[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial information, including financial statements, management's discussion and analysis, market risk disclosures, and internal controls [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents TRACON Pharmaceuticals' unaudited condensed consolidated financial statements for Q1 2021, highlighting a net loss increase and asset decrease [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides the condensed consolidated balance sheet, statements of operations, and cash flows for the specified periods Condensed Consolidated Balance Sheet (in thousands) | | March 31, 2021 (Unaudited) | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $26,408 | $32,131 | | Total current assets | $31,217 | $36,914 | | Total assets | $31,654 | $37,438 | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $10,280 | $10,543 | | Total liabilities | $11,297 | $12,366 | | Total stockholders' equity | $20,357 | $25,072 | | Accumulated deficit | $(184,173) | $(179,109) | Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Research and development | $2,284 | $1,998 | | General and administrative | $2,671 | $1,886 | | **Loss from operations** | **$(4,955)** | **$(3,884)** | | **Net loss** | **$(5,064)** | **$(4,021)** | | Net loss per share, basic and diluted | $(0.33) | $(0.78) | Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,859) | $(5,292) | | Net cash used in investing activities | $(4) | $0 | | Net cash (used in) provided by financing activities | $(860) | $3,014 | | **Change in cash and cash equivalents** | **$(5,723)** | **$(2,278)** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide critical context to the financial statements, detailing collaborations, legal disputes, and debt obligations - The company has an accumulated deficit of **$184.2 million** as of March 31, 2021, and expects to incur future net losses. Management believes current cash of **$30.4 million** is sufficient to fund operations for over a year[24](index=24&type=chunk) - The company has a collaboration with 3D Medicines and Alphamab for envafolimab, where TRACON is responsible for development and commercialization in sarcoma in North America. Royalties are payable to partners if TRACON commercializes, or receivable by TRACON if partners commercialize[68](index=68&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk) - TRACON is in a dispute with I-Mab over the TJ004309 and Bispecific agreements. I-Mab attempted to terminate the TJ004309 agreement, which TRACON is contesting. The dispute is before an ICC arbitration panel with a hearing set for February 2022[80](index=80&type=chunk)[90](index=90&type=chunk) - Janssen declined its option to reacquire rights to TRC253. TRACON retains worldwide rights and is obligated to pay Janssen up to **$45.0 million** in milestones plus low single-digit royalties on net sales[92](index=92&type=chunk) Long-Term Debt (in thousands) | | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Long-term debt | $3,500 | $4,200 | | Less current portion | $(2,800) | $(2,800) | | **Long-term debt, net of current portion** | **$698** | **$1,391** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's business strategy, financial performance, and liquidity, highlighting increased net loss and sufficient cash for operations [Overview and Pipeline](index=19&type=section&id=Overview%20and%20Pipeline) This section outlines TRACON's biopharmaceutical focus, lead product candidates, and clinical development strategy, including the ENVASARC trial - The ENVASARC Phase 2 pivotal trial for envafolimab is expected to produce interim data in **2021**, final data in **2022**, and a potential BLA submission for accelerated approval in **2023**[99](index=99&type=chunk)[100](index=100&type=chunk) - The company is in a dispute with I-Mab over the TJ004309 agreement, with I-Mab attempting to terminate it. TRACON is contesting this, and the matter is in arbitration[107](index=107&type=chunk) Key Development Pipeline and Expected Data | Product Candidate | Indication | Phase | Data Expected | | :--- | :--- | :--- | :--- | | Envafolimab | Soft Tissue Sarcoma (UPS and MFS) | Pivotal Phase 2 | Interim 2021, Final 2022 | | TRC102 | Solid tumors and Lymphomas | Phase 1/2 | 2021 | | TJ004309 | Solid Tumors | Phase 1 | 2021 | [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section details the company's operating expenses, showing increases in R&D and G&A for the three months ended March 31, 2021 Comparison of Operating Expenses (in thousands) | | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | Change | | :--- | :--- | :--- | :--- | | Research and development expenses | $2,284 | $1,998 | $286 | | General and administrative expenses | $2,671 | $1,886 | $785 | - The increase in R&D expenses was primarily due to the enrollment of the ENVASARC trial[147](index=147&type=chunk) - The increase in G&A expenses was primarily due to legal and corporate related expenses[148](index=148&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's cash position, capital resources, and financing facilities, indicating sufficient liquidity into H2 2022 - The company believes its cash, cash equivalents, and short-term investments are sufficient to fund operations into the **second half of 2022**[150](index=150&type=chunk)[165](index=165&type=chunk) - The company has an ATM facility with JonesTrading with up to **$50.0 million** available for sale as of March 31, 2021[153](index=153&type=chunk) - The company has a purchase agreement with Aspire Capital, with **$9.6 million** in net proceeds raised to date and additional capacity available[152](index=152&type=chunk) - The total outstanding balance owed under the SVB loan was **$3.5 million** as of March 31, 2021[158](index=158&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section indicates that quantitative and qualitative disclosures about market risk are not applicable to the company - Not applicable[168](index=168&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[170](index=170&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[171](index=171&type=chunk) [PART II OTHER INFORMATION](index=33&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers other essential information, including legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company reports it is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[174](index=174&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks to the company's business, including financial needs, product dependency, and operational challenges - The company has a history of operating losses, with an accumulated deficit of **$184.2 million** at March 31, 2021, and will require substantial additional financing[178](index=178&type=chunk)[180](index=180&type=chunk) - The business is heavily dependent on the success of its lead candidate, envafolimab, and clinical development is a lengthy, expensive process with an uncertain outcome[176](index=176&type=chunk)[194](index=194&type=chunk) - The COVID-19 pandemic could continue to adversely impact business operations, including clinical trials, supply chain, and business development activities[301](index=301&type=chunk)[303](index=303&type=chunk) - The company is dependent on corporate partners like 3D Medicines, Alphamab, and I-Mab. Disputes with I-Mab and reliance on partners for manufacturing and development create significant risks[233](index=233&type=chunk)[236](index=236&type=chunk) - The company's ability to use its net operating loss (NOL) carryforwards of approximately **$152.5 million** (federal) and **$117.7 million** (California) may be limited due to ownership changes[300](index=300&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities or use of proceeds for the period - None[332](index=332&type=chunk) [Defaults Upon Senior Securities](index=62&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities for the period - None[333](index=333&type=chunk) [Mine Safety Disclosures](index=62&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section on mine safety disclosures is not applicable to the company - Not applicable[334](index=334&type=chunk) [Other Information](index=63&type=section&id=Item%205.%20Other%20Information) The company reports no other material information for the period - None[335](index=335&type=chunk) [Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, agreements, and officer certifications - The report includes a list of filed exhibits, such as corporate governance documents, securities purchase agreements, and certifications by the Principal Executive Officer and Principal Financial Officer[336](index=336&type=chunk)

TRACON PHARMACEUTICALS Investor Presentation February 2021 NASDAQ: TCON Forward-Looking Statements This presentation contains statements that are, or may be deemed to be, "forward-looking statements." In some cases these forwardlooking statements can be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "anticipates," "expects," "plans," "intends," "may," "could," "might," "will," "should," "approximately," "potential," or, in each case, their negatives or oth ...

Financial Data and Key Metrics Changes - TRACON Pharmaceuticals reported a net loss of $4.3 million for Q4 2020, compared to a net loss of $3.9 million in Q4 2019, and a total net loss of $16.8 million for the year ended December 31, 2020, compared to $22.7 million for the previous year [28] - Cash, cash equivalents, and investments totaled $36.1 million at December 31, 2020, up from $16.4 million at the end of 2019, indicating improved liquidity [28] Business Line Data and Key Metrics Changes - Research and development expenses were $2.2 million for Q4 2020 and $8.2 million for the year, compared to $1.9 million and $14.5 million for the same periods in 2019, reflecting a decrease primarily due to lower manufacturing and clinical trial expenses related to the termination of the TRC105 program [27] - General and administrative expenses increased slightly to $2 million for Q4 2020 from $1.9 million in Q4 2019, and for the year, they rose to $8 million from $7.8 million [27] Market Data and Key Metrics Changes - The ENVASARC trial is expected to generate peak annual revenue of approximately $200 million in the U.S. if envafolimab is FDA approved for refractory UPS and MFS, with an additional $100 million potential from label expansion into other refractory sarcoma subtypes, totaling $300 million [12][13] Company Strategy and Development Direction - The company is focused on advancing envafolimab through the pivotal ENVASARC trial, which aims for potential approval in treating undifferentiated pleomorphic sarcoma and myxofibrosarcoma [3][10] - Plans include submitting a request for breakthrough therapy designation to the FDA based on interim efficacy data expected in 2021, with a potential product launch in the U.S. in 2023 if approved [10][11] Management's Comments on Operating Environment and Future Outlook - Management emphasized the high unmet clinical need for effective treatments in refractory UPS and MFS, highlighting the potential of envafolimab to transform the standard of care for these patients [30] - The company remains optimistic about its strategy and the ability to deliver on development and business plans for the benefit of patients and shareholders [31] Other Important Information - The company raised approximately $14 million through a registered direct placement, which is expected to extend its cash runway into the second half of 2022 [26] - TRC102, another clinical-stage asset, is being developed for various cancers, with ongoing interest from the NCI for further trials [17][22] Q&A Session Summary Question: What triggers the DMC review for the ENVASARC trial? - The review is based on safety assessments of approximately 10% to 20% of patients from each cohort after they have been on study for a set period [34][35] Question: How is patient enrollment balanced between cohorts? - The study is randomized, ensuring equal allocation of patients across both cohorts, with a rough expected balance of 3:1 in favor of UPS over MFS [36][39] Question: Are there plans for new trials involving TRC102? - There is ongoing interest from the NCI to advance TRC102, particularly in GBM, with expectations for a pilot study in first-line GBM patients [42][45] Question: Will there be combination trials with other checkpoint inhibitors? - The company is open to exploring combinations of envafolimab with other checkpoint inhibitors, viewing it as a backbone therapy [46][47] Question: What are the expectations for the upcoming trials in sarcoma? - The company plans to initiate trials combining envafolimab with doxorubicin and potentially other CTLA-4 inhibitors, aiming to penetrate various sarcoma subtypes [56][58]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36818 TRACON Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) Delaware 34-2037594 (I.R.S. ...

TRACON Pharmaceuticals, Inc. (OTCQB:TCON) Q3 2020 Earnings Conference Call November 10, 2020 4:30 PM ET Company Participants Charles Theuer - President and Chief Executive Officer Scott Brown - Chief Accounting Officer and Head of Finance Conference Call Participants Operator Good day, ladies and gentlemen, and welcome to TRACON Pharmaceuticals' Third Quarter and 2020 Earnings Conference Call. At this time, all callers are in a listen-only mode. After the speakers' prepared remarks, we will conduct a questi ...

Clinical Trials and Product Development - The pivotal ENVASARC trial for envafolimab includes approximately 160 patients, with a primary endpoint of objective response rate (ORR) expected to demonstrate superiority over the 4% ORR of Votrient in soft tissue sarcoma [101]. - Envafolimab showed a 32% confirmed ORR in 41 patients with MSI-H/dMMR colorectal cancer, with a duration of response (DOR) of at least 12 months in 75% of patients [103]. - TRC102 has demonstrated a 100% ORR in a Phase 1 trial for locally advanced non-squamous non-small cell lung cancer, significantly higher than historical data [106]. - TRC253, a treatment for metastatic castration-resistant prostate cancer, had an 8% PSA response rate in 63 evaluable patients, with 27% achieving stable disease for over five months [108]. - The company plans to submit a biologics license application (BLA) for envafolimab in 2023, assuming positive data from the ENVASARC trial [102]. - The company retains global rights to develop and commercialize TRC102, which received orphan drug designation from the FDA for malignant glioma treatment [105]. - The company has initiated an out-licensing process for TRC253 to identify a corporate partner for development in China [108]. - The company utilizes a CRO-independent product development platform to enhance capital efficiency and improve communication with clinical trial sites [113]. - The company has entered into collaborations with 3D Medicines, Alphamab, I-Mab, and Janssen to diversify its product pipeline without upfront license fees [113]. - The company expects to disclose interim data from the ENVASARC trial in 2021 and final data in 2022 [102]. Financial Performance and Projections - As of September 30, 2020, the company had cash and cash equivalents totaling $26.5 million [114]. - The company incurred net losses of $22.7 million and $35.0 million for the years ended December 31, 2019 and 2018, respectively, with an accumulated deficit of $174.8 million as of September 30, 2020 [116]. - The company expects to continue incurring significant expenses and operating losses for at least the next several years, with expenses anticipated to remain constant for the remainder of 2020 and increase in 2021 [117]. - The company anticipates needing to raise substantial additional capital to fund operations and product development [117]. - As of September 30, 2020, the company had an accumulated deficit of $174.8 million and expects to continue incurring net losses for the foreseeable future [157]. - The company has incurred losses and negative cash flows from operations since inception, necessitating additional capital through various financing methods [157]. - The company completed its initial public offering in February 2015, resulting in net proceeds of approximately $35.0 million [158]. - Net cash used in operating activities was $13.4 million for the nine months ended September 30, 2020, compared to $19.4 million for the same period in 2019 [167]. - Net cash provided by financing activities was $23.5 million for the nine months ended September 30, 2020, primarily from the sale of common stock and warrants [169]. - The company sold 2,633,838 shares of common stock at an average price of $1.66 per share in August 2020, generating net proceeds of approximately $10.0 million [162]. - The company had sold an aggregate of 4.8 million shares under the 2019 Purchase Agreement with Aspire Capital for gross proceeds of $9.6 million as of September 30, 2020 [164]. Expenses and Cost Management - Research and development expenses for the three months ended September 30, 2020, were $1.8 million, a decrease of $1.3 million compared to $3.1 million in the same period of 2019 [152]. - Research and development expenses for the nine months ended September 30, 2020, were $6.0 million, down $6.6 million from $12.6 million in the same period of 2019, primarily due to the termination of carotuximab development [155]. - The company expects research and development expenses to remain relatively constant for the remainder of 2020 and increase in 2021 due to enrollment in the ENVASARC pivotal trial [144]. - General and administrative expenses for the three months ended September 30, 2020, were $2.1 million, slightly up from $2.0 million in the same period of 2019 [153]. - General and administrative expenses for the nine months ended September 30, 2020, were $6.0 million, compared to $5.9 million in the same period of 2019 [156]. Collaborations and Agreements - Under the Envafolimab Collaboration Agreement, the company is responsible for conducting and bearing the costs of clinical trials for envafolimab in North America [119]. - The company will owe tiered double-digit royalties on net sales of envafolimab for sarcoma in North America, ranging from the teens to mid-double digits [122]. - The company entered into collaboration agreements with I-Mab for the development of multiple immuno-oncology programs, including cost-sharing arrangements for clinical trials [126]. - In the TJ004309 Agreement, the company will bear 40% of the costs for pivotal clinical trials, while I-Mab will cover 60% [127]. - The company is entitled to receive royalties on net sales by I-Mab in North America ranging from mid-single digits to low double digits [128]. - If the company exercises its licensing option for a product candidate, it would owe I-Mab a one-time upfront payment of up to $80.0 million, along with milestone payments and royalties based on the development phase [133]. Capital and Financing - The 2018 Amended SVB Loan has an interest rate of 9.0% per annum, with a final payment of 4.0% of the original principal due at maturity [160]. - The company has entered into a Purchase Agreement with Aspire Capital to purchase up to $15.0 million of shares, with $9.6 million already raised as of September 30, 2020 [164]. - The company is evaluating in-licensing and acquisition opportunities to access new product candidates, which may increase future funding requirements [170]. - The company is in compliance with all covenants and conditions of the 2018 Amended SVB Loan as of September 30, 2020 [161]. Impact of COVID-19 - The company cannot predict the extent to which the COVID-19 pandemic will impact clinical trials or increase expenses [145].

TRACON Pharmaceuticals, Inc. (OTCQB:TCON) Q2 2020 Earnings Conference Call August 5, 2020 4:30 PM ET Company Participants Charles Theuer – President and Chief Executive Officer Scott Brown – Chief Accounting Officer Conference Call Participants Swapnil Malekar – Jefferies Ed White – H.C. Wainwright Operator Good day, ladies and gentlemen, and welcome to TRACON PharmaceuticalsÂ' Second Quarter and 2020 Earnings Conference Call. At this time, all callers are in a listen-only mode. After the speakersÂ' prepare ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents TRACON Pharmaceuticals' unaudited condensed consolidated financial statements and detailed notes on accounting policies, debt, equity, and collaborations [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets ($k) | Metric | June 30, 2020 ($k) | December 31, 2019 ($k) | | :-------------------------- | :------------------- | :--------------------- | | Cash and cash equivalents | 14,453 | 16,412 | | Total current assets | 14,956 | 17,260 | | Total assets | 15,650 | 18,121 | | Total current liabilities | 9,235 | 11,834 | | Total stockholders' equity | 3,003 | 2,698 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Three Months Ended June 30 ($k) | Metric | 2020 ($k) | 2019 ($k) | Change ($k) | | :-------------------------- | :-------- | :-------- | :---------- | | Research and development | 2,218 | 4,347 | (2,129) | | General and administrative | 2,096 | 1,893 | 203 | | Total operating expenses | 4,314 | 6,240 | (1,926) | | Net loss | (4,451) | (6,326) | 1,875 | | Net loss per share (basic & diluted) | (0.70) | (2.11) | 1.41 | Six Months Ended June 30 ($k) | Metric | 2020 ($k) | 2019 ($k) | Change ($k) | | :-------------------------- | :-------- | :-------- | :---------- | | Research and development | 4,216 | 9,561 | (5,345) | | General and administrative | 3,982 | 3,842 | 140 | | Total operating expenses | 8,198 | 13,403 | (5,205) | | Net loss | (8,472) | (13,539) | 5,067 | | Net loss per share (basic & diluted) | (1.47) | (4.53) | 3.06 | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) - Total Stockholders' Equity increased from **$2,698k** at December 31, 2019, to **$3,003k** at June 30, 2020[18](index=18&type=chunk) - Issuances of common stock, net of offering costs, contributed **$8,122k** to additional paid-in capital during the six months ended June 30, 2020[18](index=18&type=chunk) - The company recorded a net loss of **$(8,472)k** for the six months ended June 30, 2020[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Activity (Six Months Ended June 30) ($k) | Cash Flow Activity (Six Months Ended June 30) | 2020 ($k) | 2019 ($k) | | :------------------------------------ | :-------- | :-------- | | Net cash used in operating activities | (9,147) | (12,824) | | Net cash provided by investing activities | — | 14,020 | | Net cash provided by financing activities | 7,188 | 4 | | Change in cash and cash equivalents | (1,959) | 1,200 | | Cash and cash equivalents at end of period | 14,453 | 26,336 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Summary of Significant Accounting Policies](index=7&type=section&id=1.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) - TRACON Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on developing and commercializing novel targeted therapeutics for cancer, and offers a U.S. drug development solution to ex-U.S. companies[24](index=24&type=chunk) - As of June 30, 2020, the company had an accumulated deficit of **$170.8 million** and cash and cash equivalents of **$14.5 million**, raising substantial doubt about its ability to continue as a going concern for one year[26](index=26&type=chunk) - The company plans to fund operations through existing cash, future equity offerings, debt financings, and potential licensing/collaboration arrangements, including **$11.7 million** remaining from Aspire Capital and **$4.2 million** from JonesTrading[27](index=27&type=chunk) - A **1-for-10 reverse stock split** was effected on November 7, 2019, reducing authorized common shares from **200,000,000** to **20,000,000**[30](index=30&type=chunk) - The COVID-19 pandemic has caused extreme volatility and disruptions in financial markets, potentially making additional debt or equity financing more difficult, costly, and dilutive[27](index=27&type=chunk) Potentially Dilutive Securities (Common Stock Equivalent Shares) | Security Type | June 30, 2020 | June 30, 2019 | | :-------------------------------- | :------------ | :------------ | | Warrants to purchase common stock | 1,561,903 | 1,561,903 | | Common stock options and restricted stock units | 658,404 | 436,845 | | ESPP shares | 809 | 383 | | **Total** | **2,221,116** | **1,999,131** | [2. Short-Term Investments, Cash Equivalents and Fair Value Measurements](index=10&type=section&id=2.%20Short-Term%20Investments%2C%20Cash%20Equivalents%20and%20Fair%20Value%20Measurements) - The company had no short-term investments at June 30, 2020, and December 31, 2019[48](index=48&type=chunk) - The fair value of long-term debt approximates its carrying value, considered a **Level 2** input in the fair value hierarchy[51](index=51&type=chunk) [3. Long-Term Debt](index=11&type=section&id=3.%20Long-Term%20Debt) Long-Term Debt Balances (in thousands) | Metric | June 30, 2020 | December 31, 2019 | | :-------------------------------- | :------------ | :---------------- | | Long-term debt | $4,667 | $5,600 | | Less debt discount, net of current portion | (39) | (61) | | Long-term debt, net of debt discount | 4,628 | 5,539 | | Less current portion of long-term debt | (1,867) | (2,800) | | Long-term debt, net of current portion | $2,761 | $2,739 | | Current portion of long-term debt, net | $1,746 | $2,604 | - The 2018 Amended SVB Loan of **$7.0 million** bears interest at **9.0%** per annum[54](index=54&type=chunk)[55](index=55&type=chunk) - A deferral agreement in April 2020 extended the interest-only payment period by **6 months** and the maturity date to **June 2022**[55](index=55&type=chunk) - The loan is collateralized by substantially all company assets, excluding intellectual property, and includes customary covenants[57](index=57&type=chunk) Future Minimum Principal and Interest Payments (in thousands) | Period | Amount ($k) | | :------------- | :---------- | | Remaining 2020 | 678 | | 2021 | 3,066 | | 2022 | 1,717 | | **Total** | **5,461** | | Less interest and final payment | (794) | | **Long-term debt** | **$4,667** | [4. Commitments and Contingencies](index=12&type=section&id=4.%20Commitments%20and%20Contingencies) - Potential future milestone payments under license agreements totaled approximately **$66.0 million** as of June 30, 2020, including for TRC253[60](index=60&type=chunk) [5. Stockholders' Equity](index=12&type=section&id=5.%20Stockholders'%20Equity) - Under the 2019 Purchase Agreement with Aspire Capital, the company sold **1.5 million shares** for gross proceeds of **$3.3 million** as of June 30, 2020, with **$11.7 million** remaining available[61](index=61&type=chunk)[62](index=62&type=chunk) - Through the Sales Agreement with JonesTrading, the company sold **3.0 million shares** for gross proceeds of **$7.3 million** as of June 30, 2020, with **$4.2 million** remaining available[63](index=63&type=chunk) Stock-Based Compensation Expense (in thousands) | Period | Research and development | General and administrative | Total | | :-------------------------------- | :----------------------- | :------------------------- | :---- | | Three Months Ended June 30, 2020 | $105 | $158 | $263 | | Three Months Ended June 30, 2019 | $205 | $211 | $416 | | Six Months Ended June 30, 2020 | $212 | $318 | $530 | | Six Months Ended June 30, 2019 | $521 | $491 | $1,012 | [6. Collaborations](index=14&type=section&id=6.%20Collaborations) - The Envafolimab Collaboration Agreement grants TRACON an exclusive license to develop and commercialize envafolimab for soft tissue sarcoma in North America, with TRACON bearing clinical trial costs and 3D Medicines/Alphamab handling IND-enabling studies and manufacturing[68](index=68&type=chunk)[69](index=69&type=chunk) - Under the TJ004309 Agreement, TRACON funds IND filing and Phase 1 trials, shares Phase 2 costs equally, and bears **40%** of pivotal trial costs, while I-Mab is responsible for non-clinical activities and drug supply[77](index=77&type=chunk) - TRACON issued a notice of dispute to I-Mab regarding potential payment entitlement under the TJ004309 agreement following I-Mab's partnership with Kalbe Genexine Biologics[78](index=78&type=chunk) - The Bispecific Agreement allows for mutual selection of up to **five** bispecific antibody candidates for North America development, with TRACON funding early-stage clinical trials and sharing Phase 3 costs equally[80](index=80&type=chunk)[81](index=81&type=chunk) - TRACON issued a notice of dispute regarding possible breach of the Bispecific Agreement due to I-Mab's prior license agreements with ABL Bio, which may limit TRACON's licensing ability[87](index=87&type=chunk)[88](index=88&type=chunk) - Santen discontinued development of DE-122 and terminated its license agreement for carotuximab in **June 2020**, meaning no further revenue will be recognized from this agreement[94](index=94&type=chunk) - Janssen did not exercise its option to regain rights to TRC253 in **April 2020**, so TRACON retains worldwide development and commercialization rights, with obligations to pay Janssen up to **$45.0 million** in milestones and low single-digit royalties[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, capital resources, product candidates, collaborations, and the COVID-19 pandemic's impact [Overview](index=19&type=section&id=Overview) - TRACON is a biopharmaceutical company focused on cancer therapeutics and partnering with ex-U.S. companies for U.S. drug development[102](index=102&type=chunk)[114](index=114&type=chunk) - The company plans to initiate the ENVASARC pivotal study for envafolimab in soft tissue sarcoma in **H2 2020**, with FDA agreement on design and ORR primary endpoint for potential accelerated approval[103](index=103&type=chunk) - Positive Phase 2 clinical data for envafolimab in MSI-H/dMMR colorectal, gastric, and other advanced solid tumors were presented at ASCO 2020, showing comparable ORR to Opdivo and Keytruda with lower immune-related adverse events[104](index=104&type=chunk) - TRC102 is in Phase 1 and 2 clinical development for mesothelioma, lung cancer, and solid tumors, with all current trials sponsored and funded by the National Cancer Institute (NCI)[105](index=105&type=chunk)[106](index=106&type=chunk) - TRACON retained worldwide rights to TRC253 for metastatic castration-resistant prostate cancer after Janssen did not exercise its option, but commercialization in the U.S. is deemed untenable; seeking a partner for China[108](index=108&type=chunk)[109](index=109&type=chunk) - The company has incurred losses since inception, with an accumulated deficit of **$170.8 million** at June 30, 2020, and expects significant expenses and operating losses for several years[115](index=115&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Existing cash and cash equivalents of **$14.5 million** at June 30, 2020, are believed to be sufficient only into the **second quarter of 2021**, necessitating substantial additional capital[115](index=115&type=chunk)[118](index=118&type=chunk) [Collaboration and License Agreements](index=22&type=section&id=Collaboration%20and%20License%20Agreements) - The Envafolimab Collaboration Agreement grants TRACON an exclusive license for envafolimab in soft tissue sarcoma in North America, with TRACON responsible for clinical trial costs and 3D Medicines/Alphamab for IND-enabling studies, CMC, and supply[119](index=119&type=chunk)[120](index=120&type=chunk) - TRACON will owe tiered **double-digit royalties** on net sales of envafolimab if it commercializes, or receive escalating **double-digit royalties** or a **50% royalty** if 3D Medicines/Alphamab commercialize[122](index=122&type=chunk)[123](index=123&type=chunk) - Under the TJ004309 Agreement, TRACON funds IND filing and Phase 1 trials, shares Phase 2 costs equally, and bears **40%** of pivotal trial costs, with I-Mab responsible for non-clinical activities and drug supply[128](index=128&type=chunk) - TRACON is entitled to escalating portions of royalty and non-royalty consideration from I-Mab's third-party licenses or royalties on I-Mab's net sales, depending on development phase completed by TRACON[129](index=129&type=chunk) - TRACON has ongoing disputes with I-Mab regarding potential breaches of the TJ004309 and Bispecific Agreements due to I-Mab's other licensing activities, which may impact TRACON's payment entitlements and ability to license bispecific candidates[129](index=129&type=chunk)[135](index=135&type=chunk) - TRACON retained worldwide development and commercialization rights to TRC253 after Janssen did not exercise its option, incurring obligations to pay Janssen up to **$45.0 million** in milestones and low single-digit royalties[136](index=136&type=chunk)[137](index=137&type=chunk) - Santen terminated its license agreement for carotuximab in **June 2020** following the discontinuation of DE-122 development, with no further revenue expected from this agreement[139](index=139&type=chunk) [Financial Operations Overview](index=25&type=section&id=Financial%20Operations%20Overview) - Revenue to date has been derived from prior collaborations with Santen and Ambrx, both of which have been terminated. Future revenue is expected to fluctuate based on new collaboration agreements and product approvals[140](index=140&type=chunk)[141](index=141&type=chunk) Research and Development Expenses (in thousands) | Product Candidate | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | TRC105 | $122 | $1,942 | $198 | $4,006 | | TRC253 | $183 | $863 | $592 | $2,082 | | TRC102 | $35 | $21 | $56 | $43 | | TRC694 | — | $10 | $2 | $141 | | Envafolimab | $163 | — | $236 | — | | TJ004309 | $387 | $50 | $674 | $114 | | **Total Third-Party R&D** | **$890** | **$2,886** | **$1,758** | **$6,386** | | Unallocated expenses | $1,328 | $1,461 | $2,458 | $3,175 | | **Total R&D Expenses** | **$2,218** | **$4,347** | **$4,216** | **$9,561** | - Research and development expenses are expected to remain relatively constant for the remainder of **2020** and increase in **2021** due to the enrollment of the ENVASARC trial[145](index=145&type=chunk) - General and administrative expenses are anticipated to remain relatively constant in the near term[150](index=150&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) - Research and development expenses decreased by **$2.1 million** for the three months ended June 30, 2020, and by **$5.3 million** for the six months ended June 30, 2020, primarily due to the termination of carotuximab development and lower TRC253 manufacturing expenses[153](index=153&type=chunk)[156](index=156&type=chunk) - General and administrative expenses increased slightly by **$0.2 million** for the three months and **$0.1 million** for the six months ended June 30, 2020[154](index=154&type=chunk)[157](index=157&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) - The company had an accumulated deficit of **$170.8 million** and cash and cash equivalents of **$14.5 million** as of June 30, 2020[159](index=159&type=chunk)[160](index=160&type=chunk) - Existing cash and cash equivalents are projected to be sufficient only into the **second quarter of 2021**, raising substantial doubt about the company's ability to continue as a going concern[160](index=160&type=chunk)[173](index=173&type=chunk) - Net cash used in operating activities was **$9.1 million** for the six months ended June 30, 2020, while net cash provided by financing activities was **$7.2 million**, primarily from common stock sales[170](index=170&type=chunk)[172](index=172&type=chunk) - The company has access to additional capital through its ATM facility with JonesTrading (**$7.3 million** sold, **$4.2 million** remaining) and the 2019 Purchase Agreement with Aspire Capital (**$3.3 million** sold, **$11.7 million** remaining)[160](index=160&type=chunk)[166](index=166&type=chunk)[168](index=168&type=chunk) - The 2018 Amended SVB Loan, with a principal of **$7.0 million** and **9.0%** interest, had its maturity extended to **June 2022** via a deferral agreement in **April 2020**[161](index=161&type=chunk)[162](index=162&type=chunk) - Future capital requirements are uncertain and depend on clinical trial progress, collaboration outcomes, regulatory approvals, and intellectual property costs[174](index=174&type=chunk) [Contractual Obligations and Commitments](index=31&type=section&id=Contractual%20Obligations%20and%20Commitments) - There have been no material changes to the company's contractual obligations and commitments since the Annual Report on Form 10-K for the year ended December 31, 2019[176](index=176&type=chunk) [Off-Balance Sheet Arrangements](index=31&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company did not have any off-balance sheet arrangements during the periods presented[177](index=177&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section assesses the company's exposure to market risks, including interest rate, foreign currency, and inflation, concluding no material impact - The company's exposure to interest rate risk is relatively low due to cash and cash equivalents being in money market funds and long-term debt bearing a fixed interest rate[178](index=178&type=chunk) - Foreign currency exchange risk arises from expenses in Pounds Sterling and Euros for clinical trials and manufacturing, but fluctuations have not been significant, and a **1%** movement would not materially affect fiscal year **2020** results[179](index=179&type=chunk) - Inflation has not had a material effect on the company's results of operations or financial condition during the periods presented[180](index=180&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of **June 30, 2020**[182](index=182&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended **June 30, 2020**[183](index=183&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in material legal proceedings, but acknowledges potential future claims and their adverse impact - The company is not currently a party to any material legal proceedings[186](index=186&type=chunk) - Litigation, regardless of outcome, can have an adverse impact due to defense and settlement costs, and diversion of management resources[186](index=186&type=chunk) [Item 1A. Risk Factors](index=33&type=page&id=Item%201A.%20Risk%20Factors) This section details factors that could adversely affect business, covering financial stability, clinical development, third-party reliance, IP, commercialization, and operational risks [Risks Related to our Financial Position and Need for Additional Capital](index=33&type=section&id=Risks%20Related%20to%20our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) - The company has incurred losses since inception, with an accumulated deficit of **$170.8 million** at June 30, 2020, and expects substantial operating losses for the foreseeable future[188](index=188&type=chunk) - Substantial additional financing is required to achieve goals, as existing cash and cash equivalents (**$14.5 million** at June 30, 2020) are only sufficient into the **second quarter of 2021**, raising substantial doubt about the company's ability to continue as a going concern[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Raising additional capital may dilute existing stockholders, restrict operations, or require relinquishing rights to product candidates on unfavorable terms[196](index=196&type=chunk) - The loan agreement with Silicon Valley Bank contains restrictive covenants that limit operational flexibility and could trigger immediate repayment upon an event of default, including a material adverse change[197](index=197&type=chunk)[199](index=199&type=chunk) [Risks Related to Clinical Development and Regulatory Approval of Product Candidates](index=35&type=section&id=Risks%20Related%20to%20Clinical%20Development%20and%20Regulatory%20Approval%20of%20Product%20Candidates) - The strategy for accelerated approval of envafolimab based on overall response rate (ORR) in UPS/MFS may be delayed or prevented if the response rate is not significantly higher than existing therapies[200](index=200&type=chunk) - Developing product candidates in combination with other therapies (e.g., envafolimab with ipilimumab) exposes the company to additional risks, including patient intolerance, unexpected consequences, and issues with third-party therapy providers[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) - Clinical development is a lengthy, expensive, and uncertain process, with failures possible at any stage, and results from earlier or ex-U.S. trials may not be predictive of future outcomes[204](index=204&type=chunk) - Delays in clinical trials are common due to various factors, including funding, regulatory approvals, patient enrollment, and the impact of the COVID-19 pandemic, which could increase costs and jeopardize regulatory approval[206](index=206&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - Product candidates may cause adverse events (e.g., anemia for TRC102, QTcF prolongation for TRC253) that could delay or prevent regulatory approval, limit the approved label, or hinder market acceptance[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - The regulatory approval processes are lengthy, time-consuming, and unpredictable, and failure to obtain approval for any product candidate would substantially harm the business[213](index=213&type=chunk)[216](index=216&type=chunk)[218](index=218&type=chunk) - Disruptions at the FDA and other government agencies due to funding shortages or global health concerns (like COVID-19) could negatively impact the review and approval timelines for product candidates[219](index=219&type=chunk)[220](index=220&type=chunk) - Obtaining and maintaining regulatory approval in one jurisdiction does not guarantee success in others, and foreign approval processes can be more stringent and time-consuming[224](index=224&type=chunk)[225](index=225&type=chunk) - Even with regulatory approval, ongoing regulatory obligations and review (e.g., post-marketing surveillance, cGMPs, cGCPs) will incur significant expenses, and non-compliance could lead to penalties or market withdrawal[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk) [Risks Related to Our Reliance on Third Parties](index=40&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) - The company relies on third-party manufacturers for product candidates, facing risks of supply delays, capacity shortages, quality control issues, and non-compliance with cGMP, which could delay clinical trials or regulatory approvals[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[233](index=233&type=chunk) - Dependence on NCI and other third-party sponsors for TRC102 clinical development means loss of their support or issues with their trial conduct could limit advancement[234](index=234&type=chunk)[235](index=235&type=chunk) - Reliance on 3D Medicines and Alphamab for envafolimab development in North America carries risks of disagreements, non-performance, or negative events outside TRACON's control, potentially impacting commercialization[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) - The ability to realize value from I-Mab collaborations depends on I-Mab's activities and funding, and ongoing disputes regarding other licensing agreements could limit TRACON's rights and payment entitlements[239](index=239&type=chunk) - Failure to establish and maintain additional collaborations, particularly for TRC253 in China, could adversely affect the ability to develop and commercialize existing product candidates and leverage clinical development capabilities[240](index=240&type=chunk)[241](index=241&type=chunk) - Reliance on third-party contractors and investigators for preclinical studies and clinical trials exposes the company to risks of non-compliance with cGCPs, insufficient patient recruitment, and data integrity issues, potentially delaying regulatory approval[242](index=242&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) [Risks Related to Our Intellectual Property](index=43&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - Failure to obtain or adequately protect intellectual property rights (patents, trade secrets) could allow competitors to use technologies, harming the business and profitability[245](index=245&type=chunk)[246](index=246&type=chunk) - The patent position is inherently uncertain; patent applications may not issue, or issued patents may be challenged, narrowed, or invalidated, and competitors may design around claims[247](index=247&type=chunk)[248](index=248&type=chunk) - The transition to a 'first-to-file' patent system and other changes from the Leahy-Smith America Invents Act could increase uncertainties and costs in patent prosecution and enforcement[249](index=249&type=chunk) - The company relies on licensors (e.g., Case Western, Janssen, 3D Medicines/Alphamab, I-Mab) to prosecute and maintain material patents, and any failure by them could adversely impact the business[254](index=254&type=chunk)[255](index=255&type=chunk) - Third-party claims of intellectual property infringement or misappropriation could lead to substantial expenses, damages, or force the company to stop or delay development and commercialization efforts[256](index=256&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - Confidentiality agreements may not prevent unauthorized disclosure of trade secrets, and enforcing such claims is expensive and unpredictable, potentially impairing competitive position[275](index=275&type=chunk)[276](index=276&type=chunk) - Protecting intellectual property rights globally is expensive and challenging, as foreign laws may offer less protection, potentially allowing competitors to use inventions or export infringing products[271](index=271&type=chunk)[272](index=272&type=chunk) [Risks Related to Commercialization of Product Candidates](index=48&type=section&id=Risks%20Related%20to%20Commercialization%20of%20Product%20Candidates) - Even if approved, product candidates may not gain market acceptance among physicians, patients, hospitals, and payors due to factors like clinical indications, side effects, cost, and reimbursement[277](index=277&type=chunk) - Off-label use of competing drugs (e.g., Keytruda in UPS/MFS) could adversely impact the peak net sales of TRACON's products if approved[278](index=278&type=chunk) - The company faces intense competition from major pharmaceutical and biotechnology companies with greater resources, who may develop more advanced or effective therapies, or achieve earlier regulatory approval[279](index=279&type=chunk)[280](index=280&type=chunk) - The changing regulatory environment for 'biosimilars' could lead to earlier competition for biological products, reducing exclusivity and market share[282](index=282&type=chunk) - Successful sales depend on obtaining coverage and adequate reimbursement from third-party payors, which is a costly and time-consuming process with no assurance of sufficient rates[284](index=284&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk) - Healthcare legislative reforms, such as challenges to the ACA and increased scrutiny over pharmaceutical pricing, could adversely affect the company's business, profitability, and ability to set fair prices[289](index=289&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - Commercializing products outside the United States involves various risks, including different regulatory requirements, reimbursement regimes, intellectual property protection, economic instability, and foreign currency fluctuations[294](index=294&type=chunk)[295](index=295&type=chunk) [Risks Related to Our Business and Industry](index=52&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) - The company lacks internal new drug discovery capabilities and relies on acquiring or in-licensing product candidates or entering collaborations, and failure to do so would limit business prospects[297](index=297&type=chunk) - High dependence on senior management and key clinical operations/regulatory personnel means the loss of these individuals could impede product development and business strategy[298](index=298&type=chunk)[299](index=299&type=chunk) - The company is exposed to risks of misconduct or illegal activities by employees, contractors, and partners, which could lead to regulatory sanctions, reputational harm, and significant penalties[300](index=300&type=chunk)[301](index=301&type=chunk) - Managing growth and expanding operations (development, regulatory, manufacturing, marketing, sales) will impose significant responsibilities and challenges, and failure to do so effectively could hinder commercialization[302](index=302&type=chunk) - The company is subject to extensive federal, state, and foreign healthcare regulations (e.g., anti-kickback, false claims, data privacy laws like HIPAA and GDPR), and non-compliance could result in significant penalties and operational disruption[303](index=303&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk) - The use of product candidates in clinical trials and commercial sales exposes the company to product liability claims, which could result in substantial liability, costs, reputational harm, and commercialization delays, with current insurance potentially insufficient[308](index=308&type=chunk)[309](index=309&type=chunk) - The ability to use net operating loss (NOL) carryforwards and other tax attributes may be limited by 'ownership changes' under Sections 382 and 383 of the Code, potentially impacting future profitability[311](index=311&type=chunk) - Internal computer systems or those of third parties are vulnerable to failures or security breaches, risking service interruption, data loss (clinical trial data, IP, personal information), reputational harm, and increased costs[312](index=312&type=chunk) - The COVID-19 pandemic continues to adversely impact the business, including clinical trials (delays in enrollment, site initiation, monitoring), supply chain disruptions, business development activities, and access to capital[313](index=313&type=chunk)[314](index=314&type=chunk)[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) [Risks Related to Our Common Stock](index=58&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) - The market price of the common stock may be highly volatile due to various factors, including clinical trial results, funding, regulatory decisions, competition, and general market conditions, potentially leading to loss of investment[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) - Failure to meet Nasdaq listing requirements could result in delisting, adversely affecting market liquidity and stock price, and making it harder to obtain financing[324](index=324&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk) - As an 'emerging growth company,' reduced reporting requirements may make the common stock less attractive to investors, potentially leading to a less active trading market and more volatile stock price[327](index=327&type=chunk)[328](index=328&type=chunk) - Future sales and issuances of common stock or rights to purchase common stock, including under equity incentive plans, could result in additional dilution of existing stockholders' ownership and cause the stock price to fall[332](index=332&type=chunk) - The company does not intend to pay dividends on its common stock, so any returns will be limited to the appreciation of the stock's value[334](index=334&type=chunk) - Provisions in the company's charter documents and Delaware law may have anti-takeover effects, making it more difficult or costly for a third party to acquire the company, even if beneficial to stockholders[335](index=335&type=chunk)[336](index=336&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports the issuance of common stock to a consultant in March 2020, exempt from Securities Act registration - On **March 24, 2020**, the company issued **100,000 shares** of common stock to a consultant, valued at **$126,000** (**$1.26 per share**)[339](index=339&type=chunk) - These securities were issued in reliance on exemptions from registration provided by Section **4(2)** of the Securities Act and/or Rule **506** of Regulation D[339](index=339&type=chunk) [Item 3. Defaults Upon Senior Securities](index=61&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reported period - There were no defaults upon senior securities[340](index=340&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company - Mine Safety Disclosures are not applicable to the company[341](index=341&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) No other information is reported for the period - No other information is reported for this item[342](index=342&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, agreements, and certifications - The exhibits include corporate documents (e.g., Amended and Restated Certificate of Incorporation, Bylaws), various agreements (e.g., Investors' Rights Agreement, Loan and Security Agreement, Common Stock Purchase Agreement), and certifications (**31.1**, **32.1**)[344](index=344&type=chunk) [Signatures](index=63&type=section&id=Signatures) This section contains the official signature of the company's authorized officer, certifying the report's submission - The report was signed by Charles P. Theuer, M.D., Ph.D., President and Chief Executive Officer, on **August 5, 2020**[348](index=348&type=chunk)

TRACON Pharmaceuticals (OTCQB:TCON) Q1 2020 Earnings Conference Call May 13, 2020 4:30 PM ET Company Participants Charles Theuer – President and Chief Executive Officer Scott Brown – Chief Accounting Officer and Head of Finance Conference Call Participants Maury Raycroft – Jefferies Ed White – H.C. Wainwright Jim Molloy – Alliance Global Partners Nicholas Abbott – Wells Fargo Bert Hazlett – BTIG Operator Good day, ladies and gentlemen, and welcome to the TRACON Pharmaceuticals First Quarter 2020 Earnings Co ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36818 TRACON Pharmaceuticals, Inc. (Exact name of registrant as specified in its charter) Delaware 34-2037594 (State or other jurisdiction of incorporation or organization) ...