Proteon Therapeutics, Inc.
Notes to Financial Statements
1. Organization and operations
Proteon Therapeutics, Inc. is an early-stage biopharmaceutical company engaged in the development of elastases to treat the
growing medical needs of renal and vascular disease patients.
Therapeutics, LLC (the "LLC" or the "Predecessor") was organized in June 2001. Proteon Therapeutics, Inc., a Delaware corporation ("the Company"), was incorporated
on March 24, 2006. Effective March 27, 2006, the Predecessor and the Company merged, with the Company being the surviving entity. During 2013, the Company formed a wholly-owned
subsidiary, organized in the United Kingdom. As of June 30, 2014 there has been no activity other than its formation. Since the inception of the Predecessor on June 1, 2001, the Company
has been primarily involved in research and development activities.
Company devotes substantially all of its efforts to product research and development, initial market development and raising capital. The Company has not generated any product
revenue related to its primary business purpose to date and is subject to a number of risks similar to those of other development stage companies, including dependence on key individuals, competition
from other companies, the need for development of commercially viable products and the need to obtain adequate additional financing to fund the development of its product candidates. The Company is
also subject to a number of risks similar to other companies in the life sciences industry, including regulatory approval of products, uncertainty of market acceptance of products, competition from
substitute products and larger companies, the need to obtain additional financing, compliance with government regulations, protection of proprietary technology, dependence on third parties, product
liability and dependence on key individuals.
Company had an accumulated deficit of $100.5 million as of December 31, 2013 and $109.3 million as of June 30, 2014 (unaudited) and will require
substantial additional capital to fund its research and development and ongoing operating expenses.
The Company believes that its cash, cash equivalents and short-term investments of approximately $5.2 million as of
December 31, 2013 and $25.4 million as of June 30, 2014 (unaudited) will be sufficient to allow the Company to fund its operations at least beyond December 31, 2014;
however, the Company may be required to raise additional capital or obtain financing from other sources to fund operations in the future. As the Company continues to incur losses, a transition to
profitability is dependent upon the successful development, approval and commercialization of its product candidate and the achievement of a level of revenues adequate to support the Company's cost
structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital or obtain financing from other sources, such as
strategic partnerships or other sources. There can be no assurances, however, that additional funding will be available on terms acceptable to the Company, or at all.
2. Summary of Significant Accounting Policies
Basis of Presentation and Use of Estimates
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United
States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting
Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The preparation of financial statements in