GNPX 2017 Annual Report

81 Liquidity and Capital Resources From our inception through December 31, 2017, we have never generated revenue from product sales and have incurred net losses in each year since inception. As of December 31, 2017, we had an accumulated deficit of $17,452,352. We have funded our operations primarily through the sale and issuance of preferred stock. In connection with our initial public offering, we converted all preferred stock to common stock and forward-split the common stock on a 6.6841954-to-1 basis. During 2016, we sold 76,577 shares of Series G preferred stock at $35.33 per share, or 511,852 shares of common stock at $5.29 per share taking into account the conversion and forward-split, to various investment funds for a total of $2,705,872. During 2017, we sold 22,473 shares of Series G preferred stock at $35.33 per share or 150,211 shares of common stock at $5.29 per share taking into account the conversion and forward-split, for a total of $793,971. As of December 31, 2017, we had $161,251 in cash. We believe the net proceeds of our recent public offering, together with the cash at December 31, 2017, will be sufficient to meet our cash, operational and liquidity requirements for at least 10 months. We do not expect to generate revenue from product sales unless and until we successfully complete development of, obtain regulatory approval for and begin to commercialize one or more of our current and potential product candidates, which we expect will take a number of years and which is subject to significant uncertainty. Accordingly, we anticipate that we will need to raise additional capital to fund our future operations. Until such time as we can generate substantial revenue from product sales, if ever, we expect to finance our operating activities through a combination of equity offerings and debt financings and we may seek to raise additional capital through strategic collaborations. However, we may be unable to raise additional funds or enter into such arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our development programs or commercialization efforts or grant to others rights to develop or market product candidates that we would otherwise prefer to develop and market ourselves. Failure to receive additional funding could cause us to cease operations, in part or in full. Furthermore, even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital due to favorable market conditions or strategic considerations. Our independent registered public accounting firm has indicated that our financial condition raises substantial doubt as to our ability to continue as a going concern. The following table sets forth the primary sources and uses of cash for the years ended December 31, 2017 and 2016: Years Ended December 31, 2017 2016 Net cash used in operating activities $ (2,171,594) $ (1,248,263) Net cash used in investing activities (63,421) (89,534) Net cash provided by financing activities 793,971 2,705,872 Net (decrease) increase in cash (1,441,044) 1,368,075 Cash used in operating activities Net cash used in operating activities was $2,171,594 and $1,248,263 for the years ended December 31, 2017 and 2016, respectively. The $923,331 increase in net cash used in operating activities was primarily due to increased headcount, associated employee-related expenses, and expenses related to the Company’s initial public offering. Cash used in investing activities Net cash used in investing activities was $63,421 and $89,534 for the years ended December 31, 2017 and 2016, respectively. The decrease of $26,113 was primarily due to increased patent prosecution expenses necessary to protect our intellectual property during the year ended December 31, 2016. Cash provided by financing activities Net cash provided by financing activities was $793,971 and $2,705,872 for the years ended December 31, 2017 and 2016, respectively. The $1,911,901 decrease in net cash provided by financing activities was primarily due to the Company’s strategic financial activities during the 2016 year in order to raise sufficient capital to expand clinical operations and prepare for an initial public offering in the coming year.