What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 120 added, 50 removed, 356 unchanged (32% of the section changed)

29 unchanged sentences

Common stock, $ 0.0001 par value, 150,000 shares authorized;

37,552 and 36,781 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

39,552 and 36,781 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital 383,611 361,819

8 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Royalties $ 68 $ 43 $ 140 $ 110

6 unchanged sentences

Interest income, net 71 16 115 51

Gain from change in fair value of derivative financial instruments—warrants 207 2

Gain (loss) from change in fair value of derivative financial instruments—warrants 61 ( 44 ) 268 ( 42 )

Other income (expense), net — 6 12 4

1 unchanged sentence

Preferred stock dividend payable on Series A Convertible Preferred Stock ( 6 ) ( 6 ) ( 12 ) ( 12 )

Deemed dividend recognized on beneficial conversion features of Series D Convertible Preferred Stock issuance — ( 602 ) — ( 602 )

Deemed dividend recognized on beneficial conversion features of Series E Convertible Preferred Stock issuance — ( 2,665 ) — ( 2,665 )

Net loss attributable to common stockholders $ ( 6,763 ) $ ( 7,397 ) $ ( 11,948 ) $ ( 11,492 )

5 unchanged sentences

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net loss $ ( 6,757 ) $ ( 4,124 ) $ ( 11,936 ) $ ( 8,213 )

Other comprehensive loss:

Unrealized loss on securities available-for-sale ( 67 ) —

Unrealized gain (loss) on securities available-for-sale 57 — ( 10 ) —

Total comprehensive loss ( 6,700 ) ( 4,124 ) ( 11,946 ) ( 8,213 )

Preferred stock dividend payable on Series A Convertible Preferred Stock ( 6 ) ( 6 ) ( 12 ) ( 12 )

Deemed dividend recognized on beneficial conversion features of Series D Convertible Preferred Stock issuance — ( 602 ) — ( 602 )

Deemed dividend recognized on beneficial conversion features of Series E Convertible Preferred Stock issuance — ( 2,665 ) — ( 2,665 )

Comprehensive loss attributable to common stockholders $ ( 6,706 ) $ ( 7,397 ) $ ( 11,958 ) $ ( 11,492 )

18 unchanged sentences

Balance, March 31, 2021 716 $ 1 37,552 $ 4 $ 363,350 $ ( 1,791 ) $ ( 67 ) $ ( 236,680 ) $ 124,817

Stock-based compensation — — — — 1,036 — — — 1,036

Sale of common stock, net of expenses (1)

— — 2,000 — 19,225 — — — 19,225

Other comprehensive gain — — — — — — 57 — 57

Preferred stock dividend — — — — — — — ( 6 ) ( 6 )

Release of clinical trial funding commitment — — — — — 546 — — 546

Net loss — — — — — — — ( 6,757 ) ( 6,757 )

Balance, June 30, 2021 716 $ 1 39,552 $ 4 $ 383,611 $ ( 1,245 ) $ ( 10 ) $ ( 243,443 ) $ 138,918

(1) Net of expenses of $ 0.8 million.

See accompanying notes to the unaudited condensed financial statements.

15 unchanged sentences

Balance, March 31, 2020 61 $ — 11,011 $ 8 $ 219,805 $ ( 679 ) $ — $ ( 212,993 ) $ 6,141

Stock-based compensation — — — — 282 — — — 282

Issuance of common stock, preferred stock and warrants for clinical trial funding commitment 155 — 603 — 2,292 ( 2,300 ) — — ( 8 )

Deemed dividend recognized on beneficial conversion features of Series D Convertible Preferred Stock issuance — — — — 602 — — ( 602 ) —

Deemed dividend recognized on beneficial conversion features of Series E Convertible Preferred Stock issuance — — — — 2,665 — — ( 2,665 ) —

Sale of common stock, preferred stock and warrants (2)

866 1 4,689 1 17,277 — — — 17,279

Issuance of common stock upon exercise of warrants — — 3,473 — 4,605 — — — 4,605

Issuance of common stock upon vesting of restricted stock units — — 2 — — — — — —

Issuance of common stock upon conversion of Series D Convertible Preferred Stock ( 155 ) — 1,547 — — — — — —

Preferred stock dividend payable on Series A Convertible Preferred Stock — — — — — — — ( 6 ) ( 6 )

Release of clinical trial funding commitment — — — — — 213 — — 213

Net loss — — — — — — — ( 4,124 ) ( 4,124 )

Balance, June 30, 2020 927 $ 1 21,325 $ 9 $ 247,528 $ ( 2,766 ) $ — $ ( 220,390 ) $ 24,382

(2) Net of expenses of $ 0.6 million, and fair value of warrants issued as a transaction advisory fee as of the date of issuance of $ 0.4 million.

See accompanying notes to the unaudited condensed financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities

2 unchanged sentences

Loss on disposal of assets 1 —

Impairment loss — 34

Depreciation 228 234

13 unchanged sentences

Investing activities:

Maturities of short-term investments 5,510 —

Purchases of short-term investments ( 141,948 ) —

3 unchanged sentences

Proceeds from sales of common stock, preferred stock and warrants, net of expenses of $ 776 and $ 93 , respectively

19,225 18,802

Costs related to the clinical trial funding commitment — ( 8 )

Proceeds from exercise of warrants 1,263 6,126

Borrowings under note payable — 305

Net cash provided by financing activities 20,488 25,225

5 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Acquisition of property and equipment included in accounts payable and accrued expenses $ 27 $ 11

Six Months Ended June 30,

Expenses from sales of common stock, preferred stock and warrants included in accounts payable and accrued liabilities $ — $ 523

Expenses from exercise of warrants included in accounts payable and accrued liabilities $ — $ 64

Preferred stock dividend payable on Series A Convertible Preferred Stock $ 12 $ 12

Deemed dividend recognized for beneficial conversion features of Series D Convertible Preferred Stock issuance $ — $ 602

Deemed dividend recognized for beneficial conversion features of Series E Convertible Preferred Stock issuance $ — $ 2,665

Common stock, Series D Convertible Preferred Stock and warrants issued in connection with clinical trial funding commitment, net of discount of $0 and $ 488 , respectively

See accompanying notes to the unaudited condensed financial statements.

4 unchanged sentences

Cardiff Oncology, Inc.

(“Cardiff Oncology” or the “Company”) headquartered in San Diego, California, is a clinical-stage biotechnology company with the singular mission of developing new treatment options for cancer patients in indications with the greatest medical need, including KRAS-mutated metastatic colorectal cancer, metastatic pancreatic cancer and Zytiga®-resistant metastatic castration-resistant prostate cancer.

Our goal is to overcome resistance, improve response to treatment and increase overall survival.

Through the integration of tumor genomics and biomarker technology, we are performing correlative studies in our clinical programs to enable assessment of patient response to treatment.

(“Cardiff Oncology” or the “Company”) headquartered in San Diego, California, is a clinical-stage oncology company with the mission of developing new precision medicine treatment options for cancer patients in indications with the greatest unmet medical need, including KRAS-mutated metastatic colorectal cancer, metastatic pancreatic cancer and Zytiga®-resistant metastatic castration-resistant prostate cancer.

The Company's common stock is listed on the Nasdaq Capital Market under the ticker symbol "CRDF".

Basis of Presentation

6 unchanged sentences

The Company has incurred net losses since its inception and has negative operating cash flows.

As of March 31, 2021, the Company had $ 125.6 million in cash, cash equivalents and short-term investments and believes it has sufficient cash to meet its funding requirements for at least the next 12 months following the issuance date of these financial statements.

As of June 30, 2021, the Company had $ 140.1 million in cash, cash equivalents and short-term investments and believes it has sufficient cash to meet its funding requirements for at least the next 12 months following the issuance date of these financial statements.

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

4 unchanged sentences

Summary of Significant Accounting Policies

During the three months ended March 31, 2021, there have been no changes to the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, other than the addition of investment securities as described below.

During the six months ended June 30, 2021, there have been no changes to the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, other than the addition of investment securities as described below.

Investment Securities

11 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per share:

Ended March 31,

Ended June 30, Six Months

Ended June 30,

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

20 unchanged sentences

The Company is currently evaluating the impact of this standard on its financial statements and related disclosures.

In May 2021, the FASB issued ASU No.

2021-04 ("ASU 2021-04), Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force).

The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

The Company is currently evaluating the impact of this standard on its financial statements and related disclosures.

Fair Value Measurements

The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of March 31, 2021 and December 31, 2020:

Fair Value Measurements at

March 31, 2021

June 30, 2021

(in thousands) Quoted Prices in Active Markets for Identical Assets and Liabilities

3 unchanged sentences

Money market fund $ 9,596 $ — $ — $ 9,596

Corporate debt securities (1) — 5,345 — 5,345

Total included in cash and cash equivalents (1) $ 9,596 $ — $ — $ 9,596

22 unchanged sentences

(1) Included as a component of cash and cash equivalents on the accompanying condensed balance sheets.

(2) Included in short-term investments in the accompanying consolidated balance sheets depending on the respective maturity date.

Cash equivalents are considered by the Company to be highly liquid investments purchased with original maturities of three months or less from the date of purchase.

(2) Included in short-term investments in the accompanying condensed balance sheets.

(3) A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

3 unchanged sentences

Investments available for sale consist of the following:

As of March 31,

As of June 30,

(in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value

6 unchanged sentences

Property and equipment consist of the following:

(in thousands) As of March 31,

(in thousands) As of June 30,

2021 As of December 31,

10 unchanged sentences

The lease currently requires fixed monthly rent payments of approximately $ 80,000 , with 3 % annual escalation.

The Company is currently in negotiations to lease lab and office space after our current lease expires.

During July 2021, the Company entered into an amended lease agreement to continue leasing 12,300 square feet of the 26,100 square feet from the lease that expires at year end.

See Note 11 to the condensed financial statements for further information regarding the amended lease agreement.

Facility Subleases

1 unchanged sentence

The components of lease expense were as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2021 2020 2021 2020

3 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

(in thousands) As of March 31,

(in thousands) As of June 30,

2021 As of December 31,

6 unchanged sentences

Supplemental cash flow and other information related to leases was as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2021 2020 2021 2020

4 unchanged sentences

Year Ending December 31, Operating Leases Sublease Income Net Operating Leases

2021 (excluding the three months ended March 31, 2021) $ 650 $ ( 303 ) $ 347

2021 (excluding the six months ended June 30, 2021) $ 406 $ ( 202 ) $ 204

Total future minimum lease payments 415 $ ( 202 ) $ 213

5 unchanged sentences

The assumptions used to determine the fair value of the warrants using the Black-Scholes option pricing model were:

As of March 31,

As of June 30,

2021 As of December 31,

13 unchanged sentences

Change in fair value of derivative financial instruments — warrants during the period recognized as a gain in the condensed statements of operations

March 31, 2021 Balance of derivative financial instruments — warrants liability

June 30, 2021 Balance of derivative financial instruments — warrants liability

Stockholders’ Equity

1 unchanged sentence

Stock-based compensation expense related to Cardiff Oncology equity awards have been recognized in operating results as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2021 2020 2021 2020

2 unchanged sentences

Total stock-based compensation expense $ 1,036 $ 282 $ 1,304 $ 459

The unrecognized compensation cost related to non-vested stock options outstanding at March 31, 2021, net of estimated forfeitures, was $ 1.2 million, which is expected to be recognized over a weighted-average remaining vesting period of 1.8 .

The weighted-average remaining contractual term of outstanding options as of March 31, 2021 was approximately 8.6 years.

The total fair value of stock options vested during the three months ended March 31, 2021 and 2020 were $ 24,333 and $ 34,929 , respectively.

The unrecognized compensation cost related to non-vested stock options outstanding at June 30, 2021, net of estimated forfeitures, was $ 7.9 million, which is expected to be recognized over a weighted-average remaining vesting period of 3.3 years.

The weighted-average remaining contractual term of outstanding options as of June 30, 2021 was approximately 8.9 years.

The total fair value of stock options vested during the six months ended June 30, 2021 and 2020 were $ 1.2 million and $ 0.8 million, respectively.

The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions during the following periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

Risk-free interest rate 0.94 % 0.44 %

1 unchanged sentence

Expected volatility of Cardiff Oncology common stock 108 % 105 %

Expected term (1)

(1) No stock options were granted during the period.

Expected term 6.0 years 5.9 years

A summary of stock option activity and changes in stock options outstanding is presented below:

3 unchanged sentences

Balance outstanding, December 31, 2020 1,860,507 $ 7.43 $ 27,963,363

Granted 1,117,106 $ 7.98

Canceled / Forfeited ( 10,770 ) $ 2.55

Balance outstanding, March 31, 2021 1,849,737 $ 7.46 $ 12,125,293

Exercisable at March 31, 2021 756,300 $ 14.61 $ 4,739,794

Vested and expected to vest at March 31, 2021 1,768,104 $ 7.68 $ 11,572,933

The number of authorized shares in the Cardiff Oncology 2014 Equity Incentive Plan (“2014 EIP”) is 2,243,056 .

As of March 31, 2021, there were 271,216 shares available for issuance under the 2014 EIP.

Balance outstanding, June 30, 2021 2,966,843 $ 7.65 $ 7,439,918

Exercisable at June 30, 2021 1,282,401 $ 9.65 $ 5,076,084

Vested and expected to vest at June 30, 2021 2,886,407 $ 7.72 $ 7,262,361

2021 Equity Incentive Plan

In June 2021 the Company's stockholders approved the 2021 Omnibus Equity Incentive Plan ("2021 Plan").

The number of authorized shares in the 2021 plan is equal to the sum of (i) 3,150,000 shares, plus (ii) the number of shares of Common Stock reserved, but unissued under the 2014 Plan;

and (iii) the number of shares of Common Stock underlying forfeited awards under the 2014 Plan.

As of June 30, 2021, there were 2,304,110 shares available for issuance under the 2021 Plan.

2014 Equity Incentive Plan

Subsequent to the adoption of the 2021 Plan, no additional equity awards can be made under the terms of the 2014 Plan.

Modification of Stock Options

In June 2021 two of the Company's directors left the Board of Directors.

At the time of departure, the Compensation Committee passed a resolution to extend the expiration date of both of the departing directors vested stock options, and to immediately accelerate the vesting of one of the directors unvested options.

The Company recorded incremental stock compensation expense of $ 0.6 million during the three months ended June 30, 2021 related to the modifications.

Restricted Stock Units

5 unchanged sentences

Vested ( 491 ) $ 147.60

Non-vested RSUs outstanding, March 31, 2021 — $ — $ —

The total fair value of vested RSUs during the three months ended March 31, 2021 and 2020 were $ 72,472 and $ 95,170 , respectively.

Non-vested RSUs outstanding, June 30, 2021 — $ — $ —

The total fair value of vested RSUs during the six months ended June 30, 2021 and 2020 were $ 72 thousand and $ 99 thousand, respectively.

A summary of warrant activity and changes in warrants outstanding, including both liability and equity classifications is presented below:

5 unchanged sentences

Exercised ( 770,833 ) $ 1.64

Balance outstanding, March 31, 2021 4,490,159 $ 5.80 3.7 years

Balance outstanding, June 30, 2021 4,490,159 $ 5.80 3.5 years

Preferred Stock

1 unchanged sentence

Shares outstanding

Class Par value Shares designated Liquidation preference As of March 31,

Class Par value Shares designated Liquidation preference As of June 30,

2021 As of December 31,

4 unchanged sentences

Series E Convertible Preferred Stock $ 0.001 865,824 None 655,044 655,044

Sale of Common Stock

During May 2021, the Company sold 2.0 million shares of its common stock under the Sales Agreement with Jefferies LLC.

Commitments and Contingencies

7 unchanged sentences

Terms of the agreement also provide for the Company to pay development milestones and royalties based on sales volume.

The Company is a party to various agreements under which it licenses technology on an exclusive basis in the field of human diagnostics and oncology therapeutics.

License fees are generally calculated as a percentage of product revenues, with rates that vary by agreement.

For the three months ended March 31, 2021 and 2020, payments have not been material.

The Company is a party of various agreements under which it licenses technology on an exclusive basis in the field of oncology therapeutics.

These agreements include License fees, Royalties and Milestone payments.

The company also has a legacy license agreement in the field of oncology diagnostics under which royalty payments are due.

These royalty payments are calculated as a percent of revenue.

For the three and six months ended June 30, 2021 and 2020, payments have not been material.

Cardiff Oncology does not believe that it has legal liabilities that are probable or reasonably possible that require either accrual or disclosure.

3 unchanged sentences

Related Party Transactions

Gary Pace Securities Purchase Agreement

In May 2020, the Company entered into a Securities Purchase Agreement with Gary W.

Pace, one of the Company's directors.

Pace purchased 447,761 shares of the Company's common stock at $ 1.34 per share for an aggregate purchase price of $ 600,000 .

Leucadia Life Sciences

In November 2018, the Company entered into a Material Transfer Agreement (“MTA”) with Leucadia Life Sciences (“Leucadia”) pursuant to which Leucadia developed a PCR-based assay for onvansertib for Acute Myeloid Leukemia (“AML”).

This assay was completed in December 2020.

For the duration of the agreement, one of the Company's directors, Dr.

Thomas Adams, was a principal stockholder of Leucadia.

During the duration of the agreement, one of the Company's directors Dr.

Thomas Adams (who is no longer a director as of June 2021), was a principal stockholder of Leucadia.

In connection with the MTA, the Company entered into a consulting agreement with Tommy Adams, Co-Founder & Chief Operating Officer of Leucadia, who is the son of Dr.

During the three months ended March 31, 2021 and 2020 the Company incurred and recorded research and development expenses of approximately $ 0 and $ 0.3 million, respectively, for services performed by Leucadia and Tommy Adams.

During the three months ended June 30, 2021 and 2020 the Company incurred and recorded research and development expenses of approximately $ 0 and $ 0.3 million, respectively, for services performed by Leucadia and Tommy Adams.

During the six months ended June 30, 2021 and 2020 the Company incurred and recorded research and development expenses of approximately $ 0 and $ 0.5 million, respectively, for services performed by Leucadia and Tommy Adams.

The COVID-19 outbreak in the United States has caused significant business disruption.

1 unchanged sentence

At this point, the extent to which COVID-19 may impact the Company's future financial condition or results of operations is uncertain.

While there has not been a material impact on the Company's condensed financial statements for the three months ended March 31, 2021, a prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to complete certain clinical trials and other efforts required to advance the development of its drugs and raise additional capital.

While there has not been a material impact on the Company's condensed financial statements for the six months ended June 30, 2021, a prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to complete certain clinical trials and other efforts required to advance the development of its drugs and raise additional capital.

In response to the pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020.

1 unchanged sentence

The Company is utilizing the deferment of employer social security payments.

The CARES Act did not have a material impact on our income tax provision for the three months ended March 31, 2021.

The CARES Act did not have a material impact on our income tax provision for the six months ended June 30, 2021.

We continue to monitor changes and revisions of the CARES Act and its impact on our financial position, results of operations and cash flows.

Subsequent Events

On May 5, 2021 the Company agreed to sell 2.0 million shares of its Common Stock for gross proceeds of $ 20.0 million under the Sales Agreement with Jefferies LLC.

Amendment to facility lease agreement

During July 2021, the Company entered into an amended lease agreement ("amended lease") with BMR-COAST 9 LP.

The amended agreement commences on January 1, 2022 and expires on February 28, 2027.

The Company will lease approximately 12,300 square feet of office and lab space.

The minimum monthly rent under the amended lease is $ 55 thousand with an annual rent escalation of 3 % per year.

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

What changed 10-Q

Item 1. Financial Statements