What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-11-05 compared with 2020-08-11 · 96 added, 138 removed, 153 unchanged (60% of the section changed)

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Such discussion represents only the best present assessment of our management.

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.

We are a clinical stage, biotechnology company, developing new treatment options for cancer patients in indications with the greatest medical need.

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.

We are developing onvansertib, a first-in-class, third-generation Polo-like Kinase 1 ("PLK1") inhibitor, in combination with standard-of-care chemotherapy and targeted therapeutics.

Our clinical development programs incorporate tumor genomics and biomarker technology to enable assessment of patient response to treatment.

We licensed onvansertib 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.

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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.

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, 5-FU, 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 metastatic colorectal cancer ("mCRC"), metastatic castration resistant prostate cancer ("mCRPC"), pancreatic cancer, triple negative breast cancer (“TNBC”), acute myeloid leukemia ("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.

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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.

• TROV-054 is a Phase 1b/2 open-label clinical trial of onvansertib in combination with FOLFIRI and bevacizumab ("Avastin ® ") for the second line treatment of patients with KRAS-mutated mCRC, which is being conducted at 6 clinical trial sites across the U.S.

- USC Norris Comprehensive Cancer Center, The Mayo Clinic Cancer Centers, Kansas University Medical Center ("KUMC") and CARTI Cancer Center;

• TROV-053 is a Phase 2 open-label clinical trial of onvansertib in combination with abiraterone acetate (Zytiga ® ) and prednisone in patients with mCRPC, which is being conducted at Beth Israel Deaconess Medical Center ("BIDMC"), Dana-Farber Cancer Institute ("DFCI"), and Massachusetts General Hospital ("MGH");

• TROV-052 is a Phase 2 open-label clinical trial of onvansertib in combination with standard-of-care chemotherapy, decitabine, in patients with relapsed or refractory 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®).

TROV-054 is a Phase 1b/2 study of onvansertib for the second-line treatment of patients with KRAS-mutated metastatic colorectal cancer ("mCRC") 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.

Synthetic lethality arises when a combination of deficiencies in the expression of two 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 the protein encoded by one of the genes.

In reference to onvansertib, CRC tumor cells harboring KRAS mutations are more vulnerable to cell death with PLK1 inhibition versus KRAS wild-type isogenic cells.

Synergy occurs when the combination of two drugs results in an unexpected greater activity than an expected additive effect of the two drugs.

Onvansertib in combination with irinotecan and 5-FU (components of 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

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.

Data presented on September 17, 2020, at the European Society for Medical Oncology ("ESMO") conference, demonstrated the safety and efficacy of onvansertib.

Of the 11 patients evaluable for efficacy, 10 of 11 (91%) patients achieved disease control (SD – stable disease plus PR – partial response) with only 1 patient progressing in <6 months while on treatment.

Five (45%) patients achieved a partial response (PR);

4 patients had a confirmed PR (≥ 30% tumor shrinkage) with 1 patient going on to curative surgery;

1 patient with an initial PR went off study prior to confirmatory scan due to a non-treatment related event.

All 5 PRs were associated with different KRAS mutation variants, including the most common that comprise nearly 80% of mutations in CRC.

Eight of 11 (73%) patients demonstrated durable response ranging from 6 to >12 months, and 4 patients remain on treatment.

Onvansertib in combination with FOLFIRI and bevacizumab is safe and well tolerated with only 9% of adverse events being grade 3 or 4 and all being resolved within 2.5 weeks.

Of the 11 patients, 8 had previously received bevacizumab as first line treatment, including the 4 patients who remain on treatment.

Key News Releases

On September 17, 2020, we announced an electronic poster presentation of clinical data further demonstrating the safety, efficacy and durability of response of onvansertib in KRAS-mutated mCRC patients at the European Society of Medical Oncology ("ESMO") Virtual Congress 2020.

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.

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.

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 ("mCRPC").

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.

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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

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.

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).

Data presented on October 20, 2020, at the 27th Annual Prostate Cancer Foundation ("PCF") Scientific Retreat, demonstrated the efficacy of onvansertib across all three cohorts of patients.

The trial is on track to meet prespecified criteria for success on its primary endpoint, with 31% (8/26) disease control rate in evaluable patients in cohorts A and B.

Two of three patients treated as of the data cutoff date in cohort C achieved the primary efficacy endpoint at 12 weeks.

Recent collaborative studies with Massachusetts Institute of Technology ("MIT") and Decipher Biosciences suggest that prostate cancer patients with the clinically defined basal molecular tumor subtype may be more likely to respond to onvansertib being added to ongoing abiraterone therapy.

Key News Releases

On October 20, 2020, we announced an electronic poster presentation of clinical data further demonstrating the safety, efficacy and durability of response of onvansertib in patients with mCRPC at the 27 th annual Prostate Cancer Foundation ("PCF") Scientific Retreat.

TROV-052 is a Phase 2 Study of onvansertib in combination with standard-of-care chemotherapy, decitabine, 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.

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.

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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 .

Data presented on June 12, 2020 at the European Hematology Association ("EHA") conference, demonstrated the safety and efficacy of onvansertib in patients.

In the completed Phase 1b portion of this trial, the 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.

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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

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.

On September 29, 2020 we announced pricing of an underwritten public offering of 6,500,000 shares of our common stock at a price of $13.50 per share.

The underwriters had an option to purchase an additional 975,000 shares, which was exercised in the full.

The offering was completed on October 2, 2020 and the gross proceeds were $100.9 million.

On May 8, 2020 we changed our company name from Trovagene, Inc.

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Each new Director brings extensive and relevant experience to our company.

Our accumulated deficit through June 30, 2020 is $220,389,581.

Our accumulated deficit through September 30, 2020 is $224.9 million.

To date, we have generated minimal revenues and expect to incur additional losses to perform further research and development activities.

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Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of June 30, 2020.

We had no off-balance sheet arrangements as of September 30, 2020.

Critical Accounting Policies

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2020 and 2019

Three Months Ended September 30, 2020 and 2019

Our total revenues consisted of the following:

Three Months Ended June 30,

Three Months Ended September 30,

2020 2019 Increase (Decrease)

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Total revenues $ 136,401 $ 51,687 $ 84,714

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.

The increase in royalty income for the three months ended September 30, 2020 as compared to the prior period is primarily from fluctuations of our sales-based or usage-based royalties on other intellectual property licenses, unrelated to onvansertib.

Revenue recognition of the royalty depends on the timing and overall sales activities of the licensees.

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Research and development expenses consisted of the following:

Three Months Ended June 30,

Three Months Ended September 30,

2020 2019 Increase (Decrease)

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Total research and development $ 2,854,812 $ 2,818,824 $ 35,988

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.

Research and development expenses increased by $35,988 for the three months ended September 30, 2020 compared to the same period in 2019.

The overall increase 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.

Due to COVID-19 presentation of data has transitioned to virtual conferences.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consisted of the following:

Three Months Ended June 30,

Three Months Ended September 30,

2020 2019 Increase (Decrease)

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Total selling, general and administrative $ 1,644,211 $ 1,440,339 $ 203,872

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.

Selling, general and administrative expenses increased by $203,872 for the three months ended September 30, 2020 compared to 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 2020.

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.

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 September 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.

Interest income was $15,864 for the three months ended September 30, 2020 as compared to $53,700 for the same period of 2019.

The decrease of interest income is primarily due to lower interest rates for three months ended September 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.

As of September 30, 2020, the derivative financial instruments — warrants liabilities were revalued to $190,199, resulting in an increase in value of $144,035 from June 30, 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 September 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 and per share amounts were as follows:

Three Months Ended June 30,

Three Months Ended September 30,

2020 2019 Increase (Decrease)

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Weighted average shares outstanding — basic and diluted 23,341,218 6,024,679 17,316,539

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

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

The $354,982 increase in net loss attributable to common shareholders was primarily the result of an increase of operating expenses and an increase in the loss recorded from the change in fair value of derivative financial instruments during the three months ended September 30, 2020, compared to the same period in the prior year.

The $0.50 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 19.8 million shares of common stock and common stock equivalents from October 1, 2019 through September 30, 2020.

Nine Months Ended September 30, 2020 and 2019

Our total revenues consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Increase (Decrease)

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Total revenues $ 246,738 $ 152,055 $ 94,683

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.

The increase in revenues for the nine months ended September 30, 2020 as compared to the prior period is primarily from fluctuations of our sales-based or usage-based royalties on other intellectual property licenses, unrelated to onvansertib.

Revenue recognition of the royalty depends on the timing and overall sales activities of the licensees.

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Research and development expenses consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Increase (Decrease)

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Total research and development $ 8,036,225 $ 8,297,763 $ (261,538)

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.

Research and development expenses decreased by $261,538 for the nine months ended September 30, 2020 compared to the same period in 2019.

Facilities and other decreased primarily due to decreased travel and conference expenses to present data related to our lead drug candidate, onvansertib.

Due to COVID-19 presentation of data has transitioned to virtual conferences.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Increase (Decrease)

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Total selling, general and administrative $ 4,799,457 $ 4,243,490 $ 555,967

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.

Selling, general and administrative expenses increased by $555,967 for the nine months ended September 30, 2020 compared to the same period in 2019.

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 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.

The increase in stock-based compensation is primarily due to stock options granted in June 2019 and June 2020.

The increase in 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 nine months ended September 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.

Interest income was $67,358 for the nine months ended September 30, 2020 as compared to $188,204 for the same period of 2019.

The decrease of interest income is primarily due to lower interest rates for nine months ended September 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.

As of September 30, 2020, the derivative financial instruments — warrants liabilities were revalued to $190,199, resulting in an increase in value of $186,072 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.

Net loss and per share amounts were as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Increase (Decrease)

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Weighted average shares outstanding — basic and diluted 15,941,665 5,180,221 10,761,444

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.

The $3,536,217 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, an increase in operating expense and a decrease in interest income, for the nine months ended September 30, 2020 compared to the same period in the prior year.

The $1.40 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 19.8 million shares of common stock and common stock equivalents from October 1, 2019 through September 30, 2020.

LIQUIDITY AND CAPITAL RESOURCES

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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.

At this point, the extent to which COVID-19 may impact our future financial condition or results of operations is uncertain.

As of September 30, 2020, we had $36,405,432 in cash and cash equivalents.

Net cash used in operating activities for the nine months ended September 30, 2020 was $11,191,025, compared to $9,990,636 for the nine months ended September 30, 2019.

Our use of cash was primarily a result of the net loss of $12,709,625 for the nine months ended September 30, 2020, adjusted for non-cash items related to release of clinical trial funding commitment of $868,093, stock-based compensation of $820,969, and depreciation and amortization of $348,748.

The net change in our operating assets and liabilities was $739,451 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

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.

Net cash used in investing activities was $153,784 during the nine months ended September 30, 2020, compared to $67,622 for the same period in 2019, which were for capital expenditures.

Net cash provided in financing activities was $37,554,949 during the nine months ended September 30, 2020, compared to $7,637,331 for the same period in 2019.

Net cash provided in financing activities during the nine months ended September 30, 2020 was primarily from $18.3 million of proceeds from the sale of common stock, preferred stock and warrants and from $19.0 million of proceeds from the exercise of warrants.

Net cash provided in financing activities during the nine months ended September 30, 2019 was primarily from $3.3 million of proceeds from the exercise of warrants and $4.4 million from the sale of common stock and warrants.

As of September 30, 2020, and December 31, 2019, we had working capital of $32,746,587 and $6,571,985, respectively.

We have incurred net losses since our inception and have negative operating cash flows.

As of September 30, 2020, we had $36.4 million in cash and cash equivalents and we believe we have sufficient cash to meet our 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.

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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,

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.

Public Offerings

On October 2, 2020, we announced the completion of an underwritten public offering of 6,500,000 shares of our common stock at a price to the public of $13.50 per share.

In addition, the underwriters exercised in full an option to purchase an additional 975,000 shares of common stock at the public offering price, less the underwriting discounts and commissions.

All of the shares in the offering were sold by us, with gross proceeds of approximately $100.9 million and net proceeds of approximately $94.0 million, after deducting underwriting discounts and commissions and estimated offering expenses.

CONTRACTUAL OBLIGATIONS

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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.

There have been no material changes to our contractual obligations in our Form 10-K for the year ended December 31, 2019.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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What changed 10-Q

Item 2. Management’s Discussion and Analysis