Common Stock

During the nine months ended September 30, 2017, 185,000 shares of Series B preferred stock were converted into 185,000 shares of common stock.

In connection with the Company’s underwritten public offering in November 2016 and pursuant to the terms of the APA, the Note automatically converted into shares of common stock in March 2017. The associated 125,397 shares issued to Pharmsynthez represent both owed principal and accrued interest.

On April 29, 2016, the Company closed the APA with an effective date of April 27, 2016, acquiring in-process research and development (“IPR&D”) related to certain intellectual property rights with respect to the immunomodulator product XBIO-101 held by Kevelt, which included the grant of the worldwide right to develop, market and license XBIO-101 for certain uses. In connection with the closing of the APA, the Company issued 3,378,788 shares of its common stock to Pharmsynthez. As there was no alternative use for the IPR&D, the Company recognized $39.5 million of expense based on the fair value of intellectual property received, which was determined to be more reliably measured than the related equity consideration.

On September 15, 2016, the Company issued 211,486 shares of common stock to Serum in exchange for $0.8 million of clinical PSA supply as well as settlement of prior purchases of PSA supply. Serum is a related party and the share transaction was approved by the Company’s Board of Directors.

On September 23, 2016, SynBio exchanged 970,000 shares of common stock in the Company for an equal number of shares of Series A Preferred Stock.

Warrants

In connection with the Company’s issuance of the Initial APA Note in March 2016, the Company issued a warrant to purchase 353,540 shares of common stock at the Exercise Price (the “Initial APA Warrant”). The Initial APA Warrant has a five-year term and is exercisable commencing March 31, 2016. The fair value of the Initial APA Warrant was calculated using the Black-Scholes option pricing model. The key valuation assumptions used consist of the Company’s stock price, a risk-free rate of 1.42% and an expected volatility of 135%.

In connection with the Company’s issuance of each of the Period Notes during the three months ended September 30, 2016, the Company issued warrants to purchase an aggregate of 138,379 shares of common stock at the Exercise Price and that are immediately exercisable. The Company has accounted for the warrants (the “Period Warrants”) as issued contemporaneous with the issuance of the associated debt instrument. The Period Warrants have five-year terms. The fair values of the Period Warrants were calculated using the Black-Scholes option pricing model. The key valuation assumptions used consisted of the Company’s stock price, risk free rates between 1.00% and 1.13% and expected volatilities of 110% and 120% and no expected dividends.

As of September 30, 2017 and December 31, 2016, there were outstanding warrants to purchase an aggregate of 3,522,225 shares of common stock at a weighted average exercise price of $4.30, which had been issued in connection with debt and equity financing arrangements.