PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited interim financial statements, including Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows, along with their accompanying notes, for the periods ended June 30, 2019 and 2018, highlighting the company's ongoing losses and liquidity challenges [Balance Sheets](index=3&type=section&id=BALANCE%20SHEETS) The balance sheet shows an increase in total assets and stockholders' equity as of June 30, 2019, compared to December 31, 2018, primarily driven by an increase in cash and cash equivalents Balance Sheet Highlights (in thousands) | Metric | June 30, 2019 | December 31, 2018 | | :-------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $9,966 | $6,608 | | Total current assets | $10,323 | $6,777 | | Total assets | $10,388 | $6,825 | | Total current liabilities | $1,199 | $793 | | Total stockholders' equity | $9,189 | $6,032 | - Total assets increased by **$3,563 thousand** from December 31, 2018, to June 30, 2019, primarily due to a rise in cash and cash equivalents[5](index=5&type=chunk) [Statements of Operations and Comprehensive Loss](index=4&type=section&id=STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) The company reported a net loss for both the three and six months ended June 30, 2019 and 2018, with a notable decrease in research and development expenses in 2019 Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $440 | $1,154 | $1,102 | $2,874 | | General and administrative | $1,068 | $1,002 | $2,187 | $2,055 | | Total costs and expenses | $1,508 | $2,156 | $3,289 | $4,929 | | Net loss | $(1,436) | $(2,116) | $(3,100) | $(4,851) | | Net loss per share (Basic and diluted) | $(1.14) | $(2.74) | $(2.87) | $(6.34) | - Research and development expenses decreased by approximately **$0.7 million** for the three months and **$1.8 million** for the six months ended June 30, 2019, compared to the corresponding periods in 2018, primarily due to the completion of the GENETIC-AF clinical trial[83](index=83&type=chunk)[84](index=84&type=chunk) - The company recognized an income tax benefit of **$27,000** and **$109,000** for the three and six months ended June 30, 2019, respectively, primarily from research and experimentation tax credits under the PATH Act[57](index=57&type=chunk)[91](index=91&type=chunk) [Statements of Stockholders' Equity](index=5&type=section&id=STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Stockholders' equity increased from $6,032 thousand at December 31, 2018, to $9,189 thousand at June 30, 2019, mainly due to proceeds from common stock issuance, partially offset by net losses Stockholders' Equity Highlights (in thousands, except share amounts) | Metric | December 31, 2018 | June 30, 2019 | | :--------------------------- | :---------------- | :------------ | | Common Shares Outstanding | 773,558 | 1,455,556 | | Additional Paid-In Capital | $144,965 | $151,222 | | Accumulated Deficit | $(138,934) | $(142,034) | | Total Stockholders' Equity | $6,032 | $9,189 | - Issuance of common stock for cash, net of offering costs, contributed **$2,900 thousand** in Q1 2019 and **$3,262 thousand** in Q2 2019 to additional paid-in capital[8](index=8&type=chunk) [Statements of Cash Flows](index=6&type=section&id=STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operating activities decreased significantly in the first six months of 2019 compared to 2018, while net cash provided by financing activities increased, leading to a substantial net increase in cash and cash equivalents Cash Flow Activities (Six Months Ended June 30, in thousands) | Activity | 2019 | 2018 | | :-------------------------------------- | :-------- | :-------- | | Net cash used in operating activities | $(2,756) | $(5,325) | | Net cash provided by investing activities | $0 | $3,049 | | Net cash provided by financing activities | $6,114 | $3,209 | | Net increase in cash and cash equivalents | $3,358 | $933 | | Cash and cash equivalents, end of period | $9,966 | $9,635 | - Net cash used in operating activities decreased by **$2.6 million** for the six months ended June 30, 2019, primarily due to a lower net loss[94](index=94&type=chunk) - Net cash provided by financing activities increased to **$6.1 million** in 2019, mainly from **$6.5 million** in proceeds from common stock issuance[10](index=10&type=chunk) [Notes to Financial Statements](index=7&type=section&id=NOTES%20TO%20FINANCIAL%20STATEMENTS) The notes provide detailed information on the company's business, significant accounting policies, financial instruments, commitments, and recent accounting pronouncements, highlighting the company's going concern uncertainty and its reliance on additional capital [(1) The Company and Summary of Significant Accounting Policies](index=7&type=section&id=(1)%20The%20Company%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note describes ARCA's business as a biopharmaceutical company focused on genetically-targeted therapies for cardiovascular diseases, with Gencaro as its lead product candidate, and addresses the company's liquidity challenges, going concern uncertainty, and key accounting policies - ARCA is a biopharmaceutical company developing genetically-targeted therapies for cardiovascular diseases, with Gencaro™ (bucindolol hydrochloride) as its lead product candidate for atrial fibrillation (AF) in heart failure (HF) patients[12](index=12&type=chunk)[61](index=61&type=chunk) - The company has not generated revenue and has incurred substantial losses, with current cash and cash equivalents projected to fund operations only through the end of the first quarter of 2020[17](index=17&type=chunk)[18](index=18&type=chunk)[67](index=67&type=chunk) - Management has determined there is substantial doubt about the company's ability to continue as a going concern due to the need for additional capital and uncertainties in clinical development[20](index=20&type=chunk)[100](index=100&type=chunk) - A **1-for-18 reverse stock split** of common stock was completed on April 3, 2019, with all common shares and per common share amounts retroactively adjusted[23](index=23&type=chunk)[69](index=69&type=chunk) - The company adopted ASU 2016-02 (Leases) effective January 1, 2019, recognizing a lease liability of approximately **$80,000** and a right-of-use asset of approximately **$60,000**, which did not materially impact financial statements[28](index=28&type=chunk) [(2) Net Loss Per Share](index=9&type=section&id=(2)%20Net%20Loss%20Per%20Share) Due to reported net losses, all potentially dilutive shares, including stock options and warrants, were excluded from the computation of diluted net loss per share for all periods presented Potentially Dilutive Securities Excluded from EPS (June 30) | Security Type | 2019 | 2018 | | :---------------------------- | :----- | :----- | | Outstanding stock options | 32,833 | 34,686 | | Unvested restricted stock units | — | 13 | | Warrants to purchase common stock | 135,862 | 148,334 | | Total | 168,695 | 183,033 | - The company reported a net loss for the three and six months ended June 30, 2019 and 2018, leading to the exclusion of all potentially dilutive shares from diluted net loss per share calculations[30](index=30&type=chunk) [(3) Fair Value Disclosures](index=10&type=section&id=(3)%20Fair%20Value%20Disclosures) The company's cash equivalents, primarily money market funds, are classified as Level 1 inputs in the fair value hierarchy, with no marketable securities as of June 30, 2019, or December 31, 2018 - Cash equivalents, consisting of money market funds, are valued using **Level 1 inputs** (quoted market prices) in the fair value hierarchy[32](index=32&type=chunk)[33](index=33&type=chunk) - The company had no marketable securities as of June 30, 2019, or December 31, 2018[31](index=31&type=chunk) [(4) Property and Equipment](index=11&type=section&id=(4)%20Property%20and%20Equipment) Net property and equipment decreased from $24 thousand at December 31, 2018, to $13 thousand at June 30, 2019, with depreciation and amortization expense remaining consistent Property and Equipment, Net (in thousands) | Category | June 30, 2019 | December 31, 2018 | | :------------------------ | :------------ | :---------------- | | Computer equipment | $61 | $65 | | Lab equipment | $142 | $142 | | Furniture and fixtures | $62 | $62 | | Computer software | $65 | $70 | | Leasehold improvements | $59 | $59 | | Total | $389 | $398 | | Accumulated depreciation and amortization | $(376) | $(374) | | Property and equipment, net | $13 | $24 | - Depreciation and amortization expense was **$11,000** for both the six months ended June 30, 2019 and 2018[37](index=37&type=chunk) [(5) Related Party Arrangements](index=11&type=section&id=(5)%20Related%20Party%20Arrangements) The company incurred expenses for unrestricted research grants with its President and CEO's academic research laboratory, with funding contingent on the company's financial condition Related Party Research Grant Expenses (in thousands) | Period | Expense | | :--------------------------- | :------ | | Six months ended June 30, 2019 | $141 | | Six months ended June 30, 2018 | $184 | - Funding for these grants is at the company's discretion and can be deferred or terminated[38](index=38&type=chunk) [(6) Commitments and Contingencies](index=11&type=section&id=(6)%20Commitments%20and%20Contingencies) This section details the company's employment agreements with key executives, its operating lease for office facilities, and the license agreement for Gencaro, including milestone and royalty obligations - The company has employment agreements with key executives that include provisions for termination and change in control[40](index=40&type=chunk) - Future minimum lease payments for the Westminster, Colorado facility as of June 30, 2019, are **$38,000** for the remainder of 2019[41](index=41&type=chunk) - The license agreement for Gencaro with CPEC includes milestone payments of **$8.0 million** upon FDA approval and up to **$5.0 million** for European and Japanese approvals, plus royalties ranging from **12.5% to 25%** of revenue[44](index=44&type=chunk) - The company acquired Aeolus' minority interest in CPEC in October 2017, effectively reducing or eliminating certain milestone and royalty obligations[44](index=44&type=chunk) [(7) Equity Financings and Warrants](index=12&type=section&id=(7)%20Equity%20Financings%20and%20Warrants) The company has utilized an 'at the market' equity financing program, selling common stock for net proceeds, and has outstanding warrants to purchase common stock - The 'at the market' sales agreement was amended in 2019 to increase the maximum aggregate offering value to **$17.5 million**[45](index=45&type=chunk) Common Stock Sales via ATM Offering (Net Proceeds) | Period | Net Proceeds (approx.) | | :--------------------------- | :--------------------- | | Six months ended June 30, 2019 | $6.2 million | | Year ended December 31, 2018 | $3.4 million | | Year ended December 31, 2017 | $6.1 million | - As of June 30, 2019, approximately **$764,000** was available to be sold under the prospectus[51](index=51&type=chunk) Outstanding Warrants as of June 30, 2019 | Year of Expiration | Number of Warrants | Weighted Average Exercise Price | | :----------------- | :----------------- | :------------------------------ | | 2020 | 2,461 | $287.28 | | 2022 | 133,401 | $109.80 | | Total | 135,862 | $113.04 | [(8) Share-based Compensation](index=13&type=section&id=(8)%20Share-based%20Compensation) Non-cash share-based compensation expense decreased for both the three and six months ended June 30, 2019, compared to 2018, with a slight decrease in outstanding stock options Share-based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $22 | $28 | $45 | $66 | | General and administrative | $23 | $32 | $50 | $91 | | Total | $45 | $60 | $95 | $157 | Stock Option Activity (Six Months Ended June 30, 2019) | Metric | Number of Options | Weighted Average Exercise Price | | :-------------------------------------- | :---------------- | :------------------------------ | | Options outstanding at December 31, 2018 | 33,503 | $96.22 | | Forfeited and cancelled | (670) | $724.80 | | Options outstanding at June 30, 2019 | 32,833 | $83.39 | | Options exercisable at June 30, 2019 | 29,618 | $88.13 | [(9) Income Taxes](index=13&type=section&id=(9)%20Income%20Taxes) The company has recorded a full valuation allowance against its net deferred tax assets due to uncertainty of future profitable operations, and an income tax benefit was recognized in 2019, primarily from federal research and experimentation tax credits - A full valuation allowance has been recorded against net deferred tax assets due to the uncertainty of future profitable operations and taxable income[55](index=55&type=chunk) - An income tax benefit of **$109,000** for the six months ended June 30, 2019, was primarily related to a federal research and experimentation income tax credit under the PATH Act[57](index=57&type=chunk)[91](index=91&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of ARCA's business, its lead product candidate Gencaro, the status of its clinical trials, and its financial condition, highlighting the company's need for additional financing, the going concern uncertainty, and the results of operations for the reported periods [Overview](index=15&type=section&id=Overview) ARCA is a biopharmaceutical company focused on genetically-targeted cardiovascular therapies, with its lead candidate Gencaro being developed for atrial fibrillation in heart failure patients, and a planned Phase 3 trial following a Special Protocol Assessment (SPA) agreement with the FDA, though the company faces significant funding challenges and is exploring strategic alternatives - ARCA applies a precision medicine approach to developing genetically-targeted therapies for cardiovascular diseases, with Gencaro as its lead product candidate for AF in HF patients[61](index=61&type=chunk) - The company received a Special Protocol Assessment (SPA) agreement with the FDA in February 2019 for its planned Phase 3 clinical program (PRECISION-AF) for Gencaro[64](index=64&type=chunk) - Current cash and cash equivalents are expected to fund operations through the first quarter of 2020, necessitating additional financing or a strategic transaction for continued development[66](index=66&type=chunk)[67](index=67&type=chunk) - As of July 31, 2019, the company sold **949,344 shares** of common stock through an 'at the market' offering, generating approximately **$15.7 million** in net proceeds[68](index=68&type=chunk) [The Proposed Gencaro Phase 3 Clinical Trial (PRECISION-AF)](index=16&type=section&id=The%20Proposed%20Gencaro%20Phase%203%20Clinical%20Trial) The PRECISION-AF Phase 3 trial is designed as a double-blind, active-controlled, multicenter study comparing Gencaro with TOPROL-XL for the prevention of recurrent AF/atrial flutter or all-cause mortality in HF patients with specific genotypes, with its initiation anticipated in Q1 2020, subject to securing additional financing - The PRECISION-AF Phase 3 trial will enroll approximately **400 HF patients** with LVEF ≥ 0.40 and ≤ 0.55 and the beta-1 389 arginine homozygous genotype[70](index=70&type=chunk) - The trial is planned to include an interim analysis and is anticipated to initiate in the first quarter of 2020, contingent on obtaining significant additional financing[70](index=70&type=chunk) [GENETIC-AF and BEST Trial DNA Substudy](index=16&type=section&id=GENETIC-AF%20and%20BEST%20Trial%20DNA%20Substudy) The GENETIC-AF Phase 2B trial showed Gencaro had a similar treatment benefit to TOPROL-XL overall, but significant benefits were observed in specific patient subpopulations, particularly those with certain disease durations and LVEF ranges, and the BEST trial substudy also indicated enhanced efficacy of Gencaro in patients with the beta-1 389 arginine homozygous genotype, which is crucial for future development - GENETIC-AF showed statistically significant treatment effects in favor of Gencaro in a majority of the Phase 2B population (N=196; **HR=0.54; p = 0.011**) and in a subset with LVEF ≥ 0.40 and ≤ 0.55 (N=91; **HR=0.42; p = 0.017**) after excluding patients with long-standing HF and AF[74](index=74&type=chunk)[75](index=75&type=chunk) - Gencaro was generally safe and well-tolerated in GENETIC-AF, with fewer adverse events of bradycardia compared to TOPROL-XL[76](index=76&type=chunk) - The BEST trial DNA substudy indicated Gencaro reduced the risk of new onset AF by **41% overall** and **74%** in patients with the beta-1 389 arginine homozygous genotype[77](index=77&type=chunk)[78](index=78&type=chunk) - Future clinical trials of Gencaro are expected to require a companion diagnostic test to identify the patient's receptor genotype, for which LabCorp developed the test for GENETIC-AF[79](index=79&type=chunk) [AB171](index=18&type=section&id=AB171) AB171, a thiol-substituted isosorbide mononitrate, is being developed as a potential genetically-targeted treatment for peripheral arterial disease and heart failure, with IND-enabling activities initiated in 2018 and nonclinical studies planned for Q4 2019, leading to an anticipated IND application in H2 2020 - AB171 is a thiol-containing derivative of isosorbide mononitrate with preclinical data suggesting genotype-specific enhancement of nitric oxide release and potent anti-oxidant properties[81](index=81&type=chunk) - IND-enabling development activities for AB171 began in 2018, with nonclinical studies planned for Q4 2019 and an IND application anticipated in the second half of 2020, subject to capital availability[81](index=81&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) The company's results of operations show a significant decrease in R&D expenses due to the completion of the GENETIC-AF trial, while G&A expenses remained relatively stable, interest income was consistent, and an income tax benefit was recognized in 2019 [Research and Development Expenses](index=18&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses decreased substantially in 2019 compared to 2018, primarily due to the completion of the GENETIC-AF clinical trial, with further reductions expected in 2019 Research and Development Expenses (in millions) | Period | 2019 | 2018 | Change (YoY) | | :--------------------------- | :---- | :---- | :----------- | | Three months ended June 30 | $0.4 | $1.2 | $(0.8) | | Six months ended June 30 | $1.1 | $2.9 | $(1.8) | - The decrease in R&D expenses was primarily related to the completion of the GENETIC-AF clinical trial in 2018 and lower personnel costs[84](index=84&type=chunk) - R&D expense in 2019 is expected to be lower than in 2018, as no material clinical trial expense is anticipated until the planned PRECISION-AF trial in Q1 2020, subject to financing[85](index=85&type=chunk) [General and Administrative Expenses](index=19&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses remained relatively stable, with a slight increase driven by consulting costs, partially offset by lower personnel costs General and Administrative Expenses (in millions) | Period | 2019 | 2018 | Change (YoY) | | :--------------------------- | :---- | :---- | :----------- | | Three months ended June 30 | $1.1 | $1.0 | $0.1 | | Six months ended June 30 | $2.2 | $2.1 | $0.1 | - The increase was primarily due to increased consulting costs, partially offset by lower personnel costs in 2019[87](index=87&type=chunk) [Interest and Other Income](index=19&type=section&id=Interest%20and%20Other%20Income) Interest and other income remained consistent for both the three and six months ended June 30, 2019 and 2018, and is expected to continue at similar levels Interest and Other Income (in thousands) | Period | 2019 | 2018 | | :--------------------------- | :--- | :--- | | Three months ended June 30 | $48 | $43 | | Six months ended June 30 | $86 | $84 | [Interest Expense](index=19&type=section&id=Interest%20Expense) Interest expense remained negligible and unchanged for both the three and six months ended June 30, 2019 and 2018, with expectations to remain negligible for the rest of 2019 Interest Expense (in thousands) | Period | 2019 | 2018 | | :--------------------------- | :--- | :--- | | Three months ended June 30 | $3 | $3 | | Six months ended June 30 | $6 | $6 | [Income Tax Benefit](index=19&type=section&id=Income%20Tax%20Benefit) The company recognized an income tax benefit in 2019, primarily due to federal research and experimentation tax credits under the PATH Act, with no comparable benefit in 2018 Income Tax Benefit (in thousands) | Period | 2019 | 2018 | | :--------------------------- | :--- | :--- | | Three months ended June 30 | $27 | $0 | | Six months ended June 30 | $109 | $0 | - The income tax benefit in 2019 was primarily related to the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), allowing qualified small businesses to monetize research and experimentation tax credits[91](index=91&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash and cash equivalents increased due to equity financings, but it continues to face substantial doubt about its ability to continue as a going concern beyond Q1 2020 without significant additional capital or a strategic transaction Cash and Cash Equivalents (in thousands) | Period | Amount | | :--------------- | :----- | | June 30, 2019 | $9,966 | | December 31, 2018 | $6,608 | - The net increase of **$3.4 million** in cash and cash equivalents during the six-month period primarily reflects **$6.2 million** in net proceeds from common stock issuance, offset by **$2.8 million** used in operating activities[91](index=91&type=chunk) Cash Flows from Activities (Six Months Ended June 30, in thousands) | Activity | 2019 | 2018 | | :-------------------------------------- | :-------- | :-------- | | Operating activities | $(2,756) | $(5,325) | | Investing activities | $0 | $3,049 | | Financing activities | $6,114 | $3,209 | | Net increase in cash and cash equivalents | $3,358 | $933 | - The company believes its cash and cash equivalents will fund operations through Q1 2020, but substantial additional capital or a strategic transaction is required for future operations and Gencaro development[99](index=99&type=chunk)[100](index=100&type=chunk) - Management has concluded there is substantial doubt about the company's ability to continue as a going concern from one year after the financial statements have been issued[100](index=100&type=chunk) [Critical Accounting Policies and Estimates](index=21&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights critical accounting policies, including the estimation of accrued outsourcing expenses, and confirms the absence of off-balance sheet arrangements and the presence of indemnification agreements - The company's critical accounting policies involve significant judgment in estimating accrued outsourcing expenses for contract services, such as manufacturing and clinical research[101](index=101&type=chunk)[102](index=102&type=chunk) - The company has not participated in any off-balance sheet arrangements[103](index=103&type=chunk) - The company enters into contractual arrangements for indemnification and maintains an insurance policy for its directors and executive officers[104](index=104&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is not applicable to the company - The company has no quantitative and qualitative disclosures about market risk to report[105](index=105&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=22&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective at a reasonable level of assurance as of June 30, 2019 - The company's disclosure controls and procedures were evaluated and deemed effective at a reasonable level of assurance as of the end of the quarter[107](index=107&type=chunk)[108](index=108&type=chunk) [Changes in Internal Control over Financial Reporting](index=22&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) There have been no changes in the company's internal control over financial reporting during the most recent fiscal quarter that have materially affected or are reasonably likely to materially affect it - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[109](index=109&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=23&type=section&id=Item%201.%20Legal%20Proceedings) The company has no legal proceedings to report - There are no legal proceedings to disclose[111](index=111&type=chunk) [ITEM 1A. RISK FACTORS](index=23&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks associated with an investment in the company's securities, categorized into risks related to business and financial condition, intellectual property and legal matters, and stock price volatility [Risks Related to Our Business and Financial Condition](index=23&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Financial%20Condition) The company faces substantial risks including the need for significant additional funding to continue operations and product development, uncertainty regarding its ability to continue as a going concern, and challenges in obtaining regulatory approval and commercializing Gencaro, with other risks including potential delisting from Nasdaq, difficulties in clinical trial enrollment, reliance on third parties, and intense market competition - The company needs substantial additional funds through equity/debt transactions or strategic partnerships to continue Gencaro development and operations, with a risk of discontinuing activities if funding is not secured[112](index=112&type=chunk)[115](index=115&type=chunk) - Management and independent auditors have concluded that substantial doubt exists about the company's ability to continue as a going concern due to the need for additional capital and funding uncertainties[116](index=116&type=chunk)[117](index=117&type=chunk) - Failure to successfully develop, obtain FDA approval for, and commercialize Gencaro in a timely manner could lead to the discontinuation of business operations[118](index=118&type=chunk)[120](index=120&type=chunk) - An SPA agreement with the FDA does not guarantee approval of Gencaro and can be revoked or altered, potentially delaying or preventing regulatory approval[121](index=121&type=chunk)[122](index=122&type=chunk) - The company faces risks of delisting from the Nasdaq Capital Market if it fails to meet listing requirements, which could adversely affect its ability to raise funds and stock liquidity[123](index=123&type=chunk)[125](index=125&type=chunk) - Difficulties in enrolling patients for future clinical trials, especially given specific genotype requirements, could delay or terminate trials[127](index=127&type=chunk) - Clinical trials for product candidates may not yield sufficient safety and efficacy results for regulatory approval, leading to potential delays or discontinuation of development[128](index=128&type=chunk)[131](index=131&type=chunk) - Reliance on contract research organizations (CROs) for clinical trials reduces direct control over timing, conduct, and expenses, posing risks of delays or quality issues[134](index=134&type=chunk) - Failure to achieve projected development goals and milestones in announced timeframes due to various factors could materially adversely affect the business[135](index=135&type=chunk) - Dependence on existing and future collaborations with third parties for product development carries risks, including collaborators' discretion, potential for disputes, and termination of agreements[136](index=136&type=chunk)[138](index=138&type=chunk) - Future Gencaro clinical trials require a third-party diagnostic services provider for genetic testing, and delays or failures in obtaining regulatory approval for this companion diagnostic could adversely affect Gencaro's marketability[142](index=142&type=chunk)[146](index=146&type=chunk) - Future sales of Gencaro may be negatively affected if its marketplace acceptance is hindered by the genetic test requirement, which adds cost, time, and potential availability issues[150](index=150&type=chunk) - Restrictions imposed by Nasdaq rules and SEC regulations, along with existing contractual rights of investors, may limit the company's ability to raise sufficient capital through future equity or convertible debt offerings[153](index=153&type=chunk) - The company expects to continue incurring significant operating losses and is years away from generating product revenue, making profitability uncertain[154](index=154&type=chunk) - Product candidates are subject to extensive, costly, and time-consuming regulatory processes, and unsuccessful or delayed approvals could increase development costs or impair future revenue[155](index=155&type=chunk)[157](index=157&type=chunk) - If product candidates receive regulatory approval, the company will be subject to ongoing regulatory obligations and restrictions, which may result in significant expenses and limit commercialization efforts[165](index=165&type=chunk)[168](index=168&type=chunk) - Reliance on third parties for commercialization or the inability to establish a direct sales force could negatively impact the business and delay Gencaro's market entry[172](index=172&type=chunk) - The success of the business is highly dependent on key personnel, and the loss of any such individual could seriously harm product development, partnering, and financing efforts[174](index=174&type=chunk) - The company lacks manufacturing capacity and relies on third-party suppliers, posing risks of lengthy delays, increased costs, and potential failures in meeting manufacturing standards[176](index=176&type=chunk) - Transitioning from a clinical development stage company to a commercial one requires successful completion of many steps, many of which are outside the company's control, leading to uncertainty in timely transition[177](index=177&type=chunk) - Gencaro will enter a competitive marketplace, and its success may be hindered if competitors develop safer, more effective, or less expensive products, or if the genetic test requirement negatively impacts market acceptance[179](index=179&type=chunk)[180](index=180&type=chunk) - Failure to obtain acceptable prices or adequate reimbursement from third-party payors for Gencaro or other product candidates would adversely affect revenues and profitability prospects[182](index=182&type=chunk)[183](index=183&type=chunk) - Healthcare reform measures, including cost containment initiatives and changes in pricing and reimbursement policies, could materially and adversely affect the company's business and financial condition[185](index=185&type=chunk)[186](index=186&type=chunk) - Many competitors have significantly greater financial resources and expertise, potentially making them more successful in developing, manufacturing, and marketing approved products[187](index=187&type=chunk) - Failure to identify and license or acquire other products or product candidates could limit business expansion and strain operations, likely requiring additional financing[189](index=189&type=chunk) - Compliance with regulatory approval requirements in foreign countries is costly and time-consuming, potentially preventing or delaying international marketing of products[190](index=190&type=chunk) - If internal control over financial reporting is not considered effective, due to factors like small staff size, it could lead to deficiencies or material weaknesses, adversely affecting the business and stock price[191](index=191&type=chunk) - Comprehensive tax reform bills, such as the Tax Cuts and Jobs Act, could adversely affect the company's business and financial condition due to changes in corporate taxation and increased compliance complexity[192](index=192&type=chunk)[193](index=193&type=chunk) - Failure to comply with federal, state, and foreign data protection laws and regulations (e.g., HIPAA, GDPR) could lead to government enforcement actions, private litigation, and adverse publicity[194](index=194&type=chunk)[198](index=198&type=chunk) [Risks Related to Intellectual Property and Other Legal Matters](index=41&type=section&id=Risks%20Related%20to%20Intellectual%20Property%20and%20Other%20Legal%20Matters) The company faces risks from product liability lawsuits, potential liabilities from hazardous materials, and the critical dependence on its license agreement for Gencaro, with intellectual property risks including potential infringement by third parties, the inability to preclude competitors, and the costs and uncertainties of intellectual property litigation - Product liability lawsuits related to clinical trials and commercial distribution could result in substantial liabilities, decreased demand, and inability to commercialize products[200](index=200&type=chunk)[201](index=201&type=chunk) - The controlled use of hazardous materials in R&D poses risks of accidental contamination or discharge, leading to potential lawsuits or fines[203](index=203&type=chunk) - The company's ability to develop and commercialize Gencaro is dependent on its exclusive license agreement with CPEC, and termination of this license would significantly impair operating results[204](index=204&type=chunk)[205](index=205&type=chunk) - Third parties may own patents that require licensing for commercialization, or could result in costly and time-consuming litigation for infringement[208](index=208&type=chunk)[209](index=209&type=chunk) - The company's intellectual property rights may not effectively preclude competitors, and patents may be challenged, invalidated, or circumvented, affecting market protection[211](index=211&type=chunk) - Litigation regarding patents and intellectual property rights is common in the biopharmaceutical industry, and involvement in such lawsuits could be costly, time-consuming, and divert management attention[214](index=214&type=chunk)[215](index=215&type=chunk) [Risks Related to Stock Price Volatility](index=43&type=section&id=Risks%20Related%20to%20Stock%20Price%20Volatility) The company's stock price is expected to be highly volatile due to various factors, including regulatory status, financing needs, clinical trial results, and market conditions, and future sales of common stock could depress the market price, while anti-takeover provisions may discourage acquisitions - The company's common stock is subject to significant fluctuations due to factors such as regulatory status of Gencaro, financing needs, clinical trial progress, and competitive developments[216](index=216&type=chunk)[217](index=217&type=chunk) - Future sales or the possibility of future sales of substantial amounts of common stock, including shares from warrant exercises and stock options, could depress the market price[219](index=219&type=chunk)[222](index=222&type=chunk) - The company does not anticipate paying cash dividends, meaning stockholders must rely on stock appreciation for any return on investment[223](index=223&type=chunk) - Anti-takeover provisions in the company's certificate of incorporation, bylaws, and Delaware law could discourage, prevent, or delay a takeover, even if beneficial to stockholders[225](index=225&type=chunk)[228](index=228&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to the company for the reported period - There are no unregistered sales of equity securities or use of proceeds to disclose[231](index=231&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reported period - There are no defaults upon senior securities to disclose[231](index=231&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reported period - There are no mine safety disclosures to report[231](index=231&type=chunk) [ITEM 5. OTHER INFORMATION](index=46&type=section&id=Item%205.%20Other%20Information) There is no other information to report for this item - No other information is provided under this item[231](index=231&type=chunk) [ITEM 6. EXHIBITS](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the quarterly report on Form 10-Q, including corporate governance documents, sales agreements, and certifications - The exhibit index includes amendments to the Certificate of Incorporation and Bylaws, sales agreements with JonesTrading, and certifications from the Principal Executive and Financial Officers[234](index=234&type=chunk)[235](index=235&type=chunk) [SIGNATURE](index=49&type=section&id=Signature) The report is duly signed on behalf of ARCA biopharma, Inc. by Brian L. Selby, Vice President, Finance, as the Principal Financial and Accounting Officer - The report was signed by Brian L. Selby, Vice President, Finance (Principal Financial and Accounting Officer) on August 1, 2019[238](index=238&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 000-22873 ARCA BIOPHARMA, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 36-3855489 (State or Other Jurisdiction of Incorp ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |-------------------------------------------------------------------------------------------------------|------------------------------------------| | | | | For the transition peri ...