Cardiff Oncology, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding the future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. In addition, our business and financial performance may be affected by the factors that are discussed under “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 27, 2020. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The following discussion and analysis is qualified in its entirety by, and should be read in conjunction with, the more detailed information set forth in the financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. Overview We are a clinical-stage, oncology therapeutics company, developing drugs that target mitosis (cell division) to treat various types of cancer, including colorectal, prostate and leukemia. Our goal is to overcome resistance, extend duration of response and increase overall survival. Our clinical development programs incorporate tumor genomics and biomarker technology to enable assessment and develop predictors of patient response to treatment. We licensed onvansertib, a first-in-class, third-generation, oral and highly-selective Polo-like Kinase 1 (PLK1) inhibitor, from Nerviano Medical Sciences (NMS) in March, 2017, pursuant to a license agreement with NMS dated March 13, 2017. This exclusive, world-wide license agreement includes 3 issued patents for onvansertib which cover composition of matter, salt forms of onvansertib and combination of onvansertib with other drugs. Onvansertib is highly potent against the PLK1 enzyme (concentration for 50% inhibition [IC50] = 2nM), whereas low or no activity was observed on a panel of 63 kinases (IC50>500 nM), including the PLK members PLK2 and PLK3 (IC50>10 μM). Onvansertib was developed to have ideal pharmacokinetics, including oral bioavailability and administration and a drug half-life of approximately 24 hours, allowing for flexible dosing and scheduling, and is well tolerated and safe with only mild to moderate side effects reported to-date. A Phase 1 safety study of onvansertib was successfully completed in patients with advanced metastatic solid tumors and published in 2017 in Investigational New Drugs. PLK1, a serine/threonine kinase, is a master regulator of mitotic progression with various roles and localizations during the different mitotic phases. Upon PLK1 depletion in cancer cells by RNA interference (RNAi), inhibition of proliferation and decreased viability, resulting from cell cycle arrest with 4N DNA content followed by apoptosis, are observed. PLK1 depletion also results in an increase in the number of cells containing abnormal spindle formation and misaligned chromosomes. Expression of PLK1 is seen in all proliferating normal tissues, and PLK1 is overexpressed in a number of tumors (including breast, prostate, ovary, lung, gastric, and colon cancers), as well as in hematologic cancers. 20 Table of Contents Onvansertib has been tested for antiproliferative activity on a panel of 148 tumor cell lines and appeared highly active with an IC50 (a measure concentration for 50% target inhibition) below 100 nM in 75 cell lines and IC50 values below 1 uM in 133 out of 148 cell lines. Onvansertib also appears active in cells expressing multi-drug resistant (“MDR”) transporter proteins and we believe its apparent ability to overcome the MDR transporter resistance mechanism in cancer cells could prove useful in broader drug combination applications. Additionally, onvansertib has been tested in in-vivo xenograft and transgenic models of different cancer types with the demonstration of tumor growth inhibition or tumor regression. In in-vitro and in-vivo preclinical studies, synergy (interaction of discrete drugs such that the total effect is greater than the sum of the individual effects) has been demonstrated with onvansertib when used in combination with numerous different chemotherapies, including irinotecan, cisplatin, cytarabine, doxorubicin, gemcitabine and paclitaxel, as well as targeted therapeutics, such as abiraterone acetate (Zytiga®), histone deacetylase (“HDAC”) inhibitors, such as belinostat (Beleodaq®), quizartinib (AC220), a development stage FLT3 inhibitor, and bortezomib (Velcade®). These therapies are used clinically for the treatment of solid tumor cancers, leukemias and lymphomas including mCRC, mCRPC, pancreatic cancer, triple negative breast cancer (“TNBC”), AML and other hematological malignancies. We believe the high-selectivity of onvansertib to PLK1, its 24-hour half-life and oral bioavailability, as well as its demonstrated safety and tolerability, with expected on-target, easy to manage and reversible side effects, may prove beneficial in addressing clinical therapeutic needs across a variety of cancers. Clinical Program Updates We currently have three active clinical trials: • TROV-054 is a Phase 1b/2 open-label clinical trial of onvansertib in combination with FOLFIRI and Avastin® in patients with KRAS-mutated metastatic colorectal cancer (mCRC), which is being conducted at USC Norris Comprehensive Cancer Center and The Mayo Clinic; • TROV-053 is a Phase 2 open-label clinical trial of onvansertib in combination with abiraterone acetate (Zytiga®) and prednisone in patients with metastatic castration-resistant prostate cancer (mCRPC), which is being conducted at Beth Israel Deaconess Medical Center ("BIDMC"), Dana-Farber Cancer Institute ("DFCI"), and Massachusetts General Hospital ("MGH"); • and TROV-052 is a Phase 2 open-label clinical trial of onvansertib in combination with standard-of-care chemotherapy, decitabine, in patients with acute myeloid leukemia (AML), which is being conducted at nine sites across the U.S. The Phase 1b portion of the AML trial was completed in the fourth quarter of 2019. KRAS-mutated mCRC TROV-054 is a Phase 1b/2 Study of onvansertib for the second-line treatment of patients with KRAS-mutated metastatic colorectal cancer in combination with standard-of-care FOLFIRI and bevacizumab (Avastin®). The primary objective of this study is to evaluate the dose-limiting toxicities (DLTs) and maximum tolerated dose (MTD) or recommended Phase 2 dose (RP2D) of onvansertib in combination with FOLFIRI and bevacizumab (Phase 1b) and to continue to assess the safety and preliminary efficacy of onvansertib in combination with FOLFIRI and bevacizumab (Phase 2). The rationale for this clinical trial is based on three key principles including synthetic lethality, synergy and proof-of-concept clinical benefit. Synthetic lethality arises when a combination of deficiencies in the expression of two or more genes leads to cell death, whereas a deficiency in only one of these genes does not. The deficiencies can arise through mutations, epigenetic alterations or inhibitors of one of the genes. In reference to onvansertib, CRC tumor cells harboring KRAS mutations are more vulnerable to cell death with PLK1 inhibition and KRAS-mutated cells are more sensitive to onvansertib than KRAS wild-type isogenic cells. Synergy occurs when the combination of two drugs results in activity greater than that of each individual drug. Onvansertib in combination with irinotecan (the “IRI” in FOLFIRI) demonstrate synergy in colorectal cancer cell lines and the combination has demonstrated significantly greater tumor growth inhibition than either drug alone. Proof-of-concept clinical response has been demonstrated in a previously completed Phase 1 trial in solid tumors in which 3 of 5 patients showing stable disease had a KRAS mutation; 2 in colorectal cancer and 1 in pancreatic cancer. Data presented on May 29, 2020, at the American Society for Clinical Oncology (ASCO) conference, demonstrated the safety and efficacy on onvansertib has been demonstrated. Of the 11 patients evaluable for efficacy, 91% (10 of 11) achieved clinical benefit; 5 patients (45%) having a partial response (PR) and 5 (45%) having stable disease (SD). The response to 21 Table of Contents treatment appears to be durable, with progression-free survival to-date of >6 months with patients remaining on treatment. Additionally, on May 26, 2020, the FDA granted Fast Track Designation to onvansertib for the second-line treatment of patients with KRAS-mutated mCRC and in June, 2020, we initiated an Expanded Access Program to afford more patients access to onvansertib, beyond the ongoing clinical trial. Key News Releases On June 9, 2020, we announced the initiation of our Expanded Access Program (EAP) for onvansertib, in combination with standard-of-care FOLFIRI and bevacizumab, for second-line treatment of patients with KRAS-mutated metastatic colorectal cancer (mCRC). This announcement followed the FDA granting Fast Track Designation for onvansertib in KRAS-mutated mCRC. On May 29, 2020, we announced positive efficacy and favorable safety data from our ongoing Phase 1b/2 clinical trial in KRAS-mutated mCRC in a virtual oral poster presentation at the American Society of Clinical Oncology (ASCO) conference. The data continues to demonstrate that the primary efficacy endpoint of overall objective response (ORR), as measured by tumor regression, is ten-fold greater than current standard-of-care of 4%. As of the date of the ASCO presentation, 89% of evaluable patients in the trial have achieved a clinical response and the response appears durable with patients having progression-free survival (PFS) of at least 6 months. Onvansertib has also shown its effectiveness in targeting the most prevalent KRAS mutation subtypes associated with colorectal cancer, which until recently have been considered to be undruggable. On May 28, 2020, we announced that the U.S. Food and Drug Administration (FDA) granted Fast Track Designation to onvansertib, for the second-line treatment of patients with KRAS-mutated metastatic colorectal cancer (mCRC). Being granted Fast Track designation for onvansertib in KRAS-mutated metastatic colorectal cancer underscores the urgent need for new treatment options for these patients and makes onvansertib eligible for accelerated approval and priority review. On May 13, 2020, we announced an agreement with PoC Capital, LLC, to fund the completion of our ongoing Phase 1b/2 clinical trial in patients with KRAS-mutated metastatic Colorectal Cancer (mCRC). Our agreement with PoC Capital follows the Company's announcement of positive safety and efficacy data from our Phase 1b trial, presented at the American Association for Cancer Research (AACR) conference. On April 28, 2020, we announced new positive results from our ongoing Phase 1b/2 clinical trial of onvansertib in combination with FOLFIRI and Avastin® (bevacizumab) for second-line treatment of patients with KRAS-mutated metastatic colorectal cancer (mCRC). The data were featured in a virtual oral presentation, delivered by Dr. Afsaneh Barzi, at the American Association for Cancer Research (AACR) conference on Monday, April 27th, 2020. At the time of this presentation the Phase 1b/2 trial had enrolled 12 patients, with 88% response in 7 of 8 evaluable patients; 3 patients with a partial response (PR); 4 patients with stable disease (SD). Data showed median progression-free survival (PFS) of at least 6.5 months with 6 patients continuing on treatment; one patient went on to have successful curative surgery. The biomarker used in this trial is changes in KRAS mutation blood levels; decreases to non-detectable levels in cycle one of treatment is predictive of future tumor regression and response. mCRPC TROV-053 is a Phase 2 Study of onvansertib in combination with Zytiga (abiraterone) and prednisone for the treatment of patients with metastatic castration-resistant prostate cancer. The primary objective of this study is to observe the effects of onvansertib in combination with abiraterone and prednisone on disease control as assessed by prostate specific antigen (PSA) decline or stabilization after 12 weeks of study treatment in patients with mCRPC showing early signs of resistance to abiraterone. The rationale for this trial is based on the mechanism of action (MOA) of onvansertib and Zytiga and the synergy of these two drugs when used in combination. Onvansertib inhibits tumor cell division (mitosis) by inducing G2/M arrest of tumor cells and the combination of onvansertib and Zytiga significantly increases mitotic arrest and is synergistic when used in combination. Additionally, PLK1 inhibition appears to enhance the efficacy of androgen signaling blockade in castration-resistant prostate cancer. Data presented on February 13, 2020, at the American Society for Clinical Oncology Genitourinary Cancers (ASCO GU) conference, demonstrated the safety and efficacy of onvansertib have been demonstrated in patients. Overall, 63% (12 of 22 Table of Contents 19) of evaluable patients achieved partial response (PR) or stable disease (SD) following 12 weeks of treatment with onvansertib and Zytiga. Response to treatment is evaluated based on prostate specific antigen (PSA) values (primary endpoint) and radiographic scans. Additionally, onvansertib-induced circulating tumor cell (CTC) decrease has been shown to be associated with progression-free survival. AML TROV-052 is a Phase 2 Study of onvansertib in combination with standard-of-care chemotherapy for the treatment of patients with relapsed or refractory acute myeloid leukemia (AML). The Phase 1b portion of this trial was completed in the fourth quarter of 2019. The objective of this trial is to evaluate the DLTs and MTD or RP2D of onvansertib (Phase 1b – completed in October 2019). In Phase 2, the objective is to assess the safety, tolerability and preliminary efficacy of the combination of onvansertib at the RP2D and decitabine in patients with relapsed or refractory AML. Additionally, as a correlative objective, this trial is evaluating potential pharmacodynamic (PD) and diagnostic biomarkers of onvansertib in patients with AML. We were granted Orphan Drug Designation (ODD) for onvansertib for the treatment of AML from the FDA and the European Commission. The rationale for this trial is based on the need for new and better therapeutic options for patients in the relapsed or refractory AML setting. Current treatment options are often limited by the patient’s age and health status. Combination treatment with onvansertib and standard-of-care chemotherapy may provide a new safe and effective therapeutic option. Data presented on June 12, 2020 at the European Hematology Association (EHA) conference, demonstrated the safety and efficacy of onvansertib has been demonstrated in patients. In the completed Phase 1b portion of this trial, the recommended Phase 2 dose (RP2D) was established at onvansertib 60 mg/m 2 . Onvansertib adverse events were primarily on-target hematological events, in accordance with the mechanism of action, and were reversible and manageable. Anti-leukemic activity was observed at a wide range of onvansertib dose levels (27 to 90 mg/m 2 ) and the complete response rate achieved in patients was 24% through all dose levels, and 31% at the 4 higher dose levels (27 to 90 mg/m 2 ). Decreases in mutant ctDNA after 1 cycle of treatment were highly predictive of clinical response and target engagement (biomarker positivity) in circulating blast cells was associated with a greater decrease in bone marrow blast cells. Phase 2 is enrolling patients and is ongoing. Key News Release On June 15, 2020, we announced the presentation of final results of our Phase 1b study, and preliminary positive data from our Phase 2 study. The data was presented as a virtual poster presentation at the European Hematology Association (EHA) annual conference and highlighted the efficacy, durability of response, favorable safety and tolerability, as well as correlative biomarker data. Anti-leukemic activity was observed at a wide range of onvansertib doses (27 to 90 mg/m 2 ), indicating a large therapeutic window. Financial and Company Updates Financial On June 16, 2020, we announced we entered into a securities purchase agreement, jointly led by biotech-focused institutional investors, Acorn Bioventures, LP, and CAM Capital, for aggregate gross proceeds of $13.5 million. On May 27, 2020, we announced we entered into a definitive securities purchase agreement with biotech-focused institutional investor, Acorn Bioventures, LP, for gross proceeds of $2.5 million. On May 19, 2020, we announced we entered into a securities purchase agreement with our Board of Directors and Executives for aggregate gross proceeds of $810,000. Company On May 8, 2020 we changed our company name from Trovagene, Inc. to Cardiff Oncology, Inc., and our Nasdaq ticker symbol to ‘CRDF.’ The web address for the Cardiff Oncology website is www.cardiffoncology.com. On May 8, 2020 Mark Erlander, PhD, assumed the role of Chief Executive Officer and Thomas Adams, PhD, transitioned from Chief Executive Officer and Chairman to Executive Chairman. 23 Table of Contents On April 22, 2020, we announced the election of three new independent Directors to our Board of Directors; Dr. James Armitage, Dr. Gary Pace and Ms. Lâle White. Each new Director brings extensive and relevant experience to our company. Our accumulated deficit through June 30, 2020 is $220,389,581. To date, we have generated minimal revenues and expect to incur additional losses to perform further research and development activities. Our drug development efforts are in their early stages, and we cannot make estimates of the costs or the time that our development efforts will take to complete, or the timing and amount of revenues related to the sale of our drugs. The risk of completion of any program is high because of the many uncertainties involved in developing new drug candidates to market, including the long duration of clinical testing, the specific performance of proposed products under stringent clinical trial protocols, extended regulatory approval and review cycles, our ability to raise additional capital, the nature and timing of research and development expenses, and competing technologies being developed by organizations with significantly greater resources. Off-Balance Sheet Arrangements We had no off-balance sheet arrangements as of June 30, 2020. Critical Accounting Policies Our accounting policies are described in ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS of our Annual Report on Form 10-K as of and for the year ended December 31, 2019, filed with the SEC on February 27, 2020. There have been no changes to our critical accounting policies since December 31, 2019. RESULTS OF OPERATIONS Three Months Ended June 30, 2020 and 2019 Revenues Our total revenues consisted of the following: Three Months Ended June 30, 2020 2019 Increase (Decrease) Royalties $ 42,633 $ 36,852 $ 5,781 Services and other — 1,496 (1,496) Total revenues $ 42,633 $ 38,348 $ 4,285 The increase in royalty income for the three months ended June 30, 2020 as compared to the prior period is primarily from fluctuations of our sales-based or usage-based royalties on our intellectual property licenses. Revenue recognition of the royalty depends on the timing and overall sales activities of the licensees. Research and Development Expenses Research and development expenses consisted of the following: Three Months Ended June 30, 2020 2019 Increase (Decrease) Salaries and staff costs $ 425,153 $ 380,050 $ 45,103 Stock-based compensation 70,085 86,058 (15,973) Clinical trials, outside services, and lab supplies 1,808,643 2,134,974 (326,331) Facilities and other 171,841 229,258 (57,417) Total research and development $ 2,475,722 $ 2,830,340 $ (354,618) 24 Table of Contents Research and development expenses decreased by $354,618 to $2,475,722 for the three months ended June 30, 2020 from $2,830,340 for the same period in 2019. The overall decrease in research and development expenses was primarily due to costs associated with clinical programs and outside service costs for three ongoing clinical trials related to the development of our lead drug candidate, onvansertib. Facilities and other decreased primarily due to decreased travel and conference expenses to present data related to our lead drug candidate, onvansertib. Selling, General and Administrative Expenses Selling, general and administrative expenses consisted of the following: Three Months Ended June 30, 2020 2019 Increase (Decrease) Salaries and staff costs $ 551,581 $ 458,361 $ 93,220 Stock-based compensation 211,691 62,776 148,915 Outside services and professional fees 484,615 576,214 (91,599) Facilities and other 421,340 330,616 90,724 Total selling, general and administrative $ 1,669,227 $ 1,427,967 $ 241,260 Selling, general and administrative expenses increased by $241,260 to $1,669,227 for the three months ended June 30, 2020 from $1,427,967 for the same period in 2019. The significant components of the increase were primarily due to the increase in stock-based compensation, salaries and staff costs, facilities and other costs, partially offset by a reduction in outside services. The increase in Stock-based compensation is primarily due to stock options granted in June 2019. The increase in salaries and staff costs is primarily due to annual increases in salary and promotions. The increase in facilities and other cost was due to an increase in insurance costs for the three months ended June 30, 2020 as compared to the same period of 2019. Interest Income Interest income was $15,671 for the three months ended June 30, 2020 as compared to $69,761 for the same period of 2019. The decrease of interest income is primarily due to lower interest rates for three months ended June 30, 2020 as compared to the same period of 2019. Change in Fair Value of Derivative Financial Instruments — Warrants We have issued warrants that are accounted for as derivative liabilities. As of June 30, 2020, the derivative financial instruments — warrants liabilities were revalued to $46,164, resulting in an increase in value of $44,144 from March 31, 2020, based primarily upon the fluctuation in our stock price as well as the changes in the expected term, volatility, and risk-free interest rates for the expected term. The increase in value upon remeasurement at June 30, 2020 was recorded as a loss from the change in fair value of derivative financial instruments — warrants in the condensed statement of operations. Net Loss Net loss and per share amounts were as follows: Three Months Ended June 30, 2020 2019 Increase (Decrease) Net loss attributable to common shareholders $ (7,397,076) $ (4,131,363) $ 3,265,713 Net loss per common share — basic and diluted $ (0.51) $ (0.76) $ (0.25) Weighted average shares outstanding — basic and diluted 14,492,159 5,408,124 9,084,035 The $3,265,713 increase in net loss attributable to common shareholders was primarily the result of an increase of $3.3 million attributable to the d eemed dividends recognized on beneficial conversion features of convertible preferred stock issuances occurring during the three months ended June 30, 2020, compared to the same period in the prior year. The $0.25 decrease in basic net loss per share was impacted by the increase in basic weighted average shares outstanding resulting 25 Table of Contents primarily from the issuance of approximately 15.9 million shares of common stock and common stock equivalents from July 1, 2019 through June 30, 2020. Six Months Ended June 30, 2020 and 2019 Revenues Our total revenues consisted of the following: Six Months Ended June 30, 2020 2019 Increase (Decrease) Royalties $ 110,337 $ 98,873 $ 11,464 Services and other — 1,496 (1,496) Total revenues $ 110,337 $ 100,369 $ 9,968 The increase in revenues for the six months ended June 30, 2020 as compared to the prior period is primarily from fluctuations of our sales-based or usage-based royalties on our intellectual property licenses. Revenue recognition of the royalty depends on the timing and overall sales activities of the licensees. Research and Development Expenses Research and development expenses consisted of the following: Six Months Ended June 30, 2020 2019 Increase (Decrease) Salaries and staff costs $ 849,126 $ 783,939 $ 65,187 Stock-based compensation 146,953 196,138 (49,185) Clinical trials, outside services, and lab supplies 3,782,184 4,062,903 (280,719) Facilities and other 403,150 435,959 (32,809) Total research and development $ 5,181,413 $ 5,478,939 $ (297,526) Research and development expenses decreased by $297,526 to $5,181,413 for the six months ended June 30, 2020 from $5,478,939 for the same period in 2019. The overall decrease in research and development expenses was primarily due to costs associated with clinical programs and outside service costs for three ongoing clinical trials related to the development of our lead drug candidate, onvansertib. Facilities and other decreased primarily due to decreased travel and conference expenses to present data related to our lead drug candidate, onvansertib. Selling, General and Administrative Expenses Selling, general and administrative expenses consisted of the following: Six Months Ended June 30, 2020 2019 Increase (Decrease) Salaries and staff costs $ 1,045,138 $ 981,158 $ 63,980 Stock-based compensation 312,132 152,763 159,369 Outside services and professional fees 979,603 1,034,045 (54,442) Facilities and other 818,373 635,186 183,187 Total selling, general and administrative $ 3,155,246 $ 2,803,152 $ 352,094 Selling, general and administrative expenses increased by $352,094 to $3,155,246 for the six months ended June 30, 2020 from $2,803,152 for the same period in 2019. The significant components of the increase were primarily due to the increase in stock-based compensation, salaries and staff costs, facilities and other costs, partially offset by a reduction in outside services. The increase in stock-based compensation is primarily due to stock options granted in June 2019. The increase in 26 Table of Contents salaries and staff costs is primarily due to annual salary increases and promotions. The increase in facilities and other cost was due to an increase in insurance costs for the six months ended June 30, 2020 as compared to the same period of 2019. Interest Income and Expense Interest income was $51,494 for the six months ended June 30, 2020 as compared to $134,504 for the same period of 2019. The decrease of interest income is primarily due to lower interest rates for six months ended June 30, 2020 as compared to the same period of 2019. Change in Fair Value of Derivative Financial Instruments — Warrants We have issued warrants that are accounted for as derivative liabilities. As of June 30, 2020, the derivative financial instruments — warrants liabilities were revalued to $46,164, resulting in an increase in value of $42,037 from December 31, 2019, based primarily upon the fluctuation in our stock price as well as the changes in the expected term, volatility, and risk-free interest rates for the expected term. The increase in value upon remeasurement at June 30, 2020 was recorded as a loss from the change in fair value of derivative financial instruments — warrants in the condensed statement of operations. Net Loss Net loss and per share amounts were as follows: Six Months Ended June 30, 2020 2019 Increase (Decrease) Net loss attributable to common shareholders $ (11,491,698) $ (8,310,463) $ 3,181,235 Net loss per common share — basic and diluted $ (0.94) $ (1.75) $ (0.81) Weighted average shares outstanding — basic and diluted 12,201,232 4,750,993 7,450,239 The $3,181,235 increase in net loss attributable to common shareholders was primarily the result of an increase of $3.0 million attributable to the d eemed dividends recognized on beneficial conversion features of convertible preferred stock issuances, an increase in the loss recorded from the change in fair value of derivative financial instruments and a decrease in interest income, for the six months ended June 30, 2020 compared to the same period in the prior year. The $0.81 decrease in basic net loss per share was impacted by the increase in basic weighted average shares outstanding resulting primarily from the issuance of approximately 15.9 million shares of common stock and common stock equivalents from July 1, 2019 through June 30, 2020. LIQUIDITY AND CAPITAL RESOURCES The COVID-19 outbreak in the United States has caused business disruptions. The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, and impact on our clinical trials, employees and vendors, all of which are uncertain and cannot be predicted. The economic effects of the outbreak could also have an adverse effect on our ability to raise additional capital. At this point, the extent to which COVID-19 may impact our financial condition or results of operations is uncertain. As of June 30, 2020, we had $27,754,813 in cash and cash equivalents. Net cash used in operating activities for the six months ended June 30, 2020 was $7,665,787, compared to $6,803,159 for the six months ended June 30, 2019. Our use of cash was primarily a result of the net loss of $8,213,094 for the six months ended June 30, 2020, adjusted for non-cash items related to release of clinical trial funding commitment of $506,509, stock-based compensation of $459,085, and depreciation and amortization of $233,909. The net change in our operating assets and liabilities was $728,402 increasing cash used in operations. At our current and anticipated level of operating loss, we expect to continue to incur an operating cash outflow for the next several years. Net cash used in investing activities was $0 during the six months ended June 30, 2020, compared to $5,274 for the same period in 2019, which were for capital expenditures in the prior period. Net cash provided in financing activities was $25,225,308 during the six months ended June 30, 2020, compared to $6,146,570 for the same period in 2019. Net cash provided in financing activities during the six months ended June 30, 2020 was primarily from $18.8 million of proceeds from the sale of common stock, preferred stock and warrants and from $6.1 27 Table of Contents million of proceeds from the exercise of warrants. Net cash provided in financing activities during the six months ended June 30, 2019 was primarily from $3.3 million of proceeds from the exercise of warrants and $2.9 million from the sale of common stock and warrants. As of June 30, 2020, and December 31, 2019, we had working capital of $23,857,104 and $6,571,985, respectively. The Company has incurred net losses since its inception and has negative operating cash flows. As of June 30, 2020, the Company had $27.8 million in cash and cash equivalents and believes it has sufficient cash to meet its funding requirements for at least the next 12 months following the issuance date of these financial statements. For the foreseeable future, the Company expects to continue to incur losses and require additional capital to further advance its clinical trial programs and support its other operations. The Company cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that the Company can raise additional funds by issuing equity securities, the Company’s stockholders may experience additional dilution. The economic effects of COVID-19 could also have an adverse effect on the Company's ability to raise additional capital. Controlled Equity Offerings and Public Offerings On March 30, 2020, we entered into a Securities Purchase Agreement with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which we agreed to offer, issue and sell to LPC, (i) in a registered direct offering, an aggregate of (a) 800,000 shares of common stock and (b) Series I warrants to purchase up to 131,967 shares (the “Series I Warrant Shares”) of our common stock. In a concurrent private placement, we also sold to LPC Series J warrants (the “Series J Warrants”) to purchase one share of our common stock for each Share and for each Series I Warrant purchased for cash in the registered direct offering. The Series J Warrants are exercisable six months following the date of issuance at an exercise price of $0.948 per share and will expire 5.5 years following the date of issuance. On April 9, 2020, we entered into a Securities Purchase Agreement with LPC, pursuant to which we agreed to offer, issue and sell to LPC, (i) in a registered direct offering, an aggregate of (a) 904,970 shares of common stock and (b) Series K warrants to purchase up to 255,000 shares (the “Series K Warrant Shares”) of our common stock. In a concurrent private placement, we also sold to LPC Series L warrants (the “Series L Warrants”) to purchase one share of our Common Stock for each Share and for each Series K Warrant purchased for cash in the registered direct offering. The Series L Warrants are exercisable six months following the date of issuance at an exercise price of $0.81 per share and will expire 5.5 years following the date of issuance. On May 8, 2020, we entered into a Stock and Warrant Subscription Agreement (the “SPA”) with PoC Capital, LLC (“PoC”) pursuant to which we issued to PoC at an aggregate issue price of $2,300,000, (i) 602,833 shares of our common stock, (ii) 154,670 shares of our Series D Preferred Stock and (iii) warrants (the “Warrants”) exercisable for 859,813 shares of our common stock, in exchange for PoC funding clinical development of onvansertib, our first-in-class, 3rd generation oral and highly selective PLK1 inhibitor in a Phase 1b/2 clinical trial in patients with metastatic colorectal cancer pursuant to a Master Services Agreement dated as of January 25, 2019 by and among us, Integrium, LLC and PoC, as amended. The Warrants are exercisable six months following the date of issuance at an exercise price of $1.50 per share and will expire 5.5 years following the date of issuance. On May 11, 2020 and May 14, 2020, we entered into Securities Purchase Agreements with certain of our directors and executives pursuant to which we sold 447,761 shares of common stock at a purchase price of $1.34 per share and 146,854 shares of common stock at a purchase price of $1.43 per share. On May 26, 2020, we entered into a Securities Purchase Agreement with Acorn Bioventures, LP (“Acorn”), pursuant to which we agreed to offer, issue and sell to Acorn, (i) in a registered direct offering, an aggregate of 1,205,400 shares of common stock, par value $0.0001 per share and (ii) in a concurrent private placement, Series M warrants to purchase up to 482,160 shares of common stock. The Series M Warrants are exercisable six months following the date of issuance at an exercise price of $2.024 per share and will expire 5.5 years following the date of issuance. On June 15, 2020 we entered into a Securities Purchase Agreement with Acorn, CDK Associates, L.L.C. (“CDK”) and Third Street Holdings LLC (“Third Street”), pursuant to which we agreed to offer, issue and sell to Acorn, CDK and Third Street, (i) in a registered direct offering, an aggregate of 1,984,328 shares of common stock and (ii) in a concurrent private placement, (a) an aggregate of 865,824 shares of Series E Preferred Stock (“Series E Preferred Stock”) and (b) Series N warrants to purchase up to 2,213,115 shares of common stock. The Series E Preferred Stock is convertible at any time determined by dividing the $10 stated value per share of the Series E Preferred Stock by a conversion price of $2.44 per share, 28 Table of Contents subject to adjustment in accordance with the Certificate of Designation. The Series N Warrants are exercisable six months following the date of issuance at an exercise price of $2.39 per share and will expire 5.5 years following the date of issuance. In conjunction with the June 15, 2020 offering, we issued 184,426 warrants as an advisory fee. These warrants are exercisable six months following the date of issuance at an exercise price of $3.05 per share and will expire 5.5 years following the date of issuance. CONTRACTUAL OBLIGATIONS For a discussion of our contractual obligations see (i) our Financial Statements and Notes to Financial Statements Note 10. Commitments and Contingencies , and (ii) Item 7 Management Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations and Commitments , included in our Annual Report on Form 10-K as of December 31, 2019. There have been no material changes to our contractual obligations in our Form 10-K for the year ended December 31, 2019, except for the following. Small Business Administration Payroll Protection Program Loan On April 15, 2020, we were granted a loan (the “Loan”) from JPMorgan Chase Bank, N.A. in the aggregate amount of $305,000, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a Note dated April 15, 2020 issued by us, matures on April 15, 2022 and bears interest at a rate of 0.98% per annum, payable monthly commencing on April 15, 2021. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, rent, and utilities. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The application for these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The certification made by the Company did not contain any objective criteria and is subject to interpretation. If, despite the good-faith belief that given the Company’s circumstances all eligibility requirements for the PPP were satisfied, it is later determined that the Company had violated any applicable laws or regulations or it is otherwise determined the Company was ineligible to receive the PPP, it may be required to repay the PPP in its entirety and/or be subject to additional penalties. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.