1. Organization Nature of Business Kadmon Holdings, Inc. (together with its subsidiaries, Kadmon or Company) is a fully integrated biopharmaceutical company engaged in the discovery, development and commercialization of small molecules and biologics to address disease areas of significant unmet medical needs, with a near-term clinical focus on inflammatory and fibrotic diseases as well as immuno-oncology. The Company leverages its multi-disciplinary research and clinical development team members to identify and pursue a diverse portfolio of novel product candidates, both through in-licensing products and employing its small molecule and biologics platforms. By retaining global commercial rights to its lead product candidates, the Company believes that it has the ability to develop these candidates while maintaining flexibility for commercial and licensing arrangements. The Company expects to continue to progress its clinical candidates and have further clinical trial events throughout 2019. Liquidity The Company maintained cash and cash equivalents of $99.4 million at March 31, 2019 . The Company had an accumulated deficit of $266.6 million and working capital of $77.1 million at March 31, 2019 . The Company entered into a Sales Agreement with Cantor Fitzgerald &amp; Co. in August 2017 under which the Company may sell up to $40.0 million in shares of its common stock in one or more placements at prevailing market prices for its common stock (the ATM Offering). Any such sales would be effected pursuant to the Companys registration statement on Form S-3 (File No. 333-222364), declared effective by the Securities Exchange Commission (SEC) on January 10, 2018. As of December 31, 2018, the Company had not sold any shares of common stock under the ATM Offering. In January 2019, the Company sold 13,778,705 shares of common stock at a weighted average price of $2.17 per share through the ATM Offering and received total gross proceeds of $29.9 million ( $29.0 million net of $0.9 million of commissions payable by the Company). In April 2019, the Company sold 2,538,100 shares of common stock at a price of $2.70 per share through the ATM Offering and received total gross proceeds of $6.9 million ( $6.7 million net of $0.2 million of commissions payable by the Company ) (Note 19). The Companys existing cash and cash equivalents are expected to enable it to advance its planned Phase 2 clinical studies for KD025 and advance certain of its other pipeline product candidates and provide for other working capital purposes. Managements plans include continuing to finance operations through the issuance of additional equity securities and expanding the commercial portfolio through the development of the current pipeline or through strategic collaborations. Any transactions which occur may contain covenants that restrict the ability of management to operate the business or may have rights, preferences or privileges senior to the Companys common stock and may dilute current stockholders of the Company. Going Concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) , which contemplate continuation of the Company as a going concern. The Company has not established a source of revenues sufficient to cover its operating costs, and as such, ha s been dependent on funding operations through the issuance of debt and sale of equity securities. Since inception, the Company has experienced significant loses and incurred negative cash flows from operations. The Company expects to incur further losses over the next several years as it develops its business. The Company has spent, and expects to continue to spend, a substantial amount of funds in connection with implementing its business strategy, including its planned product development efforts, preparation for its planned clinical trials, performance of clinical trials and its research and discovery efforts. The Companys cash and cash equivalents are not expected to be sufficient to enable the Company to meet its long-term expected plans, including commercialization of clinical pipeline products, if approved, or initiation or completion of future registrational studies. The Company has no commitments for any additional financing and may not be successful in its efforts to raise additional funds or achieve profitable operations, and there can be no assurance that additional financing will be available to the Company on commercially acceptable terms or at all. Any amounts raised will be used for further development of the Companys product candidates, for marketing and promotion, to secure additional property and equipment and for other working capital purposes. If the Company is unable to obtain additional capital, its long-term business plan may not be accomplished and the Company may be forced to curtail or cease operations. Further, the 2015 Credit Agreement contains certain developmental milestones that must be achieved by December 31, 2019, which are considered to be outside of the Companys control, as well as a minimum liquidity covenant. As such, if achievement of the developmental milestones does not occur as anticipated by December 31, 2019 or the Company violates its minimum liquidity covenant, the Company may need to use cash and cash equivalents to fund certain repayment commitments, as any such non-compliance could, under the remedies set forth in the 2015 Credit Agreement, trigger a termination of the Commitments (as defined in the 2015 Credit Agreement) or a declaration by the Lender that the Loan (as defined in the 2015 Credit Agreement) be due and payable in whole or part, together with any applicable fees and/or interest thereon. These factors individually and collectively continue to raise substantial doubt about the Companys ability to continue as a going concern. The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern.