration have similarly expressed
concerns over the pricing of pharmaceutical products and there can be no assurance as to how this scrutiny will impact future
pricing of pharmaceutical products generally. Future developments could, directly or indirectly, affect our ability to sell our
products, if approved, at a favorable price.



For
example, the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act
(PPACA), contains provisions that affect companies in the pharmaceutical industry and other healthcare related industries by imposing
additional costs and changes to business practices. Provisions affecting pharmaceutical companies include the following:



| | ● | mandatory
    rebates for drugs sold into the Medicaid program were increased, and the rebate requirement was extended to drugs used in
    risk-based Medicaid managed care plans;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





49







| | ● | the
    340B Drug Pricing Program under the Public Health Services Act was extended to require mandatory discounts for drug products
    sold to certain critical access hospitals, cancer hospitals and other covered entities;                                                                                                                                                                                                                                                                                                                                                                                          
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | expansion
    of eligibility criteria for Medicaid programs;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | expansion
    of entities eligible for discounts under the Public Health Service pharmaceutical pricing program;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | a
    new Patient Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness
    research, along with funding for such research;                                                                                                                                                                                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | pharmaceutical
    companies are required to offer discounts on brand-name drugs to patients who fall within the Medicare Part D coverage gap,
    commonly referred to as the “donut hole”; and                                                                                                                                                                                                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | pharmaceutical
    companies are required to pay an annual non-tax deductible fee to the federal government based on each company’s market
    share of prior year total sales of branded products to certain federal healthcare programs, such as Medicare, Medicaid, Department
    of Veterans Affairs and Department of Defense. Since we expect our branded pharmaceutical sales, if any of our products are
    approved, to constitute a small portion of the total federal health program pharmaceutical market, we do not expect this annual
    assessment to have a material impact on our financial condition.



There
have been judicial and Congressional challenges, and amendments to certain aspects of the PPACA. More recently, Congress has sought
to repeal all or portions of the PPACA and to replace the PPACA with new legislation. We expect there will be additional challenges
and amendments to the PPACA in the future, including potential additional attempts to repeal the PPACA in full or in part. The
full effect of the U.S. healthcare reform legislation on our business activities, both in the near and long term, is unknown.
The financial impact of the U.S. healthcare reform legislation will depend on a number of factors, including, but not limited
to, the policies reflected in implementing regulations and guidance and changes in sales volumes for products affected by the
new system of rebates, discounts and fees. The legislation may also have a positive impact on our future net sales, if any, by
increasing the aggregate number of persons with healthcare coverage in the United States.



Moreover,
we cannot predict what healthcare reform initiatives may be adopted in the future, and whether (or to what extent) existing legislation
may be modified or repealed. Further federal and state legislative and regulatory developments are likely, and we expect ongoing
initiatives in the United States to increase pressure on drug pricing. Such reforms could have an adverse effect on anticipated
revenues from our approved products and any other product candidates based on our technologies that are successfully developed
and for which regulatory approval is obtained, and may affect our overall financial condition and ability to develop drug candidates.



The
pharmaceutical market is intensely competitive. If we are unable to compete effectively with existing drugs, and existing and
new treatment methods and technologies, we may be unable to commercialize successfully any drugs that we develop.



The
pharmaceutical market is intensely competitive and rapidly changing. Many large pharmaceutical and biotechnology companies, academic
institutions, governmental agencies and other public and private research organizations are pursuing the development of novel
drugs or treatments for the same diseases and conditions that we are targeting or expect to target. Many of our competitors have:



| | ● | much
    greater financial, technical and human resources than we have at every stage of the discovery, development, manufacture and
    commercialization of products;                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                            
| | ● | more
    extensive experience in pre-clinical testing, conducting clinical trials, obtaining regulatory approvals, and in manufacturing,
    marketing and selling pharmaceutical products;
| |   |                                                                                                                                                                                            
| | ● | product
    candidates that are based on previously tested or accepted technologies;                                                                                                       
| |   |                                                                                                                                                                                            
| | ● | products
    that have been approved or are in late stages of development; and                                                                                                             
| |   |                                                                                                                                                                                            
| | ● | collaborative
    arrangements in our target markets with leading companies and research institutions.                                                                                     





50







Our
products may face intense competition from drugs or treatments that have already been approved and accepted by the medical community
for the treatment of the conditions for which we may develop drugs or treatments, or from new drugs that enter the market. We
believe a significant number of drugs are currently under development, and may become commercially available in the future, for
the treatment of conditions for which we and our partners may try to develop drugs. These drugs may be more effective, safer,
less expensive, or marketed and sold more effectively, than any products we and our partners develop.



We
anticipate that we and our partners will face competition based on many different factors regarding products that we successfully
develop, including:



| | ● | safety
    and effectiveness of such products;                                                                                        
| | - | --------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                       
| | ● | ease
    with which such products can be administered and the extent to which patients accept relatively new routes of administration;
| |   |                                                                                                                                       
| | ● | timing
    and scope of regulatory approvals for these products;                                                                      
| |   |                                                                                                                                       
| | ● | availability
    and cost of manufacturing, marketing and sales capabilities;                                                         
| |   |                                                                                                                                       
| | ● | price;                                                                                                                                
| |   |                                                                                                                                       
| | ● | reimbursement
    coverage; and                                                                                                       
| |   |                                                                                                                                       
| | ● | patent
    position.                                                                                                                  



Our
competitors may develop or commercialize products or treatments with significant advantages over any products we develop based
on any of the factors listed above or on other factors. Our competitors may therefore be more successful in commercializing their
products than we are, which could adversely affect our competitive position and business. Competitive products or treatments may
make any products we develop obsolete or noncompetitive before we can recover the expenses of developing and commercializing our
product candidates. Such competitors could also recruit our future employees, which could negatively impact our level of expertise
and the ability to execute on our business plan. Furthermore, we also face competition from existing and new treatment methods
that reduce or eliminate the need for drugs, such as the use of advanced medical devices. The development of new medical devices
or other treatment methods for the conditions we are targeting could make our product candidates noncompetitive, obsolete or uneconomical.



We
may be unable to compete successfully against other companies that are working to develop novel drugs and technology platforms
using technology similar to ours.



In
addition to the competition we face from competing drugs in general with respect to our operations, we have also faced competition
from other biotechnology and pharmaceutical companies and medical institutions that are working to develop novel drugs using technology
that competes more directly with our technologies. For example, there are a number of companies with programs in the nucleic acid
therapeutics field, including: Alnylam Pharmaceuticals, Arbutus, Arcturus Therapeutics, Benitec Biopharma, Dicerna Pharmaceuticals,
Isis Pharmaceuticals, miRagen Therapeutics, Mirna, PhaseRx Pharmaceuticals, Quark Pharmaceuticals, Regulus Therapeutics, RXi Pharmaceuticals,
Sarepta Therapeutics and Silence Therapeutics. With respect to IT-102/IT-103, our primary competitor is Kitov, which is developing
a celecoxib/amlodipine FDC using the same regulatory pathway that we are using for IT-102/IT-103. Any of the aforementioned companies
may develop its technology more rapidly and more effectively than us.





51







In
addition to competition with respect to our technology and with respect to specific products, we and our partners face substantial
competition from third parties, both in academic laboratories and in the corporate sector, to discover and develop safe and effective
means to deliver the drugs based on our technologies that are developed to the relevant cell and tissue types. If safe and effective
means of delivery were developed by our competitors, our ability to successfully commercialize a competitive product would be
adversely affected.



Many
of our competitors, either alone or together with their partners, have substantially greater R&D capabilities and financial,
scientific, technical, manufacturing, sales, marketing, distribution, regulatory and other resources and experience than us. They
may also have more established relationships with pharmaceutical companies. In order to compete successfully with respect to our
approved products, we may need to be first to obtain IP protection for, or to commercialize, such products, or we may need to
demonstrate that such products are superior to, or more cost effective than, products developed by our competitors (including
therapies that are based on different technologies). If we are not first to protect or market our products, or if we are unable
to differentiate our products from those offered by our competitors, any products for which we are able to obtain approval may
not be successful.



Universities
and public and private research institutions are also potential competitors. While these organizations primarily have educational
objectives, they may develop proprietary technologies related to the drug delivery field or secure protection that we may need
for development of our technologies and products. We may attempt to license one or more of these proprietary technologies, but
these licenses may not be available to us on acceptable terms, if at all.



Risks
Related to our Common Stock



The
trading price of our common stock has been volatile, and investors in our common stock may experience substantial losses.



The
trading price of our common stock has been volatile and may become volatile again in the future. The trading price of our common
stock could decline or fluctuate in response to a variety of factors, including:



| | ● | our
    general financial condition and ability to maintain sufficient capital to continue operations;
| | - | ------------------------------------------------------------------------------------------------------
| |   |                                                                                                       
| | ● | our
    ability to enter into and maintain collaborative arrangements with third parties;             
| |   |                                                                                                       
| | ● | our
    ability to meet the performance estimates of securities analysts;                             
| |   |                                                                                                       
| | ● | changes
    in buy/sell recommendations by securities analysts;                                       
| |   |                                                                                                       
| | ● | negative
    results from clinical and pre-clinical trials;                                           



| | ● | fluctuation
    in our quarterly operating results;  
| | - | -----------------------------------------------------
| |   |                                                      
| | ● | reverse
    splits or increases in authorized shares;
| |   |                                                      
| | ● | substantial
    sales of our common stock;           
| |   |                                                      
| | ● | general
    stock market conditions; or              
| |   |                                                      
| | ● | other
    economic or external factors.              



The
stock markets in general, and the markets for the securities of companies of our size and in our industry in particular, have
experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad
market fluctuations may adversely affect the trading price of our common stock.



Our
executive officers and directors control a large percentage of the outstanding shares of our common stock, and thus can influence
our corporate actions.



As
of the date of this report, and after giving effect to the closing of our private placement of Series E Convertible Preferred
Stock, Dr. Vuong Trieu, our Executive Chairman, directly or indirectly beneficially owns approximately 40% of the issued and
outstanding shares of our common stock. Further, as of the date of this report, and after giving effect to the closing of our
private placement of Series E Convertible Preferred Stock, our executive officers and directors as a group (including Dr.
Trieu) beneficially own approximately half of the issued and outstanding shares of our common stock. Accordingly, and
subject to the voting and director appointment rights of the holders of the Series E Convertible Preferred Stock, Dr. Trieu
individually, and our executive officers and directors as a group, can significantly influence many, if not most,
of our corporate actions. The concentration of the ownership of the issued and outstanding shares of our common stock by
our executive officers and directors may also serve to limit the trading volume of our common stock.







52







We
may not be able to achieve secondary trading of our stock in certain states because our common stock is not nationally traded.



Because
our common stock is not listed for trading on a national securities exchange, our common stock is subject to the securities laws
of the various states and jurisdictions of the U.S. in addition to federal securities law. This regulation covers any primary
offering we might attempt and all secondary trading by our stockholders. If we fail to take appropriate steps to register our
common stock or qualify for exemptions for our common stock in certain states or jurisdictions of the U.S., the investors in those
jurisdictions where we have not taken such steps may not be allowed to purchase our stock or those who presently hold our stock
may not be able to resell their shares without substantial effort and expense. These restrictions and potential costs could be
significant burdens on our stockholders.



Our
common stock is quoted on the OTCQB, which may limit the ability of our stockholders to sell their securities, and may cause volatility
in the price of our common stock.



Our
common stock is currently quoted on the OTCQB. Securities quoted on the OTCQB often experience a lack of liquidity as compared
to securities trading on a national securities exchange. Such securities also have experienced extreme price and volume fluctuations
in recent years, which have particularly affected the market prices of many smaller companies like ours. We anticipate that our
common stock will be subject to the lack of liquidity and this volume and price volatility that is characteristic of the OTCQB.



Our
common stock is considered a “penny stock,” and thereby is subject to additional sale and trading regulations that
may make it more difficult to sell.



Our
common stock is considered to be a “penny stock” since it does not qualify for one of the exemptions from the definition
of “penny stock” under Section 3a51-1 of the Exchange Act. The principal result or effect of being designated a “penny
stock” is that securities broker-dealers participating in sales of our common stock are subject to the “penny stock”
regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act. For example, Rule 15g-2 requires broker-dealers
dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually
signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock
for the investor’s account.



Moreover,
Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before
selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information
concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on
that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge
and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with
a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive
a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial
situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and
time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the
market or otherwise.



Various
restrictions in our charter documents and Delaware law could prevent or delay a change in control of us that is not supported
by our board of directors.



We
are subject to a number of provisions in our charter documents and Delaware law that may discourage, delay or prevent a merger,
acquisition or change of control that a stockholder may consider favorable. These anti-takeover provisions include:





53







| | ● | advance
    notice procedures for nominations of candidates for election as directors and for stockholder proposals to be considered at
    stockholders’ meetings; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                        
| | ● | the
    Delaware anti-takeover statute contained in Section 203 of the Delaware General Corporation Law.                                                               



Section
203 of the Delaware General Corporation Law prohibits a merger, consolidation, asset sale or other similar business combination
between us and any stockholder of 15% or more of our voting stock for a period of three years after the stockholder acquires 15%
or more of our voting stock, unless (1) the transaction is approved by our board of directors before the stockholder acquires
15% or more of our voting stock, (2) upon completing the transaction the stockholder owns at least 85% of our voting stock outstanding
at the commencement of the transaction, or (3) the transaction is approved by our board of directors and the holders of 66 2/3%
of our voting stock, excluding shares of our voting stock owned by the stockholder.



We
have never paid dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.



We
have not paid any dividends on our common stock and do not expect to do so in the foreseeable future. In addition, the terms of
any financing arrangements that we may enter into may restrict our ability to pay any dividends.



A
significant number of shares of our common stock are subject to options, warrants and conversion rights, and we expect to sell
additional shares of our common stock in the future. The issuance of these shares, which in some cases may occur on a cashless
basis, will dilute the interests of other security holders and may depress the price of our common stock.



At December 31, 2017, there were outstanding
warrants to purchase up to approximately 2.56 million shares common stock. If any of these warrants are exercised on a cashless
basis, we will not receive any cash as a result of such exercises. At December 31, 2017, there were also outstanding 750 shares
of Series C Convertible Preferred Stock, which shares are convertible into 0.5 million shares of common stock at an assumed conversion
price of $7.50 per share of common stock, and 60 shares of Series D Stock, which shares are convertible into 75,000 shares of
common stock at an assumed conversion price of $4.00 per share of common stock. On April 16, 2018, we issued 3,022 shares of Series
E Convertible Preferred Stock, which shares are convertible into 30,220,000 shares of common stock at an assumed
conversion price of $0.50 and 22,665,525 million warrants to purchase our common stock at a price of $0.55 per common share.
In addition, we may issue a significant number of additional shares of common stock (and securities convertible into or exercisable
for common stock) from time to time to finance our operations, to fund potential acquisitions, or in connection with additional
stock options or restricted stock granted to our employees, officers, directors and consultants. The issuance of common stock
(or securities convertible into or exercisable for common stock), and the exercise or conversion of securities exercisable for
or convertible into common stock, will have a dilutive impact on other stockholders and could have a material negative effect
on the market price of our common stock.





There
are outstanding a significant number of shares available for future sales under Rule 144.



Many
shares of our common stock may be deemed “restricted shares” and, in the future, may be sold in compliance with Rule
144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Any sales of such shares of our
common stock under Rule 144 could have a depressive effect on the market price of our common stock. In general, under Rule 144,
a person who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has
beneficially owned restricted securities within the meaning of Rule 144 for at least six months (including any period of consecutive
ownership of preceding non-affiliated holders) would be entitled to sell those shares, subject only to the availability of current
public information about us. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule
144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144. A person who is
deemed to be an affiliate of ours and who has beneficially owned restricted securities within the meaning of Rule 144 for at least
six months would be entitled to sell within any three-month period a number of shares that does not exceed the greater of one
percent of the then outstanding shares of our common stock or the average weekly trading volume of our common stock during the
four calendar weeks preceding such sale. Such sales are also subject to certain manner of sale provisions, notice requirements
and the availability of current public information about us.







54







Our
Board of Directors has the ability to issue “blank check” Preferred Stock.





Our
Certificate of Incorporation authorizes the issuance of up to 100,000 shares of “blank check” preferred stock, with
such designation rights and preferences as may be determined from time to time by our Board of Directors. At December 31, 2017,
90,000 shares had been designated as Series A Junior participating preferred stock and 1,000 shares had been designated as Series
B Preferred Stock, none of which are issued and outstanding. Also at December 31, 2017, 1,200 shares had been designated as Series
C Convertible Preferred Stock (of which 750 were outstanding as of such date) and 220 shares had been designated as Series D Convertible
Preferred Stock (of which 60 were outstanding as of such date). As of the date of this report, 3,500 shares have been designated
as Series E Convertible Preferred Stock, of which 3,022 are issued and outstanding. Our Board is empowered, without shareholder
approval, to issue shares of preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely
affect the voting power or other rights of the holders of our common stock. In the event of such issuances, the preferred stock
could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our
company. Although we have no present intention to issue any additional shares of our preferred stock, there can be no assurance
that we will not do so in the future.





ITEM
1B. Unresolved Staff Comments.



Not
applicable.



ITEM
2. Properties.



We
do not own or lease any real property or facilities that are material to our current business operations. If facilities are necessary
to conduct our current business operations, we utilize the facilities of Autotelic Inc. through the Master Services Agreement
to which we are a party with Autotelic Inc. As we seek to expand our business operations, we may seek to lease facilities of our
own in order to support our development, operational and administrative needs under our current operating plan. There can be no
assurance that such facilities will be available, or that they will be available on suitable terms. Our inability to obtain such
facilities could have a material adverse effect on our future plans and operations.



ITEM
3. Legal Proceedings .



Legal
Proceedings Regarding Vaya Pharma



We have been named in a complaint filed in
the Supreme Court of the State of New York as a defendant in the matter entitled Vaya Pharma, Inc. v. Symplmed Technologies,
Inc., Symplmed Pharmaceuticals, Inc., Erik Emerson and Marina Biotech, Inc. Although the complaint has been filed, we have
not been legally served. The complaint alleges, 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 are 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. If and when we are legally served , we intend to dispute jurisdiction, the
sufficiency of the pleading and the claims set forth in this complaint, and to defend this matter, vigorously. However, due to
the inherent uncertainties of litigation, the ultimate outcome of this matter is uncertain. The Company reached a tentative
settlement agreement and, although such settlement has not been finalized, the Company accrued a total provision of $250,000 for
this complaint, which is included in accrued expenses on the accompanying consolidated balance sheet.





Paragraph
IV Challenge



Our
Prestalia product is currently involved in a paragraph IV challenge regarding patents issued to perindopril arginine. This challenge,
which is currently pending in the United States District Court for the District of Delaware (No. 1:17-cv-00276), is captioned
Apotex Inc. and Apotex Corp. v. Symplmed Pharmaceuticals, LLC and Les Laboratoires Servier. The challengers (Apotex Inc.
and Apotex Corp. (“Apotex”)) have filed an Abbreviated New Drug Application seeking FDA approval to market a generic
version of Prestalia and included a Paragraph (IV) certification. In the litigation, Apotex seeks a declaratory judgment that
no valid claims of the two patents Symplmed listed in the FDA Orange Book as having claims covering Prestalia, U.S. Patent No.
6,696,481 and 7,846,961, will be infringed by the Apotex proposed generic version of Prestalia and that the claims of those patents
are invalid. The challenge is designed to provide Apotex with an opportunity to enter the market with a generic version of Prestalia,
ahead of the expiration of the patents with claims covering that product. Apotex entered into negotiations with Symplmed Pharmaceuticals,
LLC (which entity sold its assets relating to Prestalia to us in June 2017, including its License and Commercialization Agreement
with Les Laboratories Servier) and Les Laboratories Servier (which entity owns or controls intellectual property rights relating
to pharmaceutical products containing as an active pharmaceutical ingredient perindopril in combination with other active pharmaceutical
ingredients, which rights have been licensed to Symplmed Pharmaceuticals) to resolve the challenge in the second quarter of 2017,
and such parties, along with us, have come to a general agreement on terms that will result in a delay to the challengers’
ability to enter the market with a generic version of Prestalia, while still providing the challenger with the right to enter
the market prior to the expiration of the patent covering such product. The term sheet memorializing such terms is pending execution
in a final settlement agreement. In the meantime, the District Court has entered an order extending the time for the defendants
to respond to Apotex’s Complaint until January 9, 2018.





55







We
do not anticipate that the proposed settlement terms – which would provide us with the ability to exclusively market Prestalia
for a specified period of time without incurring the risks or costs of litigation – will have a material adverse impact
on our long term business as a whole. We hold this expectation because it is our intention that Prestalia will be a building block
toward the development of our company into a larger organization, which we hope will include the commercial launch by us of Prestalia
and the expansion of our commercial capabilities in connection with such activities, followed by the launch of products that we
license for commercialization purposes from our partners and the commercial launch of products that we develop internally. We
anticipate that the aforementioned steps to expand and strengthen our commercial capabilities and diversify our product offerings
so as to generate meaningful revenues in excess of those revenues generated by sales of Prestalia will occur during our exclusivity
period with respect to Prestalia (i.e., prior to the date on which Apotex enters the market with a generic version of Prestalia).
If we are able to achieve this growth, the overall economic impact that would result to us even if Apotex markets a generic version
of Prestalia and captures a significant percentage of the market for that drug following our exclusivity period would be reduced.



However,
there can be no assurance that the paragraph IV challenge will be resolved without litigation or resolved on the terms currently
proposed. There also cannot be any assurance that our plans to commercialize Prestalia (or any of the products that it may license
from its partners or that it may develop internally) and expand our product offerings and the revenue generated therefrom so as
to lessen our reliance on sales of Prestalia will be achieved. Any failure of our expectations regarding the resolution of the
paragraph IV challenge and the expansion of our commercial activities (and the revenues to be derived therefrom) could have a
material adverse effect on us, our prospects and our results of operations.



General



Currently,
there is no material litigation pending against our company other than as disclosed above. From time to time, we may become a
party to litigation and subject to claims incident to the ordinary course of our business. Although the results of such litigation
and claims in the ordinary course of business cannot be predicted with certainty, we believe that the final outcome of such matters
will not have a material adverse effect on our business, results of operations or financial condition. Regardless of outcome,
litigation can have an adverse impact on us because of defense costs, diversion of management resources and other factors.



ITEM
4. Mine Safety Disclosures.



Not
applicable.





56









PART
II



ITEM
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.



Market
Information



The
common stock of Marina is quoted on the OTCQB under the symbol “MRNA”. The table below sets forth, for each of the
quarterly periods indicated, the range of high and low bid prices of Marina’s common stock, as reported by the OTC Markets.
The prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
The prices also reflect the reverse split of Marina’s common stock that was effective August 3, 2017. Prior to the Merger,
which occurred on November 15, 2016, the common stock of IThena did not trade on any market or exchange.



|                                               |  | High |      |  | Low |  
|---------------------------------------------- |  | ---- | ---- |  | --- | -
|Fiscal
    2016:                               |  |      |      |  |     |  
|First
    Quarter                              |  | $    | 2.60 |  |     | $
|Second
    Quarter                             |  |      | 5.20 |  |     |  
|Third
    Quarter                              |  |      | 1.80 |  |     |  
|Fourth Quarter
    (through November 15, 2016) |  |      | 1.40 |  |     |  
|Fourth Quarter
    (after November 15, 2016)   |  |      | 2.40 |  |     |  
|                                               |  |      |      |  |     |  
|Fiscal
    2017:                               |  |      |      |  |     |  
|First
    Quarter                              |  | $    | 2.80 |  |     | $
|Second
    Quarter                             |  |      | 4.80 |  |     |  
|Third
    Quarter                              |  |      | 5.00 |  |     |  
|Fourth
    Quarter                             |  |      | 2.70 |  |     |  
|                                               |  |      |      |  |     |  
|Fiscal
    2018:                               |  |      |      |  |     |  
|First Quarter
    (through March 31, 2018)     |  | $    | 1.97 |  |     | $





On
April 16, 2018, the closing price of our common stock reported by the OTC Markets was $1.22 per share.



Holders



As
of April 16, 2018, there were 43 holders of record of our common stock.





Dividends



Payment
of dividends and the amount of dividends depend on matters deemed relevant by our Board, such as our results of operations, financial
condition, cash requirements, future prospects and any limitations imposed by law, credit agreements and debt securities. To date,
we have not paid any cash dividends or stock dividends on our common stock. In addition, we currently anticipate that we will
not pay any cash dividends in the foreseeable future. Furthermore, the terms of any financing arrangements that we may enter into
may restrict our ability to pay any dividends.



ITEM
6. Selected Financial Data.



Not
applicable.



57







ITEM
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.



Overview



The
following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information
necessary to understand our audited consolidated financial statements for the two year period ended December 31, 2017 and highlight
certain other information which, in the opinion of management, will enhance a reader’s understanding of our financial condition,
changes in financial condition and results of operations. In particular, the discussion is intended to provide an analysis of
significant trends and material changes in our financial position and the operating results of our business during the year ended
December 31, 2017, as compared to the year ended December 31, 2016. The December 31, 2017 statement of operations include the
full year for Marina, Ithena and their subsidiaries whereas the December 31, 2016 statement of operations include the results
of Ithena alone from January 1, 2016 to November 15, 2016 and combined with Marina and its subsidiaries from November 16, 2016
through December 31, 2016. As such, the statements of operations may not be comparable for the two years ended December 31, 2017.  This discussion should be read in conjunction with our consolidated financial statements for the two-year period
ended December 31, 2017 and related notes included elsewhere in this annual report on Form 10-K. These historical financial statements
may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results
of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be
affected by the uncertainties and risks described throughout this filing, particularly in “Item 1A. Risk Factors.”



Background
and Merger



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 mission is to provide effective and patient centric treatment for hypertension – including
resistant hypertension – through our patented total care platform. In this connection, we acquired from Symplmed Pharmaceuticals
LLC and its wholly-owned subsidiary, Symplmed Technologies, LLC, certain of the intellectual property assets related to the patented
technology platform known as 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 pipeline, devices for Therapeutic
Drug Monitoring (TDM), Blood Pressure (BP), 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®, a single-pill FDC of perindopril,
an angiotensin-converting-enzyme (“ACE”) inhibitor and amlodipine, 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 primarily on the commercialization of Prestalia and secondarily the development of IT-102 and IT-103. 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.



58







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.



Merger
with IThenaPharma



On
November 15, 2016, Marina entered into the Merger Agreement with IThenaPharma, Merger Sub and Vuong Trieu, as the IThena representative,
pursuant to which, among other things, Merger Sub merged with and into IThenaPharma, with IThenaPharma surviving as a wholly owned
subsidiary of Marina.



Pursuant
to the Merger Agreement, at the effective time of the Merger, without any action on the part of any shareholder, each issued and
outstanding share of IThenaPharma’s common stock, other than shares to be cancelled pursuant to the Merger Agreement, was
converted into the right to receive shares of Marina common stock at the exchange ratio set forth therein (the “Exchange
Ratio”). In addition, each outstanding IThenaPharma warrant was assumed by Marina and converted into a warrant representing
the right to purchase shares of Marina common stock, with the number of shares underlying such warrant and the exercise price
thereof being adjusted by the Exchange Ratio, with any fractional shares rounded down to the next lowest number of whole shares.



As
a result of the Merger, the former holders of IThenaPharma common stock immediately prior 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.



IThena
was deemed to be the accounting acquirer in the Merger, and thus the historical financial statements of IThena are treated as
the historical financial statements of our company and are reflected in our quarterly and annual reports for periods ending after
the effective time of the Merger. Accordingly, beginning with our Annual Report on Form 10-K for the fiscal year ended December
31, 2016, we reported the results of IThena and Marina and their respective subsidiaries on a consolidated basis. The December
31, 2017 statement of operations include the full year for Marina, Ithena and their subsidiaries whereas the December 31, 2016
statement of operations include the results of Ithena alone from January 1, 2016 to November 15, 2016 and combined with Marina
and its subsidiaries from November 16, 2016 through December 31, 2016. As such, the statements of operations may not be comparable
for the two years ended December 31, 2017.



Results
of Operations



Comparison
of the Year Ended December 31, 2017 to December 31, 2016



Our
loss before income taxes for the year ended December 31, 2017 is summarized as follows in comparison to the year ended December
31, 2016. The December 31, 2017 statement of operations include the full year for Marina, Ithena and their subsidiaries whereas
the December 31, 2016 statement of operations include the results of Ithena alone from January 1, 2016 to November 15, 2016 and
combined with Marina and its subsidiaries from November 16, 2016 through December 31, 2016. As such, the statements of operations
may not be comparable for the two years ended December 31, 2017. As such, the results of operations for the years ended December
31, 2017 and 2016, respectively, are not comparable.



59









|                                           |  | Years
    Ended       |           
|------------------------------------------ |  | --------------------- | ----------
|                                           |  | December
    31, 2017 |           
|Revenues                                   |  | $                     | -         
|Research and development                   |  |                       | 907,493   
|General and administrative expenses        |  |                       | 4,732,221 
|Amortization                               |  |                       | 450,903   
|                                           |  |                       |           
|Other income (expense),
    net            |  |                       | (127,931  
|Loss before provision
    for income taxes |  | $                     | (6,218,548





Revenues



We
had no revenues in the year ended December 31, 2017 or 2016. The majority of our licensing deals provide for clinical and regulatory
milestones, so significant revenues could result from the existing licenses, but are uncertain as to timing or probability. We
will continue to seek research and development collaborations as well as licensing transactions to fund business operations.



Expenses



Our
expenses for the year ended December 31, 2017 are summarized as follows in comparison to our expenses for the year ended December
31, 2016. As stated above, as a result of the November 2016 Merger with IThena, the December 31, 2017 statement of operations
include the full year for Marina, Ithena and their subsidiaries whereas the December 31, 2016 statement of operations include
the results of Ithena alone from January 1, 2016 to November 15, 2016 and combined with Marina and its subsidiaries from November
16, 2016 through December 31, 2016. As such, the statements of operations may not be comparable for the two years ended December
31, 2017.



Research
and Development



Research
and development (“R&D”) expense increased by $0.8 million, as compared to the year ended December 31, 2016, primarily
due to costs related to the MSA with Autotelic Inc. We incurred $0.7 million of costs related to the MSA, of which $0.35 million
was on a non-cash basis through the issuance of warrants. Other R&D expenses consist of costs of sublicensing fees, clinical
development, pre-clinical studies, consulting, other outside services, and other costs.



General
and Administrative





General
and administrative (“G&A”) expense increased by $4.2 million for the year ended December 31, 2017, as compared
to the year ended December 31, 2016, primarily due to G&A expenses of advisory services of $1.35 million, legal costs of approximately
$0.9 million, $0.25 million to settle litigation (described in more detail above under Part 3: Legal Proceedings), accounting
and auditing and related services fees of approximately $0.2 million, approximately $0.2 million for board member fees and approximately
$0.2 million for insurance costs. In addition, we incurred about $0.4 million of costs related to the MSA, of which $0.2 million
was on a non-cash basis through the issuance of warrants. No similar expenses were recorded during the year ended December
31, 2016.





Amortization
Expense



Amortization
expenses relates to amortization of intangible assets acquired in the November 2016 Merger and the asset purchases on June 5,
2017 and July 21, 2017, with a combined estimated fair value of $3,056,066.



60







Other
Income (Expense)





|                                           |  | Years
    ended       |         
|------------------------------------------ |  | --------------------- | --------
|                                           |  | December
    31, 2017 |         
|Interest expense                           |  | $                     | (78,890 
|Change in fair value liability of warrants |  |                       | -       
|Amortization of
    debt discount          |  |                       | (49,041 
|Total other expense,
    net               |  | $                     | (127,931











Total
net other expense for the year ended December 31, 2017 increased $49,318 compared to the year ended December 31, 2016.
The increase in interest expense is primarily attributable to an increase in notes payable during 2017, partially offset by a
decrease in the change in fair value of the Company’s price adjustable warrants. The amortization of debt discount for 2017
is a result of the debt discount arising from the issuance of convertible debt in November of 2017. The fair value liability is
revalued each balance sheet date utilizing probability-weighted Black-Scholes computations, with the decrease or increase in fair
value being reported in the statement of operations as other income or expense, respectively.





Liquidity
& Capital Resources



Working
Capital Deficiency





|                               |  | December
    31, 2017 |            |   | December
    31, 2016 |  
|------------------------------ |  | --------------------- | ---------- | - | --------------------- | -
|Current assets                 |  | $                     | 124,943    |   |                       | $
|Current liabilities            |  |                       | (5,735,503 | ) |                       |  
|Working capital
    deficiency |  | $                     | (5,610,560 | ) |                       | $





Current
assets decreased by $191,537, which was attributable to a decrease in prepaid expenses of $192,568.



Current liabilities increased by $2,767,834,
which was primarily attributable to an increase of accounts payable of $370,092, an increase in amounts due to related party
of $1,205,561, an increase of $320,000 in accrued fee payable to the FDA, an increase of $1,212,040 in convertible notes to related
and unrelated parties. This was partially offset by a decrease in the fair value of price adjustable warrant liabilities of $141,723
issuable in connection with the MSA with Autotelic Inc.







Cash
Flows





|                                                        |  | Year
    ended        |           
|------------------------------------------------------- |  | --------------------- | ----------
|                                                        |  | December
    31, 2017 |           
|                                                        |  |                       |           
|Net cash (used in) provided
    by operating activities |  | $                     | (1,260,685
|Net cash (used in) provided by investing activities     |  |                       | (375,000  
|Net cash provided
    by financing activities           |  |                       | 1,636,716 
|Increase (decrease)
    in cash and cash equivalents    |  | $                     | 1,031     









The increase in net cash used in operating
activities during the year ended December 31, 2017, compared to 2016, was mainly due to increased operating expenses subsequent
to the Merger, offset by non-cash share-based compensation of $1,828,941, increase in amortization of intangibles of $401,714,
an increase in accrued expenses of $837,714, an increase in accounts payable of $425,339, and an increase in amounts due
to related party of $1,205,561.





The
Company used cash of $300,000 in investing activities for payments towards the July 21, 2017 Prestalia acquisition and $75,000
towards the DyrctAxess acquisition during the year ended December 31, 2017. This investment was made to transform the Company
to be a commercial stage company from a development stage company.







61









The
$1,276,770 increase in net cash provided by financing activities during the year ended December 31, 2017, compared to 2016,
is primarily attributable to proceeds of $250,000 from the sale of stock, $1,240,073 from additional borrowings on related party
notes and $170,643 received from the conversion of warrants to common stock.



We
will need to raise additional operating capital in calendar year 2018 in order to maintain our operations and to realize our business
plan. Without additional sources of cash and/or the deferral, reduction, or elimination of significant planned expenditures, we
will not have the cash resources to continue as a going concern.



Going
Concern





The consolidated financial statements contained
in this report have been prepared assuming that the Company will continue as a going concern. We have an accumulated deficit for
the period from inception through December 31, 2017 in excess of $8 million, as well as negative cash flows from operating activities.
We had obtained a line of credit from Autotelic Inc. of $500,000, of which we have utilized $90,816, and such line of credit has
since expired. Our ability to continue as a going concern depends on our ability to raise substantial additional funds through
public or private equity offerings, debt financings or additional strategic alliances and licensing arrangements. On April 16,
2018, we held the initial closing of our private placement of shares of our Series E Convertible Preferred Stock, and warrants
to purchase shares of our common stock, as a result of which we raised over $10 million in net proceeds to our company. For our
assessment as of December 31, 2017, we have considered the amount raised and we will continue to reassess our ability to address
the going concern. We may raise further capital or partner with other entities to further the development of our pipeline products.





Our
continuation as a going concern is dependent on our ability to obtain additional financing as may be required and ultimately to
attain profitability. If we raise additional funds through the issuance of equity or equity-linked securities, the percentage
ownership of current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to
our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available
or are not available on acceptable terms, we may not be able to take advantage of prospective business endeavors or opportunities,
which could significantly and materially restrict our future plans for developing our business and achieving commercial revenues.
If we are unable to obtain the necessary capital when needed, we may have to cease operations.





During 2016 and 2017, we have funded our losses
primarily through the sale of common stock and warrants, loans provided by Dr. Trieu and Autotelic Inc. pursuant to the Line Letters,
and the issuance of convertible notes and/or secured loans. During the year ended December 31, 2017, we raised $250,000 from the
private placement of our equity securities, received $170,643 from the conversion of warrants to common stock, and raised $1,240,073
from the issuance of notes and convertible notes, including $380,888 borrowed under the Line Letter from Dr. Trieu and Autotelic
Inc. In addition, in April 2017, we entered into an additional credit agreement with Autotelic Inc., pursuant to which Autotelic
Inc. offered to the Company an unsecured line of credit in an amount not to exceed $500,000, to be used for current operating expenses
of the Company. We have utilized $90,819, which amount is outstanding at December 31, 2017. No additional advances are available
under this line as it had expired by December 31, 2017.



Future
Financing



The
current financing through the issuance of our newly created Series E Convertible Preferred shares will allow us to commercialize
Prestalia.We will require additional funds to implement the
growth strategy for our business. As mentioned above, we have, in the past, raised additional capital to both supplement our commercialization,
clinical development and operational needs. We may need to raise additional funds required to further our commercialization
efforts through equity financing, debt financing, strategic alliances or other sources, which may result in further dilution
in the equity ownership of our shares. We continue to pursue options available to us to raise additional funds. There can be no
assurance that additional financing will be available when needed or, if available, that it can be obtained on commercially reasonable
terms. If we will not be able to obtain the additional financing on a timely basis as required, or generate material revenues
from operations, we will not be able to meet our other obligations as they become due and will be forced to scale down or perhaps
even cease our operations.



Off-Balance
Sheet Arrangements



As
of December 31, 2017, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.





62







Critical
Accounting Policies and Estimates



Our
significant accounting policies are more fully described in the notes to our financial statements included herein for the year
ended December 31, 2017.



New
and Recently Adopted Accounting Pronouncements



Any
new and recently adopted accounting pronouncements are more fully described in Note 1 to our financial statements included herein
for the year ended December 31, 2017.



ITEM
7A. Quantitative and Qualitative Disclosures About Market Risk.



Not
applicable.



ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



The
information called for by Item 8 is included following the “Index to Financial Statements” on page F-1 contained in
this annual report on Form 10-K.



ITEM
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.



None.



ITEM
9A. Controls and Procedures.



(a)
Disclosure Controls and Procedures. As of the end of the period covered by this Annual Report on Form 10-K, we carried
out an evaluation, under the supervision and with the participation of senior management, including our principal executive officer
(“PEO”) and principal financial officer (“PFO”), of the effectiveness of the design and operation of our
disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Management
identified material weaknesses in internal control over financial reporting as described below in “Management Report on
Internal Control” and therefore, our PEO and PFO concluded that, as of December 31, 2017, our disclosure controls and procedures
were not effective.



(b)
Internal Control over Financial Reporting. Management has reported to our Board of Directors and the Audit Committee thereof
the material weaknesses described below. Other than the material weaknesses discussed in management’s assessment, which
initially arose during the fourth fiscal quarter of the fiscal year ended December 31, 2016 and thus were described in our Annual
Report on form 10-K for the fiscal year ended December 31, 2016, and certain remediation efforts that have been undertaken in
response thereto, there have been no changes in our internal control over financial reporting or in other factors during the fiscal
quarter ended December 31, 2017 that materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.



(c)
Management Report on Internal Control. Management is responsible for establishing and maintaining effective internal control
over financial reporting. Internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act, is a process designed by, or under the supervision of, our PEO and PFO, or persons performing similar
functions, and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles (GAAP). Our management, with the participation of our PEO and PFO, has established and maintained policies
and procedures designed to maintain the adequacy of our internal control over financial reporting, and include those policies
and procedures that:



1)
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions
of our assets;



2)
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations
of our management and directors; and



3)
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets
that could have a material effect on the financial statements.



63







Management
has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2017, based on the control
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in a report entitled Internal Control
— Integrated Framework (2013), and identified material weaknesses which are described below. Because of these material
weaknesses, which initially arose during the fourth fiscal quarter of the fiscal year ended December 31, 2016 and thus were described
in our Annual Report on form 10-K for the fiscal year ended December 31, 2016, management has concluded that we did not maintain
effective internal control over financial reporting for a majority of 2017 and as of December 31, 2017  with respect to the
preparation of these financial statements.



A
material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such that there
is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected
on a timely basis. In connection with the evaluation described above, management determined that our lack of a sufficient complement
of personnel with an appropriate level of knowledge and experience in the performance of an audit of a public company that is
commensurate with our financial reporting requirements constituted a material weakness as of December 31, 2017. To remediate the
foregoing material weakness, we have recently hired additional external experienced accounting and other personnel to assist with
filings and financial record keeping, including the hiring of a Chief Financial Officer, Amit Shah, in October 2017, and have
taken additional steps to improve our financial reporting systems, enhance our existing policies, procedures and controls. We
believe that, as a result of the foregoing efforts, the material weaknesses that were identified will be remediated in 2018.



This
annual report does not include an attestation report of our registered public accounting firm regarding internal control over
financial reporting. Such a report is not required for smaller reporting companies such as us pursuant to The Dodd-Frank Wall
Street Reform and Consumer Protection Act that Congress enacted in July 2010, which permanently exempts companies with less than
$75 million in market capitalization from Section 404(b) of the Sarbanes-Oxley Act of 2002 requiring an outside auditor to attest
annually to a company’s internal-control evaluations.



(d)
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all errors or misstatements
and all fraud. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance that
the objectives of the policies and procedures are met. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.



ITEM
9B. Other Information.



None.





64







PART
III



ITEM
10. Directors, Executive Officers and Corporate Governance.



As
of April 27, 2018, the number of members of our Board of Directors is fixed at seven (7). The members of our Board of Directors
as of such date are as follows:



|Name                          |  | Age |  | Position                                  |  | Director
    Since
|----------------------------- |  | --- |  | ----------------------------------------- |  | ------------------
|Vuong
    Trieu, Ph.D.        |  | 54  |  | Executive
    Chairman                    |  | November
    2016 
|Isaac
    Blech               |  | 68  |  | Director                                  |  | November
    2017 
|Philippe
    P. Calais, Ph.D. |  | 59  |  | Lead
    Independent Director             |  | January
    2017  
|Philip
    C. Ranker          |  | 58  |  | Director                                  |  | January
    2014  
|Donald
    A. Williams        |  | 59  |  | Director                                  |  | September
    2014
|Tim
    Boris                 |  | 49  |  | Director                                  |  | April
    2018    
|Erik
    Emerson              |  | 47  |  | Director
    and Chief Commercial Officer |  | April
    2018    










The
biographies of each director below contains information regarding the person’s service as a director, business experience,
director positions held currently or at any time during the last five years, and information regarding involvement in certain
legal or administrative proceedings, if applicable.



Vuong
Trieu, Ph.D. –Dr. Trieu has served as a director of our company, and as the Chairman of our Board of Directors, since
November 2016. He has also served as Executive Chairman of our company since June 30, 2017. Dr. Trieu currently serves as the Chairman of the Board and the Chief Executive Officer at Autotelic
Inc. (since May 2014), as the Chairman of the Board and the Chief Regulatory Officer at each of Glucotelic Inc. (since November
2016), Osteotelic Inc. (since July 2016), Oncotelic Inc. (since October 2015) and Stocosil (since February 2015), and as the Chairman
of the Board and the Chief Operating Officer at LipoMedics Inc. (since August 2015). He previously served as Chairman of the Board
and President of IThenaPharma Inc. from August 2014 until that entity’s merger with Marina Biotech in November 2016, as
the Chief Scientific Officer of Sorrento Therapeutics, Inc. from September 2013 until May 2014, as the President and Chief Executive
Officer at IgDraSol Inc. from January 2012 until August 2013, as the President and Chief Executive Officer at Biomiga Diagnostics
from 2011 until August 2013, and as the Director of Biology / Pharmacology at Abraxis BioScience from November 2002 until July
2011. He also served as a member of the Board of Directors of Sorrento Therapeutics, Inc. from September 2013 until August 2014.
Dr. Trieu received a Ph.D. in microbiology / molecular biology from the University of Oklahoma.



Isaac
Blech – Mr. Blech has served as a director of our company since November 2017. Mr. Blech currently serves on the Board
of Directors of Contrafect Corporation, a biotech company specializing in novel methods to treat infectious disease, and of SpendSmart
Networks, Inc., a national full-service mobile and loyalty marketing agency. Mr. Blech also serves as Vice Chairman of each of
Cerecor, Inc., a company focused on pediatrics and rare diseases, Edge Therapeutics, Inc., a CNS company developing new treatments
for conditions such as brain trauma, and Diffusion Pharmaceuticals, Inc., an oncology company. Previously, Mr. Blech served on
the Board of Directors of Medgenics, Inc. from 2011 to 2017, of InspireMD, Inc. from 2016 to 2017, and of root9B Holdings, Inc.
from 2011 to 2017. Mr. Blech was a founder of the world’s leading biotechnology companies, such as Celgene Corporation,
ICOS Corporation, Pathogenesis Corporation, Nova Pharmaceutical Corporation and Genetic Systems Corporation. These companies are
responsible for major advances in oncology, infectious disease and cystic fibrosis. Mr. Blech received a B.A. in Medicine from
Baruch College. We believe that Mr. Blech’s experience as a director of numerous public biotechnology companies gives him
the qualifications, skills and financial expertise to serve on our Board.



Tim
Boris – Mr. Boris has served as a director of our company since April 27, 2018. Mr. Boris is an experienced General
Counsel and business executive who has served on or been legal advisor to executive and leadership teams in multiple industries.
He served as the President of SpendSmart Networks, Inc. from April 19, 2016 until March 2017. Mr. Boris served as General Counsel
and Secretary of SpendSmart Networks, Inc. from January 20, 2015 and February 21, 2015, respectively, until March 2017. Mr. Boris
previously served as Vice President of Legal Affairs and General Counsel for Restorgenex Corporation (currently Diffusion Pharmaceuticals)
from August 2011 until January 19, 2015. He received a Bachelor’s of Business Administration from the University of Michigan
and a juris doctorate from the University of San Diego School of Law.





65







Philippe
P. Calais, Ph.D. – Dr. Calais has served as a director of our company since January 2017. Dr. Calais has over 30 years
of biopharmaceutical and pharmaceutical industry experience in North America and Europe. Prior to becoming CEO of Isarna Therapeutics,
a developer of oligonucleotide therapeutics, he managed several biopharmaceutical companies in Canada and in Europe and headed
a large technology transfer organization, focusing on corporate strategic positioning, company deployment and sales optimization
strategies. His management expertise, combined with extensive experience with large pharma companies, such as ICI Pharmaceuticals
and Roche, covers the full scope of the drug chain — from discovery to clinical development, commercialization as well as
partnership and franchise strategic marketing for several therapeutic areas. He has successfully raised significant financing
internationally for private and publicly traded biotechs. A French citizen residing in Germany, he has a degree and doctorate
in pharmacy from France.



Erik
Emerson – Mr. Emerson has served as a director of our company since April 27, 2018 and as our Chief Commercial Officer
since June 22, 2017. Mr. Emerson has served as the Chief Executive Officer and President of Symplmed Pharmaceuticals since he
founded that company in 2013. During his time at Symplmed Pharmaceuticals, Mr. Emerson led that company to the submission, approval
and commercial launch of Prestalia, and to the eventual sale of such assets to Marina Biotech in June 2017. He also spearheaded
the development and launch of Symplmed’s DyrctAxess technology, a patented software designed to manage prescription fulfillment
and patient monitoring. DyrctAxess has demonstrated a significant impact on patient conversion to treatment, long-term compliance
and overall patient retention. Prior to founding Symplmed, Mr. Emerson served as the head of Commercial Development at XOMA from
2010 to 2013, and as Director of Marketing at Gilead Sciences from 2007 to 2010. Mr. Emerson began his career at King Pharmaceuticals
in sales, sales training and marketing. Mr. Emerson, age 47, graduated from the University of Oregon with a Bachelor of Arts in
Political Science with a specialization in Administration and Organization.



Philip
C. Ranker– Mr. Ranker has served as a director of Marina Biotech since January 2014. Currently, Mr. Ranker serves as
chief financial officer at Bioness, Inc. Previously he served as chief accounting officer of Marina Biotech from September 7,
2011 until September 30, 2011, and then served as interim chief financial officer and secretary of Marina Biotech from October
1, 2011 until December 31, 2013. Before that, Mr. Ranker served as chief financial officer of Suneva Medical, Inc. from 2009 to
2011, and as vice president of finance at Amylin Pharmaceuticals, Inc. from 2008 to 2009. Prior to Amylin, Mr. Ranker held various
positions with Nastech Pharmaceutical Company Inc. (the predecessor to Marina Biotech) from 2004 to 2008, including vice president
of finance from August 2004 until September 2005, and chief financial officer and secretary from September 2005 until January
2008. From September 2001 to August 2004, Mr. Ranker served as director of finance for ICOS Corporation. Prior to working at ICOS,
Mr. Ranker served in various positions in corporate accounting, managed care contracting and research and development, including
senior finance director, at Aventis Pharmaceutical and its predecessor companies during his nearly 15 years with the organization.
From February 2006 until 2010, Mr. Ranker also served as a member of the board of directors and as the chair of the audit committee
of ImaRx Therapeutics, Inc., which executed an initial public offering during his tenure. Prior to Aventis, Mr. Ranker was employed
by Peat Marwick (currently KPMG) as a Certified Public Accountant. Mr. Ranker holds a B.S. in accounting from the University of
Kansas.



Donald
A. Williams– Mr. Williams has served as a director of Marina Biotech since September 2014. Mr. Williams is a 35-year
veteran of the public accounting industry, retiring in 2014. Mr. Williams spent 18 years as an Ernst & Young (EY) Partner
and the seven years as a partner with Grant Thornton (GT). Mr. Williams’ career focused on private and public companies
in the technology and life sciences sectors. During the last seven years at GT, he served as the National Leader of Grant Thornton’s
life sciences practice and the managing partner of the San Diego Office. He was the lead partner for both EY and GT on multiple
initial public offerings; secondary offerings; private and public debt financings; as well as numerous mergers and acquisitions.
From 2001 to 2014, Mr. Williams served on the board of directors and is past president and chairman of the San Diego Venture Group
and has served on the board of directors of various charitable organizations in the communities in which he has lived. Beginning
in 2015, Mr. Williams has served as a director of Alphatec Holdings, Inc. (and its wholly-owned operating subsidiary, Alphatec
Spine, Inc.). Beginning in 2016, Mr. Williams has served as a director of Akari Therapeutics PLC, and beginning in March 2017
Mr. Williams has served as a director of ImpediMed Limited. Mr. Williams served as a director of Proove Biosciences, Inc., a private
company, from January 2015 until May 2017. Mr. Williams is a graduate of Southern Illinois University with a B.S. degree.





66







Biographical
Information Concerning Executive Officers



Biographical
information concerning our executive officers as of April 27, 2018 (other than Dr. Trieu, our Executive Chairman, and Erik
Emerson, our Chief Commercial Officer, with respect to each of whom biographical information is set forth above) is set forth
below.



Joseph
W. Ramelli– Mr. Ramelli has served as our Chief Executive Officer since December 8, 2016. Previously he served as interim
Chief Executive Officer and Chairman of the Board of Directors of Marina Biotech from June 10, 2016 until December 8, 2016, and
as a director of Marina Biotech from August 2012 until December 8, 2016. Mr. Ramelli worked as a consultant for several investment
funds providing in-depth due diligence and investment recommendations. He has over 20 years of experience in the investment industry,
having worked as both an institutional equity trader and as an equity analyst at Eos Funds, Robert W. Duggan & Associates
and Seneca Capital Management. Mr. Ramelli, age 50, graduated with honors from the University of California at Santa Barbara,
with a B.A. in business economics.



Larn
Hwang, Ph.D.– Dr. Hwang has served as our Chief Scientific Officer since February 2017. Dr. Hwang, age 55, has served
as the Chief Executive Officer of Oncotelic, Inc. since October 2015 and as the Chief Scientific Officer of Autotelic Inc. since
October 2013. Dr. Hwang is a veteran in the drug development industry, with broad expertise in drug discovery and biomarker development,
as well as clinical and regulatory operations. Dr. Hwang was a founder of IgDraSol, Inc. (which merged with Sorrento Therapeutics
in 2013, where she later served as VP of Regulatory and Clinical Operations from September 2013 to May 2014) and served as its
Chief Operating Officer from April 2012 to August 2013, and she was a founder of Biomiga Diagnostics and served as its Chief Operating
Officer from 2011 to August 2013. Prior to that, she served as Head of Cell Biology at Abraxis BioScience from November 2005 to
June 2011 and as Senior Principal Scientist at Celgene Corporation from February 2011 to June 2011. Dr. Hwang has also held a
position with Johnson & Johnson. Dr. Hwang received a Ph.D. in Molecular Microbiology from The University of Texas Southwestern
Medical Center at Dallas.



Mihir
Munsif – Mr. Munsif has served as our Chief Operating Officer since February 2017. Mr. Munsif, age 55, has served as
the Senior Vice President at Autotelic Inc. since November 2016, as the Senior Vice President of Portfolio Management of LipoMedics,
Inc. since June 2016 and as the Senior Vice President of Portfolio Management of Oncotelic, Inc. since October 2015. Previously
he served as the Chief Operating Officer of IThenaPharma Inc. from September 2014 until August 2016. Prior to that, he served
as Product Life Cycle Management and Supply Chain Consulting at Accenture from March 2013 until September 2014 and as Product
Life Cycle Management and Supply Chain Management Operations at Herbalife from April 2009 until March 2013. Mr. Munsif received
a M.S. in Industrial Engineering from the University of Oklahoma and a B.S. in Chemical Engineering from Manipal Institute of
Technology.



Amit
Shah – Mr. Shah has served as our Chief Financial Officer since October 2, 2017. Mr. Shah served as the Senior Director
of Finance – ERP, at Young’s Market Company from December 2015 to August 2017, as a Consultant at Young’s Market
Company through Beacon Resources from September 2015 to December 2015, as the Vice President of Finance & Accounting, and
Acting Chief Financial Officer, of Insightra Medical Inc. from May 2014 to August 2015, and as a Business Consultant to U.S. Autoparts
through Vaco from January 2014 to May 2014. Mr. Shah also previously served as VP Finance and Acting Chief Financial Officer at
IgDraSol Inc. from January 2013 to September 2013, as Corporate Controller & Director of Finance at ISTA Pharmaceuticals from
December 2010 to November 2012, as Corporate Controller at Spectrum Pharmaceuticals from October 2007 to November 2010, and as
Controller / Senior Manager Internal Audits at Caraco Pharmaceuticals Laboratories from August 2000 to September 2007. Mr. Shah
received a Bachelor’s of Commerce degree from the University of Mumbai, and is an Associate Chartered Accountant from The
Institute of Chartered Accountants of India. Mr. Shah, age 52, is also an inactive CPA from Colorado, USA.





67







Peter
D. Weinstein, Ph.D., J.D. – Dr. Weinstein has served as our Chief Legal Officer since October 12, 2017. Dr. Weinstein
has served as Chief Executive Officer of Entralta, P.C., since 2012, a full service legal and business firm that specializes in
working with small companies. Prior to Entralta, Dr. Weinstein served as Senior Counsel at Baxter Healthcare Corporation, where
he handled legal, intellectual property, transactional and business development matters for Baxter’s major hemophilia products
and development programs. Dr. Weinstein has also served an attorney at Fish & Richardson, Brobeck, Phleger & Harrison
and Goodwin Procter, and prior to that he was an Examiner with the United States Patent & Trademark Office. Dr. Weinstein
received his law degree from Boston College Law School, his Ph.D. in Biology/Immunology from the University of Pennsylvania, and
a degree in Biology from the University of Connecticut. Dr. Weinstein, age 55, is a member of the California Bar and is registered
to practice before the United States Patent & Trademark Office as a Patent Attorney.



Director’s
Qualifications



In
selecting a particular candidate to serve on our Board of Directors, we consider the needs of our company based on particular
experiences, qualifications, attributes and skills that we believe would be advantageous for our Board members to have and would
qualify such candidate to serve on our Board given our business profile and the environment in which we operate. The table below
sets forth such experiences, qualifications, attributes and skills, and identifies the ones that each director and director nominee
possesses.



|Attributes                          |  | Mr. Blech |  | Mr. Ranker |  | Mr. Williams |  | Dr. Trieu |  | Dr. Calais |  | Mr. Boris |  | Mr. Emerson
|----------------------------------- |  | --------- |  | ---------- |  | ------------ |  | --------- |  | ---------- |  | --------- |  | -----------
|Financial
    Experience            |  | X         |  | X          |  | X            |  | X         |  | X          |  | X         |  |            
|Public
    Board Experience         |  | X         |  | X          |  | X            |  | X         |  |            |  | X         |  |            
|Industry
    Experience             |  | X         |  | X          |  | X            |  | X         |  | X          |  |           |  | X          
|Scientific
    Experience           |  |           |  |            |  |              |  | X         |  | X          |  |           |  |            
|Commercial
    Experience           |  |           |  | X          |  | X            |  | X         |  | X          |  |           |  | X          
|Corporate
    Governance Experience |  | X         |  | X          |  | X            |  | X         |  | X          |  | X         |  | X          
|Capital
    Markets Experience      |  | X         |  | X          |  | X            |  | X         |  |            |  | X         |  |            
|Management
    Experience           |  | X         |  | X          |  | X            |  | X         |  | X          |  | X         |  | X          



Arrangements
Regarding Director Nominations



Pursuant
to the Merger Agreement, and in connection with the Merger, Dr. Trieu was appointed to our Board, to serve until our 2017 annual
meeting of stockholders or until his earlier death, resignation or removal. At such time, Dr. Trieu was also appointed to serve
as Chairman of the Board. He currently serves as Executive Chairman.



Dr.
Calais was identified to serve as a member of our Board by Dr. Trieu, in his capacity as the representative of the former stockholders
of IThenaPharma, pursuant to the Merger Agreement. Dr. Trieu served as the President of IThenaPharma immediately prior to the
closing of the Merger.



Messrs.
Emerson and Boris were identified to serve as a member of our Board by the holders of a majority of the shares of our Series E
Preferred Stock sold in our private placement on April 16, 2018 pursuant to the director designation right provided in the subscription
agreements that we entered into with the purchasers of our securities in connection with such private placement.



Family
Relationships



There
are no familial relationships between any of our executive officers and directors. However, Falguni Trieu, our Director of Business
Development, is the spouse of Vuong Trieu, our Executive Chairman.





68







Director
or Officer Involvement in Certain Legal Proceedings



Our
directors and executive officers were not involved in any legal proceedings as described in Item 401(f) of Regulation S-K in the
past ten years, other than the fact that Mr. Williams had served as a member of the Board of Directors of Proove Biosciences,
Inc., a private company, from January 2015 until May 2017, which entity went into receivership in approximately September 2017.



Audit
Committee



Our
Audit Committee consists of Mr. Williams (chair), Mr. Ranker and Dr. Calais. The Audit Committee authorized and approved
the engagement of the independent registered public accounting firm, reviewed the results and scope of the audit and other services
provided by the independent registered public accounting firm, reviewed our financial statements, reviewed and evaluated our internal
control functions, approved or established pre-approval policies and procedures for all professional audit and permissible non-audit
services provided by the independent registered public accounting firm and reviewed and approved any proposed related party transactions.



Code
of Ethics



We
have adopted a Code of Business Conduct and Ethics that applies to all of our employees and officers, and the members of our Board
of Directors. The Code of Business Conduct and Ethics is available on our corporate website at www.marinabio.com. You can access
the Code of Business Conduct and Ethics on our website by first clicking “About Marina Biotech” and then “Corporate
Governance.” Printed copies are available upon request without charge. Any amendment to or waiver of the Code of Business
Conduct and Ethics will be disclosed on our website promptly following the date of such amendment or waiver.



Section
16(a) Beneficial Ownership Reporting Compliance



Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who own more
than 10% of a registered class of our equity securities (“Reporting Persons”), to file reports of ownership and changes
in ownership with the SEC. Based solely on our review of the reports filed by Reporting Persons, and written representations from
certain Reporting Persons that no other reports were required for those persons, we believe that, during the year ended December
31, 2017, the Reporting Persons met all applicable Section 16(a) filing requirements, other than that: (A) the Form 4 that was
to be filed by Amit Shah, our Chief Financial Officer, regarding the grant to him of options to purchase 60,000 shares of our
common stock on October 2, 2017 was filed on October 6, 2017; (B) the Form 3 that was to be filed by Peter D. Weinstein, our Chief
Legal Officer, regarding his appointment as Chief Legal Officer of our company on October 12, 2017, was filed on October 24, 2017;
and (C) the Form 4 that was to be filed by Peter D. Weinstein, our Chief Legal Officer, regarding the grant to him of options
to purchase 60,000 shares of our common stock on October 12, 2017 was filed on October 24, 2017.



69







ITEM
11. Executive Compensation.



The
following table sets forth information regarding compensation earned during 2017 and 2016 by our principal executive officer and
our other most highly compensated executive officers as of the end of the 2017 fiscal year (“Named Executive Officers”).



|Name and Principal Position    |  | Year |      |  | Salary ($) |  |         | Bonus ($) |  |  | Stock Awards ($)(1) |  |  | Option
    Awards     ($)(1) |         |     | All Other Compensation ($) |  |        | Total ($) | 
|------------------------------ |  | ---- | ---- |  | ---------- |  | ------- | --------- |  |  | ------------------- |  |  | ---------------------------- | ------- | --- | -------------------------- |  | ------ | --------- | 
|Vuong Trieu, Ph.D.,            |  |      | 2017 |  |            |  | —       |           |  |  | —                   |  |  |                              | —       |     |                            |  | 11,249 | (8)       | 
|Executive Chairman (2)(7)      |  |      | 2016 |  |            |  | —       |           |  |  | —                   |  |  |                              | —       |     |                            |  | —      |           | 
|                               |  |      |      |  |            |  |         |           |  |  |                     |  |  |                              |         |     |                            |  |        |           | 
|Joseph W. Ramelli, Chief       |  |      | 2017 |  |            |  | 107,157 |           |  |  | —                   |  |  |                              | $14,000 | (4) |                            |  | 11,249 | (4)       | 
|Executive Officer (3)          |  |      | 2016 |  |            |  | 82,500  | (5)       |  |  | —                   |  |  |                              | —       |     |                            |  | 11,448 | (4)       | 
|                               |  |      |      |  |            |  |         |           |  |  |                     |  |  |                              |         |     |                            |  |        |           | 
|Erik Emerson, Director & Chief |  |      | 2017 |  |            |  | —       |           |  |  | —                   |  |  | $                            | 228,000 |     |                            |  | —      |           | 
|Commercial Officer (6)         |  |      |      |  |            |  |         |           |  |  |                     |  |  |                              |         |     |                            |  |        |           | 



| | (1) | Represents
    the aggregate grant date fair value of the award computed in accordance with the provisions of FASB ASC Topic 718. The assumptions
    used in calculating the aggregate grant date fair value of the awards reported in this column are set forth in Notes 6 and
    7 to our consolidated financial statements included in this report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Dr.
    Trieu served as the President and sole director of IThenaPharma until that entity’s merger with Marina Biotech on November
    15, 2016. He served as Chairman of the Board of Directors of our company beginning on November 15, 2016, and he was appointed
    to serve as Executive Chairman of our company effective June 30, 2017. Dr. Trieu did not receive any compensation directly from IThenaPharma in his capacity as an officer
    or director of IThenaPharma during the 2016 fiscal year prior to the merger. However: (A) IThenaPharma did make payments to
    Autotelic Inc., of which entity Dr. Trieu serves as Chairman of the Board of Directors, pursuant to the Master Services Agreement
    between IThenaPharma and Autotelic Inc. effective as of January 1, 2015; and (B) we did make payments to Autotelic Inc., of
    which entity Dr. Trieu serves as Chairman of the Board of Directors, pursuant to the Master Services Agreement between our
    company and Autotelic Inc. effective as of November 15, 2016. Please see the section entitled “Certain Relationships
    and Related Party Transactions – Related Party Transactions – Related Party Transactions Involving IThenaPharma”
    below in this report for further information regarding the Master Services Agreement between IThenaPharma and Autotelic Inc.
    and the section entitled “Certain Relationships and Related Party Transactions – Related Party Transactions
    – Transactions with Vuong Trieu, Ph.D.” below in this report for further information regarding the Master
    Services Agreement between our company and Autotelic Inc. During 2017, Dr. Trieu earned $102,769 under the Master Services
    Agreement between our company and Autotelic Inc. and $45,000 as fees for serving as a member of our Board of Directors, of
    which Board fees $11,250 was accrued and payable as of December 31, 2017. Both of the foregoing amounts are included as “All
    Other Compensation” in the table above for 2017. Dr. Trieu’s accrued Board fees as of December 31, 2017 were converted
    into 2.25 shares of Series E Convertible Preferred Stock and warrants to purchase 16,875 shares of common stock on April 16,
    2018 in connection with the closing of our private placement.
| | (3) | Mr.
    Ramelli served as the interim Chief Executive Officer of Marina Biotech from June 10, 2016 until December 8, 2016, at which
    time he became Chief Executive Officer. Mr. Ramelli also served as a non-employee director of Marina Biotech from August 2012
    until June 10, 2016, and he continued to serve as a member of the Board of Directors of Marina Biotech until his resignation
    therefrom on December 8, 2016. Benefits paid to Mr.
    Ramelli include health insurance benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (4) | On
    January 4, 2016, Marina Biotech granted to Mr. Ramelli options to purchase up to 3,800 shares of common stock at an exercise
    price of $2.60 per share, which options represented the option grant covering service as a non-employee director during the
    2016 fiscal year. On November 15, 2016, Marina Biotech granted to Mr. Ramelli, as well as its non-employee directors, options
    to purchase up to 3,500 shares of common stock at an exercise price of $1.00 per share. On January 3, 2017, Marina Biotech
    granted to Mr. Ramelli options to purchase up to 8,100 shares of common stock at an exercise price of $1.70 per share, and
    on February 2, 2017, Marina Biotech granted to Mr. Ramelli 10,000 restricted shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      





70







| | (5) | Represents
    $60,000 paid to Mr. Ramelli in his capacity as an executive officer of Marina Biotech and $22,500 paid to Mr. Ramelli in his
    capacity as a director of Marina Biotech, in each case during 2016.                                                                                                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (6) | Mr.
    Emerson was appointed to serve as our Chief Commercial Officer in June 2017. On June 5, 2017, we granted 60,000 restricted
    shares of common stock to Mr. Emerson, which shares vested on December 5, 2017. Mr. Emerson was appointed to serve as a member
    of our Board of Directors on April 27, 2018. Benefits paid to Mr. Emerson include health insurance benefits.                                             
| | (7) | In
    addition to the compensation provided to Dr. Trieu as set forth in the Summary Compensation Table above, note that we also
    paid to Falguni Trieu, the spouse of Dr. Trieu, $18,925 during the 2017 fiscal year, and that we granted to Ms. Trieu options
    to purchase up to 4,000 shares of our common stock at an exercise price of $1.80, in each case in her capacity as our Director
    of Business Development.
| | (8) | On
    January 3, 2017, we granted to Dr. Trieu options to purchase up to 8,100 shares of our common stock at an exercise price of
    $1.70 per share.                                                                                                                                                                                                                                                                            



Narrative
Disclosures Regarding Compensation; Employment Agreements



We
have entered into employment offer letters with each of Mr. Ramelli and Mr. Emerson. The terms and conditions of each of the foregoing
agreements are summarized below.



Joseph
Ramelli Offer Letter



On
February 2, 2017, we entered into an employment letter (the “Ramelli Letter”) with Joseph W. Ramelli, our former Chief
Executive Officer. Pursuant to the Ramelli Letter, Mr. Ramelli shall continue to serve as our Chief Executive Officer pursuant
to the terms and conditions set forth therein. As compensation for such service, Mr. Ramelli will receive a monthly base salary
of $10,000, and he also will be entitled to receive a discretionary bonus as determined by our Board of Directors in its sole
discretion. A copy of the Ramelli Letter was filed as Exhibit 10.1 to our Current Report on Form 8-K dated February 2, 2017.



In
connection with the Ramelli Letter, we granted to Mr. Ramelli 10,000 restricted shares of common stock under our 2014 Long-Term
Incentive Plan, which shares vested on February 6, 2017.



In
connection with the Ramelli Letter, Mr. Ramelli agreed: (i) to a non-solicitation covenant regarding our employees, independent
contractors, customers, vendors and clients; and (ii) not to provide services to certain of our clients, customers or business
partners (and prospective clients, customers and business partners), in each case, during such time as Mr. Ramelli is employed
by us and for a period of twelve (12) months immediately thereafter.



Erik
Emerson Offer Letter



On
June 5, 2017, we entered into an employment offer letter (the “Emerson Letter”) with Erik Emerson, the President and
Chief Executive Officer of Symplmed, pursuant to which we agreed to hire Mr. Emerson to serve as our Chief Commercial Officer.
As compensation for his services as Chief Commercial Officer, we shall pay to Mr. Emerson an annual base salary of $150,000, and
he is entitled to receive a discretionary bonus as determined by our Board of Directors 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. A copy of the Emerson Letter was filed as Exhibit 10.1 to our Current Report on Form
8-K dated June 22, 2017, and a copy of Amendment No.1 to the Emerson Letter was filed as Exhibit 10.2 to our Current Report on
Form 8-K dated June 22, 2017.



In
connection with the Emerson Letter, we granted 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.





71







In
connection with the Emerson Letter, Mr. Emerson agreed: (i) to a non-solicitation covenant regarding our employees, independent
contractors, customers, vendors and clients; and (ii) not to provide services to certain of our clients, customers or business
partners (and prospective clients, customers and business partners), in each case, during such time as Mr. Emerson is employed
by us and for a period of twelve (12) months immediately thereafter.



Outstanding
Equity Awards at Fiscal Year End



2017
Outstanding Equity Awards at Fiscal Year-end Table



The
following table sets forth information regarding the outstanding equity awards held by our Named Executive Officers as of the
end of our 2017 fiscal year:



|                   |  | Option
    Awards                                      |       |  | Stock
    Awards                                       | 
|------------------ |  | ------------------------------------------------------ | ----- |  | ------------------------------------------------------ | 
|                   |  | Number
    ofSecuritiesUnderlyingUnexercisedOptions(#) |       |  | Number
    ofSecuritiesUnderlyingUnexercisedOptions(#) | 
|Name               |  | Exercisable                                            |       |  | Unexercisable                                          | 
|Vuong
    Trieu    |  |                                                        | 4,050 |  |                                                        | 
|                   |  |                                                        |       |  |                                                        | 
|Joseph
    Ramelli |  |                                                        | 4,050 |  |                                                        | 
|                   |  |                                                        | 3,500 |  |                                                        | 
|                   |  |                                                        | 3,800 |  |                                                        | 
|                   |  |                                                        | 3,800 |  |                                                        | 
|                   |  |                                                        | 6,200 |  |                                                        | 





Option
re-pricings



We
have not engaged in any option re-pricings or other modifications to any of our outstanding equity awards to our Named Executive
Officers during fiscal year 2017.



Compensation
of Directors



2017
Director Compensation Table



The
following Director Compensation table sets forth information concerning compensation for services rendered by our independent
directors for fiscal year 2017.



|Name                           |  | Fees
    EarnedorPaid in Cash($)(4)(5) |         |  | StockAwards($) |  |   | OptionAwards($)(1) |  |   | All
    OtherCompensation($) |  |   | Total($) |  
|------------------------------ |  | -------------------------------------- | ------- |  | -------------- |  | - | ------------------ |  | - | ---------------------------- |  | - | -------- | -
|Isaac
    Blech (2)            |  | $                                      | 11,250  |  |                |  | — |                    |  | $ | 798,159                      |  | $ |          | —
|Philippe
    Calais, Ph.D.     |  |                                        | 45,000  |  |                |  | — |                    |  |   | 11,249                       |  |   |          | —
|Stefan
    C. Loren, Ph.D. (3) |  |                                        | 33,750  |  |                |  | — |                    |  |   | 5,625                        |  |   |          | —
|Philip
C. Ranker               |  |                                        | 45,000  |  |                |  | — |                    |  |   | 11,249                       |  |   |          | —
|Donald
    A. Williams         |  |                                        | 45,000  |  |                |  | — |                    |  |   | 11,249                       |  |   |          | —
|Total:                         |  | $                                      | 180,000 |  |                |  | — |                    |  | $ | 837,532                      |  |   |          | —





72







| | (1) | Represents
the aggregate grant date fair value under FASB ASC Topic 718 of options to purchase shares of our common stock granted during
2017. On January 3, 2017, we granted to each of our directors serving on the Board at such time (including Dr. Trieu) options
to purchase up to an aggregate of 8,100 shares of common stock at an exercise price of $1.70 per share. On November 22, 2017,
we granted to Mr. Blech options to purchase up to 477,257 shares of common stock at an exercise price of $1.80 per share.                              
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (2) | Mr.
    Blech was appointed to serve as a member of the Board effective November 22, 2017.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (3) | Dr.
Loren resigned as a member of our Board effective October 2, 2017.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (4) | Represents
    total payments actually made to Messrs. Calais, Loren, Ranker and Williams of $135,000, and payments accrued with respect
    to Messrs. Blech, Calais, Ranker and Williams of $56,250.                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (5) | On
    April 16, 2018, and in connection with the closing of our private placement of Series E Preferred Stock and warrants, we issued
    to Messrs. Blech, Ranker, Trieu, Williams and Loren an aggregate of 58.25 shares of Series E 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 to
    our company as members of our Board of Directors during the period ending on December 31, 2017 in the aggregate amount of
    approximately $291,250.



As
of December 31, 2017, Dr. Loren and Mr. Williams each held options to purchase up to 25,400 shares of our common stock, Mr. Ranker
held options to purchase up to 25,650 shares of our common stock, Dr. Trieu and Dr. Calais each held options to purchase up to
8,100 shares of our common stock, and Mr. Blech held options to purchase up to 477,257 shares of our common stock.



Dr.
Trieu, who served as a director and as an executive officer of our company during 2017, has not been included in the Director
Compensation Table because he is a Named Executive Officer, and all compensation paid to him is reflected in the Summary Compensation
Table above.



Director
Compensation Program: Our compensation program for directors for the 2017 fiscal year consisted of: (i) a one-time on-boarding
grant of 5-year options to purchase up to 4,300 shares of common stock, which options shall vest 50% immediately and 50% after
one year; (ii) an annual grant of 5-year options to purchase up to 3,800 shares of common stock, which options vest 50% immediately
and 50% after one year; and (iii) an annual cash payment of $45,000 per year, payable quarterly. In addition, on January 3, 2017
we granted to each person that was serving as a director at such time options to purchase up to 4,300 shares of common stock at
an exercise price of $1.70 per share (in addition to the annual option grant for the 2017 fiscal year).



73







ITEM
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.



The
following table sets forth certain information regarding the ownership of our common stock as of April 27, 2018 (the “Determination
Date”) by: (i) each current director of our company and each director nominee; (ii) each of our Named Executive Officers;
(iii) all current executive officers and directors of our company as a group; and (iv) all those known by us to be beneficial
owners of more than five percent (5%) of our common stock.



Beneficial
ownership and percentage ownership are determined in accordance with the rules of the SEC. Under these rules, beneficial ownership
generally includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes
any shares that an individual or entity has the right to acquire beneficial ownership of within 60 days of the Determination Date,
through the exercise of any option, warrant or similar right (such instruments being deemed to be “presently exercisable”).
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of our common
stock that could be issued upon the exercise of presently exercisable options and warrants are considered to be outstanding. These
shares, however, are not considered outstanding as of the Determination Date when computing the percentage ownership of each other
person.



To
our knowledge, except as indicated in the footnotes to the following table, and subject to state community property laws where
applicable, all beneficial owners named in the following table have sole voting and investment power with respect to all shares
shown as beneficially owned by them. Percentage of ownership is based on 10,521,278 shares of common stock outstanding as of the
Determination Date. Unless otherwise indicated, the business address of each person in the table below is c/o Marina Biotech,
Inc., 17870 Castleton Street, Suite 250, City of Industry, CA 91748. No shares identified below are subject to a pledge.



|Name                                                             |  | Number
    ofShares |            |      | Percent
        ofSharesOutstanding
        (%) | 
|---------------------------------------------------------------- |  | ------------------- | ---------- | ---- | ----------------------------------------------- | 
|Officers
    and Directors:                                      |  |                     |            |      |                                                 | 
|Isaac
    Blech, Director                                        |  |                     | 1,894,271  | (1)  |                                                 | 
|Joseph
    W. Ramelli, CEO                                       |  |                     | 69,465     | (2)  |                                                 | 
|Philip
    C. Ranker, Director                                   |  |                     | 432,605    | (3)  |                                                 | 
|Donald
    A. Williams, Director                                 |  |                     | 342,300    | (4)  |                                                 | 
|Vuong
    Trieu, Ph.D., Executive Chairman                       |  |                     | 11,219,002 | (5)  |                                                 | 
|Philippe
    P. Calais, Ph.D., Director                          |  |                     | 10,000     | (6)  |                                                 | 
|Mihir
    Munsif, COO                                            |  |                     | 531,535    | (8)  |                                                 | 
|Larn
    Hwang, CSO                                              |  |                     | 188,700    | (10) |                                                 | 
|Erik
    Emerson, CCO & Director                                 |  |                     | 60,000     | (9)  |                                                 | 
|Amit
    Shah, CFO                                               |  |                     | 0          |      |                                                 | 
|Peter
    D. Weinstein, CLO                                      |  |                     | 0          |      |                                                 | 
|Tim
    Boris, Director                                          |  |                     | 0          |      |                                                 | 
|All
    directors and executive officers as a group (12 persons) |  |                     | 14,747,878 | (11) |                                                 | 
|                                                                 |  |                     |            |      |                                                 | 
|Five
    Percent (5%) Holders:                                   |  |                     |            |      |                                                 | 
|Autotelic
    LLC                                                |  |                     | 2,312,355  | (7)  |                                                 | 



*
Beneficial ownership of less than 1.0% is omitted.



| | (1) | Consists
    of presently exercisable options to purchase 49,246 shares of common stock held by Mr. Blech, presently exercisable warrants
    to purchase 16,875 shares of common stock held by Mr. Blech and 22,500 shares of common stock issuable upon conversion of
    2.25 shares of Series E Preferred Stock held by Mr. Blech. Also includes presently exercisable warrants to purchase 773,850
    shares of common stock held by a trust affiliated with Mr. Blech and 1,031,800 shares of common stock issuable upon conversion
    of 103.18 shares of Series E Preferred Stock held by a trust affiliated by Mr. Blech.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Includes
    presently exercisable options to purchase 25,400 shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               





74







| | (3)  | Includes
    presently exercisable options to purchase 27,550 shares of common stock, presently exercisable warrants to purchase 135,000
    shares of common stock and 180,000 shares of common stock issuable upon conversion of 18 shares of Series E Preferred Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (4)  | Consists
    of presently exercisable options to purchase 27,300 shares of common stock, presently exercisable warrants to purchase 135,000
    shares of common stock and 180,000 shares of common stock issuable upon conversion of 18 shares of Series E Preferred Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (5)  | Includes
    presently exercisable options to purchase 10,000 shares of common stock held by Dr. Trieu, presently exercisable warrants
    to purchase 1,135,425 shares of common stock held by Dr. Trieu and 1,513,900 shares of common stock issuable upon the conversion
    of 151.39 shares of Series E Preferred Stock held by Dr. Trieu. Also includes 2,312,355 shares held by Autotelic LLC, of which
    entity Dr. Trieu serves as Chief Executive Officer, and 86,206 shares held by LipoMedics Inc., of which entity Dr. Trieu serves
    as Chairman of the Board and Chief Operating Officer. Also includes the following shares held by Autotelic Inc., of which
    entity Dr. Trieu serves as Chairman of the Board: (i) 525,535 shares of common stock; (ii) presently exercisable warrants
    to purchase 2,706,965 shares of common stock; and (iii) 1,815,900 shares of common stock issuable upon the conversion of 181.59
    shares of Series E Preferred Stock. Does not include 49,019 shares of common stock to be issued to Oncotelic Inc., of which
    entity Dr. Trieu serves as Chairman of the Board and Chief Executive Officer.
| | (6)  | Consists
    of presently exercisable options to purchase 10,000 shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (7)  | Information
    based on a Schedule 13D filed with the SEC on November 23, 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (8)  | Information
    based on a Schedule 13G filed with the SEC on November 23, 2016. Includes presently exercisable options to purchase 6,000
    shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (9)  | Consists
    of 60,000 shares of restricted common stock that vested on December 5, 2017.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (10) | Consists
    of presently exercisable options to purchase 6,000 shares of common stock, presently exercisable warrants to purchase 78,300
    shares of common stock and 104,400 shares of common stock issuable upon conversion of 10.44 shares of Series E Preferred Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (11) | See
    the information contained in footnotes (1) – (10) above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    



Equity
Compensation Plan Information



The
following table provides aggregate information as of the end of the 2017 fiscal year with respect to all of the compensation plans
under which our common stock is authorized for issuance, including our 2008 Stock Incentive Plan and our 2014 Long-Term Incentive
Plan:



|                                                           |  | Number
    of Securities to be Issued Upon Exercise of |         |     | Weighted-Average
    Exercise Price of |   |      | Number
    of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities | 
|---------------------------------------------------------- |  | ------------------------------------------------------ | ------- | --- | -------------------------------------- | - | ---- | ---------------------------------------------------------------------------------------------------------------------- | 
|                                                           |  | Outstanding

    Options                               |         |     | Outstanding
    
Options               |   |      | Reflected
    in
 Column(a))                                                                                           | 
|Equity
    compensation plans approved by security holders |  |                                                        | 745,707 | (1) |                                        | $ | 8.84 |                                                                                                                        | 
|Total                                                      |  |                                                        | 745,707 |     |                                        | $ | 8.84 |                                                                                                                        | 



| | (1) | Consists
    of: (i) 4,500 shares of common stock underlying awards made pursuant to our 2008 Stock Incentive Plan and (ii) 741,207 shares
    of common stock underlying awards made pursuant to our 2014 Long-Term Incentive Plan.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



75







ITEM
13. Certain Relationships and Related Transactions, and Director Independence.



Approval
for Related Party Transactions



It
is our practice and policy to comply with all applicable laws, rules and regulations regarding related-person transactions. Our
Code of Business Conduct and Ethics requires that all employees, including officers and directors, disclose to the CEO the nature
of any company business that is conducted with any related party of such employee, officer or director (including any immediate
family member of such employee, officer or director, and any entity owned or controlled by such persons). If the transaction involves
an officer or director of our company, the CEO must bring the transaction to the attention of the Audit Committee or, in the absence
of an Audit Committee the full Board, which must review and approve the transaction in writing in advance. In considering such
transactions, the Audit Committee (or the full Board, as applicable) takes into account the relevant available facts and circumstances.



Related
Party Transactions



Transactions
with Vuong Trieu, Ph.D.



We
have entered into the following transactions with Dr. Trieu, our Executive Chairman, and/or entities that are controlled by him,
that require disclosure under Item 404(a) of Regulation S-K promulgated under the Exchange Act: (A) Marina and Dr. Trieu entered
into a Line Letter dated November 15, 2016 pursuant to which Dr. Trieu offered to us an unsecured line of credit in an amount
not to exceed $540,000 to be used for current operating expenses (the outstanding principal balance of which line of credit, plus
accrued and unpaid interest thereon, converted into shares of our Series E Preferred Stock and Warrants upon the closing of our
private placement on April 16, 2018); (B) Dr. Trieu is the Chief Executive Officer of Autotelic LLC, with which entity Marina
entered into a License Agreement dated November 15, 2016; (C) Dr. Trieu is the Chairman of the Board of Directors of Autotelic
Inc., with which entity Marina entered into a Master Services Agreement dated November 15, 2016, and which entity offered to us
an unsecured line of credit in an amount not to exceed $500,000 in April 2017 (the outstanding principal balance of which line
of credit, plus accrued and unpaid interest thereon, converted into shares of Series E Preferred Stock and Warrants upon the closing
of our private placement on April 16, 2018); (D) Dr. Trieu is the Chairman of the Board of Directors and Chief Operating Officer
of LipoMedics Inc., with which entity we entered into a License Agreement and a Stock Purchase Agreement, each dated February
6, 2017; (E) Dr. Trieu is the Chairman of the Board of Directors and Chief Executive Officer of Oncotelic Inc., with which entity
we entered into a License Agreement dated July 17, 2017; and (F) Dr. Trieu is the Chief Executive Officer of Autotelic LLC, which
entity owns approximately 19% of the issued and outstanding shares of the common stock of Autotelic BIO, with which entity we
entered into a binding term sheet on January 11, 2018 regarding the licensing of our IT-103 product candidate. Each of the foregoing
agreements is described below. Autotelic LLC owned approximately 25% of the issued and outstanding shares of our common stock
immediately following the completion of the Merger and Autotelic Inc. owned approximately 5.9% of the issued and outstanding shares
of our common stock immediately following the completion of the Merger.



Line
Letter with Dr. Trieu



On
November 15, 2016, Marina entered into a Line Letter with Dr. Trieu, our Executive Chairman, for an unsecured line of credit in
an amount not to exceed $540,000, all of which has been drawn down. Advances made under the Line Letter accrued interest at the
rate of five percent (5%) per annum, were evidenced by the Demand Promissory Note issued by us to Dr. Trieu, and were due and
payable upon demand by Dr. Trieu. The unpaid principal balance of the line of credit, together with accrued and unpaid interest
thereon, converted into shares of our Series E Convertible Preferred Stock and Warrants to purchase shares of common stock upon
the closing of our private placement on April 16, 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.





76







Autotelic
LLC License Agreement



On
November 15, 2016, Marina entered into a License Agreement with Autotelic LLC, a stockholder of IThenaPharma that became the holder
of 2,312,355 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 (A) 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 (B) Autotelic
LLC licensed to Marina certain patent rights, data and know-how relating to IT-102 and IT-103, in connection with individualized
therapy of 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 Therapeutic Drug Monitoring
(TDM) guided dosing for all indications using an Autotelic Inc. 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 Agreement



On
November 15, 2016, Marina entered into a Master Services Agreement (the “MSA”) 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, pursuant to which Autotelic Inc. agreed to provide certain business functions and services
from time to time at Marina’s request. The MSA has a term of ten years, though it can be terminated by either party upon
ninety (90) days’ prior written notice to the other party. The resources available to us through Autotelic Inc. include,
without limitation, regulatory, clinical, preclinical, manufacturing, formulation, legal, accounting and IT. On April 16, 2018,
and in connection with the closing of our private placement of Series E Preferred Stock and Warrants, we issued to Autotelic Inc.
an aggregate of 162.59 shares of Series E 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 the MSA.



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. Advances made under
the Line Letter accrued interest at the rate of five percent (5%) per annum, were evidenced by the Demand Promissory Note issued
to Autotelic Inc., and were due and payable upon demand by Autotelic Inc. The unpaid principal balance of the line of credit,
together with accrued and unpaid interest thereon, converted into shares of our Series E Convertible Preferred Stock and Warrants
to purchase shares of common stock upon the closing of our private placement on April 16, 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.





77







Arrangements
with LipoMedics



On
February 6, 2017, we entered into a License Agreement with LipoMedics, Inc. pursuant to which, among other things, we provided
to LipoMedics a license to our SMARTICLES platform for the delivery of nanoparticles including small molecules, peptides, proteins
and biologics. On the same date, we also entered into a Stock Purchase Agreement with LipoMedics pursuant to which we issued to
LipoMedics an aggregate of 86,206 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.



Arrangements
with Oncotelic



On
July 17, 2017, we entered into a License Agreement with 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, we could
receive up to $90 million in success-based milestones based on commercial sales of licensed products.



Arrangements
with Autotelic BIO



On
January 11, 2018, we entered into a binding agreement with Autotelic BIO (“ATB”) pursuant to which, among other things,
and subject to the satisfaction of certain conditions on or prior to January 15, 2019, we shall grant to ATB 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 be entered into between the parties. The conditions to the grant of the license include,
without limitation, that: (i) ATB shall obtain funding in a certain specified amount (the “Fundraising”); or (ii)
ATB shall obtain a co-development and licensing deal with other third-party pharmaceutical companies with respect to 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.



Transactions
with Larn Hwang, Ph.D.



Dr.
Hwang, our Chief Scientific Officer, also serves as the Chief Scientific Officer of Autotelic Inc., which entity owned approximately
5.9% of our issued and outstanding shares of common stock immediately following the completion of the Merger. Further, Marina
and Autotelic Inc. are parties to the Master Services Agreement dated November 15, 2016 that was entered into in connection with
the Merger Agreement, and on April 4, 2017 we entered into a Line Letter with Autotelic Inc. for an unsecured line of credit in
an amount not to exceed $500,000 (the outstanding principal balance of which line of credit, plus accrued and unpaid interest
thereon, converted into shares of Series E Preferred Stock and Warrants upon the closing of our private placement on April 16,
2018). Dr. Hwang is also the Chief Scientific Officer of Oncotelic, with which entity we entered into a License Agreement dated
July 17, 2017. Each of the line of credit with Autotelic Inc., the Master Services Agreement and the Oncotelic License Agreement
are described immediately above.





78







Transactions
with Mihir Munsif



Each
of Mr. Munsif, our Chief Operating Officer, and Autotelic Inc., of which entity Mr. Munsif serves as Senior Vice President, owned
approximately 5.9% of our issued and outstanding shares of common stock immediately following the completion of the Merger. In
addition, Marina and Autotelic Inc. are parties to the Master Services Agreement dated November 15, 2016 that was entered into
in connection with the Merger Agreement, and on April 4, 2017 we entered into a Line Letter with Autotelic Inc. for an unsecured
line of credit in an amount not to exceed $500,000 (the outstanding principal balance of which line of credit, plus accrued and
unpaid interest thereon, converted into shares of Series E Preferred Stock and Warrants upon the closing of our private placement
on April 16, 2018), each of which is described above. In addition, on February 6, 2017, we entered into a License Agreement and
a Stock Purchase Agreement with LipoMedics, of which entity Mr. Munsif serves as Senior Vice President of Portfolio Management,
which agreements are described above.



Related
Party Transactions Regarding IThenaPharma



IThenaPharma
had entered into a Master Services Agreement (“MSA”) with a related party, Autotelic Inc., effective January 1, 2015.
Prior to the Merger, Autotelic Inc. owned less than 10% of IThenaPharma. Pursuant to the MSA, Autotelic Inc. provided business
functions and services to IThenaPharma, and in consideration for such functions and services, Autotelic Inc. charged IThenaPharma
for 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 IThenaPharma.



As
per the MSA, IThenaPharma paid Autotelic Inc. cash in an amount equal to the actual labor cost, plus warrants for shares of IThenaPharma’s
common stock with a strike price equal to the fair market value of IThenaPharma’s common stock at the time said warrants
are issued (calculated based on the Black-Scholes model). IThenaPharma also paid Autotelic Inc. for the services provided by third
party contractors plus a 20% mark up.



In
accordance with the MSA, Autotelic Inc. billed IThenaPharma for personnel and service expenses Autotelic Inc. incurred on behalf
of IThenaPharma. Personnel costs charged by Autotelic Inc. were $166,550 and $236,594 for the years ended December 31, 2016 and
2015, respectively.



For
the years ended December 31, 2016 and 2015, Autotelic Inc. billed IThenaPharma a total of $344,563 and $332,866, respectively.
Of the total expenses billed by Autotelic Inc. for such years, $232,610 and $278,716 was paid in cash, $83,166 and $59,525 was
recorded as due to related party, and IThenaPharma issued warrants for the remaining amount due of $47,791 and $36,470, respectively.



In
December 2015, IThenaPharma issued to Autotelic Inc. warrants to purchase up to 47,374, 40,132 and 30,214 shares of IThenaPharma
common stock with a strike price at $2.76 per share, which represented a 100% markup of the personnel service from January 1 to
March 31, 2015, April 1 to June 30, 2015, and July 1 to September 30, 2015, respectively. In February 2016, IThenaPharma issued
to Autotelic Inc. warrants to purchase up to 21,453 shares of IThenaPharma common stock with a strike price at $2.76 per share,
which represented a 100% markup of the personnel service from October 1 to December 31, 2015. As noted below, the warrants were
cancelled as part of the acquisition by Autotelic Inc. from IThenaPharma of the technology asset (IT-101).



In
July 2016, IThenaPharma 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, 2018. As noted
below, the notes were assumed by Autotelic Inc. on November 15, 2016 as part of its acquisition from IThenaPharma of the technology
asset (IT-101).



On
November 15, 2016, simultaneously with the Merger, Autotelic Inc. acquired a technology asset (IT-101) from IThenaPharma, and
IThenaPharma’s investment of $479 in a foreign entity from IThenaPharma. In exchange for these assets, Autotelic Inc. agreed
to cancel all of the warrants to purchase shares of IThenaPharma common stock that it held as a result of the MSA, it received
all of IThenaPharma’s then cash balance as payment against the liabilities and it agreed to assume the remaining debts and
liabilities of IThenaPharma, including accounts payable of $71,560, accrued expenses of $11,470, amounts due to related party
of $5,375, other liabilities of $118,759, a convertible note payable of $50,000, and accrued interest payable of $567.





79







Isaac
Blech Investment / Board Appointment / Option Grant



On
November 22, 2017, we entered into a Note Purchase Agreement with a trust affiliated with Mr. Isaac Blech (the “Purchaser”)
pursuant to which we issued to the Purchaser a secured convertible promissory note in the aggregate principal amount of $500,000
(“Note”). The Note became due and payable on March 31, 2018. The unpaid principal balance of the Note, together with
accrued and unpaid interest thereon, automatically converted into 103.7 shares of Series E Preferred Stock and Warrants to purchase
up to 777,750 shares of our common stock upon the closing of our private placement on April 16, 2018. As a result of the conversion
of the Note, all of our obligations to the Purchaser under the Note have been satisfied and the Note is no longer outstanding.
Mr. Blech became a member of our Board of Directors on November 22, 2017.



Independence
of the Board of Directors



The
Board of Directors utilizes NASDAQ’s standards for determining the independence of its members. In applying these standards,
the Board considers commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, among
others, in assessing the independence of directors, and must disclose any basis for determining that a relationship is not material.
The Board has determined that five out of seven of its current members, namely Isaac Blech, Tim Boris, Philippe Calais, Ph.D.,
Philip C. Ranker and Donald A. Williams, are independent directors within the meaning of the NASDAQ independence standards. In
making these independence determinations, the Board did not exclude from consideration as immaterial any relationship potentially
compromising the independence of any of the above directors.



ITEM
14. Principal Accounting Fees and Services.



We
have appointed Squar Milner LLP (“Squar”) to serve as our independent registered public accounting firm for the fiscal
year ending December 31, 2018. Squar has served as our independent registered public accounting firm since December 8, 2016. Squar
had also served as the independent registered public accounting firm for IThenaPharma since October 2015. Prior to December 8,
2016, Wolf & Company, P.C. (“Wolf”) served as the independent registered public accounting firm for Marina Biotech.



Total
fees to our independent registered public accounting firms for the years ended December 31, 2017 and 2016 were $0.182 million
and $0.113 million, respectively, of which (x) $0.182 million was due to Squar during 2017; and (y) $0.04 million was due to Squar
during 2016 and $0.068 was paid to Wolf during 2016. The foregoing amounts were comprised of the amounts set forth below.



Audit
Fees. The aggregate fees for professional services rendered in connection with (i) the audit of our annual financial statements,
(ii) the review of the financial statements included in our Quarterly Reports on Form 10-Q for the quarters ended March 31, June
30 and September 30, (iii) consents and comfort letters issued in connection with equity offerings and (iv) services provided
in connection with statutory and regulatory filings or engagements were $0.18 million for the year ended December 31, 2017 and
$0.108 million for the year ended December 31, 2016, of which (x) $0.016 million was paid to Squar during 2017; and (y) $0.04
million was paid to Squar during 2016 and $0.068 was paid to Wolf during 2016.



Audit-Related
Fees.The aggregate fees related to audits that are not included in the above were $0.002 million paid to Squar for the year
ended December 31, 2017.



Tax
Fees. We did not incur any fees to our independent registered public accounting firm for professional services rendered in
connection with tax compliance, tax planning and federal and state tax advice for the years ended December 31, 2017 and December
31, 2016, other than $0.005 million incurred by IThenaPharma to Squar during 2016.



All
Other Fees. We did not incur any such other fees to our independent registered public accounting firm for the years ended
December 31, 2017 and December 31, 2016.



Pre-Approval
Policies and Procedures



The
Audit Committee has the authority to appoint or replace our independent registered public accounting firm (subject, if applicable,
to stockholder ratification). The Audit Committee is also responsible for the compensation and oversight of the work of the independent
registered public accounting firm (including resolution of disagreements between management and the independent registered public
accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent
registered public accounting firm was engaged by, and reports directly to, the Audit Committee.



The
Audit Committee pre-approves all audit services and permitted non-audit services (including the fees and terms thereof) to be
performed for us by our independent registered public accounting firm, subject to the de minimis exceptions for non-audit
services described in Section 10A(i)(1)(B) of the Exchange Act and Rule 2-01(c)(7)(i)(C) of Regulation S-X, provided that all
such excepted services are subsequently approved prior to the completion of the audit. In the event pre-approval for such audit
services and permitted non-audit services cannot be obtained as a result of inherent time constraints in the matter for which
such services are required, the Chairman of the Audit Committee had been granted the authority to pre-approve such services, provided
that the estimated cost of such services on each such occasion does not exceed $15,000, and the Chairman of the Audit Committee
reported for ratification such pre-approval to the Audit Committee at its next scheduled meeting. We have complied with the procedures
set forth above, and the Audit Committee has otherwise complied with the provisions of its charter.



80







PART
IV



ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES



EXHIBIT
INDEX



|Exhibit
    No. |  | Description                                                                                                                                                                                                                                                                                                                                            
|--------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1             |  | Agreement
    and Plan of Merger dated as of March 31, 2010 by and among the Registrant, Cequent Pharmaceuticals, Inc., Calais Acquisition
    Corp. and a representative of the stockholders of Cequent Pharmaceuticals, Inc. (filed as Exhibit 2.1 to our Current Report
    on Form 8-K dated March 31, 2010, and incorporated herein by reference).
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|2.2             |  | Agreement
    and Plan of Merger, dated as of November 15, 2016, by and among the Registrant, IThena Acquisition Corporation, IThenaPharma
    Inc. and Vuong Trieu as the representative of IThenaPharma Inc. (filed as Exhibit 2.1 to our Current Report on Form 8-K dated
    November 15, 2016, and incorporated herein by reference).             
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.1             |  | Restated
    Certificate of Incorporation of the Registrant dated July 20, 2005 (filed as Exhibit 3.1 to our Current Report on Form 8-K
    dated July 20, 2005, and incorporated herein by reference).                                                                                                                                                
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.2             |  | Certificate
    of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated June 10, 2008 (filed as Exhibit
    3.1 to our Current Report on Form 8-K dated June 10, 2008, and incorporated herein by reference).                                                                                                   
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.3             |  | Certificate
    of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated July 21, 2010 (filed as Exhibit
    3.1 to our Current Report on Form 8-K dated July 21, 2010, and incorporated herein by reference).                                                                                                   
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.4             |  | Certificate
    of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated July 21, 2010 (filed as Exhibit
    3.1 to our Current Report on Form 8-K dated July 21, 2010, and incorporated herein by reference).                                                                                                   
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.5             |  | Certificate
    of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated July 18, 2011 (filed as Exhibit
    3.1 to our Current Report on Form 8-K dated July 14, 2011, and incorporated herein by reference).                                                                                                   
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.6             |  | Certificate
    of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated December 22, 2011 (filed as
    Exhibit 3.1 to our Current Report on Form 8-K dated December 22, 2011, and incorporated herein by reference).                                                                                           
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.7             |  | Certificate
    of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated August 1, 2017 (filed as Exhibit
    3.1 to our Current Report on Form 8-K dated August 1, 2017, and incorporated herein by reference).                                                                                                 
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.8             |  | Amended
    and Restated Bylaws of the Registrant dated August 21, 2012 (filed as Exhibit 3.7 to our Annual Report on Form 10-K for the
    fiscal year ended December 31, 2011, and incorporated herein by reference).                                                                                                                                
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.9             |  | Certificate
    of Designation, Rights and Preferences of Series A Junior Participating Preferred Stock dated January 17, 2007 (filed as Exhibit
    3.1 to our Current Report on Form 8-K dated January 19, 2007, and incorporated herein by reference).                                                                                              
|                |  |                                                                                                                                                                                                                                                                                                                                                        
|3.10            |  | Amended
    Designation, Rights, and Preferences of Series A Junior Participating Preferred Stock, dated June 10, 2008 (filed as Exhibit
    3.2 to our Current Report on Form 8-K dated June 10, 2008, and incorporated herein by reference).                                                                                                         



81







|3.11 |  | Certificate
    of Designations or Preferences, Rights and Limitations of Series B Preferred Stock dated December 22, 2011 (filed as Exhibit
    3.1 to our Current Report on Form 8-K dated December 22, 2011, and incorporated herein by reference).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                                                                                       
|3.12 |  | Certificate
    of Designation of Rights, Preferences and Privileges of Series C Convertible Preferred Stock (filed as Exhibit 3.1 to our
    Current Report on Form 8-K dated March 7, 2014, and incorporated herein by reference).                  
|     |  |                                                                                                                                                                                                                                                       
|3.13 |  | Certificate
    of Designation of Rights, Preferences and Privileges of Series D Convertible Preferred Stock (filed as Exhibit 3.1 to our
    Current Report on Form 8-K dated August 5, 2015, and incorporated herein by reference).                 



|4.1  |  | Form
    of Warrant Certificate issued by the Registrant in February 2011 (filed as Exhibit 4.1 to our Current Report on Form 8-K dated
    February 10, 2011, and incorporated herein by reference).                                                                                                                                                       
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.2  |  | Form
    of Warrant Agreement by and between the Registrant and American Stock Transfer & Trust Company, LLC (filed as Exhibit
    4.2 to our Current Report on Form 8-K dated February 10, 2011, and incorporated herein by reference).                                                                                                                    
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.3  |  | Form
    of Series A Warrant (Common Stock Purchase Warrant) issued to the investors in the Registrant’s underwritten offering
    of securities that closed in May 2011 (filed as Exhibit 4.13 to Amendment No. 2 to our Registration Statement on Form S-1
    (No. 333-173108) filed with the SEC on May 10, 2011, and incorporated herein by reference).
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.4  |  | Form
    of Common Stock Purchase Warrant issued by the Registrant to the holders of the 15% Secured Promissory Notes (filed as Exhibit
    4.2 to our Current Report on Form 8-K dated February 10, 2012, and incorporated herein by reference).                                                                                                           
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.5  |  | Form
    of Common Stock Purchase Warrant issued by the Registrant in March 2012 (filed as Exhibit 4.1 to our Current Report on Form
    8-K dated March 19, 2012, and incorporated herein by reference).                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.6  |  | Form
    of Common Stock Purchase Warrant issued by the Registrant in March 2014 (filed as Exhibit 4.1 to our Current Report on Form
    8-K dated March 7, 2014, and incorporated herein by reference).                                                                                                                                                    
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.7  |  | Form
    of Common Stock Purchase Warrant issued by the Registrant in August 7, 2015 (filed as Exhibit 4.1 to our Current Report on
    Form 8-K dated August 5, 2015, and incorporated herein by reference).                                                                                                                                               
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.8  |  | Form
    of 12% Promissory Note issued by the Registrant in June 2016 (filed as Exhibit 4.1 to our Current Report on Form 8-K dated
    June 20, 2016, and incorporated herein by reference).                                                                                                                                                               
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.9  |  | Form
    of Demand Promissory Note issued by the Registrant to Vuong Trieu on November 15, 2016 (filed as Exhibit 4.1 to our Current
    Report on Form 8-K dated November 15, 2016, and incorporated herein by reference).                                                                                                                                 
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.10 |  | Form
    of Demand Promissory Note issued by the Registrant to Autotelic Inc. on April 4, 2017 (filed as Exhibit 4.1 to our Current
    Report on Form 8-K dated April 4, 2017, and incorporated herein by reference).                                                                                                                                      
|     |  |                                                                                                                                                                                                                                                                                                                                                             
|4.11 |  | Form
    of Convertible Promissory Note issued by the Registrant to select accredited investors in June 2017 (filed as Exhibit 4.1
    to our Current Report on Form 8-K dated June 5, 2017, and incorporated herein by reference).                                                                                                                         



82







|4.12 |  | Form
    of Secured Convertible Promissory Note issued by the Registrant to a trust affiliated with Isaac Blech (filed as Exhibit 4.1
    to our Current Report on Form 8-K dated November 22, 2017, and incorporated herein by reference).                                     
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                                                                                                                 
|4.13 |  | Amendment
    to Secured Convertible Promissory Note, dated December 22, 2017, by and between the Registrant and a trust affiliated with
    Isaac Blech (filed as Exhibit 4.1 to our Current Report on Form 8-K dated December 22, 2017, and incorporated herein by reference).
|     |  |                                                                                                                                                                                                                                                                                 
|4.14 |  | Stock
    Option Agreement dated as of November 22, 2017 by and between the Registrant and Isaac Blech (filed as Exhibit 4.2 to our
    Current Report on Form 8-K dated November 22, 2017, and incorporated herein by reference).**                                            



|10.9 |  | The
    Registrant’s 2008 Stock Incentive Plan (filed as Appendix A to our Definitive Proxy Statement on Schedule 14A filed
    on April 29, 2008, and incorporated herein by reference).**                                                                                                                                                                                                                 
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.1 |  | License
    Agreement dated as of March 20, 2009 by and between Novartis Institutes for BioMedical Research, Inc. and the Registrant (filed
    as Exhibit 10.3 to our Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2009, and incorporated herein by reference).
    (1)                                                                                                                 
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.2 |  | License
    Agreement, effective as of December 22, 2011, by and between the Registrant and Mirna Therapeutics, Inc. (filed as Exhibit
    10.3 to our Current Report on Form 8-K/A filed on February 22, 2012, and incorporated herein by reference). (1)                                                                                                                                                  
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.3 |  | Note
    and Warrant Purchase Agreement, dated as of February 10, 2012, among the Registrant, Cequent Pharmaceuticals, Inc., MDRNA
    Research, Inc., and the purchasers identified in the signature pages thereto (filed as Exhibit 10.1 to our Current Report
    on Form 8-K dated February 10, 2012, and incorporated herein by reference).                                                            
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.4 |  | First
    Amendment to Note and Warrant Purchase Agreement and Secured Promissory Notes, dated April 30, 2012, among the Registrant,
    Cequent Pharmaceuticals, Inc., MDRNA Research, Inc., and the purchasers identified on the signature pages thereto (filed as
    Exhibit 10.80 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and incorporated herein by reference).
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.5 |  | Second
    Amendment to Note and Warrant Purchase Agreement and Secured Promissory Notes, dated May 31, 2012, among the Registrant, Cequent
    Pharmaceuticals, Inc., MDRNA Research, Inc., and the purchasers identified on the signature pages thereto (filed as Exhibit
    10.81 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and incorporated herein by reference). 
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.6 |  | Third
    Amendment to Note and Warrant Purchase Agreement and Secured Promissory Notes, dated August 3, 2012, among the Registrant,
    Cequent Pharmaceuticals, Inc., MDRNA Research, Inc., and the purchasers identified on the signature pages thereto (filed as
    Exhibit 10.1 to our Current Report on Form 8-K dated August 2, 2012, and incorporated herein by reference).                        



|10.7 |  | Fourth
    Amendment to Note and Warrant Purchase Agreement and Secured Promissory Notes, dated October 4, 2012, among the Registrant,
    Cequent Pharmaceuticals, Inc., MDRNA Research, Inc., and the purchasers identified on the signature pages thereto (filed as
    Exhibit 10.1 to our Current Report on Form 8-K dated October 4, 2012, and incorporated herein by reference). 
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                                                                                                                                                                                                                         
|10.8 |  | Fifth
    Amendment to Note and Warrant Purchase Agreement and Secured Promissory Notes, dated February 7, 2013, among the Registrant,
    Cequent Pharmaceuticals, Inc., MDRNA Research, Inc., and the purchasers identified on the signature pages thereto (filed as
    Exhibit 10.1 to our Current Report on Form 8-K dated February 7, 2013, and incorporated herein by reference).



83







|10.9  |  | Sixth
    Amendment to Note and Warrant Purchase Agreement and Secured Promissory Notes, dated August 9, 2013, among the Registrant,
    Cequent Pharmaceuticals, Inc., MDRNA Research, Inc., and the purchasers identified on the signature pages thereto (filed as
    Exhibit 10.43 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and incorporated herein by reference).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.10 |  | Term
    Sheet for Convertible Preferred Stock Financing (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K
    dated February 23, 2014, and incorporated herein by reference).                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.11 |  | Securities
    Purchase Agreement, dated as of March 7, 2014, between and among the Registrant and each purchaser identified on the signature
    pages thereto (filed as Exhibit 10.1 to our Current Report on Form 8-K dated March 7, 2014, and incorporated herein by reference).                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.12 |  | 2014
    Long-Term Incentive Plan of the Registrant (filed as Exhibit 10.2 to our Current Report on Form 8-K dated September 15, 2014,
    and incorporated herein by reference).**                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.13 |  | Amendment
    No. 2, dated May 14, 2015, to that certain License Agreement, effective as of December 22, 2011, by and between the Registrant
    and Mirna Therapeutics, Inc. (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on May 14, 2015, and incorporated
    herein by reference).                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|10.14 |  | Securities
    Purchase Agreement, dated as of August 5, 2015, between and among the Registrant and each purchaser identified on the signature
    pages thereto (filed as Exhibit 10.1 to our Current Report on Form 8-K dated August 5, 2015, and incorporated herein by reference).                                                                                                                      



|10.15 |  | Note
    Purchase Agreement, dated as of June 20, 2016, by and among the Registrant and each purchaser identified on the signature
    pages thereto (filed as Exhibit 10.1 to our Current Report on Form 8-K dated June 20, 2016, and incorporated herein by reference).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                          
|10.16 |  | Master
    Services Agreement, dated as of November 15, 2016, by and between the Registrant and Autotelic Inc. (filed as Exhibit 10.1
    to our Current Report on Form 8-K dated November 15, 2016, and incorporated herein by reference).                              
|      |  |                                                                                                                                                                                                                                                                          
|10.17 |  | Line
    Letter dated November 15, 2016 from Vuong Trieu to the Registrant (filed as Exhibit 10.2 to our Current Report on Form 8-K
    dated November 15, 2016, and incorporated herein by reference).                                                                  
|      |  |                                                                                                                                                                                                                                                                          
|10.18 |  | Employment
    Letter dated February 2, 2017 between the Registrant and Joseph W. Ramelli (filed as Exhibit 10.1 to our Current Report on
    Form 8-K dated February 2, 2017, and incorporated herein by reference).**                                                  
|      |  |                                                                                                                                                                                                                                                                          
|10.19 |  | Stock
    Purchase Agreement dated as of February 6, 2017 by and between the Registrant and Lipomedics Inc. (filed as Exhibit 10.1 to
    our Current Report on Form 8-K dated February 6, 2017, and incorporated by reference herein).                                  
|      |  |                                                                                                                                                                                                                                                                          
|10.20 |  | Employment
    Letter dated February 13, 2017 between the Registrant and Larn Hwang, Ph.D. (filed as Exhibit 10.1 to our Current Report on
    Form 8-K dated February 8, 2017, and incorporated by reference herein).**                                                 
|      |  |                                                                                                                                                                                                                                                                          
|10.21 |  | Employment
    Letter dated February 13, 2017 between the Registrant and Mihir Munsif (filed as Exhibit 10.2 to our Current Report on Form
    8-K dated February 8, 2017, and incorporated by reference herein).**                                                      
|      |  |                                                                                                                                                                                                                                                                          
|10.22 |  | Line
    Letter dated April 4, 2017 from Autotelic Inc. to the Registrant (filed as Exhibit 10.1 to our Current Report on Form 8-K
    dated April 4, 2017, and incorporated herein by reference).                                                                       
|      |  |                                                                                                                                                                                                                                                                          
|10.23 |  | License
    Agreement dated February 6, 2017 between the Registrant and Lipomedics Inc. (filed as Exhibit 10.5 to our Quarterly Report
    on Form 10-Q for the fiscal quarter ended March 31, 2017, and incorporated herein by reference).(1)                           



84







|10.24 |  | Asset
    Purchase Agreement dated as of June 5, 2017 by and between the Registrant and Symplmed Pharmaceuticals LLC (filed as Exhibit
    10.1 to our Current Report on Form 8-K dated June 5, 2017, and incorporated herein by reference).                                                                                                                                                                     
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.25 |  | Form
    of Note Purchase Agreement by and among the Registrant and the lenders named on the signature pages thereto (filed as Exhibit
    10.2 to our Current Report on Form 8-K dated June 5, 2017, and incorporated herein by reference).                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.26 |  | Employment
    Offer Letter dated June 5, 2017 between the Registrant and Erik Emerson (filed as Exhibit 10.1 to our Current Report on Form
    8-K dated June 22, 2017, and incorporated herein by reference).**                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.27 |  | Amendment
    to Employment Offer Letter between the Registrant and Erik Emerson (filed as Exhibit 10.2 to our Current Report on Form 8-K
    dated June 22, 2017, and incorporated herein by reference).**                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.28 |  | Amendment
    Agreement, dated July 3, 2017, by and among the Registrant and the lenders signatory thereto (filed as Exhibit 10.1 to our
    Current Report on Form 8-K dated July 3, 2017, and incorporated herein by reference).                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.29 |  | Asset
    Purchase Agreement dated as of July 21, 2017 by and among the Registrant, Symplmed Pharmaceuticals, LLC and Symplmed Technologies,
    LLC (filed as Exhibit 10.1 to our Current Report on Form 8-K dated July 21, 2017, and incorporated herein by reference).                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.30 |  | Intellectual
    Property Purchase Agreement dated as of September 8, 2017 by and between the Registrant and Novosom Verwaltungs GmbH (filed
    as Exhibit 10.1 to our Current Report on Form 8-K filed on September 14, 2017, an incorporated herein by reference).                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.31 |  | License
    Agreement dated July 17, 2017 between the Registrant and Oncotelic Inc. (filed as Exhibit 10.4 to our Quarterly Report on
    Form 10-Q/A for the fiscal quarter ended September 30, 2017, and incorporated herein by reference). (1   )                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.32 |  | Amendment
    Agreement, dated August 3, 2017, by and among the Registrant and the lenders signatory thereto (filed as Exhibit 10.5 to our
    Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2017, and incorporated herein by reference).                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.33 |  | Employment
    Offer Letter dated October 2, 2017 between the Registrant and Amit Shah (filed as Exhibit 10.1 to our Current Report on Form
    8-K dated October 2, 2017, and incorporated herein by reference).**                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.34 |  | Employment
    Offer Letter dated October 12, 2017 between the Registrant and Peter D. Weinstein (filed as Exhibit 10.1 to our Current Report
    on Form 8-K dated October 12, 2017, and incorporated herein by reference).**                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.35 |  | Note
    Purchase Agreement dated as of November 22, 2017 by and between the Registrant and River Charitable Remainder Unit Trust,
    FBO Isaac Blech, July 20, 1987, Isaac Blech Trustee (filed as Exhibit 10.1 to our Current Report on Form 8-K dated November
    22, 2017, and incorporated herein by reference).                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.36 |  | Security
    Agreement, dated as of November 22, 2017, among the Registrant, IThenaPharma Inc., Cequent Pharmaceuticals, Inc., MDRNA Research,
    Inc. and River Charitable Remainder Unit Trust, FBO Isaac Blech, July 20, 1987, Isaac Blech Trustee (filed as Exhibit 10.2
    to our Current Report on Form 8-K dated November 22, 2017, and incorporated herein by reference).                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.37 |  | Intellectual
    Property Security Agreement, dated as of November 22, 2017, by the Registrant, IThenaPharma Inc., Cequent Pharmaceuticals,
    Inc. and MDRNA Research, Inc. in favor of River Charitable Remainder Unit Trust, FBO Isaac Blech, July 20, 1987, Isaac Blech
    Trustee (filed as Exhibit 10.3 to our Current Report on Form 8-K dated November 22, 2017, and incorporated by reference herein).



85







|21.1   |  | Subsidiaries
    of the Registrant. (2)                                                                                                                               
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                       
|23.1   |  | Consent of Squar Milner LLP, independent registered public accounting firm. (2)                                                                                       
|       |  |                                                                                                                                                                       
|31.1   |  | Certification
    of our Principal Executive Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.
    (2)                
|       |  |                                                                                                                                                                       
|31.2   |  | Certification
    of our Principal Financial Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.
    (2)                
|       |  |                                                                                                                                                                       
|32.1   |  | Certification
    of our Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002. (3)
|       |  |                                                                                                                                                                       
|32.2   |  | Certification
    of our Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002. (3)
|       |  |                                                                                                                                                                       
|101INS |  | XBRL
    Instance Document (#)                                                                                                                                        
|       |  |                                                                                                                                                                       
|101SCH |  | XBRL
    Taxonomy Extension Schema Document (#)                                                                                                                       
|       |  |                                                                                                                                                                       
|101CAL |  | XBRL
    Taxonomy Extension Calculation Linkbase Document (#)                                                                                                         
|       |  |                                                                                                                                                                       
|101DEF |  | XBRL
    Taxonomy Extension Definition Linkbase Document (#)                                                                                                          
|       |  |                                                                                                                                                                       
|101LAB |  | XBRL
    Taxonomy Extension Label Linkbase Document (#)                                                                                                               
|       |  |                                                                                                                                                                       
|101PRE |  | XBRL
    Taxonomy Extension Presentation Linkbase Document (#)                                                                                                        



|(1) | Portions
    of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange
    Act of 1934, amended, and the omitted material has been separately filed with the SEC.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Filed
    herewith.                                                                                                                                                                                                                   
|(3) | Furnished
    herewith.                                                                                                                                                                                                               
|(4) | To
    be filed by amendment.                                                                                                                                                                                                         
|#   | Previously
    filed or furnished.                                                                                                                                                                                                    
|**  | Indicates
    management contract or compensatory plan or arrangement.                                                                                                                                                                



(b)
Financial Statement Schedules. All financial statement schedules are omitted because they are not applicable or not required or
because the required information is included in the financial statements or notes thereto.



86







SIGNATURES



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused
this Annual Report on Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized, on April  30 2018.



| | MARINA
    BIOTECH, INC.
| | ------------------------
| |                         
| | By:                     
| |                         
| |                         



Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K/A has been signed by
the following persons on behalf of the Registrant and in the capacities indicated on April 30, 2018.



|Signature                         |  | Title                            
|--------------------------------- |  | ---------------------------------
|                                  |  |                                  
|/s/
    Vuong Trieu, Ph.D.        |  | Executive
    Chairman           
|Vuong
    Trieu, Ph.D.            |  | (Principal
    Executive Officer)
|                                  |  |                                  
|/s/
    Joseph Ramelli            |  | Chief
    Executive Officer      
|Joseph
    Ramelli                |  | (Principal
    Executive Officer)
|                                  |  |                                  
|/s/
    Amit Shah                 |  | Chief
    Financial Officer      
|Amit
    Shah                     |  | (Principal
    Financial Officer)
|                                  |  |                                  
|/s/
    Isaac Blech               |  | Director                         
|Isaac
    Blech                   |  |                                  
|                                  |  |                                  
|                                  |  | Director                         
|Tim Boris                         |  |                                  
|                                  |  |                                  
|/s/
    Philippe P. Calais, Ph.D. |  | Director                         
|Philippe
    P. Calais, Ph.D.     |  |                                  
|                                  |  |                                  
|/s/ Erik
    Emerson              |  | Director                         
|Erik Emerson                      |  |                                  
|                                  |  |                                  
|/s/
    Philip C. Ranker          |  | Director                         
|Philip
    C. Ranker              |  |                                  
|                                  |  |                                  
|/s/
    Donald A. Williams        |  | Director                         
|Donald
    A. Williams            |  |                                  



87







ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



MARINA
BIOTECH, INC.

CONSOLIDATED
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 AND 2016



TABLE
OF CONTENTS



|                                                            | Page
|----------------------------------------------------------- | ----
|                                                            |     
|REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | F-2 
|                                                            |     
|CONSOLIDATED
    FINANCIAL STATEMENTS:                      |     
|                                                            |     
|Consolidated
    Balance Sheets                             | F-3 
|                                                            |     
|Consolidated
    Statements of Operations                   | F-4 
|                                                            |     
|Consolidated
    Statements of Stockholders’ Equity         | F-5 
|                                                            |     
|Consolidated
    Statements of Cash Flows                   | F-6 
|                                                            |     
|Notes
    to Consolidated Financial Statements              | F-7 



F-1







REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To
the Stockholders and the Board of Directors of Marina Biotech, Inc.



Opinion
on the Financial Statements



We
have audited the accompanying consolidated balance sheets of Marina Biotech, Inc. and its subsidiaries (the Company) as of December
31, 2017 and 2016, the related consolidated statements of operations, stockholders’ equity and cash flows for the years
then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion,
the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017
and 2016, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.



Going
Concern Uncertainty



The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 2 to the financial statements, the Company has suffered recurring losses from operations and negative cash flows from
operations and has had recurring negative working capital. This raises substantial doubt about the Company’s ability to
continue as a going concern. Management’s plans in regard to these matters also are described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this uncertainty.



Basis
for Opinion



These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company
in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.



We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.



Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.



/s/
Squar Milner LLP



We
have served as the Company’s auditor since 2015.



Los
Angeles, California

April
17, 2018



F-2







MARINA
BIOTECH, INC.

CONSOLIDATED
BALANCE SHEETS





|                                                                                                                                                                                                                                |  | December
    31, 2017 |            |   | December
    31, 2016 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ---------- | - | --------------------- | -
|ASSETS                                                                                                                                                                                                                          |  |                       |            |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Current assets                                                                                                                                                                                                                  |  |                       |            |   |                       |  
|Cash                                                                                                                                                                                                                            |  | $                     | 106,378    |   |                       | $
|Prepaid expenses
    and other assets                                                                                                                                                                                           |  |                       | 18,565     |   |                       |  
|Total current assets                                                                                                                                                                                                            |  |                       | 124,943    |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Intangible assets, net of amortization                                                                                                                                                                                          |  |                       | 2,555,974  |   |                       |  
|Goodwill                                                                                                                                                                                                                        |  |                       | 3,502,829  |   |                       |  
|                                                                                                                                                                                                                                |  |                       | 6,058,803  |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Total assets                                                                                                                                                                                                                    |  | $                     | 6,183,746  |   |                       | $
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|LIABILITIES
    AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                        |  |                       |            |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Current liabilities                                                                                                                                                                                                             |  |                       |            |   |                       |  
|Accounts payable                                                                                                                                                                                                                |  | $                     | 1,033,353  |   |                       | $
|Accrued expenses                                                                                                                                                                                                                |  |                       | 1,139,369  |   |                       |  
|Due to related party                                                                                                                                                                                                            |  |                       | 1,336,518  |   |                       |  
|Accrued fee payable                                                                                                                                                                                                             |  |                       | 320,000    |   |                       |  
|Notes payable                                                                                                                                                                                                                   |  |                       | 444,223    |   |                       |  
|Notes payable - related parties                                                                                                                                                                                                 |  |                       | 1,462,040  |   |                       |  
|Fair value of
    liabilities for price adjustable warrants (Note 1)                                                                                                                                                            |  |                       | -          |   |                       |  
|Total current liabilities                                                                                                                                                                                                       |  |                       | 5,735,503  |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Commitments and contingencies (Note 9)                                                                                                                                                                                          |  |                       |            |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Stockholders’ equity                                                                                                                                                                                                            |  |                       |            |   |                       |  
|Preferred stock, $0.01 par value; 100,000 shares
    authorized                                                                                                                                                                 |  |                       |            |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Series C convertible preferred stock, $0.01
    par value; $5,100 liquidation preference; 1,200 shares authorized; 750 and 1,020 shares issued and outstanding as of September
    30, 2017 and December 31, 2016, respectively |  |                       | -          |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Series D convertible preferred stock, $0.01
    par value; $300 liquidation preference; 220 shares authorized; 60 shares issued and outstanding as of December 31, 2017 and
    December 31, 2016, respectively                 |  |                       | -          |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Common stock, $0.006 par value; 180,000,000
    shares authorized, 10,521,728 and 8,977,138 shares issued and outstanding as of December 31, 2017 and 2016, respectively                                                        |  |                       | 63,127     |   |                       |  
|Additional paid-in capital                                                                                                                                                                                                      |  |                       | 8,413,823  |   |                       |  
|Accumulated deficit                                                                                                                                                                                                             |  |                       | (8,028,707 | ) |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Total stockholders’
    equity                                                                                                                                                                                                  |  |                       | 448,243    |   |                       |  
|                                                                                                                                                                                                                                |  |                       |            |   |                       |  
|Total liabilities
    and stockholders’ equity                                                                                                                                                                                  |  | $                     | 6,183,746  |   |                       | $







The
accompanying footnotes are an integral part of these consolidated financial statements.



F-3







MARINA
BIOTECH, INC.

CONSOLIDATED
STATEMENTS OF OPERATIONS



|                                               |  | For
    the Year EndedDecember 31, |           
|---------------------------------------------- |  | ---------------------------------- | ----------
|                                               |  | 2017                               |           
|                                               |  |                                    |           
|Operating
    expenses                         |  |                                    |           
|                                               |  |                                    |           
|Research
    and development                   |  |                                    | 907,493   
|General
    and administrative                 |  |                                    | 4,732,221 
|Amortization                                   |  |                                    | 450,903   
|Total
    operating expenses                   |  |                                    | 6,090,617 
|                                               |  |                                    |           
|Loss
    from operations                       |  |                                    | (6,090,617
|                                               |  |                                    |           
|Other
    expense                              |  |                                    |           
|                                               |  |                                    |           
|Interest
    expense                           |  |                                    | (78,890   
|Change
    in fair value liability of warrants |  |                                    | -         
|Amortization
    of debt discount              |  |                                    | (49,041   
|                                               |  |                                    | (127,931  
|                                               |  |                                    |           
|Loss
    before provision for income taxes     |  |                                    | (6,218,548
|                                               |  |                                    |           
|Provision
    for income taxes                 |  |                                    | 800       
|                                               |  |                                    |           
|Net
    loss                                   |  | $                                  | (6,219,348
|                                               |  |                                    |           
|Net
    loss per share – basic and diluted     |  | $                                  | (0.63     
|                                               |  |                                    |           
|Weighted
    average shares outstanding        |  |                                    | 9,836,109 



The
accompanying footnotes are an integral part of these consolidated financial statements.



F-4







MARINA
BIOTECH, INC.

CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ DEFICIENCY









|                                                                                      |  |                  |            |   |               |   |        | Additional  |  |   |           |   |  |       |           
|------------------------------------------------------------------------------------- |  | ---------------- | ---------- | - | ------------- | - | ------ | ----------- |  | - | --------- | - |  | ----- | ----------
|                                                                                      |  | Common
    Stock |            |   | Paid-in       |   |        | Accumulated |  |   |           |  
|                                                                                      |  | Number           |            |   | Par
    Value |   |        | Capital     |  |   | Deficit   |   |  | Total |           
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Balance,
    December 31, 2015                                                        |  |                  | 5,839,283  |   |               | $ | 35,036 |             |  | $ | 1,169,088 |   |  | $     | (1,113,939
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Issuance
    of warrants                                                              |  |                  | -          |   |               |   | –      |             |  |   | 36,470    |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Capital
    contribution from related party                                           |  |                  | -          |   |               |   | –      |             |  |   | 257,252   |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Effect
    of reverse acquisition on November 15, 2016:                               |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Adjustment
    for reverse merger                                                     |  |                  | 3,137,855  |   |               |   | 18,827 |             |  |   | 3,653,173 |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Net
    loss                                                                          |  |                  | –          |   |               |   | –      |             |  |   | –         |   |  |       | (837,143  
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Balance,
    December 31, 2016                                                        |  |                  | 8,977,138  |   |               | $ | 53,863 |             |  | $ | 5,115,983 |   |  | $     | (1,951,082
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Modified
    retrospective adjustment of adoption of new accounting standard (Note 1) |  |                  |            |   |               |   |        |             |  |   |           |   |  | $     | 141,723   
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Sale
    of common stock to related party                                             |  |                  | 86,207     |   |               |   | 517    |             |  |   | 249,483   |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Common
    stock issued for services                                                  |  |                  | 530,058    |   |               |   | 3,180  |             |  |   | 1,400,977 |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Common
    stock issued to settle accounts payable and accrued liabilities            |  |                  | 622,296    |   |               |   | 3,734  |             |  |   | 972,980   |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Return
    of common stock against settlement of note receivable                      |  |                  | (8,725     | ) |               |   | (52    | )           |  |   | (31,352   | ) |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Restricted
    stock issued to officers                                               |  |                  | 70,000     |   |               |   | 420    |             |  |   | 245,580   |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Share
    based compensation                                                          |  |                  | –          |   |               |   | –      |             |  |   | 178,784   |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Warrants
    issued with convertible debt as loan fee                                 |  |                  | –          |   |               |   | –      |             |  |   | 112,210   |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Exercise
    of warrants for common stock                                             |  |                  | 60,944     |   |               |   | 366    |             |  |   | 170,277   |   |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Conversion
    of Series C Preferred to common stock                                  |  |                  | 180,000    |   |               |   | 1,080  |             |  |   | (1,080    | ) |  |       |           
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Effects
    of rounding due to reverse split                                          |  |                  | 3,360      |   |               |   | 19     |             |  |   | (19       | ) |  |       | –         
|                                                                                      |  |                  |            |   |               |   |        |             |  |   |           |   |  |       |           
|Net
    loss                                                                          |  |                  | –          |   |               |   | –      |             |  |   | –         |   |  |       | (6,219,348
|Balance,
    December 31, 2017                                                        |  |                  | 10,521,278 |   |               | $ | 63,127 |             |  | $ | 8,413,823 |   |  | $     | (8,028,707



The
accompanying footnotes are an integral part of these consolidated financial statements.



F-5







MARINA
BIOTECH, INC.

CONSOLIDATED
STATEMENTS OF CASH FLOWS





|                                                                                   |  | For
    the Years Ended December 31, |           
|---------------------------------------------------------------------------------- |  | ------------------------------------ | ----------
|                                                                                   |  | 2017                                 |           
|Cash
    Flows Used in Operating Activities:                                       |  |                                      |           
|                                                                                   |  |                                      |           
|Net
    loss                                                                       |  | $                                    | (6,219,348
|Adjustments
    to reconcile net loss to net cash used in operating activities:    |  |                                      |           
|Share
    based compensation                                                       |  |                                      | 424,784   
|Common
    shares issued to third party for services                               |  |                                      | 1,404,157 
|Warrants
    issued for services                                                   |  |                                      | -         
|Amortization
    of intangibles                                                    |  |                                      | 450,903   
|Change
    in fair value liabilities for price adjustable warrants                 |  |                                      | -         
|Changes
    in operating assets and liabilities:                                   |  |                                      |           
|Prepaid
    expenses and other assets                                              |  |                                      | 161,164   
|Accounts
    payable                                                               |  |                                      | 425,339   
|Accrued
    expenses                                                               |  |                                      | 837,714   
|Due
    to related party                                                           |  |                                      | 1,205,561 
|Other
    liabilities)                                                             |  |                                      | -         
|                                                                                   |  |                                      |           
|Net
    Cash Used in Operating Activities                                          |  |                                      | (1,260,685
|                                                                                   |  |                                      |           
|Cash
    Flows (Used in) Provided by Investing Activities:                         |  |                                      |           
|Net
    cash acquired in reverse acquisition                                       |  |                                      | -         
|Purchase
    of intangible assets                                                  |  |                                      | (375,000  
|                                                                                   |  |                                      |           
|Net
    Cash (Used in) Provided by Investing Activities                            |  |                                      | (375,000  
|                                                                                   |  |                                      |           
|Cash
    Flows from Financing Activities:                                          |  |                                      |           
|                                                                                   |  |                                      |           
|Proceeds
    from sale of common stock to related party                            |  |                                      | 250,000   
|Proceeds
    from notes payable due to related party                               |  |                                      | 500,000   
|Proceeds
    from convertible notes                                                |  |                                      | -         
|Proceeds
    from convertible notes due to related parties, net                    |  |                                      | 790,073   
|Proceeds
    from exercise of warrants for common stock                            |  |                                      | 170,643   
|Payments
    for notes payable                                                     |  |                                      | (24,000   
|Loan
    fees                                                                      |  |                                      | (50,000   
|                                                                                   |  |                                      |           
|Net
    Cash Provided by Financing Activities                                      |  |                                      | 1,636,716 
|                                                                                   |  |                                      |           
|Net
    increase (decrease) in cash                                                |  |                                      | 1,031     
|                                                                                   |  |                                      |           
|Cash
    – Beginning of Period                                                     |  |                                      | 105,347   
|Cash
    - End of Period                                                           |  | $                                    | 106,378   
|                                                                                   |  |                                      |           
|Supplementary
    Cash Flow Information:                                           |  |                                      |           
|Interest
    paid                                                                  |  | $                                    | -         
|Income
    taxes paid                                                              |  | $                                    | 800       
|                                                                                   |  |                                      |           
|Non-cash
    Investing and Financing Activities:                                   |  |                                      |           
|Issuance
    of warrants for services                                              |  | $                                    | -         
|Common
    stock issued in reverse acquisition                                     |  | $                                    | -         
|Contributed
    capital                                                            |  | $                                    | -         
|Common
    stock issued for accounts payable                                       |  | $                                    | 976,714   
|Return
    of common stock for other assets                                        |  | $                                    | 31,404    
|Adjustment
    to goodwill for change in value of pre-acquisition accounts payable |  | $                                    | 55,247    
|Assumption
    of liabilities for acquisition of assets                            |  | $                                    | 320,000   
|Warrants
    issued with convertible debt as loan fee                              |  | $                                    | 112,210   
|Non-cash
    retrospective adjustment (Note 1)                                     |  | $                                    | 141,723   



The
accompanying footnotes are an integral part of these consolidated financial statements.



F-6







MARINA
BIOTECH, INC.

Notes
to Consolidated Financial Statements

FOR
THE YEAR ENDED dECEMBER 31, 2017



Note
1 – organization and business operations



Reverse
Merger with IThenaPharma



On
November 15, 2016, Marina entered into, and consummated the transactions contemplated by, an Agreement and Plan of Merger between
and among IthenaPharma, Inc., a Delaware corporation (“IThena”), IThena Acquisition Corporation, a Delaware corporation
and wholly-owned subsidiary of Marina (“Merger Sub”), and Vuong Trieu as the IThena representative (the “Merger
Agreement”), pursuant to which IThena merged into Merger Sub (the “Merger”). For a more detailed discussion
on the reverse merger, refer to Note 3 – Intangible Assets below.



IThena
is a developer of personalized therapies for combined pain/hypertension through its proprietary Fixed Dose Combination (“FDC”)
technology and point of care Therapeutic Drug Monitoring (“TDM”). Through the combination of these technologies, IThenaPharma
is looking to deliver therapies with improved compliance and personalized dosing. IThena’s lead products are the celecoxib
FDCs which include IT-102 and IT-103, fixed dose combinations of celecoxib and lisinopril and celecoxib and olmesartan, respectively.
IT-102 and IT-103 are being developed as celecoxib without the drug induced edema associated with celecoxib alone. IT-102 and
IT-103 are being developed initially for combined arthritis / hypertension and subsequently for treatment of pain, or cancer,
or other indications requiring high doses of celecoxib.



Business
Operations



Marina
Biotech, Inc. and its wholly-owned subsidiaries, MDRNA Research, Inc., Cequent Pharmaceuticals, Inc., Atossa Healthcare, Inc.,
and IthenaPharma, Inc. (collectively “Marina,” “we,” “our,” or “us”) is 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. Its portfolio of products currently focuses on FDCs in
hypertension, arthritis, pain and oncology allowing for innovative solutions to such unmet medical needs. Its mission is to provide
effective and patient 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 the patented technology platform known as 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 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®, a single-pill FDC of perindopril,
an angiotensin-converting-enzyme (“ACE”) inhibitor and amlodipine, 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 primarily on the commercialization of Prestalia. The development of IT-102 and IT-103 will be achieved through
partnering with other entities or raising additional funds to advance the development of the products. 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.



F-7











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.



NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis
of Presentation



The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”). The summary of significant accounting policies presented below is designed
to assist in understanding the Company’s financial statements. Such financial statements and accompanying notes are the
representations of Company’s management, who is responsible for their integrity and objectivity.



Principles
of Consolidation



The
consolidated financial statements include the accounts of IThenaPharma Inc. and Marina Biotech, Inc. and the wholly-owned subsidiaries,
Cequent, MDRNA, and Atossa, and eliminate any inter-company balances and transactions.



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 August 3, 2017. Unless indicated otherwise, all share and per share information included
in these financial statements give effect to the reverse split.



Going
Concern and Management’s Liquidity Plans





The
accompanying consolidated financial statements have been prepared on the basis that we will continue as a going concern, which
contemplates realization of assets and the satisfaction of liabilities in the normal course of business. At December 31, 2017,
we had a significant accumulated deficit of approximately $8 million and a negative working capital of approximately $6 million.
  Our operating activities consume the majority of our cash resources. We anticipate that we will continue to incur
operating losses as we execute our commercialization and research and development plans, as well as strategic and business development
initiatives. In addition, we have had and will continue to have negative cash flows from operations, at least into the near future.
We have previously funded, and plan to continue funding, our losses primarily through the sale of common and preferred stock,
combined with or without warrants, the sale of notes, revenue provided from our license agreements and, to a lesser extent, equipment
financing facilities and secured loans. However, we cannot be certain that we will be able to obtain such funds required for our
operations at terms acceptable to us or at all.





On April 16, 2018, we held the initial closing
of our private placement of shares of our Series E Convertible Preferred Stock, and warrants to purchase shares of our common stock,
as a result of which we raised over $10 million in net proceeds to our company. For our assessment as of December 31, 2017, we
have considered the amount raised and we will continue to reassess our ability to address the going concern.



F-8







The
accompanying consolidated financial statements do not include any adjustments relating to the recoverability of and classification
of assets carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue
as a going concern.



Use
of Estimates



The
preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Significant
areas requiring the use of management estimates include valuation allowance for deferred income tax assets and fair value of financial
instruments. Actual results could differ materially from such estimates under different assumptions or circumstances.



Cash
and Cash Equivalents



The
Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
There are no cash equivalents as of December 31, 2017 or 2016.



The
Company deposits its cash with major financial institutions and may at times exceed the federally insured limit. At December 31,
2017 and 2016, the Company had no cash balances in excess of the federal insurance limit.



Goodwill



The
Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine
whether impairment may exist. Goodwill and certain intangible assets   are assessed annually, or when certain triggering
events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business
climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business,
or other factors. Specifically, goodwill impairment is determined using a two-step process.   The first step of the
goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying
amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value
of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions
about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based
on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in
the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit
is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit
exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss,
if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill
with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair
value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill
is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the
reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as
if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price
paid to acquire the reporting unit.



The
Company did not record an impairment loss on goodwill for the years ended December 31, 2017 or 2016.



F-9







Fair
Value of Financial Instruments



We
consider the fair value of cash, accounts payable, due to related parties, notes payable, notes payable to related parties, convertible
notes payable and accrued liabilities not to be materially different from their carrying value. These financial instruments have
short-term maturities. We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting
Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring
fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The
guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present
value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).
The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value
into three broad levels. The following is a brief description of those three levels:



|Level
    1: | Observable
    inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.                                                                                                                                                                                            
|------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             |                                                                                                                                                                                                                                                                                                            
|Level
    2: | Inputs
    other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted
    prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities
    in markets that are not active.
|             |                                                                                                                                                                                                                                                                                                            
|Level
    3: | Unobservable
    inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which
    reflect those that a market participant would use.                                                                                                        





Our
cash is subject to fair value measurement and is determined by Level 1 inputs. We measure the liability for committed stock issuances
with a fixed share number using Level 1 inputs. We measured the liability for price adjustable warrants and certain features
embedded in notes, using the probability adjusted Black-Scholes option pricing model (“Black-Scholes”), which management
has determined approximates values using more complex methods, using Level 3 inputs. There were no liabilities measured at fair
value as of December 31, 2017 (see Recent Accounting Pronouncements below). The following tables summarize our liabilities measured
at fair value on a recurring basis as of December 31, 2016:





|                                                       |  | Balance
                                         at December
                                         31, 2016 |         |  | Level
    1 Quoted prices in active markets for identical assets |   |   | Level
    2 Significant other observable inputs |  |   | Level
    3 Significant unobservable inputs | 
|------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------- | ------- |  | ---------------------------------------------------------------- | - | - | ----------------------------------------------- |  | - | ------------------------------------------- | 
|Liabilities:                                           |  |                                                                                                                |         |  |                                                                  |   |   |                                                 |  |   |                                             | 
|Fair
    value liability for price adjustable warrants |  | $                                                                                                              | 141,723 |  |                                                                  | $ | - |                                                 |  | $ | -                                           | 
|Total
    liabilities at fair value                    |  | $                                                                                                              | 141,723 |  |                                                                  | $ | - |                                                 |  | $ | -                                           | 



The
following presents activity of the fair value liability of price adjustable warrants determined by Level 3 inputs for the period
ended December 31, 2017:





|                                                                                                                         |  | Fair
    valueliability forprice adjustablewarrants |         
|------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------- | --------
|                                                                                                                         |  |                                                     |         
|Balance at December 31, 2016                                                                                             |  | $                                                   | 141,723 
|Reclassification
    of derivative liability due to adoption of ASU 2017-11 (See Recent Accounting Pronouncements below) |  |                                                     | (141,723
|Balance at December
    31, 2017                                                                                         |  | $                                                   | -       





F-10









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:



|● | For
    finite-lived intangible assets, such as developed technology rights, and for other long-lived assets, we compare the undiscounted
    amount of the projected cash flows associated with the asset, or asset group, to the carrying amount. If the carrying amount
    is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases
    of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate; and
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|● | For
    indefinite-lived intangible assets, such as acquired in-process R&D assets, each year and whenever impairment indicators
    are present, we determine the fair value of the asset and record an impairment loss for the excess of book value over fair
    value, if any.                                                                                                                                                                                                                                                   



Management
determined that no impairment indicators were present and that no impairment charges were necessary as of December 31, 2017 or
2016.





Revenue
Recognition



Revenue
will be recognized when persuasive evidence that an arrangement exists, delivery has occurred, collectability is reasonably assured,
and fees are fixed or determinable. Deferred revenue expected to be recognized within the next 12 months will be classified as
current. Substantially, a majority of our revenues is planned to be generated from the sales of product. We plan to launch
Prestalia, our FDA approved product. We also expect some of our revenue will be generated from licensing arrangements that
do not involve multiple deliverables and have no ongoing influence, control or R&D obligations. Our license arrangements may
include upfront non-refundable payments, development milestone payments, patent-based or product sale royalties, and commercial
sales, all of which are treated as separate units of accounting. In addition, we may receive revenues from sub-licensing arrangements.
For each separate unit of accounting, we will determine that the delivered items have value to the other party on a stand-alone
basis, we will have objective and reliable evidence of fair value using available internal evidence for the undelivered item(s)
and our arrangements generally do not contain a general right of return relative to the delivered item.



Product
Sales



Revenue
from our product sales will be recognized when title and risk of loss have transferred to our customer, and the following additional
criteria are met:



|(1) | appropriate evidence
    of a binding arrangement exists with our customer;          
|--- | -------------------------------------------------------------------------------------
|(2) | price is substantially
    fixed or determinable;                                    
|(3) | collection from
    our customer is reasonably assured;                              
|(4) | our customer’s
    obligation to pay us is not contingent on resale of the product;  
|(5) | we do not have
    significant continued performance obligations to our customer; and
|(6) | we have a reasonable
    basis to estimate returns.                                  



Our
gross revenue will be reduced by our gross-to-net, or GTN, estimates each period, resulting in our reported “product sales,
net.” We will defer revenue recognition in full if these estimates are not reasonably determinable at the time of sale.
These estimates will be based upon information received from external sources (such as written or oral information obtained from
our customers with respect to their period-end inventory levels and their sales to end-users during the period), in combination
with management’s informed judgments. Due to the inherent uncertainty of estimates, the actual amount we incur may be materially
different than our GTN estimates, and require prospective revenue adjustments in periods after the initial sale was recorded.



Our
GTN estimates may be comprised of the following categories:



| | ● | Product
    Returns Allowances:  Our customers may be permitted to return purchased product beginning at its expiration date, and
    within six months thereafter.  Returned product is generally destroyed and not resold. Returns outside of the above referenced
    criteria for expiry.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | Prompt
    Pay Discounts: Discounts for prompt payment will be estimated at the time of sale, based on our future eligible customers’
    prompt payment history and the contractual discount percentage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | Medicaid
    Rebates: Our products may be subject to state government-managed Medicaid programs, whereby rebates are issued to participating
    state governments. These rebates arise when a patient treated with our product is covered under Medicaid, resulting in a discounted
    price for our product under the applicable Medicaid program.  Our Medicaid rebate accrual calculations will require us
    to project the magnitude of our sales, by state, that will be subject to these rebates. There could be a significant time
    lag in us receiving rebate notices from each state (generally several months or longer after our sale is recognized). Our
    estimates will be based on our historical claim levels by state, as supplemented by management’s judgment.



Revenue
from licensing arrangements will be recorded when earned based on the specific terms of the contracts. Upfront non-refundable
payments, where we are not providing any continuing services as in the case of a license to our IP, are recognized when the license
becomes available to the other party.



Milestone
payments typically represent nonrefundable payments to be received in conjunction with the uncertain achievement of a specific
event identified in the contract, such as initiation or completion of specified development activities or specific regulatory
actions such as the filing of an Investigational New Drug Application (“IND”). We believe a milestone payment represent
the culmination of a distinct earnings process when it is not associated with ongoing research, development or other performance
on our part and it is substantive in nature. We recognize such milestone payments as revenue when it becomes due and collection
is reasonably assured.



Royalty
and earn-out payment revenues will generally be recognized upon commercial product sales by the licensee as reported by the licensee.



F-11







Stock-based
Compensation



We
use Black-Scholes for the valuation of stock-based awards. Stock-based compensation expense is based on the value of the portion
of the stock-based award that will vest during the period, adjusted for expected forfeitures. The estimation of stock-based awards
that will ultimately vest requires judgment, and to the extent actual or updated results differ from our current estimates, such
amounts will be recorded in the period the estimates are revised. Black-Scholes requires the input of highly subjective assumptions,
and other reasonable assumptions could provide differing results. Our determination of the fair value of stock-based awards on
the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of highly
complex and subjective variables. These variables include, but are not limited to, the expected life of the award and expected
stock price volatility over the term of the award. Stock-based compensation expense is recognized immediately for immediately-vested
portions of the grant, with the remaining portions recognized on a straight-line basis over the applicable vesting periods based
on the fair value of such stock-based awards on the grant date. Forfeiture rates have been estimated based on historical rates
and compensation expense is adjusted for general forfeiture rates in each period. Beginning in September 2014, Marina did not
use historical forfeiture rates and did not apply a forfeiture rate as the historical forfeiture rate was not believed to be a
reasonable estimate of the probability that the outstanding awards would be exercised in the future. Given the specific terms
of the awards and the recipient population, we expect these options will all be exercised in the future.



Non-employee
stock compensation expense is recognized immediately for immediately-vested portions of a grant, with the remaining portions recognized
on a straight-line basis over the applicable vesting periods. At the end of each financial reporting period prior to vesting,
the value of the unvested stock options, as calculated using Black-Scholes, is re-measured using the fair value of our common
stock, and the stock-based compensation recognized during the period is adjusted accordingly.



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, 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:



|                                                         |  | Year
    ended December 31, |          
|-------------------------------------------------------- |  | --------------------------- | ---------
|                                                         |  | 2017                        |          
|                                                         |  |                             |          
|Stock
    options outstanding                            |  |                             | 745,707  
|Warrants                                                 |  |                             | 2,559,612
|Shares
    to be issued upon conversion of notes payable |  |                             | 319,617  
|                                                         |  |                             |          
|Total                                                    |  |                             | 3,624,936



Income
Taxes



Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and
credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes the enactment date.



The
Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets
and liabilities and the related financial amounts, using currently enacted tax rates.



Reclassification
of Prior Year Presentation



Certain prior year amounts have been
reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results
of operations or cash flows.







F-12







Under
the provisions of ASC 740, Income Taxes(“ASC 740”), the Company recognizes the financial statement benefit
of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following
an audit. For tax positions meeting the more- likely-than-not threshold, the amount recognized in the financial statements is
the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant
tax authority. The Company did not have any unrecognized tax benefits and there was no effect on the Company’s financial
condition or results of operations as a result of adopting the provisions of ASC 740.



The
Company recognizes a tax benefit only if it is more likely than not that the position is sustainable, based solely on its technical
merits and considerations of the relevant taxing authorities; administrative practice and precedents. The Company completed its
analysis of uncertain tax positions in accordance with applicable accounting guidance and determined no amounts were required
to be recognized in the financial statements at December 31, 2017 and 2016.



Recent
Accounting Pronouncements





In
July 2017, the Financial Accounting Standards Board issued Accounting Standads Update (“ASU”)
2017-11, Earnings Per Share (Topic260), Distinguishing Liabilities from Equity (Topic480), Derivatives and
Hedging (Topic815) – I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement
of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily
Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”), which addresses the complexity of
accounting for certain financial instruments with down round features and addresses the difficulty of navigating Topic 480 because
of the existence of extensive pending content in the ASC as a result of the indefinite deferral of accounting requirements about
mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests.
This update applies to all entities that issue financial instruments that include down round features and entities that present
earnings per share in accordance with Topic 260. This guidance is effective for financial statements issued for fiscal years beginning
after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an
interim period. If early adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year
that includes that interim period. In November 2017, the Company adopted the provisions relating to the issuance of financial
statements that include down round provisions utilizing the modified retrospective approach. See Fair Value of Accounting
Instruments above for the impact of the adoption on the consolidated financial statements.



In
May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic718) – Scope of Modification
Accounting (“ASU 2017-09”), which provides guidance about which changes to the terms or conditions of a stock-based
payment award require an entity to apply modification accounting in Topic 718. This update applies to any entity that changes
the terms or conditions of a stock-based payment award. This guidance is effective for financial statements issued for fiscal
years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not currently expect
ASU 2017-09 to have a material effect on its financial statements and disclosures upon adoption.



In
January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying
the Test for Goodwill Impairment” (ASU 2017-04)”. Under the amendments, an entity should perform its annual
or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should
recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but
the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The FASB also eliminated
the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment, and if it
fails that qualitative test, to perform Step 2 of the goodwill impairment test. The same impairment test will therefore apply
to all reporting units, and an entity will be required to disclose the amount of goodwill allocated to each reporting unit with
a zero or negative carrying amount of net assets. SEC filers are required to adopt the new standard for annual or any interim
goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual
goodwill impairment tests performed on testing dates on or after January 1, 2017. The Company does not currently expect ASU 2017-04
to have a material effect on its financial statements and disclosures upon adoption.





F-13







In
August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash
Payments (Topic230) (“ASU 2016-15”), which addresses eight specific cash flow issues with the objective
of reducing the existing diversity in practice. This update applies to all entities that are required to present a statement of
cash flows under Topic 230. This guidance is effective for financial statements issued for fiscal years beginning after December
15, 2017, and interim periods within those fiscal years. The Company does not currently expect ASU 2016-15 to have a material
effect on its financial statements and disclosures upon adoption.





In
March 2016, FASB issued (“ASU”) 2016-09, Compensation – Stock Compensation – Improvements to Employee
Shared-Based Payment Accounting(“ASU 2016-09”).This guidance is intended to simplify the accounting for
share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities
and classification on the statement of cash flows. The amendments in this update are effective for public business entities for
financial statements issued for annual periods beginning after December 15, 2016, including interim periods within those annual
periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2017, and interim
periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any entity in any interim or
annual periods. The Company is currently assessing the impact of this ASU on its financial statements.



In
February 2016, the FASB issued Accounting Standards Update, Leases (“ASU 2016-02”),. This
update requires lessees to recognize at the lease commencement date a lease liability which is the lessee’s obligation to
make lease payments arising from a lease, measured on a discounted basis, and right-of-use assets, which is an asset that represents
the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessees will no longer be provided
with a source of off-balance sheet financing. This update is effective for financial statements issued for annual periods beginning
after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. Lessees and lessors
must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest
comparative period presented in the financial statements. The modified retrospective approach would not require any transition
accounting for leases that expired before the earliest comparative period presented. Applying a full retrospective transition
approach is not allowed. The Company does not expect the adoption of this standard to have a material effect on its financial
statements.



In
January 2016, FASB ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”).
The Update intends to enhance the reporting model for financial instruments to provide users of financial instruments with more
decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial
instruments. This new standard affects all entities that hold financial assets or owe financial liabilities. Entities should apply
the amendments as a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The
amendments related to equity securities without readily determinable fair values, including disclosure requirement, should be
applied prospectively to equity investments that exist as of the date of adoption of the update. ASU 2016-01 is effective for
public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.
For all other entities, including not-for-profit entities and employee benefit plans within the scope of ASC Topics 960 through
965 on plan accounting, ASC 2016-01 is effective for fiscal years beginning after December 15, 2018, and interim periods within
fiscal years beginning after December 15, 2019. All entities that are not public business entities may adopt the ASC 2016-01 earlier
as of the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of
this guidance is not expected to have a material impact on the Company’s financial position, results of operations or cash
flows.



In
May 2014, FASB issued changes to the recognition of revenue from contracts with customers. These changes created a comprehensive
framework for all entities in all industries to apply in the determination of when to recognize revenue, and, therefore, supersede
virtually all existing revenue recognition requirements and guidance. This framework is expected to result in less complex guidance
in application while providing a consistent and comparable methodology for revenue recognition. The core principle of the guidance
is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this
principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance
obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance
obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. In August
2015, the FASB deferred the effective date by one year, making these changes effective for the Company on January 1, 2018. The
Company does not expect the adoption of this standard to have a material effect on its financial statements.





F-14







Subsequent
Event Policy



Management
has evaluated all activity since December 31, 2017, through the date the financial statements were issued and has concluded that
no subsequent events have occurred that would require recognition in the Financial Statements or disclosure in the Notes to the
Financial Statements, other than those described in Note 11.



Note
3 – Intangible Assets



Reverse
Merger with IThenaPharma



On
November 15, 2016, we entered into, and consummated the transactions contemplated by, an Agreement and Plan of Merger between
and among Marina Biotech, Inc., IThenaPharma Inc., a Delaware corporation (“IThena”), IThena Acquisition Corporation,
a Delaware corporation and wholly-owned subsidiary of Marina (“Merger Sub”), and Vuong Trieu as the IThena representative
(the “Merger Agreement”), pursuant to which IThena merged into Merger Sub (the “Merger”). Upon completion
of the Merger and subject to the applicable provisions of the Merger Agreement, Merger Sub has ceased to exist and IThena continued
as the surviving corporation of the Merger and as a wholly-owned subsidiary of Marina. As consideration for the Merger, Marina
issued to the former shareholders of IThena 5,839,283 shares of the Company’s common stock, representing approximately 65%
of the issued and outstanding shares of Marina’s common stock following the completion of the Merger. Outstanding warrants
to purchase 30,000 shares of common stock of IThena were converted into warrants to purchase common stock of Marina. In addition,
Marina appointed Vuong Trieu, the president of IThena, as the Chairman of the Board of Directors of Marina, effective November
15, 2016. Dr. Trieu, in his capacity as the IThena representative, later appointed Philippe P. Calais, Ph.D., as a member of the
Board of Directors of Marina effective December 8, 2016, pursuant to the rights granted to the former shareholders of IThena in
the Merger Agreement.



As
the former shareholders of IThena control greater than 50% of the Company subsequent to the Merger, for accounting purposes, the
Merger was treated as a “reverse acquisition” and IThena is considered the accounting acquirer. IThena accounted for
the acquisition of Marina under the purchase accounting method following completion. Accordingly, IThena’s historical results
of operations replace Marina’s historical results of operations for all periods prior to the Merger, and for all periods
following the Merger, the results of operations of both companies are included. As a result of the Merger, while we have presented
the results for the year ended December 31, 2017; the results for the year ended 2016 reflect only the results of IThena.



The
purchase price of approximately $3.7 million represents the consideration in the reverse merger transaction and is calculated
based on the number of shares of common stock of the combined company that Marina stockholders owned as of the closing of the
transaction and the fair value of assets and liabilities assumed by IThena.



The
number of shares of common stock Marina issued to IThena stockholders is calculated pursuant to the terms of the Merger Agreement
based on Marina common stock outstanding as of November 15, 2016, as follows:



|Shares
    of Marina common stock outstanding as of November 15, 2016            |  |  | 3,137,855 |  
|-------------------------------------------------------------------------------- |  |  | --------- | -
|Divided
    by the percentage of Marina ownership of combined company            |  |  | 35        | %
|Adjusted
    total shares of common stock of combined company                    |  |  | 8,977,138 |  
|Multiplied
    by the assumed percentage of IThena ownership of combined company |  |  | 65        | %
|Shares
    of Marina common stock issued to IThena upon closing of transaction   |  |  | 5,839,283 |  



The
application of the acquisition method of accounting is dependent upon certain valuations and other studies that have yet to be
completed. The purchase price allocation will remain preliminary until IThena management determines the fair values of assets
acquired and liabilities assumed. The final determination of the purchase price allocation is anticipated to be completed as soon
as practicable after completion of the transaction and will be based on the fair values of the assets acquired and liabilities
assumed as of the transaction closing date. The final amounts allocated to assets acquired and liabilities assumed could differ
significantly from the amounts presented.



F-15







The
purchase price as of December 31, 2017 has been allocated based on a preliminary estimate of the fair value of assets acquired
and liabilities assumed:



|Assets
    and Liabilities Acquired:                 |  |   |            |  
|---------------------------------------------------- |  | - | ---------- | -
|Cash                                                 |  | $ | 5,867      |  
|Net
    current liabilities assumed (excluding cash) |  |   | (1,871,725 | )
|Identifiable
    intangible assets                   |  |   | 2,361,066  |  
|Debt                                                 |  |   | (326,037   | )
|Net
    assets acquired                              |  |   | 169,171    |  
|Goodwill                                             |  |   | 3,502,829  |  
|Purchase
    price                                   |  | $ | 3,672,000  |  



The
above estimated purchase price allocation and goodwill valuation reflects changes in fair value determinations of $55,247 for
the year ended December 31, 2017 and approximately $1,238,000 since the Merger date. 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.



The
Company used the discounted cash flow method for the impairment testing as of December 31, 2017. The Company performed discounted
cash flow analysis projected over 5 years to estimate the fair value of the reporting unit, using management’s best judgement
as to revenue growth rates and expense projections. This analysis indicated cash flows (and discounted cash flows) greater than
the $3.5 million book value of goodwill. The Company determined these were no indicators of impairment in goodwill for the Company
as of December 31, 2017.



On
November 15, 2016, Marina agreed to issue to Novosom Verwaltungs GmbH (“Novosom”) 150,000 shares of common stock upon
the closing of the Merger in consideration of Novosom’s agreement that the consummation of the Merger would not constitute
a “Liquidity Event” under that certain Asset Purchase Agreement dated as of July 27, 2010 between and among Marina,
Novosom and Steffen Panzner, Ph.D., and thus that no additional consideration under such agreement would be due to Novosom as
a result of the consummation of the Merger.



In
July 2016, Marina pledged to issue common stock valued at approximately $15,000 to Novosom for the portion due under our July
2010 Asset Purchase Agreement with Novosom, related to Marina’s 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. In November 2016, we issued 11,905 shares
with a value of approximately $15,000 to Novosom as the equity component owed under our July 2016 license agreement.



Acquisition
of Assets from Symplmed



In
June 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 FDC 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 U.S. (and its territories and possessions) in
consideration of regulatory and sales-based milestone payments and royalty payments based on net sales. Management has determined
that this acquisition was deemed an asset purchase under FASB ASC 805.



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 December 31, 2017 and is subject to change.



F-16







Further,
we entered into an offer letter to hire our current Chief Commercial Officer, who was the President and Chief Executive Officer
of Symplmed, which appointment became effective on June 22, 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, 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, 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 assets acquired, their useful life, and method
of amortization:



|                                  |  | Estimated
     Fair Value |           |  | Estimated
     Useful Life  (Years) |  |      | Annual
     Amortization  Expense | 
|--------------------------------- |  | ------------------------- | --------- |  | ----------------------------------- |  | ---- | --------------------------------- | 
|Intangible
    asset from Merger  |  | $                         | 2,361,066 |  |                                     |  | 6.0  |                                   | 
|Intangible
    asset - Prestalia  |  |                           | 620,000   |  |                                     |  | 6.6  |                                   | 
|Intangible
    asset – DyrctAxess |  |                           | 75,000    |  |                                     |  | 14.0 |                                   | 
|Total                             |  | $                         | 3,056,066 |  |                                     |  |      |                                   | 



The
net intangible asset was $2,555,974, net of accumulated amortization of $500,092, as of December 31, 2017. Amortization expense
was $450,903 and $49,189 for the year ended December 31, 2017 and 2016, respectively.



Note
4 - 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, Autotelic Inc., effective November 15, 2016. Autotelic Inc. currently owns less than 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.





During
the period commencing November 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 is no less than $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 will
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”).



F-17









In
accordance with the MSA, Autotelic Inc. billed the Company for personnel and service expenses Autotelic Inc. incurred on behalf
of the Company. For the year ended December 31, 2017 and 2016, Autotelic Inc. billed a total of $791,889 and $344,563, including
personnel costs of $558,098 and $166,550, respectively. An unpaid balance of $730,629 is included in due to related party in the
accompanying balance sheet as of December 31, 2017. The Company agreed to issue warrants at a future date for the remaining balance
due of $605,889, which is included in due to related parties as of December 31, 2017.



In
connection with a private placement of our Series E Convertible Preferred Stock (Preferred Shares), Autotelic agreed to convert
the entire unpaid balance due to it as of March 31, 2018 into shares of Series E Convertible Preferred Stock and warrants in full
and complete satisfaction of the unpaid balance. Also see Note 11 – Subsequent Events below.





Note
5 – Notes Payable



Following
is a breakdown of notes payable as of December 31, 2017





|                                                                                   |  | 2017 |           |  | 2016 |  
|---------------------------------------------------------------------------------- |  | ---- | --------- |  | ---- | -
|                                                                                   |  |      |           |  |      |  
|Notes payable                                                                      |  | $    | 97,523    |  |      | $
|Convertible notes
    payable                                                      |  |      | 346,700   |  |      |  
|Total notes payable                                                                |  | $    | 444,223   |  |      | $
|                                                                                   |  |      |           |  |      |  
|Notes payable – related parties                                                    |  |      | 93,662    |  |      | $
|Convertible notes
    payable – related parties (net of debt discount of $113,170) |  |      | 1,368,378 |  |      |  
|Total notes payable
    – related parties                                          |  | $    | 1,462,040 |  |      | $







Note
Payable – Service Provider





In December 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, which was not paid. The balance due on the note was
$121,523 and $97,523 as of December 31, 2017 and 2016, respectively.







Note
Purchase Agreement and Amendment



In
June 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 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.





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 Initial Closing of the Private Placement. 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 11 – Subsequent Events below.



As
of December 31, 2017 and 2016, the accrued interest expense on the Notes amounted to $46,700 and $14,475, respectively,
with a total balance of principal and interest of $346,700 and $314,475, respectively.





Bridge
Note Financing



In
June 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.



F-18







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.





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 Initial Closing of the Private Placement. 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 11 – Subsequent Events below.





As
of December 31, 2017, the accrued interest expense on the Notes amounted to $11,365, with a total balance of principal and interest
of $411,365 and is included in convertible notes payable – related parties on the accompanying balance sheet.



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 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).



On
November 22, 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 $504,274 as of December 31, 2017 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 $49,041 for the year ended December 31, 2017, with a remaining unamortized
value of $113,169. The net balance of the note of $391,105 is included in convertible notes to related parties on the accompanying
balance sheet at December 31, 2017.



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 Initial Closing of
the Private Placement. 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 11 – 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,
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
($250,000 as of December 31, 2016). Accrued interest on the Line Letter was $25,836 and $0 as of December 31, 2017 and December
31, 2016, 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 Initial Closing of the Private Placement.
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. Also see Note 11 – Subsequent Events below.



Line
Letter with Autotelic Inc.



On
April 4, 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.





F-19







The
balance under the line was $93,662, including accrued interest of $2,847 as of December 31, 2017 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 Initial Closing of the Private Placement.
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. Also see Note 11 – Subsequent Events below.





Note
6 – 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 April 2018, Marina designated 3,500 shares of
Series E Convertible Preferred Stock,





Series
C Preferred





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. On September 15, 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. In February 2016, an investor converted 110 shares
of Series D Preferred into 137,500 shares of common stock.



Series
E Convertible Preferred Shares



In
connection with a private placement offering, we recently created a new Series E Convertible Preferred Stock (Preferred Shares).
Also see Note 11 – Subsequent Events below.



Each share of Series E Convertible
Preferred Stock has a stated value of $5,000 per share and is convertible into shares of common stock at a conversion price of
$0.50 per share. In connection with the private placement offering we issued 2,334 Preferred Shares.





Common
Stock



Our
common stock currently trades on the OTCQB tier of the OTC Markets.



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 $1.55 to settle aggregate liabilities of approximately $956,000,
whichhad been 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 $54,000 ($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 $1.80 per share to our CEO for services and were fully vested by December 31, 2017.



In
February 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.





F-20









In March 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 with a fair value of
$31,404, which were cancelled effective March 31, 2017.



In
April 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 to the service provider in May 2017.



In
May 2017, the holders of warrants purchased 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.







In
June 2017, we entered into an offer letter to hire our current Chief Commercial Officer, who was the President and Chief Executive
Officer of Symplmed, which appointment became effective on June 22, 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 a fair value
of $228,000 ($3.80 per share), 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 and were fully vested as of December 31, 2017.





In
August 2017, in connection with the reverse split, we issued 3,360 shares of common stock due to rounding at exchange and participant
levels.



In
September 2017, an investor converted 270 shares of Series C Preferred stock into 180,000 shares of our common stock on a cashless
basis.



In
September 2017, we entered into an engagement letter with a financial advisor pursuant to which, among other things, we agreed
to issue to such financial advisor, in partial consideration of the services to be rendered under the engagement letter, an aggregate
of 500,058 shares of our common stock. The shares were issued in November 2017 with an aggregate fair value of approximately $1,350,157.



Warrants



As of December 31, 2017, there were 2,559,612
warrants outstanding, with a weighted average exercise price of $4.28 per share, and annual expirations as
follows:





|Expiring
    in 2018    |  |  | 11,383    | 
|----------------------- |  |  | --------- | 
|Expiring
    in 2019    |  |  | 600,000   | 
|Expiring
    in 2020    |  |  | 1,189,079 | 
|Expiring
    in 2021    |  |  | 343,750   | 
|Expiring
    in 2022    |  |  | 66,667    | 
|Expiring
    thereafter |  |  | 348,733   | 
|                        |  |  | 2,559,612 | 



On
May 21, 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.



On
November 22, 2017, we issued warrants to purchase 66,667 shares of our common stock to a consultant in connection with a related
party convertible note issued in November 2017 at an exercise price of $0.75 and a term of five years with an aggregate fair value
of $112,210.



A
total of 149,111 warrants expired in May 2017.





On
April 13, 2018, in connection with a private placement of our Series E Convertible Preferred Stock, we issued 22,665,525 warrants.
Also see Note 11 – Subsequent events.





F-21







Note
7 — Stock Incentive Plans



Stock
Options



Stock
option activity was as follows:





|                                   |  | Options Outstanding |        
|---------------------------------- |  | ------------------- | -------
|                                   |  | Shares              |        
|Outstanding, January 1, 2016       |  |                     | -      
|Options acquired in reverse merger |  |                     | 168,811
|Outstanding, December 31, 2016     |  |                     | 168,811
|Options granted                    |  |                     | 658,057
|Options expired and forfeited      |  |                     | (81,161
|Outstanding, December 31, 2017     |  |                     | 745,707
|Exercisable, December 31, 2017     |  |                     | 139,673







The
following table summarizes additional information on Marina’s stock options outstanding at December 31, 2017:





|                             |                                                             |  | Options
    Outstanding |  |         | Options
    Exercisable                                      | 
|---------------------------- | ----------------------------------------------------------- |  | ----------------------- |  | ------- | ------------------------------------------------------------ | 
|Range
    of Exercise Prices |                                                             |  | Number
    Outstanding  |  |         | Weighted-
    Average Remaining
    Contractual Life (Years) | 
|$                            | 1.00                                                        |  |                         |  | 14,000  |                                                              | 
|$                            | 1.70
                                         – $1.80       |  |                         |  | 534,007 |                                                              | 
|$                            | 2.60
                                         – $8.20       |  |                         |  | 168,400 |                                                              | 
|$                            | 10.70
                                         – $22.00     |  |                         |  | 25,050  |                                                              | 
|$                            | 476.00
                                         - $876.00   |  |                         |  | 2,100   |                                                              | 
|$                            | 1276.00
                                         - $2076.00 |  |                         |  | 2,150   |                                                              | 
|                             | Totals                                                      |  |                         |  | 745,707 |                                                              | 





Weighted-Average
Exercisable Remaining Contractual Life (Years) 3.95



In January 2017, the Company granted a total
of 48,600 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 and a five-year term. During the
year ended December 31, 2017, a total of 4,050 of these options were forfeited, and 4,050 options were extended to January
2022.



In
February 2017, the Company granted a total 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.



In
October 2017, we appointed our Chief Financial Officer. In connection with this appointment, we granted the officer options to
purchase up to 60,000 shares of our common stock under our 2014 Long-Term Incentive Plan, with all of such options vesting and
becoming exercisable on the one-year anniversary of the grant date. The options have a 5-year term and an exercise price of $2.70.



On
October 19, 2017, we appointed our Chief Legal Officer. In connection with this appointment, we granted the officer options to
purchase up to 60,000 shares of our common stock under our 2014 Long-Term Incentive Plan, with all of such options vesting and
becoming exercisable on the one-year anniversary of the grant date. The options have a 5-year term and an exercise price of $2.40.



On November 22, 2017, the Company granted
a total of 473,457 stock options to a related party noteholder in connections with the issuance of a convertible note. The options
vest 5% each quarter over 5 years, have an exercise price equal to the Company’s stock price on the date of vesting, and
have a ten-year term.





F-22









At December 31, 2017, we had approximately
$949,500 of total unrecognized compensation expense related to unvested stock options. Total expense related to stock options was
$178,784 for the year ended December 31, 2017.



At December 31, 2017, the intrinsic value of
options outstanding or exercisable was $9,100 as there were 14,000 options outstanding with an exercise price less than $1.65,
the per share closing market price of our common stock at that date.





Note
8 — Intellectual Property and Collaborative Agreements



Novosom
Agreements



In
July 2010, Marina entered into an agreement pursuant to which Marina acquired intellectual property for Novosom’s SMARTICLES-based
liposomal delivery system. In February 2016, Marina issued Novosom 20,548 shares of common stock valued at approximately $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 $250,000 and could receive
up to $40 million in success-based milestones. In April 2016, Marina issued Novosom 47,468 shares of common stock valued at approximately
$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 $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 $50,000 per the
terms of this license agreement. In November 2016, we issued 11,905 shares with a value of $15,000 to Novosom as the equity component
owed under Marina’s July 2016 license agreement.



Arrangements
with LipoMedics



In
February 2017, we entered into a License Agreement (the “License Agreement”) with 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 and Marina 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, is the Chairman of the Board and Chief Operating Officer of LipoMedics.



F-23







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 $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 of $10 million upon reaching Commercial
Sales in the Territory in any given twelve month period equal to or greater than $500 million for a given Licensed Product and
of $20 million upon reaching Commercial Sales in any given twelve month period equal to or greater than $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. As of the date of this filing, such stock
purchase has not occurred and we are in discussion with Oncotelic to complete the purchase.





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 $0.5 million, 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
March 16, 2018, Marina entered into an Licensing Agreement with Agenovir Corporation, whereby Marina granted Agenovir exclusive
rights to the company’s 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 agreement, Marina has agreed to assign ownership
of the intellectual property associated with the DiLA2 delivery system to Agenovir Corporation.



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 3).



F-24







Note
9 – Commitments and Contingencies



Amendment
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’s activities, the Company is subject to claims and/or threatened legal actions, which arise
out of the normal course of business. Other than the disclosure below, as of the date of this filing, the Company is not aware
of any pending lawsuits against the Company, its officers or directors.





The
Company has been named on a complaint filed in New York State as a defendant in the matter entitled Vaya Pharma, Inc. v.
Symplmed Technologies, Inc., Symplmed Pharmaceuticals, Inc., Erik Emerson and Marina Biotech, Inc. While this complaint
has been filed in the Supreme Court of the State of New York, the Company has not been legally served. The complaint alleges,
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) the Company is liable, as successor, for any and all claims by
Vaya Pharma, Inc. against the Symplmed Defendants, though pursuant to the agreement the Company is 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. If and when the Company is legally served, it is the
intention of the Company to dispute jurisdiction, the sufficiency of the pleading and the claims set forth in this complaint,
and to defend this matter, vigorously. However, due to the inherent uncertainties of litigation, the ultimate outcome of this
matter is uncertain. The Company reached a tentative settlement agreement and, although such settlement has not been
finalized, the Company accrued a total provision of $250,000 for this complaint, which is included in accrued expenses on the
accompanying consolidated balance sheet.



Our Prestalia product is currently involved
in a paragraph IV challenge regarding patents issued to perindopril arginine. This challenge, which is currently pending in the
United States District Court for the District of Delaware (No. 1:17-cv-00276), is captioned Apotex Inc. and Apotex Corp. v.
Symplmed Pharmaceuticals, LLC and Les Laboratoires Servier. The challengers (Apotex Inc. and Apotex Corp. (“Apotex”))
have filed an Abbreviated New Drug Application seeking FDA approval to market a generic version of Prestalia and included a Paragraph
(IV) certification. In the litigation, Apotex seeks a declaratory judgment that no valid claims of the two patents Symplmed listed
in the FDA Orange Book as having claims covering Prestalia, U.S. Patent No. 6,696,481 and 7,846,961, will be infringed by the
Apotex proposed generic version of Prestalia and that the claims of those patents are invalid. The challenge is designed to provide
Apotex with an opportunity to enter the market with a generic version of Prestalia, ahead of the expiration of the patents with
claims covering that product. Apotex entered into negotiations with Symplmed Pharmaceuticals, LLC (which entity sold its assets
relating to Prestalia to us in June 2017, including its License and Commercialization Agreement with Les Laboratories Servier)
and Les Laboratories Servier (which entity owns or controls intellectual property rights relating to pharmaceutical products containing
as an active pharmaceutical ingredient perindopril in combination with other active pharmaceutical ingredients, which rights have
been licensed to Symplmed Pharmaceuticals) to resolve the challenge in the second quarter of 2017, and such parties, along with
us, have come to a general agreement on terms that will result in a delay to the challengers’ ability to enter the market
with a generic version of Prestalia, while still providing the challenger with the right to enter the market prior to the expiration
of the patent covering such product. The term sheet memorializing such terms is pending execution in a final settlement agreement.
In the meantime, the District Court has entered an order extending the time for the defendants to respond to Apotex’s Complaint
until January 9, 2018 .



We do not anticipate that the proposed
settlement terms – which would provide us with the ability to exclusively market Prestalia for a specified period of time
without incurring the risks or costs of litigation – will have a material adverse impact on our long term business as a
whole. We hold this expectation because it is our intention that Prestalia will be a building block toward the development of
our company into a larger organization, which we hope will include the commercial launch by us of Prestalia and the expansion
of our commercial capabilities in connection with such activities, followed by the launch of products that we license for commercialization
purposes from our partners and the commercial launch of products that we develop internally. We anticipate that the aforementioned
steps to expand and strengthen our commercial capabilities and diversify our product offerings so as to generate meaningful revenues
in excess of those revenues generated by sales of Prestalia will occur during our exclusivity period with respect to Prestalia
(i.e., prior to the date on which Apotex enters the market with a generic version of Prestalia). If we are able to achieve this
growth, the overall economic impact that would result to us even if Apotex markets a generic version of Prestalia and captures
a significant percentage of the market for that drug following our exclusivity period would be reduced.



However, there can be no assurance that
the paragraph IV challenge will be resolved without litigation or resolved on the terms currently proposed. There also cannot
be any assurance that our plans to commercialize Prestalia (or any of the products that it may license from its partners or that
it may develop internally) and expand our product offerings and the revenue generated therefrom so as to lessen our reliance on
sales of Prestalia will be achieved. Any failure of our expectations regarding the resolution of the paragraph IV challenge and
the expansion of our commercial activities (and the revenues to be derived therefrom) could have a material adverse effect on
us, our prospects and our results of operations.





NOTE
10 - INCOME TAXES



We
have identified our federal and California state tax returns as “major” tax jurisdictions. The periods our income
tax returns are subject to examination for these jurisdictions are 2014 through 2016. We believe our income tax filing positions
and deductions will be sustained on audit, and we do not anticipate any adjustments that would result in a material change to
our financial position. Therefore, no liabilities for uncertain income tax positions have been recorded.



At
December 31, 2017, we had available net operating loss carry-forwards for federal income tax reporting purposes of approximately
$323 million and had available tax credit carry-forwards for federal tax reporting purposes of approximately $10.6 million, which
are available to offset future taxable income. Portions of these carry-forwards will expire through 2037 if not otherwise utilized.
We have not performed a formal analysis, but we believe our ability to use such net operating losses and tax credit carry-forwards
is subject to annual limitations due to change of control provisions under Sections 382 and 383 of the Internal Revenue Code,
which significantly impacts our ability to realize these deferred tax assets.





F-25







Our
net deferred tax assets, liabilities and valuation allowance are as follows:



|                                         |  | Year
    Ended December 31, |           
|---------------------------------------- |  | --------------------------- | ----------
|                                         |  | 2017                        |           
|Deferred
    tax assets:                 |  |                             |           
|Net
    operating loss carryforwards (a) |  | $                           | 2,075,529 
|Tax
    credit carryforwards (a)         |  |                             |           
|Depreciation
    and amortization        |  |                             | 3,107,094 
|Share
    based compensation             |  |                             | 297,893   
|Other                                    |  |                             | 389,146   
|Total
    deferred tax assets            |  |                             | 5,869,662 
|Valuation
    allowance                  |  |                             | (5,354,880
|Net
    deferred tax assets              |  |                             | 514,782   
|Deferred
    tax liabilities:            |  |                             |           
|Intangible
    assets                    |  |                             | (514,782  
|Net
    deferred tax liabilities         |  | $                           | -         



(a)
reflects estimated change of control limitation under Section 382 and 383 of the Internal Revenue Code as of December 31, 2016
due to reverse merger on November 15, 2016.





We
record a valuation allowance in the full amount of our net deferred tax assets since realization of such tax benefits has been
determined by our management to be less likely than not. The valuation allowance increased $1,436,089 and $3,444,024
during 2017 and 2016, respectively.





In
2017 and 2016, there was income tax expense of $800 and $800, respectively, due to IThena’s income tax due the state of
California.



As
of the date of this filing, the Company has not filed its 2016 federal and state corporate income tax returns. The Company expects
to file these documents as soon as practicable.



The
Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to
21% and will require the Company to re-measure certain deferred tax assets and liabilities based on the rates at which they are
anticipated to reverse in the future, which is generally 21%. The Company adopted the new rate as it relates to
the calculations, of deferred tax amounts as of December 31, 2017.



Note
11 - Subsequent Events



Except
for the events discussed below, there were no subsequent events that required recognition or disclosure. The Company evaluated
subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission.





On
March 16, 2018, Marina entered into an Licensing Agreement with Agenovir Corporation, whereby Marina granted Agenovir exclusive
rights to the company’s 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 agreement, Marina has agreed to assign ownership
of the intellectual property associated with the DiLA2 delivery system to Agenovir Corporation.



Series E Convertible Preferred Share
Private Placement Offering



On April 16, 2018, we entered into Subscription
Agreements (the “Purchase 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 price of $5,000
per share of Preferred Stock. Each share of Preferred Stock is initially convertible into shares of our common stock (the “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 exercise
price equal to $0.55 per share of Common Stock, subject to adjustment thereunder. The closing is the initial closing (the “Initial
Closing”) of our private placement (the “Private Placement”) of up to $10,000,000 of Securities, which amount
may be increased to $15,000,000 at the discretion of our company and its placement agent in the Private Placement (the “Maximum
Offering Amount”). 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.
The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years following the final closing
of the Private Placement and contain customary exercise limitations.



We received total gross proceeds of approximately
$11.7 million from the Initial Closing, prior to deducting placement agent fees and estimated expenses payable by us associated
with the Initial Closing. We intend intends to use the proceeds of the Private Placement 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. Pursuant to the Purchase Agreements, we may periodically conduct additional closings
until we have sold the Maximum Offering Amount.



F-26