UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended:SeptemberJune 30, 20172021

or

or

For the transition period from _____________ to _____________.

Commission File Number:000-13789

MARINA BIOTECH,ADHERA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

(626) 964-5788(919)518-3748

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

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 (§ 232.405 of this chapter) 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or a small reportingan emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B)to13(a) of the SecuritiesExchange 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]. ☒.

AsAs of November 13, 2017,August 23, 2021, there were 10,521,278 13,035,290 shares of the registrant’s common stock outstanding.

MARINA BIOTECH,ADHERA THERAPEUTICS, INC.

FORM 10-Q

FOR THE THREE AND NINE MONTHSQUARTERLY PERIOD ENDED SEPTEMBERJUNE 30, 20172021

TABLE OF CONTENTS

Items 3, 4 and 5 have not been included as they are not applicable.

PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARINA BIOTECH,ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance SheetsCONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share and per share amounts)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MARINA BIOTECH,ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of OperationsCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except for share and per share amounts)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MARINA BIOTECH,

ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in Stockholders’ Equitythousands, except for share amounts)

(Unaudited)

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

ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MARINA BIOTECH,

ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash FlowsNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MARINA BIOTECH, INC.

Notes to Condensed Consolidated Financial Statements

FOR THE THREE and NINE MONTHS ENDED SEPTEMBERJUNE 30, 20172021

(Unaudited)

Note 1 – Nature of Operations, Basis of Presentation and Significant Accounting Policies

Business Overview

Marina Biotech,Adhera Therapeutics, Inc. and its wholly-owned subsidiaries, MDRNA Research, Inc. (“MDRNA”), Cequent Pharmaceuticals, Inc. (“Cequent”), Atossa Healthcare, Inc. (“Atossa”), and IthenaPharma,IThenaPharma, Inc. (“IThena”) (collectively “Marina,” “we,” “our,“Adhera,” or “us”the “Company”), is an emerging specialty biotech company that, to the extent that resources and opportunities become available, is strategically evaluating its focus including a fully integrated, commercial stage biopharmaceutical company delivering proprietaryreturn to a drug therapeuticsdiscovery and development company.

Previously, the Company was a commercially focused entity that leveraged innovative distribution models and technologies to improve the quality of care for significant unmet medical needspatients in the U.S., EuropeUnited States suffering from chronic and certain additional international markets. Its portfolio of products currently focusesacute diseases with a focus on fixed dose combinations (“FDC”)combination therapies in hypertension, arthritis, painhypertension. On January 4, 2021, the licensor terminated the licensing agreement for the product candidate.

As of the date of this report, the Company is not engaged in any research, development, or commercialization activities, and oncology allowingis not generating any revenues from operations.

On July 28, 2021, the Company and Melior Pharmaceuticals II, LLC entered into an exclusive license agreement for innovative solutions to such unmet medical needs. Its missionthe development, commercialization and exclusive license of MLR-1019. MLR-1019 is being developed as a new class of therapeutic for Parkinson’s disease (PD) and 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, certainthe best of the intellectual property assets relatedCompany’s knowledge, the only drug candidate today to address both movement and non-movement aspects of PD. Under the patented technology platform known as DyrctAxess, also called Total Care, that offers enhanced efficiency, controlAgreement, the Company was granted an exclusive license to use the MP Patents and informationknow-how to empower patients, physicians and manufacturers to help achieve optimal care.

In doing so, we have created a universal platformdevelop products in consideration for the effective treatment of hypertensioncash payments upon meeting certain performance milestones as well as fora royalty of 5% of gross sales.

To the distribution of FDC hypertensive drugs, such asextent that resources have been available, the Company has continued to work with its advisors to restructure our FDA-approved product Prestalia,company and to identify potential strategic transactions, including the other productsMelior transaction described above. There can be no assurance that the Company will be successful in our pipeline, devices for therapeutic drug monitoring, blood pressure,raising sufficient capital to meet its obligations under the Melior license agreement. If the Company does not raise substantial additional capital to develop 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 fixed dose combination 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 ofcommercialize repay its indebtedness which is an FDC of celecoxib, a COX-2 selective nonsteroidal anti-inflammatory drug (“NSAID”) and either lisinopril (IT-102)in default 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 inrestructure the precancerous syndrome and orphan indication Familial Adenomatous Polyposis (“FAP”); and (iv) CEQ508 combined with IT-103 to treat Colorectal Cancer.

Our current focusindebtedness, it 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 believelikely 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.Company will discontinue all operations and seek bankruptcy protection.

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.

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 2 – Intangible Assets below as well as our 2016 Annual Report on Form 10K filed with the SEC.

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.

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

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions pursuant to Form 10-Qthe rules and Article 8regulations of Regulation S-X.the Securities and Exchange Commission. Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete audited financial statements. The accompanying unaudited financial informationThis quarterly report should be read in conjunction with the audited consolidated financial statements includingin the notes thereto, as of andCompany’s Annual Report on Form 10-K for the year ended December 31, 2016, included in our 2016 Annual Report on Form 10-K filed with the SEC.2020. The information furnished in this report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. The results of operations for the ninesix months ended SeptemberJune 30, 20172021 are not necessarily indicative of the results for the year ending December 31, 20172021 or for any future period.

Principles of Consolidation

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

Going Concern and Management’s Liquidity Plans

The accompanying condensed consolidated financial statements have been prepared on the basis that wethe Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. At SeptemberAs of June 30, 2017, we2021, the Company had a significant accumulated deficitcash and cash equivalents of $5,177,237 $42,000 and ahas negative working capital of $4,551,207. We had obtained a line of creditapproximately $16.3million.

The Company has incurred recurring losses and negative cash flows from Autotelic Inc. of $500,000, of which we have utilized $92,590. As such, we currently have approximately $407,000 of available funds under our line of credit under this line of credit with Autotelic Inc. We believe this amount of available funds is sufficient to fund our operations through December 31, 2017. Our operating activities consume the majority of our cash resources. We anticipate that we will continue to incursince inception and has funded its operating losses through the sale of common stock, preferred stock, warrants to purchase common stock, convertible notes and secured promissory notes. The Company incurred a net loss of approximately $942,000for the six months ended June 30, 2021. The Company had an accumulated deficit of approximately $46.8 million as we execute our commercialization plans, as well as strategic and business development initiatives. of June 30, 2021.

In addition, we have had andto the extent that the Company continues its business operations, the Company anticipates that it 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 throughHowever, 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, weCompany cannot be certain that weit will be able to obtain such funds required for our operations at terms acceptable to us or at all. In 2016, we fundedGeneral market conditions, as well as market conditions for companies in our financial and business position, as well as the ongoing issue arising from the COVID-19 pandemic, 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. If the Company is unable to obtain additional financing in the future, there may be a negative impact on the financial viability of the Company. The Company plans to increase working capital by managing its cash flows and expenses, divesting development assets and raising additional capital through private or public equity or debt financing. There can be no assurance that such financing or partnerships will be available on terms which are favorable to the Company or at all. While management of the Company believes that it has a plan to fund ongoing operations, primarilythere is no assurance that its plan will be successfully implemented. Failure to raise additional capital through one or more financings, divesting development assets or reducing discretionary spending could have a material adverse effect on the issuance of convertible debt and license-related revenues.

There isCompany’s ability to achieve its intended business objectives. These factors raise substantial doubt about ourthe Company’s ability to continue as a going concern for one yeara period of twelve months from the issuance date of this Form 10-Q, which may affect our ability to obtain future financing or engage in strategic transactions, and may require us to curtail our operations. We cannot predict, with certainty,report. The condensed consolidated financial statements do not contain any adjustments that might result from the outcomeresolution of our actions to generate liquidity, includingany of the availability of additional equity or debt financing, or whether such actions would generate the expected liquidity as currently planned.above uncertainties.

Summary of Significant Accounting Policies

Reclassification

Certain reclassifications have been made to prior periods consolidated statements of operations including adjustments related to the adoption of ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) to conform to current period presentation. These reclassifications had no material effect on prior periods consolidated net loss or stockholders’ deficit.

Use of Estimates

The preparation of the accompanying condensed 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 assetsaccruals related to our operating activity including legal and other consulting expenses, the fair value of financial instruments.non-cash equity-based issuances, the fair value of derivative liabilities, and the valuation allowance on deferred tax assets. Actual results could differ materially from such estimates under different assumptions or circumstances.

Fair Value of Financial Instruments

We considerThe Company considers the fair value of cash, accounts payable, due to related parties, notes payable, notes payable to related parties, convertible notes payabledebt, and accrued liabilitiesexpenses 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:

Our cashAs of June 30, 2021, the Company measured a conversion feature on an outstanding convertible note loan as a derivative liability using significant unobservable prices that are based on little or no verifiable market data, which is subject toLevel 3 in the fair value measurement and is determined by Level 1 inputs. We measure the liability for committed stock issuances withhierarchy, resulting in a fixed share number using Level 1 inputs. We measure 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. The following tables summarize our fair value estimate of approximately $103,000. There were 0liabilities or assets measured at fair value on a recurringnon-recurring basis as of SeptemberJune 30, 20172021 and there were 0 liabilities or assets measured at fair value on a reoccurring or non-recurring basis as of December 31, 2016:

2020.

Schedule of Fair Value Measurements

Convertible Debt and Warrant Accounting

Debt with warrants

In accordance with ASC Topic 470-20-25, when the Company issues debt with warrants, the Company treats the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the consolidated statements of operations. The following presents activity ofoffset to the contra-liability is recorded as additional paid in capital in the Company’s consolidated balance sheets if the warrants are not treated as a derivative. The Company determines the fair value liability of the warrants using the Black-Scholes Option Pricing Model (“Black-Scholes”),the binomial model or the Monte Carlo Method based upon the underlying conversion features of the debt and then computes and records the relative fair value as a debt discount. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the consolidated statements of operations.

Convertible debt – derivative treatment

When the Company issues debt with a conversion feature, it first assess whether the conversion feature meets the requirements to be treated as a derivative, as follows: a) one or more underlyings, typically the price adjustable warrants determined by Level 3 inputsof our common stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets the definition of a derivative does not have to be separated from the host instrument if the component qualifies for the period ended September 30, 2017:scope exception for certain contracts involving an issuer’s own equity. The scope exception applies if the contract is both a) indexed to its own stock; and b) classified in stockholders’ equity in its statement of financial position.