What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-04 compared with 2021-08-05 · 74 added, 100 removed, 133 unchanged (57% of the section changed)

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Our goal is to target tumor vulnerabilities with treatment combinations that overcome disease resistance and improve disease response to standard treatment regimens and to 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 anti-cancer therapeutics.

We are developing onvansertib, an oral highly-selective Polo-like Kinase 1 ("PLK1") inhibitor, in combination with standard-of-care anti-cancer therapeutics.

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

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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 a novel polo-like kinase ("PLK1")-selective adenosine triphosphate (ATP) competitive inhibitor with oral bioavailability, and a relatively short drug half-life of 24 hours.

Onvansertib is a novel PLK1 selective adenosine triphosphate ("ATP") competitive inhibitor with oral bioavailability, and a relatively short drug half-life of 24 hours.

Onvansertib is highly potent against the PLK1 enzyme (concentration for 50% inhibition [IC 50 ]=5 ± 3 nM), whereas low or no activity was observed on a panel of 63 kinases (IC50>500 nM), including the PLK members PLK2 and PLK3 (IC 50 >10 μM).

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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.

Expression of PLK1 is seen in all proliferating normal tissues, and PLK1 is overexpressed in a number of tumors (including colorectal, pancreatic, prostate, ovary, breast and lung cancer), as well as in hematologic cancers.

Although 5 different PLK family members are described in humans, the inhibition of the enzymatic activity or the depletion of PLK1 is sufficient to induce a G2/M cell cycle block and apoptosis in tumor cell lines and tumor regression in xenograft models.

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There are 3 ongoing clinical studies of onvansertib in combination treatment:

for second line treatment in patients with KRAS-mutated metastatic colorectal cancer ("mCRC"), in patients with metastatic pancreatic ductal adenocarcinoma ("mPDAC"), and in patients with metastatic castration-resistant prostate cancer ("mCRPC").

Combination studies in vitro showed synergistic effects when onvansertib was administered with different cytotoxic agents including antimicrotubule agents, topoisomerase 1 inhibitors, antimetabolites, alkylating agents, proteasome inhibitors, kinase inhibitors, BCL-2 inhibitors, and androgen biosynthesis inhibitors.

In addition, in vivo combination studies confirmed the positive results obtained in vitro and synergistic effects were observed in xenograft models for onvansertib in combination with abiraterone, 5-fluorouracil (5 FU), irinotecan (including NKTR-102), quizartinib, venetoclax, and paclitaxel, while additive effects in combination with cytarabine or bevacizumab were reported.

We believe the high-selectivity of onvansertib to PLK1, its 24-hour half-life and oral bioavailability, as well as evidence of safety and clinical benefit, with expected on-target, easy to manage and reversible side effects, may prove beneficial in addressing clinical therapeutic needs across a variety of cancers.

second line treatment in patients with KRAS-mutated metastatic colorectal cancer ("mCRC"), second line treatment in patients with metastatic pancreatic ductal adenocarcinoma ("mPDAC"), and in patients with metastatic castration-resistant prostate cancer ("mCRPC") showing resistance to abiraterone.

In vitro studies have shown synergistic effects when onvansertib was administered in combination with different cytotoxic agents including antimicrotubule agents, topoisomerase 1 inhibitors, antimetabolites, alkylating agents, proteasome inhibitors, kinase inhibitors, BCL-2 inhibitors, and androgen biosynthesis inhibitors.

In addition, in vivo combination studies have confirmed the positive results obtained in vitro and synergistic effects have been observed in xenograft models of onvansertib in combination with abiraterone, 5-fluorouracil (5 FU), irinotecan (including NKTR-102), quizartinib, venetoclax, and paclitaxel, while additive effects in combination with cytarabine or bevacizumab have been demonstrated.

We believe the high-selectivity of onvansertib to PLK1, its 24-hour half-life, oral bioavailability, and flexible dosing schedule, as well as evidence of favorable safety and clinical benefit, with expected on-target, easy to manage and reversible side effects, may prove beneficial in addressing clinical therapeutic needs across a variety of cancers.

Ongoing Clinical Programs Update:

• TROV-054 is a Phase 1b/2 open-label multi- center 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 7 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"), Inova Schar Cancer Institute and CARTI Cancer Center;

• TROV-053 is a Phase 2 open-label multi-center 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");

• CRDF-001 is a Phase 2 open-label multi-center clinical trial of onvansertib in combination with nanoliposomal irinotecan (“Onivyde ® ”), leucovorin, and fluorouracil for second line treatment of patients with metastatic pancreatic ductal adenocarcinoma ("mPDAC"), which is being conducted at 6 clinical trial sites across the U.S.

– The Mayo Clinic Cancer Centers (Arizona, Minnesota and Florida), Kansas University Medical Center (“KUMC”), University of Nebraska Medical Center (“UNMC”) and Inova Schar Cancer Institute.

- USC Norris Comprehensive Cancer Center, The Mayo Clinic Cancer Centers (Arizona, Minnesota and Florida), Kansas University Medical Center, Inova Schar Cancer Institute and CARTI Cancer Center;

• CRDF-001 is a Phase 2 open-label multi-center clinical trial of onvansertib in combination with nanoliposomal irinotecan (“Onivyde ® ”), leucovorin, and fluorouracil for second line treatment of patients with mPDAC, which is being conducted at 6 clinical trial sites across the U.S.

– The Mayo Clinic Cancer Centers (Arizona, Minnesota and Florida), Kansas University Medical Center, University of Nebraska Medical Center and Inova Schar Cancer Institute;

• TROV-053 is a Phase 2 open-label multi-center clinical trial of onvansertib in combination with abiraterone acetate (Zytiga ® ) and prednisone in patients with mCRPC, which is being conducted at 3 clinical trial sites - Beth Israel Deaconess Medical Center, Dana-Farber Cancer Institute, and Massachusetts General Hospital.

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).

TROV-054 is a Phase 1b/2 clinical trial 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 trial 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.

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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 in combination with 5-FU (components of FOLFIRI) demonstrate synergy in

colorectal cancer cell lines and both combinations have demonstrated significantly greater tumor growth inhibition than either drug alone.

Onvansertib in combination with irinotecan and in combination with 5-FU (components of FOLFIRI) demonstrate synergy in colorectal cancer cell lines and both combinations have demonstrated significantly greater tumor growth inhibition than either

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 tumors with a KRAS mutation;

2 in colorectal cancer and 1 in pancreatic cancer.

Data presented on April 12, 2021, at a key opinion leader webinar, provided an update of the ongoing phase 1b/2 clinical study in KRAS-mutated metastatic colorectal cancer.

Of the 18 patients evaluable for efficacy, 7 (39%) achieved an objective response (partial response;

4 patients have had a confirmed PR;

with 1 patient going on to curative surgery;

1 patient with a non-confirmed PR went off study due to an unrelated adverse event prior to their 16-week confirmatory scan and 2 patients were awaiting their respective confirmatory scans.

This objective response rate (ORR) compares favorably with current standard of care benchmarks that range from 5 to 13%.

To-date, the time to achieving a PR ranges from 2 to 6 months in patients on treatment.

Objective responses were observed across different KRAS variants, including the 3 most common in CRC.

Median progression free survival (mPFS) is currently 9.4 months which compares favorably with the current standard of care benchmarks that range from 4.5 to 5.7 months.

16 of 18 patients had a KRAS variant detected by ddPCR at baseline (all had a KRAS mutation detected by NGS).

The greatest decreases in KRAS mutant allelic frequency (MAF) after 1 cycle of treatment were observed in patients achieving a PR (ranging from a decrease ranging from 78% to 100%), while the 2 patients who experienced disease progression showed a more modest reduction in KRAS MAF (decrease of 55% and 26%, respectively).

Patients with PR and stable disease (SD) tended to have lower on-treatment KRAS MAF than patients with early progressive disease (PD).

Of all adverse events (AEs) reported for onvansertib in combination with FOLFIRI/bevacizumab, only 11% have been 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 AE reported in ≥2 patients was neutropenia (n=8), which was managed by dose delay, growth factor therapy and/or discontinuation of the 5-FU bolus;

no patients went off trial due to neutropenia.

To-date, no major or unexpected toxicities have been attributed to onvansertib.

Key News Releases

We Announced the upcoming presentation of new data from Lead Clinical Program in KRAS-mutated Colorectal Cancer on Wednesday, September 8, 2021.

Updated data from the Phase 1b/2 trial evaluating onvansertib in combination with standard-of-care FOLFIRI/bevacizumab for the second-line treatment of patients with KRAS-mutated metastatic colorectal cancer (mCRC) will be announced at a webinar featuring the clinical trial principal investigator, Heinz-Josef Lenz, M.D., FACP (USC Norris Comprehensive Cancer Center), and key clinical advisor Afsaneh Barzi, M.D., Ph.D., (City of Hope Comprehensive Cancer Center).

On April 12, 2021, we announced a KOL Event Webinar presentation of Phase 1b/2 data from our ongoing trial in KRAS-mutated mCRC demonstrating continued robust response to treatment and progression-free survival.

On April 10, 2021, we announced an electronic oral poster presentation of findings from our Expanded Access Program ("EAP") demonstrating the clinical benefit of onvansertib in KRAS-mutated mCRC at the American Association for Cancer Research ("AACR") Annual Meeting 2021.

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.

Data presented on September 8, 2021, at a key opinion leader webinar, provided an update of the ongoing phase 1b/2 clinical trial in KRAS-mutated metastatic colorectal cancer.

• 8 of 19 (42%) patients treated per protocol at the recommended Phase 2 dose ("RP2D") of onvansertib 15 mg/m 2 who were evaluable for disease response as of the data cut-off achieved a partial response ("PR").

Historically, objective response rates ("ORR") of 5-13% have been reported in a similar patient population treated with standard of care chemotherapy;

• 12 of 32 (38%) patients evaluable for response as of data cutoff date across all dose levels achieved a PR;

• Median progression-free survival ("mPFS") across all response-evaluable patients is 9.4 months and has not yet been reached in those treated per protocol at the RP2D.

Historically, mPFS of ~4.5-5.7 months has been reported in a similar patient population treated with standard of care chemotherapy;

• The combination regimen of onvansertib plus FOLFIRI/bevacizumab is well tolerated.

CRDF-001 is a Phase 2 clinical trial of onvansertib in combination with nanoliposomal irinotecan and 5-FU for the second line treatment of patients with metastatic pancreatic ductal adenocarcinoma ("mPDAC").

The first patient was dosed in June 2021.

The objective of this trial is to assess the safety and preliminary efficacy of onvansertib in combination with nanoliposomal irinotecan (Onyvide ® ), 5-FU and leucovorin as a second-line treatment in patients with mPDAC who have failed first-line gemcitabine-based therapy.

The trial is expected to enroll approximately 45 patients across six sites in the U.S.

including the three Mayo Clinic Cancer Centers (Arizona, Minnesota and Florida), Kansas University Medical Center, University of Nebraska Medical Center and Inova Schar Cancer Institute.

TROV-053 is a Phase 2 clinical trial 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 trial 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 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 in pre-clinical experiments.

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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 11, 2021, at the American Society of Clinical Oncology Genitourinary Cancers Symposium (“ASCO-GU”) provided evidence of the safety and efficacy of onvansertib in combination with abiraterone.

A (n=17) and B (n=12) showed similar response 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.

Data as of July 2, 2021, as follow-up to the data presented on February 11, 2021, at the American Society of Clinical Oncology Genitourinary Cancers Symposium (“ASCO-GU”) provided evidence of the safety and efficacy of onvansertib in combination with abiraterone.

Arms A (n=17) and B (n=20) and C (13) showed 29%, 40% and 54% of patients, respectively, achieving the primary endpoint of disease control at 12 weeks.

The more continuous dosing schedule of Arm C has shown an increase in the rate of patients achieving disease stabilization, to-date.

Evidence of efficacy was observed in patients harboring AR alterations across all 3 arms.

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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 April 10, 2021, we announced, in collaboration with MIT, an electronic oral poster presentation featuring gene signature analyses data identifying androgen-independent mechanism for onvansertib-abiraterone synergy in mCRPC.

CRDF-001 is a Phase 2 Study of onvansertib in combination with nanoliposomal irinotecan and 5-FU for the second line treatment of patients with metastatic pancreatic ductal adenocarcinoma ("PDAC").

The first patient was dosed in June 2021.

The objective of this trial is to assess the safety and preliminary efficacy of onvansertib in combination with nanoliposomal irinotecan (Onyvide ® ), 5-FU and leucovorin as a second-line treatment in patients with metastatic PDAC who have failed first-line gemcitabine-based therapy.

The trial is expected to enroll approximately 45 patients across six sites in the U.S.

including the three Mayo Clinic Cancer Centers (Arizona, Minnesota and Florida), Kansas University Medical Center, University of Nebraska Medical Center and Inova Schar Cancer Institute.

Key News Releases

On June 8, 2021, we announced that the first patient had been dosed in a Phase 2 Trial of Onvansertib in Combination with Irinotecan and 5-FU in Pancreatic Cancer.

Onvansertib plus abiraterone has demonstrated safety across all 3 dosing schedules.

Company Updates

On June 28, 2021, we announced that Cardiff Oncology has been added as a member of the small-cap Russell 2000 ® Index, the all-cap Russell 3000 ® Index, and the Russell Microcap ® Index, as part of the 2021 Russell indexes reconstitution.

On July 12, 2021, we announced the appointments of Katherine L.

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Ruffner on August 4, 2021.

On June 10, 2021, our shareholders elected eight members to our Board of Directors.

The shareholders elected Mani Mohindru, Ph.D., and Renee P Tannenbaum, Pharm D., as new independent directors.

Our accumulated deficit through June 30, 2021 is $243.4 million.

Our accumulated deficit through September 30, 2021 is $250.4 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, 2021.

We had no off-balance sheet arrangements as of September 30, 2021.

Critical Accounting Policies

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2021 and 2020

Total revenues was $68k for the three months ended June 30, 2021 as compared to $43k for the prior period.

Three Months Ended September 30, 2021 and 2020

Total revenues were $86,000 for the three months ended September 30, 2021 as compared to $136,000 for the prior period.

Revenues are from our sales-based or usage-based royalties on other intellectual property licenses, unrelated to onvansertib.

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Research and development expenses consisted of the following:

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands) 2021 2020 Increase (Decrease)

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Total research and development $ 4,154 $ 2,855 $ 1,299

Research and development expenses increased by $1.6 million for the three months ended June 30, 2021 compared to the same period in 2020.

Research and development expenses increased by $1.3 million for the three months ended September 30, 2021 compared to the same period in 2020.

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.

Salaries and staff costs decreased primarily due to departmental changes of certain executives in the current period.

Facilities costs increased due to amending our operating lease.

Salaries and staff costs increased primarily due to increased headcount in the current period.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consisted of the following:

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands) 2021 2020 Increase (Decrease)

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Total selling, general and administrative $ 2,930 $ 1,644 $ 1,286

Selling, general and administrative expenses increased by $1.2 million for the three months ended June 30, 2021 compared to the same period in 2020.

Selling, general and administrative expenses increased by $1.3 million for the three months ended September 30, 2021 compared to the same period in 2020.

The significant components of the increase were outside services and stock-based compensation.

The increase in stock-based compensation is primarily due to the modification of stock option grants for former directors who were no longer on the board as of June 2021.

The increase in outside services and professional fees is primarily due to increased legal fees mainly related to the expansion of our patent portfolio and recruiting fees.

The increase in stock-based compensation is primarily due to new stock option grants issued to employees and directors.

The increase in outside services and professional fees is primarily due to increased investor relations fees, recruiting fees, and legal fees related to the expansion of our patent portfolio.

Change in Fair Value of Derivative Financial Instruments — Warrants

We have issued warrants that are accounted for as derivative liabilities.

As of June 30, 2021, the derivative financial instruments — warrants liabilities were revalued to $17 thousand, resulting in a decrease in value of $61 thousand from March 31, 2021, based primarily upon the fluctuation in our stock price as well as the decrease in the remaining life of the warrants.

The decrease in value upon remeasurement at June 30, 2021 was recorded as a gain from the change in fair value of derivative financial instruments — warrants in the condensed statement of operations.

As of September 30, 2021, the derivative financial instruments — warrants liabilities were revalued to $5,000, resulting in an increase in value of $12,000 from June 30, 2021, based primarily upon the fluctuation in our stock price as well as the decrease in the remaining life of the warrants.

The decrease in value upon remeasurement at September 30, 2021 was recorded as a gain 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,

(in thousands, except per share amounts) 2021 2020 Increase (Decrease)

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Weighted average shares outstanding — basic and diluted 39,552 23,341 16,211

The $0.6 million decrease in net loss attributable to common shareholders was primarily the result of an increase of operating expenses, offset by a decrease in preferred stock dividend for the three months ended June 30, 2021, compared to the same period in the prior year.

The $0.34 decrease in net loss per share was impacted by the increase in basic weighted average shares outstanding resulting primarily from the issuance of approximately 18.2 million shares of common stock and common stock equivalents from July 1, 2020 through June 30, 2021.

Six Months Ended June 30, 2021 and 2020

Total revenues was $140 thousand for the six months ended June 30, 2021 as compared to $110 thousand for the prior period.

The $2.4 million increase in net loss attributable to common shareholders was primarily the result of an increase of operating expenses for the three months ended September 30, 2021, compared to the same period in the prior year.

The $0.02 decrease in net loss per share was impacted by the increase in basic weighted average shares outstanding resulting primarily from the issuance of approximately 13.3 million shares of common stock and common stock equivalents from October 1, 2020 through September 30, 2021.

Nine Months Ended September 30, 2021 and 2020

Total revenues were $226,000 for the nine months ended September 30, 2021 as compared to $247,000 for the prior period.

Revenues are from our sales-based or usage-based royalties on other intellectual property licenses, unrelated to onvansertib.

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Research and development expenses consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2021 2020 Increase (Decrease)

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Total research and development $ 11,552 $ 8,036 $ 3,516

Research and development expenses increased by $2.2 million for the six months ended June 30, 2021 compared to the same period in 2020.

Research and development expenses increased by $3.5 million for the nine months ended September 30, 2021 compared to the same period in 2020.

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Selling, general and administrative expenses consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2021 2020 Increase (Decrease)

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Total selling, general and administrative $ 8,003 $ 4,800 $ 3,203

Selling, general and administrative expenses increased by $1.9 million for the six months ended June 30, 2021 compared to the same period in 2020.

Selling, general and administrative expenses increased by $3.2 million for the nine months ended September 30, 2021 compared to the same period in 2020.

The significant components of the increase were outside services and stock-based compensation.

The increase in stock-based compensation is primarily due to the modification of stock option grants for former directors who were no longer on the board as of June 2021.

The increase in outside services and professional fees is primarily due to increased legal fees mainly related to the expansion of our patent portfolio and recruiting fees.

The increase in stock-based compensation is primarily due to additional stock option grants to employees and directors during the period and the modification of stock option grants for departing directors in June 2021.

The increase in outside services and professional fees is primarily due to increased legal fees related to the expansion of our patent portfolio.

Outside services also increased from recruiting fees and board of directors fees.

Change in Fair Value of Derivative Financial Instruments — Warrants

We have issued warrants that are accounted for as derivative liabilities.

As of June 30, 2021, the derivative financial instruments — warrants liabilities were revalued to $17 thousand, resulting in a decrease in value of $268 thousand from December 31, 2020, based primarily upon the fluctuation in our stock price as well as the decrease in the remaining life of the warrants.

The change in value upon remeasurement at June 30, 2021 was recorded as a gain from the change in fair value of derivative financial instruments — warrants in the condensed statement of operations.

As of September 30, 2021, the derivative financial instruments — warrants liabilities were revalued to $5,000, resulting in a decrease in value of $280,000 from December 31, 2020, based primarily upon the fluctuation in our stock price, as well as the decrease in the remaining life of the warrants.

The change in value upon remeasurement at September 30, 2021 was recorded as a gain 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:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands, except per share amounts) 2021 2020 Increase (Decrease)

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Weighted average shares outstanding — basic and diluted 38,501 15,942 22,559

The $0.5 million increase in net loss attributable to common shareholders was primarily the result of an increase in operating expenses, offset by a decrease in preferred stock dividend for the six months ended June 30, 2021 compared to the same period in the prior year.

The $0.63 decrease in basic net loss per share was impacted by the increase in weighted average shares outstanding resulting primarily from the issuance of approximately 18.2 million shares of common stock from July 1, 2020 through June 30, 2021.

The $2.9 million increase in net loss attributable to common shareholders was primarily the result of an increase in operating expenses, offset by a decrease in preferred stock dividend for the nine months ended September 30, 2021 compared to the same period in the prior year.

The $0.51 decrease in basic net loss per share was impacted by the increase in weighted average shares outstanding resulting primarily from the issuance of approximately 13.3 million shares of common stock from October 1, 2020 through September 30, 2021.

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.

Thus far COVID-19 has not caused material disruptions to our operational and financial performance.

The extent of the impact of COVID-19 on our future 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.

Net cash used in operating activities for the six months ended June 30, 2021 was $10.2 million, compared to $7.7 million for the six months ended June 30, 2020.

Our use of cash was primarily a result of the net loss of $11.9 million for the

six months ended June 30, 2021, adjusted for non-cash items related to release of clinical trial funding commitment of $0.9 million, stock-based compensation of $1.3 million, and depreciation of $0.2 million.

Net cash used in operating activities for the nine months ended September 30, 2021 was $15.7 million, compared to $11.2 million for the nine months ended September 30, 2020.

Our use of cash was primarily a result of the net loss of $18.8 million for the nine months ended September 30, 2021, adjusted for non-cash items related to stock-based compensation of $2.2 million, release of clinical trial funding commitment of $1.5 million, amortization of premiums on short-term investments $1.2 million, and depreciation of $0.3 million.

The net change in our operating assets and liabilities was $1.8 million 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 $130.7 million primarily related to net purchases of marketable securities during the six months ended June 30, 2021, compared to no investing activities for the same period in 2020.

Net cash provided in financing activities was $20.5 million during the six months ended June 30, 2021, compared to $25.2 million for the same period in 2020.

Net cash provided in financing activities during the six months ended June 30, 2021 was from $1.3 million of proceeds from the exercise of warrants and $19.2 million from the sale of common stock.

Net cash provided in financing activities during the six months ended June 30, 2020 was from $6.1 million of proceeds from the exercise of warrants and $18.8 million from the sale of common stock, preferred stock and warrants.

As of June 30, 2021, and December 31, 2020, we had working capital of $138.3 million and $127.2 million, respectively.

Net cash used in investing activities was $122.7 million primarily related to net purchases of marketable securities during the nine months ended September 30, 2021, compared to $0.2 million investing activities for the same period in 2020.

Net cash provided in financing activities was $20.5 million during the nine months ended September 30, 2021, compared to $37.6 million for the same period in 2020.

Net cash provided in financing activities during the nine months ended September 30, 2021 was $19.2 million from the sale of common stock and $1.3 million proceeds from the exercise of warrants.

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

As of September 30, 2021, and December 31, 2020, we had working capital of $132.7 million and $127.2 million, respectively.

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

As of June 30, 2021, we had $140.1 million in cash, cash equivalents and short-term investments and we believe we have sufficient cash to meet our funding requirements for at least the next 12 months following the date of this Quarterly Report on Form 10-Q.

For the foreseeable future, we expect to continue to incur losses and require additional capital to further advance its clinical trial programs and support its other operations.

As of September 30, 2021, we had $134.0 million in cash, cash equivalents and short-term investments and we believe we have sufficient cash to meet our funding requirements for at least the next 12 months following the issuance date of this Quarterly Report on Form 10-Q.

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.

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The economic effects of COVID-19 could also have an adverse effect on our ability to raise additional capital.

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, 2020.

There have been no material changes to our contractual obligations in our Form 10-K for the year ended December 31, 2020.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis