UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
 
(Mark One) 
 
☒ 
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the Quarterly Period Ended June 30, 2020March 31, 2021
 
 
 
☐ 
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period fromto                      
 
 
 
Commission File Number: : 001-39070
 
 
 

 
 
MONOPAR THERAPEUTICS INC.
(Exact name of registrant as specified in its charter)
 
 
DELAWARE 32-0463781
(State or other jurisdiction of
incorporation or organization)
 
 
(I.R.S. employer
identification number)
1000 Skokie Blvd., Suite 350, Wilmette, IL 60091
(Address of principal executive offices) (zip code)
 
(847) 388-0349
 
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
 
 
Title of each class
 Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.001 par value
MNPR
The Nasdaq Stock Market LLC
(Nasdaq Capital Market)
 

Securities registered pursuant to Section 12(g) of the Act:
 
None
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes ☒   No ☐
 
 
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes  ☒    No  ☐
 
 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer Accelerated filer
Non-accelerated filer   Smaller reporting company
   Emerging growth company
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  ☐    No  ☒
 
 
 
The number of shares outstanding with respect to each of the classes of our common stock, as of July 31, 2020,April 30, 2021, is set forth below:
 
Class

Number of shares outstanding
Common Stock, par value $0.001 per share
10,736,396

12,569,933
 
 
 
 
 
 
 
MONOPAR THERAPEUTICS INC.
TABLE OF CONTENTS
 
   
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Forward-Looking Statements
 
 
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Act”) and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q are forward-looking statements. The words “hopes,” “believes,” “anticipates,” “plans,” “seeks,” “estimates,” “projects,” “expects,” “intends,” “may,” “could,” “should,” “would,” “will,” “continue,” and similar expressions are intended to identify forward-looking statements. The following uncertainties and factors, among others, could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements:
 
our ability to raise sufficient funds by mid-2021in the next 12 months in order for us to startcomplete the Phase 3 portion of our Validive Phase 2b/3 clinical trial and thereafter in orderif required complete a smaller second confirmatory Phase 3 clinical trial, to completecontinue the trial, support furtherclinical development of camsirubicin in and beyond the Phase 2dose escalation run-in clinical trial, to support further development of potential radio-immuno-therapeutics to treat severe COVID-19 (patients with SARS-CoV-2 infection), to support further development of MNPR-101 and related compounds and generally to support our current and any future product candidates through completion of clinical trials, approval processes and, if applicable, commercialization;commercialization;
 
our ability to find a suitable pharmaceutical partner to further our development efforts, if we are unable to raise sufficient additional financing;
 
risks and uncertainties associated with our research and development activities, including our clinical trials;
 
estimated timeframes for our clinical trials and regulatory reviews for approval to market products;
 
plans to research, develop, gain approval and commercialize our current and future product candidates;
 
the rate and degree of market acceptance and the competitive clinical efficacy and safety of any products for which we receive marketing approval;
 
the difficulties of commercialization, marketing and product manufacturing capabilities and overall strategy;
 
uncertainties of intellectual property position and strategy;
 
challengingdelivering strong future financial performance;
the risks inherent in our estimates regarding expenses, capital requirements and need for additional financing;
the uncertain impact of government laws and regulations;
 
our ability to attract and retain key personnel;
 
the risks inherent in our estimates regarding expenses, capital requirements and the availability of additional financing;
the impact of government laws and regulations including increased governmental control of healthcare;
the uncertain impact of the COVID-19 pandemic on our ability to advance our clinical programs and raise additional financing; and
 
uncertainty of financial and operational projections.
 
Although we believe that the expectations reflected in such forward-looking statements are appropriate, we can give no assurance that such expectations will be realized. Cautionary statements are disclosed in this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements. We undertake no obligation to update any statements made in this Quarterly Report on Form 10-Q or elsewhere, including without limitation any forward-looking statements, except as required by law.
 
Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information.
 
 

Risks Associated With Our Business
Our business is subject to numerous risks and uncertainties, including those highlighted in “Item 1A - Risk Factors” of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2021. These risks include, among others, the following:

We are a clinical stage biopharmaceutical company with a history of financial losses. We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain cash self-sufficiency or profitability, which could result in a decline in the market value of our common stock.
Funds raised to-date are not sufficient to 1) complete our Validive Phase 2b/3 ("VOICE") clinical program, including, if required, completing a smaller second Phase 3 confirmatory clinical trial; 2) continue the clinical development of camsirubicin beyond the dose escalation run-in clinical trial; or 3) to support continued development of MNPR-101 and related compounds. If we are unable to raise enough funds in the next 12 months from the sale of our common stock or other financing efforts, we will have to consider strategic options such as out-licensing Validive or other product candidates, entering into a clinical or commercial partnership, or terminating one or more programs. There can be no assurance that we can find a suitable partner on satisfactory terms.
We have a limited operating history, no revenues from operations, and are dependent upon raising capital to continue our drug development programs.
We do not have and may never have any approved products on the market. Our business is highly dependent upon receiving approvals from various U.S. and international governmental agencies and will be severely harmed if we are not granted approval to manufacture and sell our product candidates.
Our clinical trials may not yield sufficiently conclusive results for regulatory agencies to approve the use of our products, which will adversely affect our financial condition.
If we experience delays or difficulties in the enrollment of subjects in clinical trials, our receipt of necessary regulatory approvals will be delayed or prevented, which will materially delay our program schedules and adversely affect our financial condition.
We rely on third parties to conduct our drug product manufacturing, non-clinical studies, and our clinical trials. If these third parties do not or cannot successfully carry out their contractual duties or meet expected deadlines or performance goals, the initiation or conduct of our clinical trials may be delayed and we may be unable to obtain regulatory approval for, or commercialize, our current product candidates or any future products, and our financial condition will be adversely affected.
We face significant competition from other biotechnology and pharmaceutical companies, in targeted medical indications, and our operating results will suffer if we fail to compete effectively. Competition and technological change may make our product candidates obsolete or non-competitive.
The termination of third-party licenses will adversely affect our rights to important compounds or technologies.
If we and our third-party licensors do not obtain and preserve protection for our respective intellectual property rights, our competitors may be able to develop competing drugs, which will adversely affect our financial condition.
If we lose key management leadership, and/or scientific personnel, and if we cannot recruit qualified employees or other significant personnel for future personnel requirements, we may experience program delays and increased compensation and operational costs, and our business will be materially disrupted.
The COVID-19 pandemic could have a substantial negative impact on our business, financial condition, operating results, stock price and ability raise additional funds.



 

 
PART I
 
FINANCIAL INFORMATION
 
 
Item 1. Financial Statements
Monopar Therapeutics Inc.
 
Condensed Consolidated
Balance Sheets
(Unaudited)
 
 
June 30, 2020
 
 
December 31, 2019*
 
 
March 31, 2021
 
 
December 31, 2020*
 
Assets
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 $12,546,189 
 $13,213,929 
 $25,723,113 
 $16,737,109 
Other current assets
  183,416 
  15,711 
  114,569 
  62,690 
Total current assets
  12,729,605 
  13,229,640 
  25,837,682 
  16,799,799 
    
    
Other non-current assets
  73,050 
  122,381 
  68,858 
Total assets
 $12,802,655 
 $13,352,021 
 $25,906,540 
 $16,868,657 
Liabilities and Stockholders’ Equity
    
Liabilities and Stockholders' Equity
    
Current liabilities:
    
    
Accounts payable, accrued expenses and other current liabilities
 $525,748 
 $724,165 
 $806,272 
 $1,176,666 
Current portion of bank loan
  47,379 
   
Total current liabilities
  573,127 
  724,165 
Total current liabilities and total liabilities
  806,272 
  1,176,666 
    
    
Long-term liabilities:
    
Non-current portion of bank loan
  75,021 
   
Total long-term liabilities
  75,021 
   
Total liabilities
  648,148 
  724,165 
Commitments and contingencies (Note 6)
    
    
Stockholders’ equity:
    
    
Common stock, par value of $0.001 per share, 40,000,000 authorized, 10,735,973 and 10,587,632 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
  10,736 
  10,587 
Common stock, par value of $0.001 per share, 40,000,000 shares authorized, 12,569,933 and 11,453,465 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively
  12,570 
  11,453 
Additional paid-in capital
  40,572,598 
  38,508,825 
  59,161,975 
  47,873,570 
Accumulated other comprehensive loss
  (11,554)
  (10,970)
  (5,099)
  (7,873)
Accumulated deficit
  (28,417,273)
  (25,880,586)
  (34,069,178)
  (32,185,159)
Total stockholders' equity
  12,154,507 
  12,627,856 
  25,100,268 
  15,691,991 
Total liabilities and stockholders’ equity
 $12,802,655 
 $13,352,021 
Total liabilities and stockholders' equity
 $25,906,540 
 $16,868,657 
 

* Derived from the Company’s audited consolidated financial statements.
 
The accompanying notes are an integral
part of these condensed consolidated financial statements.

Monopar Therapeutics Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Unaudited)
 
 
Three Months Ended June 30,
 
 
Six Months Ended June 30,
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
 $832,503 
 $329,294 
 $1,176,910 
 $1,164,894 
General and administrative
  631,629 
  602,815 
  1,423,236 
  1,174,524 
Total operating expenses
  1,464,132 
  932,109 
  2,600,146 
  2,339,418 
Loss from operations
  (1,464,132)
  (932,109)
  (2,600,146)
  (2,339,418)
Other income:
    
    
    
    
Interest income, net
  18,322 
  26,409 
  63,459 
  57,483 
Net loss
  (1,445,810)
  (905,700)
  (2,536,687)
  (2,281,935)
Other comprehensive income:
    
    
    
    
Foreign currency translation gain (loss)
  3,457 
  1,067 
  (584)
  (1,060)
Comprehensive loss
 $(1,442,353)
 $(904,633)
 $(2,537,271)
 $(2,282,995)
Net loss per share:
    
    
    
    
Basic and diluted
 $(0.14)
 $(0.10)
 $(0.24)
 $(0.25)
Weighted average shares outstanding:
    
    
    
    
Basic and diluted
  10,648,285 
  9,291,421 
  10,628,635 
  9,291,421 

 
 
The accompanying notes are an integral
part of these condensed consolidated financial statements.
 

 
Monopar Therapeutics Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Unaudited)
 
 
For the Three Months Ended March 31,
 
 
 
2021
 
 
2020
 
Operating expenses:
 
 
 
 
 
 
Research and development
 $1,206,779 
 $344,407 
General and administrative
  687,936 
  791,607 
Total operating expenses
  1,894,715 
  1,136,014 
Loss from operations
  (1,894,715)
  (1,136,014)
Other income:
    
    
Interest income
  10,696 
  45,137 
Net loss
  (1,884,019)
  (1,090,877)
Other comprehensive income (loss):
    
    
Foreign currency translation gain (loss)
  2,774 
  (4,041)
Comprehensive loss
 $(1,881,245)
 $(1,094,918)
Net loss per share:
    
    
Basic and diluted
 $(0.16)
 $(0.10)
Weighted average shares outstanding:
    
    
Basic and diluted
  12,139,422 
  10,608,199 
The accompanying notes are an integral
part of these condensed consolidated financial statements.

Monopar Therapeutics Inc.
Condensed Consolidated Statements of Stockholders’ Equity
Three Months Ended March 31, 2020
(Unaudited)
 
 
 
Common Stock
 
 
Additional
 
 
Accumulated
 
 
 
 
 
 
 
 
 
Shares
 
 
Amount
 
 
Paid-in Capital
 
 
Other Comprehensive Loss
 
 
Accumulated Deficit
 
 
Total Stockholders' Equity
 
Balance at January 1, 2019
  9,291,421 
 $9,291 
 $28,567,221 
 $(2,396)
 $(21,655,712)
 $6,918,404 
     Stock-based compensation (non-cash)
   
   
  233,776 
   
   
  233,776 
     Net loss
   
   
   
   
  (1,376,235)
  (1,376,235)
     Accumulated other comprehensive loss
   
   
   
  (2,127)
   
  (2,127)
Balance at March 31, 2019
  9,291,421 
  9,291 
  28,800,997 
  (4,523)
  (23,031,947)
  5,773,818 
 Stock-based compensation (non-cash)
   
   
  257,633 
   
   
  257,633 
 Net loss
   
   
   
   
  (905,700)
  (905,700)
 Accumulated other comprehensive gain
   
   
   
  1,067 
   
  1,067 
Balance at June 30, 2019
  9,291,421 
 $9,291 
 $29,058,630 
 $(3,456)
 $(23,937,647)
 $5,126,818 
 
Common Stock
 
 
Additional
 
 
Accumulated
 
 
 
 
 
 
 
 
Common Stock
 
 
 
 
 
Shares
 
 
Amount
 
 
Paid-in Capital
 
 
Other Comprehensive Loss
 
 
Accumulated Deficit
 
 
Total Stockholders' Equity
 
 
Shares
 
 
Amount
 
 
Additional Paid-in Capital
 
 
Accumulated Other Comprehensive Loss
 
 
Accumulated Deficit
 
 
Total Stockholders' Equity
 
Balance at January 1, 2020
  10,587,632 
 $10,587 
 $38,508,825 
 $(10,970)
 $(25,880,586)
 $12,627,856 
  10,587,632 
 $10,587 
 $38,508,825 
 $(10,970)
 $(25,880,586)
 $12,627,856 
Issuance of common stock under a Capital on DemandTM Sales Agreement with
JonesTrading Institutional Services LLC, net of commissions and fees of $16,284
  33,903 
  34 
  526,109 
   
   
  526,143 
Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net in commissions and fees of $16,284
  33,903 
  34 
  526,109 
   
  526,143 
Issuance of common stock to non-employee
directors pursuant to vested restricted stock units
  1,288 
  1 
  (1)
   
   
   
  1,288 
  1 
  (1)
   
Stock-based compensation (non-cash)
   
  338,497 
   
   
  338,497 
   
  338,497 
   
  338,497 
Offering costs
   
  (2,161)
   
   
  (2,161)
   
  (2,161)
   
    
  (2,161)
Net loss
   
   
  (1,090,877)
  (1,090,877)
   
  (1,090,877)
Accumulated other comprehensive loss
   
  (4,041)
   
  (4,041)
   
  (4,041)
   
  (4,041)
Balance at March 31, 2020
  10,622,823 
  10,622 
  39,371,269 
  (15,011)
  (26,971,463)
  12,395,417 
  10,622,823 
 $10,622 
 $39,371,269 
 $(15,011)
 $(26,971,463)
 $12,395,417 
Issuance of common stock under a Capital on DemandTM Sales Agreement with
JonesTrading Institutional Services LLC, net of commissions and fees of $29,425
  111,858 
  113 
  950,577 
   
   
  950,690 
Issuance of common stock to non-employee
directors pursuant to vested restricted stock units
  1,292 
  1 
  (1)
    
   
   
Stock-based compensation (non-cash)
   
  367,358 
   
   
  367,358 
Offering costs
   
  (116,605)
    
    
  (116,605)
Net loss
   
   
  (1,445,810)
  (1,445,810)
Accumulated other comprehensive gain
   
  3,457 
   
  3,457 
Balance at June 30, 2020
  10,735,973 
 $10,736 
 $40,572,598 
 $(11,554)
 $(28,417,273)
 $12,154,507 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.



Monopar Therapeutics Inc.
Condensed Consolidated Statements of Stockholders’ Equity
Three Months Ended March 31, 2021
(Unaudited)
 
 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares
 
 
Amount
 
 
Additional Paid-in Capital
 
 
Accumulated Other Comprehensive Loss
 
 
Accumulated Deficit
 
 
Total Stockholders' Equity
 
Balance at January 1, 2021
  11,453,465 
 $11,453 
 $47,873,570 
 $(7,873)
 $(32,185,159)
 $15,691,991 
        Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions and fees of $338,153
  1,104,047 
  1,104 
  10,924,208 
   
   
  10,925,312 
        Issuance of common stock to non-employee directors pursuant to vested restricted stock units
  3,004 
  3 
  (3)
   
   
   
        Issuance of common stock to employees pursuant to vested restricted stock units, net of taxes
  6,504 
  7 
  (21,507)
   
   
  (21,500)
        Issuance of common stock upon exercise of stock options
  2,913 
  3 
  17,475 
   
   
  17,478 
        Stock-based compensation (non-cash)
   
   
  368,232 
   
   
  368,232 
        Net loss
   
   
   
   
  (1,884,019)
  (1,884,019)
        Accumulated other comprehensive income
   
   
   
  2,774 
   
  2,774 
Balance at March 31, 2021
  12,569,933 
 $12,570 
 $59,161,975 
 $(5,099)
 $(34,069,178)
 $25,100,268 
 
 

The accompanying notes are an integral part of these condensed consolidated financial statements.

Monopar Therapeutics Inc.
 
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
 
 
 
Six Months Ended June 30,
 
 
 
2020
 
 
2019
 
Cash flows from operating activities:
 
 
 
 
 
 
Net loss
 $(2,536,687)
 $(2,281,935)
Adjustments to reconcile net loss to net cash used in operating activities:
    
    
Stock-based compensation expense (non-cash)
  705,855 
  491,409 
Changes in operating assets and liabilities, net
    
    
Other current assets
  (122,258)
  (13,902)
Accounts payable, accrued expenses and other current liabilities
  (167,954)
  68,721 
Net cash used in operating activities
  (2,121,044)
  (1,735,707)
Cash flows from financing activities:
    
    
       Cash proceeds from the sales of common stock under a Capital on DemandTM 
       Sales Agreement with JonesTrading Institutional Services LLC, net of cash commissions and fees of $43,999
  1,421,569 
   
Offering costs
  (89,521)
  (26,177)
PPP forgivable bank loan
  122,400 
   
Net cash provided by (used in) financing activities
  1,454,448 
  (26,177)
Effect of exchange rates
  (1,144)
  (1,060)
Net decrease in cash and cash equivalents
  (667,740)
  (1,762,944)
Cash and cash equivalents at beginning of period
  13,213,929 
  6,892,772 
Cash and cash equivalents at end of period
 $12,546,189 
 $5,129,828 

 
 
For the Three Months Ended March 31,
 
 
 
2021
 
 
2020
 
Cash flows from operating activities:
 
 
 
 
 
 
Net loss
 $(1,884,019)
 $(1,090,877)
Adjustments to reconcile net loss to net cash used in operating activities:
    
    
Stock-based compensation expense (non-cash)
  368,232 
  338,497 
Changes in operating assets and liabilities, net
    
    
Other current assets
  (51,879)
  (42,084)
Accounts payable, accrued expenses and other current liabilities
  (370,394)
  (331,106)
Net cash used in operating activities
  (1,938,060)
  (1,125,570)
Cash flows from financing activities:
    
    
Cash proceeds from the sales of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions, fees and offering costs of $338,153 and $34,384 for the three months ended March 31, 2021 and March 31, 2020, respectively
  10,925,312 
  508,044 
Taxes paid related to net share settlement of vested restricted stock units
  (21,500)
   
Cash proceeds from the issuance of stock upon exercise of stock options
  17,478 
   
Net cash provided by financing activities
  10,921,290 
  508,044 
Effect of exchange rates
  2,774 
  (4,041)
Net increase (decrease) in cash and cash equivalents
  8,986,004 
  (621,567)
Cash and cash equivalents at beginning of period
  16,737,109 
  13,213,929 
Cash and cash equivalents at end of period
 $25,723,113 
 $12,592,362 
 
The accompanying notes are an integral
part of these condensed consolidated financial statements.
 

 
 
MONOPAR THERAPEUTICS INC.
 
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
June 30, 2020March 31, 2021
 
Note 1 - Nature of Business and Liquidity
 
Nature of Business
 
Monopar Therapeutics Inc. (“Monopar” or the “Company”) is a clinical-stage biopharmaceutical company primarily focused on developing proprietary therapeutics designed to extend life or improve quality of life for cancer patients. Monopar currently has three compounds in development: 1) Validive® (clonidine(clonidine mucobuccal tablet; clonidine MBT), a Phase 2b/3-ready,3 clinical stage, first-in-class mucoadhesive buccal tablet for the prevention and treatment of radiation induced severe oral mucositis (“SOM”) in oropharyngeal cancer patients; 2) camsirubicin (generic name for MNPR-201, GPX-150; 5-imino-13-deoxydoxorubicin), a proprietary Phase 2 clinical stage topoisomerase II-alpha selective novel analog of doxorubicin engineered specifically to retain anticancer activity while minimizing toxic effects on the heart; and 3) a preclinical stage uPAR targeted antibody, MNPR-101 and related compounds, for advanced cancers and severe COVID-19.
 
Liquidity
 
The Company has incurred an accumulated deficit of approximately $28.4$34.1 million as of June 30, 2020.March 31, 2021. To date, the Company has primarily funded its operations with the net proceeds from the Company’s initial public offering of its common stock on Nasdaq, private placements of convertible preferred stock and of common stock, from the cash provided in the camsirubicin asset purchase transaction, from sales of its common stock in the public market under a Capital on DemandTM Sales Agreement, private placements of convertible preferred stock and from a forgivable bank loan.of common stock and cash provided in the camsirubicin asset purchase transaction. Management believesestimates that currently available resourcescash will provide sufficient funds to enable the Company to meet its planned obligations past September 2021.at least through June 2022. The Company’s ability to fund its future operations, including the clinical development of Validive and camsirubicin, is dependent primarily upon its ability to execute its business strategy, to obtain additional funding and/or to execute collaborative research agreements. There can be no certainty that future financing or collaborative research agreements will occur.occur at a time needed to maintain operations, if at all.
 
In December 2019, a novel strain of coronavirus (“COVID-19”) surfaced in China and byspread to essentially all of the remaining world. By March 2020 COVID-19 was designated a global pandemic, resulting in government-mandated travel restrictions and temporary shut-downsshutdowns or limitations of non-essential businesses in many states in the United States.U.S. The Company is able to remain open but has allowed theirits employees to work from home, if required by local authorities. Due to the volatility of the stock markets resulting from travel restrictions and indeterminate but temporary business shut-downs, the Company faces challenges in raising substantial cash in the near-term. In response to the current COVID-19 pandemic and its effects on clinical trials, Monopar has modified the original adaptive design Phase 3 clinical trial for its lead product candidate, Validive, to be a Phase 2b/3 clinical trial (“VOICE”) to better fit the types of trials which can enroll patients in the current environment. This modification will allowallowed the Company to initiateactivate the VOICE clinical trial without requiring near-term financing. The decision to proceed toTo complete the VOICE clinical program, including, if required, completing a smaller second Phase 3 portion of the clinical trial without a delay will largely be dependent on the Company’s cash position closer to that time, anticipated to be in the second half of 2021. To initiate and complete the Phase 3 portion of theconfirmatory clinical trial, Monopar will require additional funding in the millions or tens of millions of dollars (depending on if the Company has consummated a collaboration or partnership or neither for Validive), which it is planning to pursue in the next 12 months. Due to many uncertainties, the Company is unable to estimate the pandemic’s financial impact or duration at this time, or its potential impact on the Company’s plannedcurrent clinical trials.trials including the pandemic’s effect on drug candidate manufacturing, shipping, patient recruitment at clinical sites and regulatory agencies around the globe.
 
 
Note 2 - Significant Accounting Policies
 
Basis of Presentation
 
These condensed consolidated financial statements include the financial results of Monopar Therapeutics Inc., its wholly-owned French subsidiary, Monopar Therapeutics, SARL, and its wholly-owned Australian subsidiary, Monopar Therapeutics Australia Pty Ltd and have been prepared in accordance with accounting

MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2020
principles generally accepted in the United StatesU.S. (“GAAP”) and include all disclosures required by GAAP for interim financial reporting. All intercompany accounts have been eliminated. The principal accounting policies applied in the preparation of these condensed consolidated financial statements are set out below and have been consistently applied in all periods presented. The Company has been primarily involved in performing research activities, developing product candidates, and raising capital to support and expand these activities.
 
In the opinion of management, the

MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2021
The accompanying unaudited condensed consolidated financial statements contain all normal, recurring adjustments necessary to present fairly the Company’s condensed consolidated financial position as of June 30, 2020March 31, 2021, and as of December 31, 2019, the Company’s condensed consolidated results of operations and comprehensive loss for the three and six months ended June 30, 2020 and 2019, and the Company’s condensed consolidated cash flows for the sixthree months ended June 30, 2020March 31, 2021 and 2019. 2020.
The condensed consolidated results of operations and comprehensive loss and condensed consolidated cash flows for the periods presented are not necessarily indicative of the consolidated results of operations or cash flows which may be reported for the remainder of 20202021 or for any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2019,2020, included in the Company’s Annual Report on Form 10-K filed with the United StatesU.S. Securities and Exchange Commission (the “SEC”) on March 27, 2020.25, 2021.
 
Functional Currency
 
The Company's consolidated functional currency is the U.S. Dollar. The Company's Australian subsidiary and French subsidiary use the Australian Dollar and European Euro, respectively, as their functional currency. At each quarter-end, each foreign subsidiary's balance sheets are translated into U.S. Dollars based upon the quarter-end exchange rate, while their statements of operations and comprehensive loss and statements of cash flows are translated into U.S. Dollars based upon an average exchange rate during the period.
 
Comprehensive Loss
 
Comprehensive loss represents net loss plus any gains or losses not reported in the condensed consolidated statements of operations and comprehensive loss, such as foreign currency translations gains and losses that are typically reflected on the Company’s condensed consolidated statements of stockholders’ equity.
 
Use of Estimates
 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
 
Going Concern Assessment
 
The Company applies Accounting Standards Codification 205-40 (“ASC 205-40”), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which the Financial Accounting Standards Board (“FASB”) issued to provide guidance on determining when and how reporting companies must disclose going concern uncertainties in their financial statements. ASC 205-40 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, a company must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” In July 2020,April 2021, the Company analyzed its cash requirements through September 2021June 2022 and has determined that, based upon the Company’s current available cash, the Company has no substantial doubt about its ability to continue as a going concern.
 

 
 
MONOPAR THERAPEUTICS INC.
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
June 30, 2020March 31, 2021
 
Cash Equivalents
 
The Company considers all highly liquid investments purchased with a maturity of 90 days or less on the date of purchase to be cash equivalents. Cash equivalents as of June 30,March 31, 2021 and December 31, 2020 and 2019 consisted of one money market account.
 
Deferred Offering Costs
 
Deferred offering costs represent legal, auditing, travel and filing fees related to fundraising efforts that have not yet been concluded.
 
Prepaid Expenses
 
Prepayments are expenditures for goods or services before the goods are used or the services are received and are charged to operations as the benefits are realized. Prepaid expenses may include payments to development collaborators in excess of actual expenses incurred by the collaborator, measured at the end of each reporting period. Prepayments also include insurance premiums, dues and subscriptions and software costs of $10,000 or more per year that are expensed monthly over the life of the contract.contract, which is typically one year. Prepaid expenses are reflected on the Company’s condensed consolidated balance sheets as other current assets.
 
Bank Loans
In May 2020, the Company applied for and received a bank loan pursuant to the Paycheck Protection Program (“PPP”) established pursuant to the Coronavirus Aid, Relief, and Economic Security Act, as administered by the U.S. Small Business Administration (“SBA”).
The SBA will forgive the bank loan pursuant to the PPP, if certain conditions are met, namely the bank loan must be used primarily for payroll during the 24-week period following receipt of the loan, without significant staffing reductions during that period. The Company believes it is eligible and intends to apply for loan forgiveness in August 2020 when the bank is able to process SBA loan forgiveness application. Should the bank loan not be forgiven, the Company would be required to pay 1% annual interest on the loan with principal and interest payments beginning approximately seven months after receipt of the loan with payments over 18 months. The Company has recorded the PPP loan on the balance sheet as of June 30, 2020 as current (due within 12 months) and non-current portions of bank loan.
 
Concentration of Credit Risk
 
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company maintains cash and cash equivalents at two reputable financial institutions. As of June 30, 2020,March 31, 2021, the balance at one financial institution was in excess of the $250,000 Federal Deposit Insurance Corporation (“FDIC”) insurable limit. The Company has not experienced any losses on its deposits since inception and management believes the Company is not exposed to significant risks with respect to these financial institutions.
 
Fair Value of Financial Instruments
 
For financial instruments consisting of cash and cash equivalents, accounts payable, accrued expenses, and other current liabilities, and bank loans, the carrying amounts are reasonable estimates of fair value due to their relatively short maturities.
 

MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2020
The Company adopted ASC 820, Fair Value Measurements and Disclosures,, as amended, which addresses the measurement of the fair value of financial assets and financial liabilities. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.
 
The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources. Unobservable inputs reflect a reporting entity’s pricing an asset or liability developed based on the best information available under the circumstances. The fair value hierarchy consists of the following three levels:
 
Level 1 - instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets.
 
Level 2 - instrument valuations are obtained from readily available pricing sources for comparable instruments.
 
Level 3 - instrument valuations are obtained without observable market values and require a high-level of judgment to determine the fair value.

MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2021
 
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level 1, 2 or 3 of the fair value hierarchy during the three and six months ended June 30, 2020March 31, 2021 and the year ended December 31, 2019.2020. The following table presents the assets and liabilities recorded that are reported at fair value on our condensed consolidated balance sheets on a recurring basis. No values were recorded in Level 2 or Level 3 at June 30, 2020March 31, 2021 and December 31, 2019.2020.
 
Assets and Liabilities Measured at Fair Value on a Recurring Basis
 
June 30, 2020
 
Level 1
 
 
Total
 
March 31, 2021 
 
Level 1
 
 
Total
 
Assets
 
 
 
 
 
 
 
Cash equivalents(1)
 $12,397,916 
 
 $25,430,341 
Total
 $12,397,916 
 
 $25,430,341 
 
 
December 31, 2019
 
Level 1
 
 
Total
 
December 31, 2020 
 
Level 1
 
 
Total
 
Assets
 
 
 
 
 
 
 
Cash equivalents(1)
 $13,083,536 
 
 $16,605,682 
Total
 $13,083,536 
 
 $16,605,682 
 
(1)
Cash equivalents represent the fair value of the Company’s investment in a money market account.
 
Net Loss per Share
 
Net loss per share for the three and six months ended June 30,March 31, 2021 and 2020 and 2019 is calculated by dividing net loss by the weighted-average shares of common stock outstanding during the period. Diluted net loss per share for the three and six months ended June 30,March 31, 2021 and 2020 and 2019 is calculated by dividing net loss by the weighted-average shares of the sum of a) weighted average common stock outstanding (10,648,285(12,139,422 and 10,628,63510,608,199 shares for the three and six months ended June 30,March 31, 2021 and 2020, respectively; 9,291,421 shares for the three and six months ended June 30, 2019)respectively) and b) potentially dilutive shares of common stock (such as stock options and restricted stock units) outstanding during the period. As of June 30,March 31, 2021 and 2020, and 2019, potentially dilutive securities included

MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2020
stock-based awards to purchase up to 1,296,5731,600,215 and 1,105,8961,337,007 shares of the Company’s common stock, respectively. For the three and six months ended June 30,March 31, 2021 and 2020, and 2019, potentially dilutive securities are excluded from the computation of fully-dilutedfully diluted net loss per share as their effect is anti-dilutive.
 
Research and Development Expenses
  
Research and development (“R&D”) costs are expensed as incurred. Major components of R&D expenses include salaries and benefits paid to the Company’s R&D staff, fees paid to consultants and to the entities that conduct certain R&D activities on the Company’s behalf and materials and supplies which are used in R&D activities during the reporting period.


MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2021
Clinical Trial Expense
 
The Company accrues and expenses the costs for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with contract research organizations, service providers, and clinical trial sites. The Company determines the estimates through discussions with internal clinical personnel and external service providers as to progress or stage of completion of trials or services and the agreed upon fee to be paid for such services. Costs of setting up clinical trial sites for participation in the trials are expensed immediately as R&D expenses. Clinical trial site costs related to patient screening and enrollment are accrued as patients are screened/entered into the trial. During the three and six months ended June 30, 2020 and 2019, the Company had no clinical trials in progress.
 
Collaborative Agreements
 
The Company and its collaborative partners are active participants in collaborative arrangementsagreements and all parties would be exposed to significant risks and rewards depending on the technical and commercial success of the activities. Contractual payments to the other parties in collaboration agreements and costs incurred by the Company when the Company is deemed to be the principal participant for a given transaction are recognized on a gross basis in R&D expenses. Royalties and license payments are recorded as earned.
 
During the three and six months ended June 30,March 31, 2021 and 2020, and 2019, no milestones were met and no royalties were earned, therefore, the Company did not pay or accrue/expense any license or royalty payments.
 
Licensing Agreements
 
The Company has various agreements licensing technology utilized in the development of its product or technology programs. The licenses contain success milestone obligations and royalties on future sales. During the three and six months ended June 30,March 31, 2021 and 2020, and 2019, no milestones were met and no royalties were earned, therefore, the Company did not pay or accrue/expense any license or royalty payments under any of its license agreements.
 
Patent Costs
 
The Company expenses costs relating to issued patents and patent applications, including costs relating to legal, renewal and application fees, as a component of general and administrative expenses in its condensed consolidated statements of operations and comprehensive loss.
 
Income Taxes
 
On December 16, 2015, the Company began using an asset and liability approach for accounting for deferred income taxes, which requires recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements but have not been reflected in its taxable income. Estimates and judgments are required in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred income tax assets, which arise from temporary differences and carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled.

 

 

 
MONOPAR THERAPEUTICS INC.
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
June 30, 2020March 31, 2021
 
 
 
The Company regularly assesses the likelihood that its deferred income tax assets will be realized from recoverable income taxes or recovered from future taxable income. To the extent that the Company believes any amounts are morenot “more likely than notnot” to be realized, the Company records a valuation allowance to reduce the deferred income tax assets. In the event the Company determines that all or part of the net deferred tax assets are not realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. Similarly, if the Company subsequently determines deferred income tax assets that were previously determined to be unrealizable are now realizable, the respective valuation allowance would be reversed, resulting in an adjustment to earnings in the period such determination is made.
Internal Revenue Code SectionSections 382 and 383 (“Section 382”Sections 382 and 383”) provides that, after an ownership change,limit the amountuse of a loss corporation’s net operating loss (“NOL”) for any post-change year that may be offset by pre-change losses shall not exceed the Section 382 limitation for that year.carryforwards and R&D credits, after an ownership change. To date, the Company has not conducted a Section 382 or 383 study, however, because the Company will continue to raise significant amounts of equity in the coming years, the Company expects that SectionSections 382 and 383 will limit the Company’s usage of NOLs and R&D credits in the future.
 
ASC 740, Income Taxes, requires that the tax benefit of net operating losses, temporary differences, and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. The Company has reviewed the positive and negative evidence relating to the realizability of the deferred tax assets and has concluded that the deferred tax assets are not more“more likely than notnot” to be realized with the exception of its U.S. Federal R&D tax credits which will be utilized to reduce payroll taxes in future periods.realized. As a result, the Company recorded a full valuation allowance as of June 30, 2020March 31, 2021 and December 31, 2019.2020. U.S. Federal R&D tax credits from 2016 to 2019 were utilized to reduce payroll taxes in future periods and were recorded as other current assets for amounts anticipated to be received within 12 months and other non-current assets for amounts anticipated to be received beyond 12 months on the Company’s condensed consolidated balance sheets. The Company intends to maintain the valuation allowance until sufficient evidence exists to support its reversal. The Company regularly reviews its tax positions. For a tax benefit to be recognized, the related tax position must be more“more likely than notnot” to be sustained upon examination. Any amount recognized is generally the largest benefit that is more“more likely than notnot” to be realized upon settlement. The Company’s policy is to recognize interest and penalties related to income tax matters as an income tax expense. For the three and six months ended June 30,March 31, 2021 and 2020, and 2019, the Company did not have any interest or penalties associated with unrecognized tax benefits.
 
The Company is subject to U.S. Federal, Illinois and California income taxes. In addition, the Company is subject to local tax laws of France and Australia. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company was incorporated on December 16, 2015 and is subject to U.S. Federal, state and local tax examinations by tax authorities for the tax years ended December 31, 2019, 2018, 2017 and 2016, and for the short tax period December 16, 2015 to December 31, 2015.through 2020. The Company does not anticipate significant changes to its current uncertain tax positions through June 30, 2020.March 31, 2021. The Company plans on filing its U.S. Federal and state tax returns for the year endingended December 31, 20192020 prior to the extended filing deadlines in all jurisdictions.

 
Stock-Based Compensation
 
The Company accounts for stock-based compensation arrangements with employees, non-employee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based awards, including stock option and restricted stock unit (“RSU”) grants. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model or the closing stock price on the date of grant in the case of RSUs.
 
 

 
MONOPAR THERAPEUTICS INC.
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
June 30, 2020March 31, 2021
 
Stock-based compensation costsexpense for awards granted to employees, and non-employee directors and consultants are based on the fair value of the underlying instrument calculated using the Black-Scholes option-pricing model on the date of grant for stock options and using the closing stock price on the date of grant for RSUs and recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating the future stock price volatility, forfeiture rates and expected terms. The expected volatility rates are estimated based on the actual volatility of comparable public companies over recent historical periods of the same length as the expected term. The Company selected these companies based on reasonably comparable characteristics, including market capitalization, stage of corporate development and with historical share price information sufficient to meet the expected term (life) of the stock-based awards. The expected term for options granted to date is estimated using the simplified method. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has not paid dividends and does not anticipate paying a cash dividend in the future vesting period and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. Prior to January 1, 2019, the measurement of consultant stock-based compensation was subject to periodic adjustments as the underlying equity instruments vested and was recognized as an expense over the period in which services were rendered. Since January 1, 2019, consultant stock-based compensation is valued on the grant date and is recognized as an expense over the period in which services are rendered.
 
Recent Accounting Pronouncements
In August 2018, the FASB issued Accounting Standards Updates (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The ASU modifies, and in certain cases eliminates, the disclosure requirements on fair value measurements in Topic 820. The amendments in ASU No. 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted this ASU and has determined that it had no material effect on its condensed consolidated financial statements and footnote disclosures for the three and six months ended June 30, 2020.
 
Note 3 - Capital Stock
 
Holders of the common stock are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefor. Upon dissolution and liquidation of the Company, holders of the common stock are entitled to a ratable share of the net assets of the Company remaining after payments to creditors of the Company. The holders of shares of common stock are entitled to one vote per share for the election of each director nominated to the boardBoard and one vote per share on all other matters submitted to a vote of stockholders.
 
The Company’s amended and restated certificate of incorporation authorizes the Company to issue 40,000,000 shares of common stock with a par value of $0.001 per share.
 
Sales of Common Stock
On December 23, 2019, the Company closed the initial public offering of its common stock. The Company sold 1,277,778 shares of its common stock at a public offering price of $8.00 per share pursuant to an underwriting agreement with JonesTrading Institutional Services, LLC (“JonesTrading”). The Company paid JonesTrading a customary commission and reimbursement of a portion of their legal fees incurred in connection with the offering, which in aggregate totaled approximately $0.7 million. Net proceeds on a cash basis were approximately $9.4 million, after deducting underwriting discounts and accrued, unpaid offering expenses. The Company had incurred and paid prior to the initial public offering approximately $0.6 million of fundraising expenses which were capitalized on the Company’s balance sheet as deferred offering costs and were reclassified as offering expenses (a contra-equity balance sheet account) upon the closing of the Company’s initial public offering. After deducting previously paid offering expenses of approximately $0.6 million, the accrual basis net proceeds were $8.8 million as reported on the Company’s consolidated statement of stockholders’ equity as of December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2020. The Company’s common stock began trading on the Nasdaq Capital Market on December 19, 2019.

MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2020
 
On January 13, 2020, the Company entered into a Capital on Demand™ Sales Agreement with JonesTrading, as sales agent, pursuant to which Monopar may offer and sell (at its discretion), from time to time, through or to JonesTrading shares of Monopar’s common stock, having an aggregate offering price of up to $19.7 million. Pursuant to this agreement, as of June 30,during the three months ended March 31, 2020, the Company sold 145,76133,903 shares of its common stock at an average gross price per share of $10.45$16.00 for net proceeds of $1,476,833,$508,043 after fees, commissions and offering costs of $34,384. Also pursuant to this agreement, during the three months ended March 31, 2021, the Company sold 1,104,047 shares of its common stock at an average gross price per share of $10.20 for net proceeds of $10,925,311 after fees and commissions of $45,709.$338,153. In aggregate pursuant to this agreement, the Company sold 1,964,724 shares of its common stock at an average gross price per share of $10.02 for net proceeds of $19,100,602, after fees and commissions of $591,188.
 
As of June 30, 2020,March 31, 2021, the Company had 10,735,97312,569,933 shares of common stock issued and outstanding.
 
Note 4 - Stock Incentive Plan
 
In April 2016, the Company’s Board of Directors and stockholders representing a majority of the Company’s outstanding stock at that time, approved the Monopar Therapeutics Inc. 2016 Stock Incentive Plan, as amended (the “Plan”), allowing the Company to grant up to an aggregate 700,000 shares of stock-based awards in the form of stock options, restricted stock units, stock appreciation rights and other stock-based awards to employees, non-employee directors and consultants. In October 2017, the Company’s Board of Directors voted to increase the stock award pool to 1,600,000 shares of common stock, which subsequently was approved by the Company’s stockholders. In April 2020, the Company’s Board of Directors voted to increase the stock award pool to 3,100,000 (and increase of 1,500,000 shares of common stock), which was approved by the Company’s stockholders in June 2020.
 
In January 2020, the Company's Plan Administrator Committee granted two new hire stock option grants and a consultant stock option grant to the Company’s acting chief medical office, in aggregate, for the purchase of 15,125 shares of the Company’s common stock with exercise prices ranging from $16.80 to $17.75. The stock options have a 10-year term and vest over 1 to 4 years.
 
In February 2020,
MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2021

During the Company'sthree months ended March 31, 2021, the Company’s Plan Administrator Committee (with regards to non-officer employees)employees and consultants) and the Company'sCompany’s Compensation Committee, as ratified by the Board of Directors (in the case of executive officers and non-employee directors) granted an aggregate of 189,985 stock options with exercise prices ranging from $12.93 to $14.35 as annual equity grants to executive officers, non-officer employees, consultants and non-employee directors and staff. Allaggregate stock options have a 10-year term and vest over 1 to 4 years. The annual equity grants also included an aggregate 45,722 restricted stock units to executive officers, non-employee directors and staff which vest over 1 to 4 years.
In May 2020, the Company's Plan Administrator Committee granted stock option grants to a new hire and an employee, in aggregate, for the purchase of 4,000196,476 shares of the Company’s common stock with exercise prices ranging from $7.61$5.76 to $7.66.$9.67 which vest from one year to four years. All stock optionsoption grants have a 10-year termterm. In addition, an aggregate 124,374 restricted stock units were granted to executive officers, non-officer employees and non-employee directors which vest over 4one to four years.
 
Under the Plan, the per share exercise price for the shares to be issued upon exercise of an option shall be determined by the Plan Administrator, except that the per share exercise price shall be no less than 100% of the fair market value per share on the grant date. Fair market value is established by the Company’s Board of Directors, using third party valuation reports, recent private financings or the Company’s closing pricesprice on Nasdaq since the Company’s listing on December 19, 2019.Nasdaq. Stock options generally expire after 10 years.

MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2020
 
Stock option activity under the Plan was as follows:
 
 Options Outstanding
 
Options Outstanding
 
 Number of Options Weighted-Average Exercise Price
 
Number of Shares Subject to Options
 
 
Weighted-Average Exercise Price
 
Balances at January 1, 2019   1,105,896  $                                                             2.99
Balances at January 1, 2020
  1,087,463 
 $    2.94 
Granted  
  174,357 
  14.08 
Forfeited  
  (3,243)
  8.47 
Balances at December 31, 2020
  1,258,577 
  4.47 
Granted(1)
  196,476 
  6.93 
Forfeited(2)
  (3,344)
  17.25 
Exercised   (18,433)   5.97
  (2,913)
  6.00 
Balances at December 31, 2019   1,087,463               2.94
Granted(1)
   209,110   14.42
Forfeited  
Exercised   — 
Balances at June 30, 2020   1,296,573 4.79
Balances at March 31, 2021
  1,448,796 
  4.77 
 
(1)
209,110196,476 options vest as follows: options to purchase up to 180,401168,704 shares of the Company’s common stock vest 6/48ths on the six-month anniversary of grant date and 1/48th per month thereafter; options to purchase up to 22,58417,772 shares of the Company’s common stock vest quarterly over one year; and options to purchase up to 6,12510,000 shares of the Company’s common stock vest monthly over one year. The exerciseExercise prices range from $5.76 to $9.67 per share of the 209,110 options are as follows: for 186,985 options $14.35; for 9,000 options $17.75; for 6,125 options $16.80; for 3,000 options $12.93; for 2,000 options $7.66 and for 2,000 options $7.61.share.
 
(2)
Forfeited options represent unvested shares and vested, expired shares related to employee terminations.
A summary of options outstanding as of June 30, 2020March 31, 2021 is shown below:
 
Exercise Prices
 
Number of Shares Subject to Options Outstanding
 
Weighted-Average Remaining Contractual Term in Years
 
Number of Shares Subject to Options Fully Vested and Exercisable
 
Weighted-Average Remaining Contractual Term in Years Number of Shares Subject to Options Outstanding Weighted-Average Remaining Contractual Term in Years Number of Shares Subject to Options Fully Vested and Exercisable Weighted-Average Remaining Contractual Term in Years
$0.00-$5.00
  555,420 
6.21 years
  509,500 
6.17 years
$5.01-$10.00
  536,043 
8.02 years
  328,154 
7.97 years
$10.01-$15.00
  189,985 
9.59 years
  32,218 
9.59 years
$15.01-$20.00
  15,125 
9.55 years
  3,063 
9.59 years
$0.001-$5.00   557,420 5.47   555,670 5.46
$5.01-$10.00   732,519 7.98   400,390 7.28
$10.01-$15.00   146,732 8.84   74,428 8.84
$15.01-$20.00   12,125 8.09   8,583 7.81
  1,296,573 
7.49 years
  872,935 
6.99 years   1,448,796     1,039,071  
 
 
 
 

 
 
MONOPAR THERAPEUTICS INC.
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
June 30, 2020March 31, 2021
 
 
Restricted stock unit activity under the Plan was as follows:
 
 
Restricted Stock Units
 
 
Weighted-Average Grant Date Fair Value per Unit
 
 
Restricted Stock Units
 
 
Weighted-Average Grant Date Fair Value per Unit
 
Unvested balance at January 1, 2020
   
 $ 
   
 $      — 
Granted
  45,722 
  12.93 
  45,722 
  12.93 
Vested
  (2,580)
  12.93 
  (5,156)
  12.93 
Forfeited
   
   
  (500)
  12.93 
Unvested Balance at June 30, 2020
  43,142 
  12.93 
Unvested balance at January 1, 2021
  40,066 
  12.93 
Granted
  124,374 
  6.81 
Vested
  (13,021)
  11.52 
Unvested Balance at March 31, 2021
  151,419 
  8.02 
 
 
During the three months ended June 30, March 31, 2021 and 2020,and 2019, the Company recognized $248,889$246,343 and $164,600, respectively,$220,765 of employee and non-employee director stock-based compensation expense as general and administrative expenses, respectively, and $100,898$111,589 and $72,324, respectively,$100,171 as research and development expenses. During the six months ended June 30, 2020 and 2019, the Company recognized $469,655 and $315,326, respectively, of employee and non-employee director stock-based compensation expense as general and administrative expenses, and $201,069 and $134,665, respectively, as research and development expenses.respectively. The stock-based compensation expense is allocated on a departmental basis, based on the classification of the stock-based award holder. No income tax benefits have been recognized in the condensed consolidated statements of operations and comprehensive loss for stock-based compensation arrangements.
 
The Company recognizes as an expense the fair value of options granted to persons (currently consultants) who are neither employees nor non-employee directors. Stock-based compensation expense for consultants which waswere recorded as research and development expense for the three months ended June 30, March 31, 2021 and 2020 was $10,300 and 2019 was $17,571 and $20,708, and for the six months ended June 30, 2020 and 2019 $35,131 and $41,418,$17,561, respectively.
 
The fair value of options granted from inception to June 30, 2020March 31, 2021 was based on the Black-Scholes option-pricing model assuming the following factors: 4.7 to 6.2 years expected term, 55% to 85% volatility, 0.4% to 2.9% risk free interest rate and zero dividends. The expected term for options granted to date was estimated using the simplified method. There were 4,000196,476 and 209,110163,357 stock option grantsoptions granted during the three and six months ended June 30,March 31, 2021 and 2020, respectively. For the three and six months ended June 30,March 31, 2021 and 2020, the weighted averageweighted-average grant date fair value was $5.43$4.90 and $9.34 per share, and $9.22 per share, respectively. There were no stock option grants during the three and six months ended June 30, 2019. For the three months ended June 30,March 31, 2021 and 2020 and 2019, the fair value of shares vested was $0.4$0.3 million and $0.3 million, respectively. For the six months ended June 30, 2020 and 2019, the fair value of shares vested was $0.6 million and $0.5$0.2 million, respectively. At June 30, 2020,March 31, 2021, the aggregate intrinsic value of outstanding stock options was approximately $4.9$3.6 million of which approximately $4.3$3.5 million was vested and approximately $0.6$0.1 million is expected to vest (representing options to purchase up to 423,638409,725 shares of the Company'sCompany’s common stock)stock expected to vest), and the weighted-average exercise price in aggregate was $4.79$4.77 which includes $2.84$3.49 for fully vested stock options and $8.79$8.01 for stock options expected to vest. At June 30, 2020, theMarch 31, 2021, unamortized unvested balance of stock-based compensation was approximately $3.0$3.2 million, to be amortized over 2.933.0 years.
 
 
 

 
 
MONOPAR THERAPEUTICS INC.
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
June 30, 2020March 31, 2021
 
 
Note 5 - Related Party Transactions
 
In December 2019,As of March 31, 2021, Tactic Pharma, LLC (“Tactic Pharma”), purchased 125,000 sharesthe Company’s initial investor, beneficially owned 34.0% of Monopar’s common stock in Monopar’s initial public offering at $8 per share for an aggregate $1 million, at which time its beneficial ownership in Monopar was 41.6%. As of June 30, 2020,and during the three months ended March 31, 2021, there were no transactions between Tactic Pharma beneficially owned 41.0% of Monopar’s common stock.and Monopar.
 
During the three and six months ended June 30, 2020 and 2019, the Company was governed by six members of its Board of Directors (“Related Parties”). The Related Parties are also current common stockholders (owning approximately an aggregate 3% of the common stock outstanding as of June 30, 2020). None of the Related Partiesrelated parties discussed below received compensation other than market-rate salary, market-rate stock-based compensation and benefits and performance-based bonus or in the case of non-employee directors, market-rate Board fees and market-rate stock-based compensation. The Company considers the following individuals as related parties: Three of the BoardCompany’s board members arewere also Managing Members of Tactic Pharma as of June 30, 2020.March 31, 2021. Chandler D. Robinson is the Company’s Co-Founder, Chief Executive Officer, common stockholder, Managing Member of Tactic Pharma, former Manager of the predecessor LLC, Manager of CDR Pharma, LLC and Board member of Monopar as a C Corporation. Andrew P. Mazar is the Company’s Co-Founder, Executive Vice President of Research and Development, Chief Scientific Officer, common stockholder, Managing Member of Tactic Pharma, former Manager of the predecessor LLC and Board member of Monopar as a C Corporation. Michael Brown is a Managing Member of Tactic Pharma (as of February 1, 2019 with no voting power as it relates to the Company)Monopar), a previous managing member of Monopar as an LLC, common stockholder and Board member of Monopar as a C Corporation. Christopher M. Starr is the Company’s Co-Founder, Executive Chairman of the Board of Directors, common stockholder, former Manager of the predecessor LLC and Board member of Monopar as a C Corporation.
During the three months ended March 31, 2019, the Company paid or accrued approximately $33,725 in legal fees to a large national law firm, in which a family member of the Company’s Chief Executive Officer was a law partner through January 31, 2019. The family member personally billed a de minimis amount of time on the Company’s legal engagement with the law firm in this period.
 
 
Note 6 – Commitments and Contingencies
 
License, Development and Collaboration Agreements
 
Onxeo S.A.
 
In June 2016, the Company executed an option and license agreement with Onxeo S.A. (“Onxeo”), a public French company, which gave Monopar the exclusive option to license (on a world-wide exclusive basis) Validive to pursue treating severe oral mucositis in patients undergoing chemoradiation treatment for head and neck cancers. The pre-negotiated Onxeo license agreement for Validive as part of the option agreement includes clinical, regulatory, developmental and sales milestones that could reach up to $108 million if the Company achieves all milestones, and escalating royalties on net sales from 5% to 10%. On September 8, 2017, the Company exercised the license option, and therefore paid Onxeo the $1 million fee under the option and license agreement.

MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2020
 
Under the agreement, the Company is required to pay royalties to Onxeo on a product-by-product and country-by-country basis until the later of (1) the date when a given product is no longer within the scope of a patent claim in the country of sale or manufacture, (2) the expiry of any extended exclusivity period in the relevant country (such as orphan drug exclusivity, pediatric exclusivity, new chemical entity exclusivity, or other exclusivity granted beyond the expiry of the relevant patent), or (3) a specific time period after the first commercial sale of the product in such country. In most countries, including the U.S., the patent term is generally 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country, not taking into consideration any potential patent term adjustment that may be filed in the future or any regulatory extensions that may be obtained. The royalty termination provision pursuant to (3) described above is shorter than 20 years and is the least likely cause of termination of royalty payments.
 

MONOPAR THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2021
The Onxeo license agreement does not have a pre-determined term, but expires on a product-by-product and country-by-country basis; that is, the agreement expires with respect to a given product in a given country whenever the Company’s royalty payment obligations with respect to such product have expired. The agreement may also be terminated early for cause if either the Company or Onxeo materially breach the agreement, or if either the Company or Onxeo become insolvent. The Company may also choose to terminate the agreement, either in its entirety or as to a certain product and a certain country, by providing Onxeo with advance notice.
 
The Company plans tois internally developdeveloping Validive with the near-term goal of commencing a Phase 2b/3and has activated clinical sites and began dosing for its VOICE clinical trial, which, if successful, may allow the Company to apply for marketing approval within the next several years. The Company will need to raise significant funds or enter into a collaboration partnership to support the further development, including potential commercialization of Validive. As of June 30, 2020,March 31, 2021, the Company had not reached any of the pre-specified milestones and has not been required to pay Onxeo any funds under this license agreement other than the $1 million one-time license fee.
  
Grupo Español de Investigación en Sarcomas (“GEIS”)
 
In June 2019, the Company executed a clinical collaboration agreement with GEIS for the development of camsirubicin in patients with advanced soft tissue sarcoma (“ASTS”). Following completion of the dose escalation run-in clinical trial in the U.S. (or another country) that Monopar currently anticipates initiating in the second half of 2021, the Company continues to expect that GEIS will be the study sponsor and will lead a multi-country, randomized, open-label Phase 2 clinical trial to evaluate camsirubicin head-to-head against the current 1st-linefirst-line treatment for ASTS, doxorubicin. Enrollment of the trial is anticipated to begin in the second half of 2020 and will include approximately 170 ASTS patients. The Company will provide study drug and supplemental financial support for the clinical trial averaging approximately $2 million to $3 million per year. During the three and six months ended June 30, 2020,March 31, 2021, the Company incurred approximately $33,000$0.3 million in expenses under the GEIS agreement and other clinical-related expenses. In addition, the Company incurred approximately $246,000 and $264,000 inexpenses including clinical material manufacturing and database management expenses for thein support of GEIS’s Phase 2 camsirubicin clinical trial fortrial. During the three and six months ended June 30,March 31, 2020, respectively.the Company provided a nominal amount of financial support and incurred a nominal amount of drug manufacturing costs under the GEIS agreement. The Company can terminate the agreement by providing GEIS with advance notice, and without affecting the Company’s rights and ownership to any intellectual property or clinical data.
 
XOMA Ltd.
 
The intellectual property rights contributed by Tactic Pharma LLC (“Tactic Pharma”) to the Company included the non-exclusive license agreement with XOMA Ltd. for the humanization technology used in the development of MNPR-101. Pursuant to such license agreement, the Company is obligated to pay XOMA Ltd. clinical, regulatory and sales milestones for MNPR-101 that could reach up to $14.925 million if the Company achieves all milestones. The agreement does not require the payment of sales royalties. There can be no assurance that the Company will reach any milestones under the XOMA agreement. As of June 30, 2020,March 31, 2021, the Company had not reached any milestones and has not been required to pay XOMA Ltd. any funds under this license agreement.
 

 
 
MONOPAR THERAPEUTICS INC.
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
June 30, 2020March 31, 2021
 
 
 
Operating Leases
 
Commencing January 1, 2018, theThe Company entered into a leaseis currently leasing office space for its executive headquarters at 1000 Skokie Blvd., Suite 350, Wilmette, Illinois. The lease term was January 1, 2018 through December 31, 2019, at which time the lease was on a month-to-month basis. In addition, effective February 2019, the Company leased additional office space in the same buildingVillage of Wilmette, Illinois for $4,487 per month on a month-to-month basis.
 
During the three months ended June 30,March 31, 2021 and 2020, and 2019, the Company recognized operating lease expenses of $14,620$13,462 and $13,462, respectively. During the six months ended June 30, 2020 and 2019, the Company recognized operating lease expenses of $28,103 and $24,965,$13,483, respectively.
 
Effective January 1, 2019, the Company adopted ASU 2016-02, as amended by ASU 2018-10, which requires the Company to record leases on its condensed consolidated balance sheet (a) a lease liability and (b) a right-of-use asset. Because the Company had no lease obligation (other than on a month-to-month basis) past December 31, 2019, the Company had no lease liability and right-of-use asset on its condensed consolidated balance sheet as of June 30, 2020 or December 31, 2019.
 
Legal Contingencies
 
The Company may be subject to claims and assessments from time to time in the ordinary course of business. No claims have been asserted to date.
 
Indemnification
 
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made. To date, the Company has not paid any claims nor been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of future claims against these indemnification obligations.
 
In accordance with its second amended and restated certificate of incorporation, amended and restated bylaws and the indemnification agreements entered into with each officer and non-employee director, the Company has indemnification obligations to its officers and non-employee directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacities. There have been no claims to date.
  
Paycheck Protection Program (“PPP”) Bank Loan

 
In May 2020, the Company applied for and received a $122,400 PPP bank loan established pursuant to the Coronavirus Aid, Relief, and Economic Security Act, as administered by the U.S. Small Business Administration (“SBA”).
The SBA will forgive the bank loan pursuant to the PPP, if certain conditions are met, namely the bank loan must be used primarily for payroll during the 24-week period following receipt of the loan, without significant staffing reductions during that period. The Company believes it is eligible and intends to apply for loan forgiveness in August 2020 when the bank is able to process SBA loan forgiveness application. Should the bank loan not be forgiven, the Company would be required to pay 1% annual interest on the loan with principal and interest payments beginning approximately seven months after receipt of the loan with payments over 18 months. The Company has recorded the PPP loan on the balance sheet as of June 30, 2020 as current (due within 12 months) and non-current portions of bank loan, although the Company anticipates to reclassify the liability to a contra-expense account on the Company’s statements of operations and comprehensive loss in the second half of 2020, if the Company’s PPP bank loan is fully forgiven by the SBA.
 

 
 
 
 
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
 
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes contained in this Quarterly Report.Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing activities, includes forward-looking statements that involve risks and uncertainties.
 
 
Overview
 
We are a clinical stage biopharmaceutical company primarily focused on developing proprietary therapeutics designed to extend life or improve quality of life for cancer patients. We are building a drug development pipeline through the licensing and acquisition of oncology therapeutics in late preclinical and clinical development stages. We leverage our scientific and clinical experience to help reduce the risk of and accelerate the clinical development of our drug product candidates.
 
In December 2019, we closed        Under our initial public offering. We sold 1,277,778 shares of our common stock at a public offering price of $8.00 per share. Net proceeds were approximately $9.4 million, after deducting underwriting discounts and accrued, unpaid offering expenses. Our common stock began trading on the Nasdaq Capital Market on December 19, 2019.
In January 2020, we entered into a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services, LLC (“JonesTrading”), as sales agent, pursuant to which we may offer and sell (at our discretion), from time to time, through or to JonesTrading shares of our common stock, having an aggregate offering price of up to $19.7 million. Pursuant to this agreement, as of June 30, 2020,March 31, 2021, we have sold 145,7611,964,724 shares of our common stock at an average gross price of $10.02 per share of $10.45 for net proceeds of $1,476,832,$19,100,602, after fees and commissions of $45,709.$591,188.
 
In June 2020,February 2021, we entered into a 50/50 collaboration development agreement with NorthStar Medical Radioisotopes, LLC (“NorthStar”) to develop potential Radio-Immuno-Therapeutics (“RITs”) to treat severe COVID-19 (patients with SARS-CoV-2 infection). NorthStar is a commercial producer and supplierannounced the first patient dosed in our Phase 2b/3 VOICE trial of medical radioisotopes. This collaboration combines NorthStar’s expertise in the innovative production, supply, and distribution of important medical radioisotopes with our expertise in therapeutic drug development and our pre-IND stage humanized urokinase plasminogen activator receptor (“uPAR”) targeted monoclonal antibody known as MNPR-101, along with a proprietary portfolio of related monoclonal antibodies that target uPAR or its ligand uPA. uPAR seems to be selectively expressed on aberrantly activated immune cells. In response to coronavirus infection, these rogue immune cells produce pro-inflammatory cytokines that can cause runaway inflammation throughout the body, commonly referred to as a cytokine storm. It is this systemic hyper-inflammatory state that is thought to be largely responsibleValidive® for the severe lung injury and multiple organ damage that contributes to poor outcomes and deathprevention of CRT-induced severe oral mucositis in patientspatients with severe COVID-19.
oropharyngeal In this collaboration, NorthStar and we plan to couple MNPR-101 to a therapeutic radioisotope supplied by NorthStar in order to create a highly selective agent that has the potential to kill aberrantly activated cytokine-producing immune cells. By eradicating these cells with a targeted RIT, the goal is to spare healthy cells while quickly reducing the cytokine storm and its harmful systemic effects. cancUnder the agreement, NorthStar and we will start out sharing development costs 50/50, and the initial financial commitment for each company is nominal. Additional financial contributions will be subject to mutual agreement of the parties.
e
r (“VOICE”).
 
Given the COVID-19 pandemic and its effects on clinical trials, and fundraising, we have adjusted our clinical development planplans accordingly to fit what is feasible in the current environment. We are presently simplifyinghave simplified the adaptive design of the previously planned Phase 3 clinical trial for our lead product candidate, Validive, (clonidine mucobuccal tablet; clonidine MBT), to a seamless, adaptive Phase 2b/3 clinical trial design (our VOICE trial) that will allow us to minimize touch points with patients and sites. This trial design will allow us to immediately advance to the Phase 3 portion of the trial if supported by the Phase 2b data. We are aiming to enrollinterim data at the first patient inend of the Phase 2b portion of the trial intrial. To complete the second half of 2020. This modification will allow us to initiate theVOICE clinical trial without requiring near-term financing. The decision to proceed to theprogram, including, if required, completing a smaller second Phase 3 portion of the clinical trial without a delay will largely be dependent on our cash position closer to that time, anticipated to be in the second half of 2021. To initiate and complete the Phase 3 portion of theconfirmatory clinical trial, we will require additional funding in the millions or tens of millions of dollars (depending on if we have consummated a collaboration or partnership or neither for Validive), which we are planning to pursue inwithin the next 12 months. We are continuing to devote
        In June 2019, we executed a portion of the net proceeds from our initial public offering to fund our camsirubicin Phase 2 clinical trial for which we signed a collaboration agreement in June 2019 with Grupo Español de Investigación en Sarcomas (“GEIS”), discussed for the development of camsirubicin in further detail below.patients with advanced soft tissue sarcoma (“ASTS”). Based on our current inability to gain regulatory approval to initiate the camsirubicin Phase 2 clinical trial in Spain, we are evaluating alternatives to move the dose escalation run-in clinical trial forward outside of Spain. We believe that we will be able to initiate the run-in clinical trial in the second half of 2021 in the U.S. or another country. Following completion of the run-in clinical trial, we continue to expect that GEIS will sponsor and lead a multi-country, randomized, open-label Phase 2 clinical trial to evaluate camsirubicin head-to-head against the current first-line treatment for ASTS, doxorubicin. We believe we have funds sufficient to enable GEIS to commence its open label Phase 2 clinical trial in the second half of 2020 and to obtain topline results from the dose escalation “run-in” clinical trial. Additional funding will be required to support further development beyond the run-in portion of theclinical trial.
 
       Pursuant to our 50/50 collaboration development agreement with NorthStar Medical Radioisotopes, LLC (“NorthStar”) to develop potential Radio-Immuno-Therapeutics (“RITs”) to treat severe COVID-19 (patients with SARS-CoV-2 infection), we have coupled MNPR-101 to therapeutic radioisotopes supplied by NorthStar. The resulting conjugates are designed to be highly selective agents that have the potential to kill aberrantly activated cytokine-producing immune cells. By eradicating these cells with a uPAR-targeted RIT (“uPRIT”), the goal is to spare healthy cells while quickly reducing the cytokine storm and its harmful systemic effects. Through April 30, 2021, we have incurred immaterial expense related to the NorthStar collaboration, while partnering with several key companies and institutions to further the collaboration’s development efforts. These collaborators include: IsoTherapeutics Group, LLC, which generated the uPRIT candidates; Aragen Bioscience Inc., which screened the uPRIT candidates through preclinical biochemical testing; and Texas Lung Injury Institute / University of Texas Health Science Center at Tyler, which plans to perform preclinical testing and, if successful, clinical testing.
       In February 2021, we announced the publication of a peer-reviewed study in the European Journal of Cancer which reported the potential utility of MNPR-101 conjugates as uPAR imaging agents to improve surgical outcomes in bladder cancer and for surveillance post-resection. This publication builds on previous studies using conjugates of MNPR-101 and its mouse analog, ATN-658, for the optical imaging of oral and colon cancer.
     In March 2021, we announced the publication of a peer-reviewed study titled “Engineered Antibody Fragment against the Urokinase Plasminogen Activator for Fast Delineation of Triple-Negative Breast Cancer by Positron Emission Tomography.” Urokinase plasminogen activator (“uPA”) is an established biomarker in current breast cancer clinical practice guidelines and its presence is used to select appropriate drug treatment. This study demonstrates the potential to identify breast cancers with uPA overexpression and monitor uPA activity during treatment using positron emission tomography or PET imaging along with our uPA antibody fragment radiotracer. We have a panel of proprietary antibodies and antibody fragments to uPA and its receptor uPAR (such as MNPR-101).

Recent Patent Updates
               A series of patents were recently issued for Validive (clonidine HCl mucobuccal tablet). These patents, including U.S. Patent No. 10,675,271, provide claims covering “Clonidine and/or clonidine derivatives for use in the prevention and/or treatment of adverse side effects of chemotherapy”. These patents expand the potential use of Validive in cancer patients, beyond the earlier allowed claims for the prevention of oral mucositis in patients receiving CRT. Specifically, they provide protection for the potential ability of Validive to prevent or treat common chemotherapy-associated side effects such as asthenia and fatigue and would provide protection should we determine in the future to conduct additional Validive development activities related to adverse side effects of chemotherapy beyond oropharyngeal cancer.
               In addition, the U.S. Patent and Trademark Office (“USPTO”) recently issued U.S. patent No. 10,450,340 covering compositions of matter (2-pyrrilino camsirubicin) for a novel family of camsirubicin analogs. This patent, which expands our camsirubicin intellectual property portfolio, is expected to expire in 2038, not including any patent term extensions. The patent broadens our camsirubicin portfolio and creates a pipeline that has been designed to retain the potentially favorable non-cardiotoxic chemical backbone of camsirubicin and the potent broad-spectrum antitumor activity of doxorubicin. Further, preclinical evidence suggests that this new family of 2-pyrrilino camsirubicin analogs could be active in doxorubicin-resistant tumor cells which may enable use in cancer types beyond those possible with camsirubicin.
Our Product Pipeline
 
Our Product Candidates
 
Validive (clonidine mucobuccal tablet; clonidine MBT)
 
Validive is designeda mucobuccal tablet (MBT) formulation of clonidine. The MBT formulation was developed to be used prophylacticallyenhance oral mucosal drug delivery and provide high salivary concentrations of the active ingredient while minimizing systemic absorption. The Validive tablet is tasteless and self-administered once daily by affixing it to reduce the incidence, delayoutside of the time to onset,upper gum where it dissolves slowly over the period of several hours, resulting in the extended release of clonidine into the oral cavity and decreaseoropharynx, the durationsite of severe oral mucositis (“SOM”) in patients undergoing chemoradiotherapyfollowing chemoradiation treatment (“CRT”) for oropharyngeal cancer (“OPC”).OPC. Validive therapy is designed to begin on the first day of CRT and continue daily through the last day of CRT.
                SOM is athe painful and debilitating inflammation and ulceration of the mucous membranes lining the oral cavity and oropharynx in response to chemoradiation.chemoradiation therapy. The majority of patients receiving CRT to treat their OPC develop SOM, which remainsis one of the most common and devastating side effects of treatment in this indication. TheWe believe Validive has the potential clinical benefits to address several critical elements that affect SOM patients, of reducing or delayingincluding:

Reduction in the incidence of SOM.SOM or reducingcan increase the durationrisk of SOM, include: reduced treatment discontinuations leading to potentially improved overall survival outcomes; reduced mouthacute and throat pain avoiding the need to receive parenteral nutrition; and decreased long-term and often permanent debilitation arising from swallowing difficulties, neck and throat spasms,chronic comorbidities, including dysphagia, trismus and lung complications, duewhich are often irreversible and lead to food aspiration. Our mucobuccal tablet (“MBT”) formulation isincreased hospitalization and the need for additional interventions. In a novel delivery system for clonidine that allows for prolonged and enhanced local delivery of drug in the regions of mucosal radiation damage in patients with OPC. Validive has been granted fast track designation in the U.S., orphan drug designation in the EU, and has global intellectual property patent protection through mid-2029 not accounting for possible extensions.
In September 2017, we exercised an option to license Validive from Onxeo S.A., the company that developed Validive through its Phase 2 clinical trial. In the completed Phase 2 clinical trial, Validive demonstrated clinically meaningful efficacy signals within the 64-patient OPC population randomized to placebo, Validive 50 µg dose andpatient cohort treated with Validive 100 µg dose. Thedemonstrated a reduction in the absolute incidence of SOM in OPC patients who received a dosecompared to placebo of Validive 100 µg once per day was reduced by 26.3% (incidence rate of 65.2% in placebo, 45.0% in Validive 50 µg group, and 38.9% in Validive 100 µg group). The medianA reduced incidence of SOM in OPC patients may lower the risk of acute and chronic comorbidities, improve clinical outcomes and quality of life.
Delay in the time to onset of SOM. SOM can cause cancer treatment delay and/or discontinuation, which may impact overall survival outcomes. In the Phase 2 clinical trial, OPC patients had a time to onset of SOM wasof 37 days in the placebo cohort; 45 days45-day time to onset of SOM in the Validive 50 µg cohortcohort; and no median time of onset was not reached in the Validive 100 µg group sinceas fewer than half of this cohort ofthe patients developed SOM. There was also a 37.8% reductionProlonging time to onset of SOM may lead to fewer missed CRT treatments, resulting in improved overall survival outcomes.
Decrease in the median duration of SOM. Longer duration of SOM leads to a higher risk of the need for parenteral nutrition and lower quality of life. SOM patients experience difficulty or inability to drink and/or eat, and difficulty in swallowing often results in malnourishment and feeding tube intervention. The Phase 2 clinical trial data demonstrated a 15.5-day reduction (by 37.8%) in the duration of SOM for thepatients treated with Validive 100 µg group versus(41 day median duration with placebo, (41.034 days placebo group, 34.0 dayswith the Validive 50 µg group, and 25.5 days for the Validive 100 µg group) in patients that developed SOM. Median duration of SOM across all patients, inclusive of both those that did and did not develop SOM, was 17 days in the placebo group and 0 days in each of the Validive 50 ug and 100 µg groups. A positive dose response was seenReduced duration of SOM may result in eachlower risk of these threemalnourishment and feeding tube intervention, and fewer treatment terminations/delays.
                In September 2017, we exercised an option to license Validive from Onxeo S.A., the company that had developed Validive through its Phase 2 clinical endpoints.trial. In this completed Phase 2 clinical trial, Validive demonstrated clinically meaningful and dose-dependent efficacy signals within the 64-patient OPC population randomized to placebo. Additionally, patients in the Validive cohorts in the Phase 2 clinical trial demonstrated a safety profile similar to that of placebo. While not designed by us, Onxeo’s promising preclinical studies and Phase 2 clinical trial have informed the design and conduct of what we believe will be an effective Phase 2b/3 (VOICE) clinical trial.
 
SOM typically arises in the immune tissue at the back of the tongue and throat, which comprise the oropharynx, and consists of acute severe tissue damage and pain that prevents patients from swallowing, eating and drinking. Validive stimulates the alpha-2 adrenergic receptor (alpha-2AR) on macrophages (white blood cells present in the immune tissues of the oropharynx) suppressing pro-inflammatory cytokine expression. Validive exerts its effects locally in the oral cavity and oropharynx over a prolonged period of time through its unique MBT formulation. Patients who develop SOM are also at increased risk of developing late onsetlate-onset toxicities, including trismus (jaw, neck, and throat spasms), dysphagia (disruption of a patient’s ability to eat and drink due to difficulty in swallowing), and lung complications, which are often irreversible and lead to increased hospitalization and the need for further interventions sometimes years after completion of chemoradiotherapy.CRT. We believe that a reduction in the incidence and duration of SOM by Validive will have the potential to reduce treatment discontinuation and/or treatment delays potentially leading to improved survival outcomes, and reducing or eliminating these long-term morbidities resulting from CRT.
 
The OPC target population for Validive is the most rapidly growing segment of head and neck cancer (“HNC”) patients, with an estimated to exceed 40,000 new cases annually of OPC in the U.S alone in 2019.alone. The growth in OPC is driven by the increasing prevalence of oral human papilloma virus (“HPV”) infections in the U.S. and around the world. Despite the availability of a pediatric/adolescent HPV vaccine, the rate of OPC incidence in adults is not anticipated to be materially reduced for many decades due to low adoption of the vaccine to date. As a result, the incidence of HPV-driven OPC is projected to increase for many years to come and will continue to support a clinical need for Validive for the prevention of CRT-induced SOM in patients with OPC since CRT is the standard of care treatment, and we do not anticipate this changing for years to come.
 
A pre-Phase 3 meeting with the FDA was held, and based on the meeting discussion a Phase 3 clinical protocol and accompanying statistical analysis plan (“SAP”) was submitted to the FDA for review and comments. We have also received protocol assistance and advice on our Phase 3 protocol and SAP from the European Medicines Agency Committee on Human Medicinal Products (EMA/CHMP/SAWP). Based on comments and guidance provided by FDA and EMA, and our analysis of the current COVID-19 pandemic and its effects on clinical trials, we have modified our original adaptive design Phase 3 clinical trial to be a sequentialseamless Phase 2b/3 (VOICE) clinical trial to better fit the current clinical research environment. The primary endpoint, absolute incidence of SOM, remains the same, but the overall design of the trial has been simplified and the touch points with the healthcare system have been minimized. The Validive program willWe have now consist of a randomized Phase 2b/3initiated clinical trial sites and commenced dosing in patients with OPC. Our aim is to commence the Phase 2b/3 clinical2b portion of our VOICE trial. We anticipate the interim completion of Phase 2b portion of the VOICE trial will be reached in the secondfirst half of 2020. Proceeding to2022, and the Phase 3 portion of the trialenrollment will be subject tocompleted in the Phase 2b interim results and our abilityfirst quarter of 2023. We will need to raise additional funding or find a suitable pharmaceutical partner.partner to complete the VOICE clinical program including, if required, completion of a smaller second Phase 3 confirmatory clinical trial. Validive has been granted fast track designation in the U.S., orphan drug designation in the EU, and has global intellectual property patent protection through mid-2029 not accounting for possible extensions.
 

 
 
Camsirubicin (5-imino-13-deoxydoxorubicin; formerly MNPR-201, GPX-150)
 
Our second product candidate, camsirubicin,                Camsirubicin is a novel analogproprietary doxorubicin analog. Doxorubicin is widely used to treat adult and pediatric solid and blood (hematologic) cancers, including soft tissue sarcomas, breast, gastric, ovarian and bladder cancers, leukemias and lymphomas. Despite clinical studies demonstrating the anti-cancer benefit of higher cumulative doses of doxorubicin, whichthe clinical efficacy of doxorubicin has historically been limited by the risk of patients developing irreversible, potentially life-threatening cardiotoxicity at these higher cumulative doses of drug. For example, several clinical studies completed in the 1990s demonstrated that concurrent doxorubicin (60 mg/m2, 8 cycles) and paclitaxel gave a 94% overall response rate in patients with metastatic breast cancer but led to 18% of these patients developing congestive heart failure. Reduction of doxorubicin to 4-6 cycles of treatment decreased the incidence of congestive heart failure, but also reduced response rates to 45-55%. In a clinical study looking at dose response, sarcoma patients on the high dose (75 mg/m2) doxorubicin had a response rate of 37% compared to just 18% in the low dose (45 mg/m2) doxorubicin group. With the cumulative dose restriction on doxorubicin, the median progression free survival for ASTS patients is approximately 6 months, with median overall survival of 12-15 months. There is a significant unmet opportunity to develop a replacement for doxorubicin that can be dosed higher and for longer.
                Camsirubicin has been designedengineered specifically to reduceretain the cardiotoxic side effects generated byanticancer activity of doxorubicin while retainingminimizing the toxic effects on the heart. Similar to doxorubicin, the antitumor effects of camsirubicin are mediated through the stabilization of the topoisomerase II complex after a DNA strand break and DNA intercalation leading to tumor cell apoptosis (cell death). Inhibiting the topoisomerase II-alpha isoform is desired for the anti-cancer activity.effect, while inhibiting the topoisomerase II-beta isoform has been demonstrated to mediate, at least in part, the cardiotoxicity associated with doxorubicin. Camsirubicin is not metabolizedmore selective than doxorubicin for inhibiting topoisomerase II-alpha versus topoisomerase II-beta. This selectivity may at least partly explain the minimal cardiotoxicity that has been observed for camsirubicin in preclinical and clinical studies to the derivatives that are believeddate. We believe these attributes provide a strong rationale to be responsible for doxorubicin’s cardiotoxic effects.develop camsirubicin without restriction on cumulative dose, in a broad spectrum of cancer types.
                A Phase 2 clinical trial for camsirubicin has been completed in patients with advanced (e.g. unresectable or metastatic) soft tissue sarcoma (“ASTS”). Average life expectancy for these patients is 12-15 months.ASTS. In this study, 52.6% of patients evaluable for tumor progression demonstrated clinical benefit (partial response or stable disease), which was proportional to dose and consistently observed at higher cumulative doses of camsirubicin (>1000 mg/m2). Camsirubicin was very well tolerated in this study and underscored the ability to potentially administer camsirubicin without restriction of cumulative dose in patients with ASTS. DoxorubicinAlthough doxorubicin has been the standard of care treatment for over 40 years for patients with ASTS, doxorubicin is limited to a lifetime cumulative dose maximum of 450 mg/m2. EvenThis means that even if a patient is responding, they are pulled off of doxorubicin treatment once this cumulative dose has been reached. Thus, there is a significant unmet opportunity to develop a replacement for doxorubicin that retains anti-cancer activity while reducing or eliminating the risk for irreversible heart damage.
 
Based on encouraging clinical results to date, we plan to continue the development of camsirubicin as 1st-linefirst-line treatment in patients with ASTS, where the current first linefirst-line treatment is doxorubicin. The aim is to administer camsirubicin without restricting cumulative dose, thereby potentially improving efficacy beyond that of doxorubicin by keepingcontinuing to treat patients who are responding onto treatment.
                In June 2019, we entered intoexecuted a clinical collaboration agreement with GEIS. GEIS will lead a multi-country, randomized, open-label Phase 2 clinical trial evaluatingfor the development of camsirubicin head-to-head against doxorubicin in patients with ASTS. GEIS is an internationally renowned non-profit organization focused on the research, development and management of clinical trials for sarcoma that has worked with many of the leading biotech and global pharmaceutical companies. EnrollmentBased on our current inability to gain regulatory approval to initiate the camsirubicin Phase 2 clinical trial in Spain, we are evaluating alternatives to move the dose escalation run-in clinical trial forward outside of Spain. We believe that we will be able to initiate the run-in clinical trial is currently anticipated to begin in the second half of 2020, and to include approximately 170 ASTS patients, an interim analysis, and take around two years to enroll. The primary endpoint2021 in the U.S. or another country. Following completion of the run-in clinical trial, we continue to expect that GEIS will sponsor and lead a multi-country, randomized, open-label Phase 2 clinical trial to evaluate camsirubicin head-to-head against the current first-line treatment for ASTS, doxorubicin. We believe we have funds sufficient to obtain topline results from the run-in clinical trial. Additional funding will be progression-free survival, with secondary endpoints including overall survival and incidence of treatment-emergent adverse events. In November 2019,required to support further development beyond the European Commissionrun-in clinical trial. Camsirubicin has been granted orphan drug designation for camsirubicin for the treatment of soft tissue sarcoma in the U.S. and the EU.
 
MNPR-101


 
Our third program,MNPR-101 (formerly huATN-658)
                MNPR-101 is a novel, preclinical stage drug candidate. It is a first-in-class humanized monoclonal antibody to the urokinase plasminogen activator receptor (“uPAR”), a well-credentialed cancer therapeutic target. uPAR is a protein receptor that resides on the cell surface and is overexpressed in many deadly cancers, but has little to no expression in healthy tissue; several Phase 1 imaging studies utilizing a peptide against uPAR in advanced cancer patients show that uPAR is detected selectively in the tumor.
                In normal cells, uPAR is transiently expressed as part of a highly regulated process required for the breakdown of the extracellular matrix during normal tissue remodeling. In cancer, however, uPAR is constitutively overexpressed by the tumor cell, and the uPAR extracellular matrix degrading function is hijacked by the tumor to support tissue invasion, metastasis, and angiogenesis. uPAR expression is important to tumor cell survival, and uPAR expression increases in high grade and metastatic disease.
                MNPR-101 has demonstrated significant antitumor activity in numerous preclinical models of tumor growth, both as a monotherapy and in combination with other therapeutics and is being advanced toward an IND. Based on the selective expression of uPAR in numerous tumor types, we anticipate MNPR-101 will be well-tolerated and amenable to a variety of combination treatment approaches in the clinic.
uPRIT as a Potential Therapeutic for Severe COVID-19
                MNPR-101 is also being developed for the treatment of advanced cancerssevere COVID-19 and severe COVID-19.other respiratory diseases. We have entered into a collaboration development agreement with NorthStar to develop potential RITsuPRITs to treat severe COVID-19. This collaboration combines NorthStar’s expertise in the innovative production, supply, and distribution of important medical radioisotopes with our expertise in therapeutic drug development. NorthStar and we plan to coupleWe have coupled MNPR-101 along with a proprietary portfolio of related monoclonal antibodies that target uPAR or its ligand uPA with a therapeutic radioisotope.radioisotope in collaboration with NorthStar and IsoTherapeutics Group, LLC, which have generated the MNPR-101 conjugates capable of binding radioactive isotopes. uPAR seems to be selectively expressed on aberrantly activated immune cells. In response to coronavirus (SARS-CoV2) infection, these rogue immune cells produce pro-inflammatory cytokines that can cause runaway inflammation throughout the body, commonly referred to as a cytokine“cytokine storm. It is this systemic hyper-inflammatory state that is thought to be largely responsible for the severe lung injury and further multiple organ damage that contributes to poor outcomes and death in patients with severe COVID-19.
 
We and                In collaboration with NorthStar, we have filed a provisional patent application entitled “Precision Radioimmunotherapeutic Targeting of the Urokinase Plasminogen Activator Receptor (uPAR) for Treatment of Severe COVID-19 Disease” with the U.S. Patent and Trademark Office (“USPTO”).USPTO. This application covers novel compositions and uses of cytotoxic radioisotopes attached to antibodies that bind to uPAR, thereby creating precision targeted radiotherapeutics, also known as uPRITs, for the treatment of severe COVID-19 and other respiratory diseases. Advanced COVID-19 patients frequently develop severe, life-threatening, pulmonary inflammation as a result of a viral induced cytokine storm. The development of this cytokine storm is associated with a high rate of mortality in severe COVID-19 patients, even withwhen oxygen support and mechanical ventilation.ventilation are utilized. uPRITs have been designed with the goal of selectively destroyingeradicating the aberrantly activated immune cells responsible for causing the cytokine storm. By eradicating these cells with a targeted RIT, the goal is to spare healthy cells while quickly reducing the cytokine storm and its harmful systemic effects. The co-inventors of the provisional patent application are James Harvey, Chief Scientific Officer of NorthStar, and Andrew P. Mazar, our Chief Scientific Officer. In addition to NorthStar and the IsoTherapeutics Group, LLC, which generated the uPRIT candidates, we have entered into collaborations with: Aragen Bioscience Inc., which screened the uPRIT candidates through preclinical biochemical testing; and Texas Lung Injury Institute / University of Texas Health Science Center at Tyler, which plans to perform preclinical testing and, if successful, clinical testing.
 
MNPR-101 as a Potential Imaging Agent
                Using MNPR-101, a multimodal imaging probe was developed and tested in vivo in human bladder cancer models. A publication in the European Journal of Cancer (Baart et al. 2021) reported that high expression of uPAR in bladder cancer is localized at the tumor periphery, suggesting that using a fluorescent-conjugated MNPR-101 probe might allow surgeons to better visualize the borders of the tumor, potentially resulting in more complete tumor resection and thereby minimizing relapse. Similar approaches have been utilized successfully in the resection of other tumor types, such as breast cancer.
                Bladder cancer is often treated with transurethral resection to remove cancerous tissue; however, recurrence can occur in up to 78% of patients within 5 years. Up to 40% of recurrent cases develop muscle invasive disease, which has a poor prognosis and requires complete removal of the bladder. Many patients with muscle-invasive bladder cancer go on to develop and succumb to metastatic disease.
                uPA and its receptor uPAR work together to drive aggressive tumor invasion, leading to metastasis, morbidity, and mortality in breast and other cancers. However, uPA is difficult to measure and currently requires a substantial amount of fresh frozen tissue. In a recent peer-reviewed publication, our antibody fragment (ATN-291 F(ab’)2) conjugated to a copper radiotracer enabled rapid PET visualization of tumors with uPA overexpression in a human breast cancer model in mice. PET imaging may expand the current application of uPA as a breast cancer biomarker and enable the monitoring of tumor uPA expression during treatment. The publication demonstrates, and we may further research, the potential utility of our uPA antibody fragments as imaging agents in models of breast cancer.

Our Strategy
                Our management team has extensive experience in developing therapeutics through regulatory approval and commercialization. In aggregate, companies they co-founded have achieved four drug approvals in the U.S. and the EU, successfully sold an asset developed by management which is currently in Phase 3 clinical trials, and completed the sale of a biopharmaceutical company for over $800 million in cash. Understanding the preclinical, clinical, regulatory and commercial development processes and hurdles are key factors in successful drug development and the expertise demonstrated by our management team across all of these areas increases the probability of success in advancing the product candidates in our product pipeline. We continue to add experienced management to our clinical team and have teamed up with a serial med-tech entrepreneur to develop our potential imaging and diagnostics capabilities. Our strategic goal is to acquire, develop and commercialize promising oncology product candidates that address important unmet medical needs of cancer patients. The six key elements of our strategy to achieve this goal are to:
Leverage data generated from the Phase 2 Validive clinical trial to position us effectively for a successful VOICE clinical program for Validive for SOM in OPC. In the Phase 2 clinical trial the absolute incidence of SOM in OPC patients was reduced by 26.3%, the time to onset was delayed, and the duration of disease in patients that developed SOM was decreased by 15.5 days in the Validive 100 µg cohort versus placebo. In addition to the data from the Phase 2 clinical trial, we believe the guidance from our key opinion leaders (“KOLs”) as well as from the FDA and EMA, and our own internal clinical trial design expertise, position us well for an effective VOICE clinical trial program.
Obtain FDA approval of Validive and maximize the commercial potential of Validive in the U.S. and the EU, seeking partnerships outside these markets. If the VOICE clinical program of Validive is successful and FDA approval is obtained, we currently intend to commercialize Validive in the U.S. and the EU ourselves, which may include establishing our own specialty sales force and seeking partnerships outside of these territories for regulatory approval and drug sales and distribution.
Advance the clinical development of camsirubicin, by pursuing indications where doxorubicin has demonstrated efficacy. ASTS will be the first indication, which will allow camsirubicin to go head-to-head against doxorubicin, the current first-line treatment. In this indication, camsirubicin previously demonstrated clinical benefit (stable disease or partial response) in 52.6% of patients evaluable for tumor progression in a single-arm Phase 2 study. Clinical benefit was proportional to dose and consistently observed at higher cumulative doses of camsirubicin (>1000 mg/m2). Camsirubicin was very well tolerated in this Phase 2 study and underscored the ability to potentially administer camsirubicin without restriction as to cumulative dose (doxorubicin is limited to 450 mg/m2 cumulative dose due to heart toxicity).
Continue the development of MNPR-101 and related molecules as therapeutic, diagnostic and imaging agents. We plan to continue the development of MNPR-101 for diagnostic and therapeutic use in severe COVID-19 and in cancer.
Expand our drug development pipeline through advancing current assets, in-licensing, and acquisition of oncology product candidates. The 2-pyrrilino camsirubicin analogs represent proprietary compositions of matter that retain the non-cardiotoxic backbone of camsirubicin but may have features in terms of antitumor activity and mechanism that distinguish this family of compounds from camsirubicin. We plan to continue the expansion of our drug development pipeline through acquiring or in-licensing additional oncology product candidates, particularly those that leverage existing scientific and clinical data that helps reduce the risks of the next steps in clinical development.
Utilize the expertise and prior experience of our team in the areas of asset acquisition, drug development and commercialization to establish ourselves as a leading biopharmaceutical company. Our senior executive team has relevant experience in biopharmaceutical in-licensing and acquisitions as well as developing product candidates through approval and commercialization. In aggregate, our team has co-founded BioMarin Pharmaceutical (Nasdaq: BMRN), Raptor Pharmaceuticals ($800 million sale to Horizon Pharma), and Tactic Pharma, LLC (“Tactic Pharma”) (sale of lead asset, choline tetrathiomolybdate, which was ultimately acquired by Alexion in June 2018 for $764 million; Alexion is currently in the process of being acquired by AstraZeneca).

 
Revenues
 
We are an emerging growth company,company. We have no approved drugs and have not generated any revenues. To date, we have engaged in acquiring or in-licensing pharmaceutical drug product candidates, licensing rights to drug product candidates, entering into collaboration agreements for testing and clinical development of our drug product candidates and providing the infrastructure to support the clinical development of our drug product candidates. We do not anticipate commercial revenues from operations until we complete testing and development of one of our drug product candidates and obtain marketing approval or we sell, enter into a collaborative marketing arrangement, or out- licenseout-license one of our drug product candidates to another party. See “Liquidity and Capital Resources”.
 

 
Recently Issued and Adopted Accounting Pronouncements
 
A description of                During the three months ended March 31, 2021, there were no relevant recently issued accounting pronouncements that may potentiallywould impact our financial position and our condensed consolidated results of operations is disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.and comprehensive loss.
 
Critical Accounting Policies and Use of Estimates
 
While our significant accounting policies are described in more detail in Note 2 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our condensed consolidated financial statements.
 
Clinical Trials Expense
                We accrue and expense the costs for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with contract research organizations, service providers, and clinical trial sites. We determine the estimates through discussions with internal clinical personnel and external service providers as to progress or stage of completion of trials or services and the agreed upon fee to be paid for such services. Costs of setting up clinical trial sites for participation in the trials are expensed immediately as R&D expenses. Clinical trial site costs related to patient screening and enrollment are accrued as patients are screened/entered into the trial.
Stock-Based Compensation
 
We account for stock-based compensation arrangements with employees, non-employee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based awards, including stock option grants and RSUs.restricted stock units (“RSUs”). The fair value method requires us to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model or the closing stock price on the date of grant in the case of RSUs.
 
Stock-based compensation costs for stock awards granted to our employees, and non-employee directors and consultants are based on the fair value of the underlying instruments calculated using the Black-Scholes option-pricing model on the date of grant for stock options and using the closing stock price on the date of grant for RSUs and recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including selecting methods for estimating the Company’s future stock price volatility, forfeiture rates and expected term. The expected volatility rates are estimated based on the actual volatility of comparable public companies over recent historical periods of the same length as the expected term. We generally selected these companies based on reasonably comparable characteristics, including market capitalization, risk profiles, stage of corporate development and with historical share price information sufficient to meet the expected term of the stock-based awards. The expected term for stock options granted during the three and six months ended June 30,March 31, 2021 and 2020 and 2019 was estimated using the simplified method. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We have not paid dividends and do not anticipate paying a cash dividend in future vesting periods and, accordingly, use an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards.
 

 
Results of Operations
 
Comparison of the Three Months Ended March 31, 2021 and Six Months Ended June 30, 2020 and June 30, 2019
 
The following tables summarizetable summarizes the results of our operations for the three and six months ended June 30, 2020March 31, 2021 and 2019:2020:
 
 
Three Months Ended June 30,
 
 
Six Months Ended June 30,
 
 
Three Months Ended March 31,
 
 
 
 
 
(Unaudited)
 
 
(Unaudited)
 
 
 
 
(in thousands)
 
2020
 
 
2019
 
 
Variance
 
 
2020
 
 
2019
 
 
Variance
 
 
2021
 
 
2020
 
 
Variance
 
Research and development expenses
 $832 
 $329 
 $503 
 $1,177 
 $1,165 
 $12 
 $1,207 
 $344 
 $863 
General and administrative expenses
  632 
  603 
  29 
  1,423 
  1,174 
  249 
  688 
  792 
  (104)
Total operating expenses
  1,464 
  932 
  532 
  2,600 
  2,339 
  261 
  1,895 
  1,136 
  759 
Operating loss
  (1,464)
  (932)
  (532)
  (2,600)
  (2,339)
  (261)
  (1,895)
  (1,136)
  (759)
Interest income, net
  18 
  26 
  (8)
  63 
  57 
  6 
Interest income
  11 
  45 
  (34)
Net loss
 $(1,446)
 $(906)
 $(540)
 $(2,537)
 $(2,282)
 $(255)
 $(1,884)
 $(1,091)
 $(793)
 
 
Research and Development Expenses
 
Research and Development (“R&D”) expenses for the three months ended June 30, 2020March 31, 2021 were approximately $832,000,$1,207,000, compared to approximately $329,000,$344,000 for the three months ended June 30, 2019.March 31, 2020. This represents an increase of approximately $503,000$863,000 primarily attributed to increases in expenses of $308,000 for the planning of the GEIS-sponsored camsirubicin Phase 2 clinical trial including manufacturing, of $213,000, increases in personnel costs for three new R&D employees,$274,000 due to annual R&D personnel salary increases, and annual (non-cash) equity grants, salaries and benefits of approximately $113,000,new R&D personnel and theappropriate partial allocation of the CEO's salary and benefits to R&D expenses due to significant efforts related to the start-up of clinical trial activities, $239,000 for increases in Validive clinical trial planningexpense and manufacturingmanufacturing-related costs of approximately $89,000, an increaseand $42,000 in the allocation of the CEO's salarynet increases to R&D expenses of $79,000 and an increase in other R&D expenses of $9,000.
R&D expenses for the six months ended June 30, 2020 were approximately $1,177,000, compared to approximately $1,165,000, for the six months ended June 30, 2019. This represents an increase of approximately $12,000 primarily attributed to increases in expenses for the planning of the camsirubicin Phase 2 clinical trial including manufacturing of $202,000, increases in personnel costs for three new R&D employees, annual R&D personnel salary increases and annual (non-cash) equity grants of approximately $189,000, an increase to the allocation of the CEO's salary to R&D expenses of $82,000 and an increase in other R&D expenses of $33,000, partially offset by a decrease in Validive clinical trial planning and manufacturing costs of approximately $494,000.expenses.
 
 
General and Administrative Expenses
 
General and Administrativeadministrative (“G&A”) expenses for the three months ended June 30, 2020March 31, 2021 were approximately $632,000,$688,000, compared to approximately $603,000,$792,000 for the three months ended June 30, 2019.March 31, 2020. This represents an increasea decrease of approximately $29,000$104,000 primarily attributed to:to a net increasesdecrease in stock-based compensation for annual (non-cash) equity grantsG&A salaries and annual G&A personnel salary increasesbenefits partially due to the increased allocation of $110,000; external fees related to public company compliance of $28,000, net increases in general costs of operations of $23,000 offset by decreases in the CEO's compensation allocatedsalary and benefits out of G&A expense to G&AR&D expenses due to the increased commitment of $79,000, decreases in legal, patent and audit fees of $28,000; and decreases in stock-based compensation for non-employee directors (non-cash) of $25,000.
G&A expenses for the six months ended June 30, 2020 were approximately $1,423,000, comparedCEO time to approximately $1,174,000, for the six months ended June 30, 2019. This represents an increase of approximately $249,000 primarily attributed to: net increases in stock-based compensation for annual (non-cash) equity grants and annual G&A personnel salary increases of $242,000; increases in legal, patent and audit fees of $39,000; external fees related to public company compliance of $62,000, and net increases in general costs of operations of $38,000, partially offset by decreases in the CEO's compensation allocated to G&A expenses of $82,000, and decreases in stock-based compensation for non-employee directors (non-cash) of $50,000.
clinical trial activities.
 

 
Interest Income
 
Interest income for the three months ended June 30, 2020 compared toMarch 31, 2021 decreased by approximately $34,000 versus the three months ended June 30, 2019 decreased by approximately $8,000,March 31, 2020 due to thea significant decrease in bank interest rates.
Interest income for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 increasedrates partially offset by approximately $6,000, due to thean increase in bank balances resulting from funds raised in our initial public offering in December 2019, partially offset byCapital on DemandTM Sales Agreement with JonesTrading during the decrease in bank interest rates.three months ended March 31, 2021.
 
 
Liquidity and Capital Resources
 
Sources of Liquidity
 
We have incurred losses and cumulative negative cash flows from operations since our inception in December 2014 resulting in an accumulated deficit of approximately $28.4$34.1 million as of June 30, 2020.March 31, 2021. We anticipate that we will continue to incur losses for the foreseeable future. We expect that our researchR&D and development and general and administrativeG&A expenses will increase to enable the execution of our strategic plan. As a result, we anticipate that we will needseek to raise additional capital within the next 12 months to fund our future operations. We will seek to obtain needed capital through a combination of equity offerings, debt financings, strategic collaborations and grant funding. To date, we have funded our operations through private placements of our preferred and common stock, the net receipt of funds related to the acquisition of camsirubicin, net proceeds from the initial public offering of our common stock, and net proceeds from sales under our Capital on Demand™DemandTM Sales Agreement.Agreement, private placements of our preferred and common stock, and the net receipt of funds related to the acquisition of camsirubicin. We anticipate that the currently available funds as of July 31, 2020,April 30, 2021, will fund our planned operations at least through September 2021.June 30, 2022.
 
               
We invest our cash equivalents in a money market account.
 
 
Cash Flows
 
The following table provides information regarding our cash flows for the sixthree months ended June 30, 2020March 31, 2021 and 2019.2020.
 
 
 
Six Months Ended
 
 
Six Months Ended June 30, 2020 Versus
 
 
 
June 30,
 
 
Six Months Ended June 30, 2019
 
(in thousands)
 
2020
 
 
2019
 
 
Variance
 
Net cash used in operating activities
 $(2,121)
 $(1,736)
 $(385)
Net cash provided by (used in) financing activities
  1,454 
  (26)
  1,480 
Effect of exchange rates
  (1)
  (1)
   
Net decrease in cash and cash equivalents
 $(668)
 $(1,763)
 $1,095 
 
 
Three Months Ended March 31,
 
 
 
 
 
 
(Unaudited)
 
 
 
 
(in thousands)
 
2021
 
 
2020
 
 
Variance
 
Net cash used in operating activities
 $(1,938)
 $(1,126)
 $(812)
Net cash provided by financing activities
  10,921 
  508 
  10,413 
Effect of exchange rates on cash and cash equivalents
  3 
  (4)
  7 
Net increase (decrease) in cash and cash equivalents
 $8,986 
 $(622)
 $9,608 
                During the three months ended March 31, 2021 we had net cash inflow of approximately $8,986,000, compared to net cash outflow of $622,000 during three months ended March 31, 2020, an increase of approximately $9,608,000.
 
 
Cash Flow Used in Operating Activities
 
The increase of approximately $385,000$812,000 in cash flow used in operating activities during the sixthree months ended June 30, 2020,March 31, 2021 compared to the sixthree months ended June 30, 2019,March 31, 2020, was primarily a result of increased R&D andcash operating expenses partially offset by a decrease in G&A cash operating expenses.
 
Cash Flow Used in Investing Activities
 
There was no cash flow used in investing activities for the sixthree months ended June 30, 2020March 31, 2021 and 2019.2020.
 
Cash Flow Provided by (Used in) Financing Activities
 
The increase of approximately $1,480,000 in cash flow provided by financing activities forduring the sixthree months ended June 30, 2020March 31, 2021 compared to the sixthree months ended June 30, 2019,March 31, 2020 of approximately $10,413,000 was a resultprimarily due to the increase of net proceeds from sales of our common stock under our Capital on DemandTM Sales Agreement with JonesTrading and the receipt of a forgivable PPP bank loan.JonesTrading.
 

 
Future Funding Requirements
 
To date, we have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate any revenue from product sales unless and until we obtain regulatory approval of and commercialize any of our current or future drug product candidates or we out- licenseout-license or sell a drug product candidate to another party. At the same time, we expect our expenses to increase in connection with our ongoing development activities, particularly as we continue the research, development, future preclinical studies and clinical trials of, and seek regulatory approval for, our current and future drug product candidates. If we obtain regulatory approval of any of our current or future drug product candidates, we will need substantial additional funding for commercialization requirements and our continuing drug product development operations.
 
               
As a company, we have not completed development through marketing approvals of any therapeutic products. We expect to continue to incur significant increases in expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially as we:
 
advance the clinical development and execute the regulatory strategy for Validive;
 
continueadvance the clinical development and execute the regulatory strategy for camsirubicin;
 
continue the preclinical activities and potentially enter clinical development of MNPR-101 (and related compounds) for severe COVID-19;COVID-19 and/or other indications;
 
acquire and/or license additional pipeline drug product candidates and pursue the future preclinical and/or clinical development of such drug product candidates;
 
seek regulatory approvals for any of our current and future drug product candidates that successfully complete registration clinical trials;
 
establish or purchase the services of a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;
 
develop our manufacturing/quality capabilities or establish a reliable, high quality supply chain sufficient to support our clinical requirements and to provide sufficient capacity to launch and grow the sales of any product for which we obtain marketing approval; and
 
add or contract for required operational, financial and management information systems and capabilities and other specialized expert personnel to support our drug product candidate development and planned commercialization efforts.
 

We anticipate that the funds available as of July 31, 2020,April 30, 2021, will fund our planned operations at least through September 2021.June 2022. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of our drug product candidates, and the extent to which we enter into collaborations with third parties to participate in the development and commercialization of our drug product candidates, we are unable to accurately estimate with high reliability the amounts and timing required for increased capital outlays and operating expenditures associated with our current and anticipated drug product candidate development programs.

               Our future capital requirements will depend on many factors, including:
 
the progress of regulatory interactions and clinical development of Validive;
●            
the progress of clinical development and regulatory outcomesinteractions and approvals of Validive;
the progress of clinical development and regulatory interactions and approvals of camsirubicin;
 
the progress of preclinical and clinical development of MNPR-101 (and related compounds) including activities through our collaboration with NorthStar;
 
the number and characteristics of other drug product candidates that we may license, acquire or otherwise pursue;
 
the scope, progress, timing, cost and results of research, preclinical development and clinical trials of current and future drug product candidates;
 
the costs, timing and outcomes of seeking and obtaining and maintaining FDA and international regulatory approvals;
 
the costs associated with manufacturing/quality requirements and establishing or contracting for sales, marketing and distribution capabilities;
 
our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other intellectual property rights;
 
our need and ability to hire or contract for additional management, administrative, scientific, medical, sales and marketing, and manufacturing/quality and other specialized personnel or external expertise;
 
the effect and timing of entry of competing products or new therapies that may limit market penetration or prevent the introduction of our drug product candidates or reduce the commercial potential of our product portfolio;
 
our need to implement additional required internal systems and infrastructure; and
 
the economic and other terms, timing and success of our existing collaboration and licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future, including the timing of receipt of or payment to or from others of any milestone or royalty payments under these arrangements.
 
 

Funding Requirements Second Half of 2020 Onward
                Expenditures are expected to increase in the second half of 20202021 onward for:
 
contractclinical research services and clinical site fees for the Validiveour VOICE clinical program, including, if required, completing a smaller second Phase 2b/3 confirmatory clinical trial;
 
process development, manufacturing costs and clinical database management of camsirubicin in connection with the GEIS Phase 2dose escalation run-in clinical trial;
 
supporting the NorthStar collaboration; and

GEIS collaboration milestone fees; and
●            
employee compensation and consulting fees to support the planningour product candidate programs including Validive, camsirubicin and initiation of our Validive Phase 2b/3 clinical trial.MNPR-101 and related compounds.
 
We are aiming to enroll the first patient in a Phase 2b/3have activated clinical trial for Validivesites and commenced dosing in our VOICE clinical trial. In order to complete the VOICE clinical program, including, if required, completing a smaller second half of 2020. We will proceed to the Phase 3 portion of theconfirmatory clinical trial based on an interim analysis of the Phase 2b portion, pending our ability to raise sufficient funds. To commence the Phase 3 portion of the trial, we will require additional funding in the millions or tens of millions of dollars (depending on if we have consummated a collaboration or partnership or neither for Validive), or find a suitable pharmaceutical partner, both of which we are planning to pursue inwithin the next 12 months. There can be no assurance that any such events will occur. We intend to continue evaluating drug product candidates for the purpose of growing our pipeline. Identifying and securing high qualityhigh-quality compounds usually takes time and related expenses; however, our spending could be significantly accelerated in the second half of 20202021 and onward if additional drug product candidates are acquired and enter clinical development. In this event, we may be required to expand our management team, and pay higher contract manufacturing costs, contract research organization fees, other clinical development costs and insurance costs that are not currently projected. The anticipated operating cost increases in the second half of 20202021 and onward are expected to be primarily driven by the funding of our planned Validive Phase 2b/3VOICE clinical trial and inprogram, support of the GEIS Phase 2camsirubicin clinical trialprogram and development of camsirubicin.MNPR-101 and related compounds. Beyond our need to raise additional funding in the nextcoming 12 months to startcomplete the Validive Phase 3 portion of the trial,VOICE clinical program, we will also need significant additional funding thereafter in order to completecommercialize Validive if approved for marketing, support of the camsirubicin clinical trial, support further development of camsirubicin in and beyond the Phase 2 trialprogram, to support our collaboration with NorthStar, , if successful,and further development of MNPR-101 and related compounds, and generally to support our current and any future product candidates through completion of trials, approval processes and, if applicable, commercialization.
 

Until we can generate a sufficient amount of product revenue to finance our cash requirements, we expect to finance our future cash needs primarily through a combination of equity offerings, debt financings, strategic collaborations and grant funding. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our current stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our current stockholders’ rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with other parties, we maylikely will have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug product candidates or grant licenses on terms that may not be favorable to us, which will reduce our future returns and affect our future operating flexibility. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our pipeline product development or commercialization efforts or grant rights to others to develop and market drug product candidates that we would otherwise prefer to develop and market ourselves.

 
 
Contractual Obligations and Commitments
 
License, Development and Collaboration Agreements
 
Onxeo S.A.
 
In June 2016, we executed an agreement with Onxeo S.A., a French public company, which gave us the exclusive option to license (on a world-wide exclusive basis) Validive (clonidine mucobuccal tablet; clonidine MBT a mucoadhesive tablet of clonidine based on the Lauriad mucoadhesive technology) to pursue treating severe oral mucositis in patients undergoing chemoradiation treatment for head and neck cancers.. The agreement includes clinical, regulatory, developmental and sales milestones that could reach up to $108 million if we achieve all milestones, and escalating royalties from 5% to 10% on net sales. In September 2017, we exercised the option to license Validive from Onxeo for $1 million, but as of July 31, 2020,April 30, 2021, we have not been required to pay Onxeo any other funds under the agreement. We anticipate the need to raise significant funds to support the completion of clinical development and marketing approval of Validive.
 
Under the agreement, we are required to pay royalties to Onxeo on a product-by-product and country-by-country basis until the later of (1) the date when a given product is no longer within the scope of a patent claim in the country of sale or manufacture, (2) the expiry of any extended exclusivity period in the relevant country (such as orphan drug exclusivity, pediatric exclusivity, new chemical entity exclusivity, or other exclusivity granted beyond the expiry of the relevant patent), or (3) a specific time period after the first commercial sale of the product in such country. In most countries, including the U.S., the patent term is generally 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country, not taking into consideration any potential patent term adjustment that may be filed in the future or any regulatory extensions that may be obtained. The royalty termination provision pursuant to (3) described above is shorter than 20 years and is the least likely cause of termination of royalty payments.
 
The Onxeo license agreement does not have a pre-determined term, but expires on a product-by-product and country-by-country basis; that is, the agreement expires with respect to a given product in a given country whenever our royalty payment obligations with respect to such product have expired. The agreement may also be terminated early for cause if either we or Onxeo materially breach the agreement, or if either we or Onxeo become insolvent. We may also choose to terminate the agreement, either in its entirety or as to a certain product and a certain country, by providing Onxeo with advance notice.
 
Grupo Español de Investigación en Sarcomas (“GEIS”)
 
In June 2019, we executed a clinical collaboration with GEIS for the development of camsirubicin in patients with advanced soft tissue sarcoma (“ASTS”). Following completion of the dose escalation run-in clinical trial in the U.S. (or another country) that we currently anticipate initiating in the second half of 2021, we continue to expect that GEIS will be the study sponsor and will lead a multi-country, randomized, open-label Phase 2 clinical trial to evaluate camsirubicin head-to-head against doxorubicin in patients with ASTS. Enrollment of the trial is anticipated to begin in the second half of 2020 and will include approximately 170current first-line treatment for ASTS, patients.doxorubicin. We will provide study drug and supplemental financial support for the clinical trial averaging approximately $2 million to $3 million per year. Cumulatively through June 30, 2020, During the three months ended March 31, 2021, we incurred approximately $33,000$0.3 million in expenses under the GEIS agreement and other clinical-related expenses. In addition, we incurred approximately $344,000 inexpenses including clinical material manufacturing and database management expenses for thein support of GEIS’s Phase 2 camsirubicin clinical trial.trial. During the three months ended March 31, 2020, we provided a nominal amount of financial support and incurred a nominal amount of drug manufacturing costs under GEIS agreement. We can terminate the agreement by providing GEIS with advance notice, and without affecting the Company’s rights and ownership to any intellectual property or clinical data.
 

 
XOMA Ltd.
 
The intellectual property rights contributed by Tactic Pharma, LLC                Pursuant to us included thea non-exclusive license agreement with XOMA Ltd. for the humanization technology used in the development of MNPR-101. Pursuant to such license agreement,MNPR-101, we are obligated to pay XOMA Ltd. clinical, regulatory and sales milestones which could reach up to $14.925 million if we achieve all milestones for MNPR-101MNPR-101. The agreement does not require the payment of sales royalties. There can be no assurance that we will achieve any milestones. As of July 31, 2020,April 30, 2021, we had not reached any milestones and had not been required to pay XOMA Ltd. any funds under this license agreement.
 
Service Providers
 
In the normal course of business, we contract with service providers to assist in the performance of researchR&D, including drug product manufacturing, process development, clinical development, and development,G&A including financial strategy, audit, tax and legal support. We can elect to discontinue the work under these agreements at any time. We could also enter into collaborative research and development, contract research, manufacturing and supplier agreements in the future, which may require upfront payments and/or long-term commitments of cash.
 
Office Lease
 
Effective January 1, 2018, we leased                We are currently leasing office space in the Village of Wilmette, Illinois for $2,520$4,487 per month for 24 months. This office space houses our current headquarters. On December 31, 2019, the office lease expired and we continued to lease on a month-to-month basis. In February 2019, we leased additional office spaces on a month-to month basis, at our headquarters and we anticipate that we will lease additional space in the future as we hire additional personnel.
 
Legal Contingencies
 
We are currently not, and to date have never been, a party to any adverse material legal proceedings.
 
Indemnification
 
In the normal course of business, we enter into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. Our exposure under these agreements is unknown because it involves claims that may be made against us in the future, but that have not yet been made. To date, we have not paid any claims or been required to defend any action related to our indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations.
 
In accordance with our Second Amended and Restated Certificate of Incorporation, and Amended and Restated Bylaws and the indemnification agreements entered into with each officer and non-employee director, we have indemnification obligations to our officers and Board Membersnon-employee directors for certain events or occurrences, subject to certain limits, while they are serving at our request in such capacity. There have been no claims to date.
 
Off-Balance Sheet Arrangements
 
To date, we have not had any off-balance sheet arrangements, as defined under the SEC rules.
   
 

 
 
 
Item 4. Controls and Procedures
 
Our Chief Executive Officer and Chief Financial Officer have provided certifications filed as Exhibits 31.1 and 32.1, and 31.2, respectively. Such certifications should be read in conjunction with the information contained in this Item 4 for a more complete understanding of the matters covered by those certifications.
 
(a) Disclosure Controls and Procedures
 
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of June 30, 2020,March 31, 2021, pursuant to Rules 13a15(e) and 15d15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures, as of such date, were effective.
 
(b) Changes in Internal Control over Financial Reporting
 
We have concluded that the condensed consolidated financial statements and other financial information included in this Quarterly Report on Form 10-Q fairly present in all material respects our financial condition, results of operations and comprehensive loss and cash flows as of, and for, the periods presented.
 
There have been no changes in our internal control over financial reporting during the three and six months ended June 30, 2020March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
 

 
 
PARTPART II. OTHER INFORMATION
Item 1A. Risk Factors
 
Item 1A. Risk Factors
Except for the updated risk factor set forth below, there                There have been no material changes in information regarding our risk factors as described in Item 1A of our Annual Report on Form 10-K as filed with the SEC on March 27, 2020.25, 2021.
 
Our operations and financial results could be adversely impacted by the global outbreak of the 2019 Novel Coronavirus (COVID-19), which has negatively impacted our stock price and our ability to raise substantial funds in the near-term, and may negatively impact our ability to manufacture our product candidates for our clinical trials, and our ability to accrue and conduct our planned clinical trials. Any such impact will negatively impact our financial condition and could require us to delay our clinical development programs.
               In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, resulting in significant disruptions to Chinese manufacturing and supply chain, as well as travel restrictions in many countries. In March 2020, COVID-19 was designated a global pandemic and many countries, including the United States, have declared national emergencies and have implemented preventive measures by limiting large public gatherings (social distancing) and shelter-in-place mandates. Many employers are restricting non-essential work travel and are requiring that employees work from their homes to limit personal interaction. Many businesses are closed or are operating in a substantially reduced fashion and many employees have been laid off. While the extent of the impact of the COVID-19 pandemic on our business and financial results is uncertain, a continued and prolonged public health crisis such as the COVID-19 pandemic would have a negative impact on our business, financial condition and operating results. The COVID-19 pandemic has resulted in significant volatility and substantial declines in the stock markets, which has negatively impacted our stock price and negatively impacted our ability to raise significant funds in the near-term. It is unknown the potential impact in the long-term in the event of a prolonged disruption or recession. In addition,the COVID-19 pandemic could impact the conduct of clinical trials as a result of quarantines, site closures, travel limitations, delays in the manufacturing of our product candidates for our clinical trials due to supply chain disruptions, and delays in the initiation and enrollment of patients in our planned clinical trials, or other considerations if site personnel or trial subjects become infected with COVID-19, which would negatively impact our financial condition and could require us to delay our clinical development programs. Given the dynamic nature of these circumstances, the duration of any business disruption or potential impact of the COVID-19 pandemic to our business is difficult to predict. In response to the current COVID-19 pandemic and its effects on clinical trials, we have modified the original adaptive design Phase 3 clinical trial for our lead product candidate, Validive, to be a Phase 2b/3 clinical trial to better fit the types of trials which can enroll patients in the current environment. We are aiming to enroll the first patient in a Phase 2b/3 clinical trial for Validive in the second half of 2020. The Phase 3 portion of the clinical trial is anticipated to start right after the Phase 2b portion, pending our ability to raise sufficient funds. To commence the Phase 3 portion of the trial, we will require additional funding in the millions or tens of millions of dollars (depending on if we have consummated a collaboration or partnership or neither for Validive), or find a suitable pharmaceutical partner, both of which we are planning to pursue in the next 12 months. There can be no assurance that any such events will occur.
 

 
 
 
 
Item 6. Exhibits
 
The following exhibits are filed as part of this Quarterly Report.Report on Form 10-Q.
 
Exhibit
 
Document
 
Incorporated by Reference From:
 
 
Filed herewith
 
 
Filed herewith
 
 
Filed herewith
101.INS
 
XBRL Instance Document
 
 
101.SCH
 
XBRL Taxonomy Extension Schema
 
 
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase
 
 
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase
 
 
101.LAB
 
XBRL Taxonomy Extension Label Linkbase
 
 
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase
 
 
 
.
 

 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
MONOPAR THERAPEUTICS INC.

 
 

MONOPAR THERAPEUTICS INC


  
Dated: August 6, 2020May 13, 2021
By:  
/s/  Chandler D. Robinson



Name: Chandler D. Robinson



Title:   Chief Executive Officer and Director
(Principal Executive Officer)

 
 

 

MONOPAR THERAPEUTICS INC


  
Dated: August 6, 2020May 13, 2021
By:  
/s/ Kim R. Tsuchimoto
Kim R. Tsuchimoto



Name:Kim R. Tsuchimoto



Title:   Chief Financial Officer
(Principal Financial Officer)

 
 
 
 
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