Item 7. Management’s Discussion and Analysis
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
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. 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") 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 [IC 50 ] = 2nM), whereas low or no activity was observed on a panel of 63 kinases (IC 50 >500 nM), including the PLK members PLK2 and PLK3 (IC 50 >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.
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Onvansertib has been tested for antiproliferative activity on a panel of 148 tumor cell lines and appeared highly active with an IC 50 (a measure concentration for 50% target inhibition) below 100 nM in 75 cell lines and IC 50 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.
Onvansertib has been evaluated preclinically in combination with several different chemotherapies, including irinotecan, cisplatin, cytarabine, doxorubicin, gemcitabine and paclitaxel, and with targeted therapeutics such as abiraterone, histone deacetylase ("HDAC") inhibitors, fms-like tyrosine kinase 3 ("FLT3") inhibitors, and bortezomib. These therapies are used clinically for the treatment of many hematologic and solid cancers, including acute myeloid leukemia ("AML"), non-Hodgkin’s lymphoma ("NHL"), metastatic CRC, metastatic castration resistant prostate cancer ("mCRPC"), adrenocortical carcinoma ("ACC"), triple negative breast cancer ("TNBC"), small cell lung cancer ("SCLC"), and ovarian cancer.
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 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 (Arizona, Minnesota and Florida), 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 and enrollment in Phase 2 was completed in October 2020.
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 ("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 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 January 15, 2021, at the American Society of Clinical Oncology Gastrointestinal Cancers Symposium (“ASCO-GI”), demonstrated the safety and efficacy of onvansertib. Of the 12 patients evaluable for efficacy, 5
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(42%) achieved a partial response (PR); 4 patients had a confirmed PR; 1 patient went on to curative surgery; 1 patient with a non-confirmed PR went off study due to an unrelated event prior to their 16-week confirmatory scan. 8 (67%) patients showed a durable response to treatment of >6 months with a range from 6.1 to 13.7 months. Time to achieving a PR ranges from 2 to 6 months in patients on treatment. 10 of 12 patients had a KRAS variant detected by ddPCR at baseline (all had a KRAS mutation detected by NGS). Clinical responses were observed across different KRAS variants, including the 3 most common in CRC. The greatest decreases in KRAS mutant allelic frequency (MAF) after 1 cycle of treatment were observed in patients achieving a PR (ranging from -78% to -100%), while the 2 patients who progressed showed a more modest reduction in KRAS MAF (-55% and -26%). Patients with PR and stable disease (SD) tended to have lower on-treatment KRAS MAF than patients with early progressive disease (PD). Onvansertib in combination with FOLFIRI/bevacizumab is safe and well tolerated with only 9% of all adverse events (AEs) being grade 3 or 4. Grade 4 adverse events were attributed to the 5-FU bolus component of the combination regimen, which was eliminated in subsequent cycles of treatment per protocol and institutional guidelines. The only G3/G4 AEs reported in ≥2 patients were neutropenia (n=8), which were managed by dose delay, growth factor therapy and/or discontinuation of the 5-FU bolus; no patients went off trial due to neutropenia. No major or unexpected toxicities were attributed to onvansertib.
Key News Releases
On January 15, 2021, we announced an electronic poster presentation of clinical data further demonstrating the clinical benefit of onvansertib in KRAS-mutate mCRC and initial findings from our Expanded Access Program (EAP) in mCRC.
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 mCRC. This announcement followed the FDA granting Fast Track Designation for onvansertib in KRAS-mutated mCRC.
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 ("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.
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 11, 2021, at the American Society of Clinical Oncology Genitourinary Cancers Symposium (“ASCO-GU”) demonstrated safety and efficacy of onvansertib in combination with abiraterone. Arms A (n=17) and B (n=12) showed similar efficacy with 29% and 25% of patients achieving the primary endpoint and 53% and 42% of patients with SD at 12 weeks, respectively. The more continuous dosing schedule of Arm C (n=8) has shown a higher response rate with 63% of patients, to-date, achieving the primary endpoint and 75% with SD at 12 weeks. Efficacy was observed in patients harboring AR alterations across all 3 arms. ctDNA analysis revealed differences in baseline genomic profiles of patients achieving SD at 12 weeks vs patients progressing before or at 12 weeks. Mutations exclusively present in patients with SD were associated with cell cycle and DNA repair pathways that may result in increased sensitivity to onvansertib and efficacy of the combination. Onvansertib + abiraterone has demonstrated safety across all 3 dosing schedules.
Key News Releases
On February 11, 2021, we announced an electronic poster presentation of clinical data further demonstrating the safety, efficacy and durability of response in patient with mCRPC at the American Society of Clinical Oncology Genitourinary Cancers Symposium (“ASCO-GU”).
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AML
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 (Phase 2 enrollment completed in October 2020). 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.
Data presented on December 6, 2020 at the 62 nd American Society of Hematology ("ASH") conference, demonstrated the safety, tolerability and anti-leukemic activity of onvansertib in combination with decitabine in patients with difficult-to-treat relapsed/refractory AML. Nine of 45 (20%) patients achieved a complete remission with or without hematologic count recovery (CR/CRi – 5 in Phase 1b and 4 in Phase 2); 55% of responders had a mutation in a splicing factor. Two patients proceeded to transplant following CR and four patients remain on treatment with duration of response of 9, 10, 17 and 20 months, respectively. Together with data demonstrating the safety and tolerability of the combination therapy, these findings highlight onvansertib’s potential to address critical unmet needs in hematologic malignancies.
Key News Releases
On December 6, 2020, we announced an electronic poster presentation of data from the Phase 1b/2 trial in AML demonstrating the safety and efficacy of onvansertib in relapsed or refractory patients at the annual American Society of Hematology (“ASH”) conference.
Financial and Company Updates
Financial
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 full. The offering was completed on October 2, 2020 and the gross proceeds were $100.9 million.
Company
On December 21, 2020 we announced that Dr. Thomas Adams has stepped down from his positions as Executive Chairman and Chairman of the Board of Directors and will continue to serve as a Director. Dr. Rodney Markin was appointed by the Board of Directors as our new Chairman of the Board.
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.
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 December 31, 2020 is $231,495,279. 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
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research and development expenses, and competing technologies being developed by organizations with significantly greater resources.
Critical Accounting Policies
Our accounting policies are described in Part II, Item 8. Financial Statements—Note 2 Basis of Presentation and Summary of Significant Accounting Policies in this Annual Report on Form 10-K . The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. We believe that the following discussion represents our critical accounting policies.
Accrued Clinical Trial Expenses
We expense research and development expenditures as incurred, which include costs related to clinical trial activities. We accrue costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by the clinical research organizations (CROs), investigators, professional service providers, and other vendors providing clinical trial services (collectively, the “service providers”). As of December 31, 2020 our clinical trial accrual balance of $1,683,195 is included in accrued liabilities and other liabilities. Our related 2020 clinical trial expenses are included in research and development expense of $11,235,396. Certain accrued clinical trial expenses are released from service receivables classified within equity as clinical trial services are performed.
Derivative Financial Instruments—Warrants
We have issued common stock warrants in connection with the execution of certain equity financings. Such warrants are classified as derivative liabilities and are recorded at their fair market value as of each reporting period. Such warrants do not meet the exemption that a contract should not be considered a derivative instrument if it is (1) indexed to its own stock and (2) classified in stockholders’ equity. The warrants contain a feature that could require the transfer of cash in the event a change of control occurs without an authorization of our Board of Directors, and therefore classified as a liability. Changes in fair value of derivative liabilities are recorded in the statement of operations under the caption “gain (loss) from changes in fair value of derivative financial instruments — warrants.”
The fair value of warrants is determined using the Black-Scholes option-pricing model using assumptions regarding the historical volatility of Cardiff Oncology’s common stock price, the remaining life of the warrants, and the risk-free interest rates at each period end. Accordingly, the fair value of the warrants is sensitive to changes in these estimates. At December 31, 2020 and 2019, the fair value of such warrants was $284,971 and $4,127, respectively, and was recorded as a liability under the caption “derivative financial instruments — warrants” on the balance sheet.
Stock-based Compensation
Stock-based compensation expense is measured at the grant date based on the estimated fair value of the award and is recognized straight-line over the requisite service period of the individual grants, which typically equals the vesting period. We estimate the grant date fair value using a Black-Scholes model. Stock-based compensation recorded in our statement of operations is based on awards expected to ultimately vest and has been reduced for estimated forfeitures. We recognize the value of the awards on a straight-line basis over the awards’ requisite service periods. The requisite service period is generally the time over which our stock-based awards vest. Compensation expense for RSU's is measured at the grant date and recognized ratably over the vesting period in the statement of operations. The fair value of RSU's is determined based on the closing market price of our common stock on the grant date.
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangements as described by Item 303(a)(4) of Regulation S-K.
Recent Accounting Pronouncements
See Item 8. Financial Statements—Note 2 Basis of Presentation and Summary of Significant Accounting Policies in this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.
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Results of Operations
Years Ended December 31, 2020 and 2019
Revenues
Our total revenues were $365,993 and $244,632 for the years ended December 31, 2020 and 2019, respectively. Total revenues consisted of the following:
For the years ended December 31,
2020 2019 Increase/(Decrease)
Royalty income $ 365,993 $ 243,137 $ 122,856
Service revenue — 1,495 (1,495)
Total revenues $ 365,993 $ 244,632 $ 121,361
The increase in revenues for the year ended December 31, 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.
Research and Development Expenses
Research and development expenses consisted of the following:
For the years ended December 31,
2020 2019 Increase/(Decrease)
Salaries and staff costs $ 1,723,601 $ 1,585,381 $ 138,220
Stock-based compensation 354,692 399,687 (44,995)
Clinical trials, outside services, and lab supplies 8,388,482 8,250,313 138,169
Facilities and Other 768,621 926,855 (158,234)
Total research and development expenses $ 11,235,396 $ 11,162,236 $ 73,160
Research and development expenses increased by $73,160 to $11,235,396 for the year ended December 31, 2020 from $11,162,236 for the year ended December 31, 2019. The increase in salaries and staff costs is primarily due to promotions, merit increases and increased headcount. The increase in costs associated with clinical programs and outside service costs is primarily related to assay development and recruiting fees. Facilities and other decreased primarily due to decreased travel and conference expenses to present data related to our 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:
For the years ended December 31,
2020 2019 Increase/(Decrease)
Salaries and staff costs $ 2,430,671 $ 1,955,305 $ 475,366
Stock-based compensation 1,410,112 485,256 924,856
Outside services and professional fees 2,639,403 1,986,039 653,364
Facilities and other 1,736,285 1,334,290 401,995
Total selling, general and administrative $ 8,216,471 $ 5,760,890 $ 2,455,581
Selling, general and administrative expenses increased by $2,455,581 to $8,216,471 for the year ended December 31, 2020, from $5,760,890 for the year ended December 31, 2019. The increase of stock-based compensation expense and salaries and staff costs is primarily related to the Separation Agreement with Thomas Adams which includes accelerated vesting of
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stock options of approximately $583,000 and a one-time severance payment of $300,000. The increase in outside services and professional fees is primarily related to legal and patent fees to analyze our competitive landscape and evergreen patent strategy. The increase in facilities and other cost was due to a decrease in sublease income, an increase in Delaware franchise tax and an increase in insurance costs.
Interest Income
Interest income was $89,809 and $234,169 for the years ended December 31, 2020 and 2019, respectively. The decrease of interest income is due to significantly lower average interest rates during 2020 as compared to 2019.
Change in Fair Value of Derivative Financial Instruments—Warrants
We have issued warrants to purchase shares of our common stock that are accounted for as derivative liabilities. As of December 31, 2020, the derivative financial instruments—warrants liabilities related to securities issued were revalued to $284,971, resulting in a increase in fair value of $280,844 from December 31, 2019 based primarily upon the change in our stock price from $1.24 at December 31, 2019 to $17.99 at December 31, 2020, and the changes in the expected term, volatility and risk-free interest rates for the expected term. The increase in value was recorded as non-operating loss for the year ended December 31, 2020.
Net Loss
Net loss and per share amounts were as follows:
For the years ended December 31,
2020 2019 Increase/(Decrease)
Net loss $ (19,306,672) $ (16,414,159) $ 2,892,513
Preferred stock dividend (24,240) (24,240) —
Deemed dividend on preferred stock (3,266,484) (268,269) 2,998,215
Net loss attributable to common stockholders $ (22,597,396) $ (16,706,668) $ 5,890,728
Net loss per common share — basic and diluted $ (1.08) $ (2.80) $ (1.72)
Weighted-average shares outstanding — basic and diluted 20,874,665 5,973,906 14,900,759
The increase of $5,890,728 net loss attributable to common stockholders is primarily related to an increase of deemed dividends on preferred stock of $2,998,215, related to the beneficial conversion upon issuance of preferred stock and an increase of net loss of $2,892,513. The increase of 14,900,759 basic and diluted weighted-average shares outstanding primarily resulting from the sales of common stock through public and direct offerings and the issuance of common stock upon exercise of warrants. The $1.72 decrease in basic and diluted net loss per share was impacted by the increase in net loss attributable to shareholders and the increase in basic and weighted average shares outstanding.
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 future financial condition or results of operations is uncertain. There has not been a material impact on the Company's financial statements for the twelve months ended December 31, 2020.
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As of December 31, 2020, we had $130,980,681 in cash and cash equivalents. Net cash used in operating activities for the year ended December 31, 2020 was $16,314,962, compared to $13,267,500 for the year ended December 31, 2019. Our use of cash was primarily a result of the net loss of $19,306,672 for the year ended December 31, 2020, adjusted for items mainly related to stock-based compensation of $1,764,804, release of clinical trial funding commitment of $1,100,415, and depreciation of $466,009. The net change in our operating assets and liabilities was $654,531 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 by investing activities was $211,880 and $67,622 for the years ended December 31, 2020 and 2019, respectively. Investing activities during the year ended December 31, 2020 and 2019 consisted of the purchase of capital equipment.
Net cash provided by financing activities was $137,312,231 during the year ended December 31, 2020, compared to $12,077,281 provided in financing activities during the year ended December 31, 2019. Financing activities during the year ended December 31, 2020 and 2019 related primarily to sales of Common Stock, Preferred Stock, Warrants and proceeds from exercise of warrants.
As of December 31, 2020 and 2019, we had working capital of $127,237,483 and $6,571,985, respectively. The increase in working capital is primarily due to the increase in cash and cash equivalents from financing activities during the year ended December 31, 2020.
We have incurred net losses since our inception and have negative operating cash flows. As of December 31, 2020, we had $130,980,681 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, we expect to continue to incur losses and require additional capital to further advance our clinical trial programs and support our other operations. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we can raise additional funds by issuing equity securities, our stockholders may experience additional dilution. The economic effects of COVID-19 could also have an adverse effect on our ability to raise additional capital.
Our working capital requirements will depend upon numerous factors including but not limited to the nature, cost and timing of our research and development programs. To date, our sources of cash have been primarily limited to the sale of equity securities. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. If we are unable to raise additional capital when required or on acceptable terms, we may have to significantly delay, scale back or discontinue the development and/or commercialization of one or more product candidates, all of which may have a material adverse impact on our operations. We may also be required to (i) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (ii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize ourselves on unfavorable terms. We are evaluating all options to raise additional capital, increase revenue, as well as reduce costs, in an effort to strengthen our liquidity position, which may include the following: (1) Raising capital through public and private equity offerings; (2) Introducing operation and business development initiatives to bring in new revenue streams; (3) Reducing operating costs by identifying internal synergies; and (4) Engaging in strategic partnerships. We continually assess our spending plans to effectively and efficiently address our liquidity needs.
Controlled Equity Offerings and Public Offerings
See Note 5 to the financial statements.
Nasdaq Compliance
On September 5, 2017, we received a written notice from Nasdaq notifying us that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market, as the minimum bid price of our common stock had been below $1.00 per share for 30 consecutive business days. The Notice had no immediate effect on the listing of our common stock, and our common stock continued to trade on the Nasdaq Capital Market under the symbol “TROV”. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had until March 5, 2018, to regain compliance with the minimum bid price requirement.
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We were eligible for extensions and hearings and ultimately announced on February 12, 2019 that our stockholders approved a reverse stock split of our issued and outstanding shares of common stock and on February 19, 2019, we effected a six for one reverse stock split of our issued and outstanding shares of common stock. On March 11, 2019 we received a letter from Nasdaq, informing us that we had regained compliance with the minimum bid price requirement. We were subject to a Nasdaq Panel Monitor until March 10, 2020. We received a letter from Nasdaq on May 29, 2020 informing us that we are in compliance with applicable Nasdaq Listing Rules.