What changed in this filing

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Item 1. Financial Statements

2022-05-05 compared with 2021-11-04 · 99 added, 209 removed, 284 unchanged (52% of the section changed)

3 unchanged sentences

(in thousands, except par value)

September 30,

2022 December 31,

12 unchanged sentences

Accounts payable $ 1,261 $ 1,439

Accrued expenses 4,010 3,851

Accrued liabilities 4,738 4,527

Operating lease liabilities 665 551

1 unchanged sentence

Total current liabilities 6,664 6,559

Derivative financial instruments—warrants 5 285

Operating lease liabilities, net of current portion 2,438 2,568

Other liabilities 30 156

Total Liabilities 9,102 9,127

3 unchanged sentences

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

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

43,306 and 41,964 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital 401,655 400,503

Service receivables — ( 139 )

Accumulated other comprehensive income 16 —

Accumulated other comprehensive loss ( 748 ) ( 142 )

Accumulated deficit ( 270,809 ) ( 259,810 )

5 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Royalties $ 86 $ 136 $ 226 $ 247

Total revenues 86 136 226 247

Three Months Ended March 31,

Royalty revenues $ 74 $ 72

Costs and expenses:

3 unchanged sentences

Loss from operations ( 11,074 ) ( 5,442 )

Other income (expense), net:

Interest income, net 130 57

1 unchanged sentence

Other income (expense), net ( 49 ) ( 1 )

Total other income (expense), net 81 263

Net loss ( 10,993 ) ( 5,179 )

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

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

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

Net loss attributable to common stockholders $ ( 10,999 ) $ ( 5,185 )

5 unchanged sentences

(in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Net loss $ ( 10,993 ) $ ( 5,179 )

Other comprehensive income:

Unrealized gain on securities available-for-sale 26 — 16 —

Other comprehensive loss:

Unrealized loss on securities available-for-sale ( 606 ) ( 67 )

Total comprehensive loss ( 11,599 ) ( 5,246 )

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

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

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

Comprehensive loss attributable to common stockholders $ ( 11,605 ) $ ( 5,252 )

12 unchanged sentences

Stock-based compensation — — — — 1,152 — — — 1,152

Issuance of common stock upon exercise of warrants — — 771 — 1,263 — — — 1,263

Other comprehensive loss — — — — — — ( 606 ) — ( 606 )

Issuance of common stock upon conversion of Series E Convertible Preferred Stock ( 328 ) ( 1 ) 1,342 — — — — — ( 1 )

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

2 unchanged sentences

Balance, March 31, 2022 388 $ — 43,306 $ 4 $ 401,655 $ — $ ( 748 ) $ ( 270,809 ) $ 130,102

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

Stock-based compensation — — — — 940 — — — 940

Other comprehensive gain — — — — — — 26 — 26

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

Release of clinical trial funding commitment — — — — — 579 — — 579

Net loss — — — — — — — ( 6,913 ) ( 6,913 )

Balance, September 30, 2021 716 $ 1 39,552 $ 4 $ 384,551 $ ( 666 ) $ 16 $ ( 250,362 ) $ 133,544

(1) Net of expenses of $ 0.8 million.

See accompanying notes to the unaudited condensed financial statements.

Preferred Stock

7 unchanged sentences

Stock-based compensation — — — — 268 — — — 268

Sale of common stock and warrants — — 800 — 1,000 — — — 1,000

Issuance of common stock upon exercise of warrants — — 771 — 1,263 — — — 1,263

Issuance of common stock upon vesting of restricted stock units — — 7 — — — — — —

Other comprehensive loss — — — — — — ( 67 ) — ( 67 )

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

2 unchanged sentences

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

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

Stock-based compensation — — — — 362 — — — 362

Issuance of common stock upon exercise of warrants — — 4,957 1 12,910 — — — 12,911

Issuance of common stock upon exercise of stock options — — 3 — 7 — — — 7

Issuance of common stock upon vesting of restricted stock units — — 1 — — — — — —

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

Preferred Stock

Shares Preferred Stock

Amount Common Stock

Shares Common Stock

Amount Additional

Paid-In Capital Service Receivable Accumulated Other Comprehensive Income/(Loss) Accumulated Deficit Total

Stockholders’ Equity

Release of clinical trial funding commitment — — — — — 362 — — 362

Net loss — — — — — — — ( 4,497 ) ( 4,497 )

Balance, September 30, 2020 927 $ 1 26,286 $ 10 $ 260,807 $ ( 2,404 ) $ — $ ( 224,893 ) $ 33,521

(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)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities

2 unchanged sentences

Loss on disposal of assets — 1

Impairment loss — 34

Depreciation 31 119

17 unchanged sentences

Sales of short-term investments 17,085 2,497

Net cash used in investing activities ( 122,654 ) ( 154 )

Net cash provided by (used in) investing activities 18,358 ( 111,698 )

Financing activities:

Proceeds from sales of common stock, preferred stock and warrants, net of expenses of $ 776 and $ 634 , respectively

19,225 18,279

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

Proceeds from exercise of options — 7

Proceeds from exercise of warrants — 1,263

Borrowings under note payable — 305

Net cash provided by financing activities — 1,263

5 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Nine Months Ended September 30,

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

Preferred stock dividend payable on Series A Convertible Preferred Stock $ 6 $ 6

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.

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Cardiff Oncology, Inc.

(“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 metastatic castration-resistant prostate cancer.

(“Cardiff Oncology” or the “Company”) headquartered in San Diego, California, is a clinical-stage biotechnology company leveraging Polo-like Kinase 1 (“PLK1”) inhibition to develop novel therapies across a range of cancers with the greatest unmet medical need, including KRAS-mutated metastatic colorectal cancer, metastatic pancreatic cancer and metastatic castration-resistant prostate cancer.

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

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

As of September 30, 2021, the Company had $ 134.0 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 March 31, 2022, the Company had $ 129.4 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.

1 unchanged sentence

To the extent that the Company can raise additional funds by issuing equity securities, the Company’s stockholders may experience additional dilution.

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

See Note 10 to the condensed financial statements for further information.

Summary of Significant Accounting Policies

During the nine months ended September 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

All investments have been classified as “available-for-sale” and are carried at fair value as determined based upon quoted market prices or pricing models for similar securities at period end.

Investments with contractual maturities less than 12 months at the balance sheet date are considered short-term investments.

Investments with contractual maturities beyond one year are also classified as short-term due to the Company’s ability to liquidate the investment for use in operations within the next 12 months.

Realized gains and losses on investment securities are included in earnings and are derived using the specific identification method for determining the cost of securities sold.

The Company has not realized any significant gains or losses on sales of available-for-sale investment securities during any of the periods presented.

As all the Company’s investment holdings are in the form of debt securities or certificates of deposit, unrealized gains and losses that are determined to be temporary in nature are reported as a component of accumulated other comprehensive income.

A decline in the fair value of any security below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security.

Interest income is recognized when earned and is included in investment income, as are the amortization of purchase premiums and accretion of purchase discounts on investment securities.

During the three months ended March 31, 2022, 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, 2021.

Net Loss Per Share

2 unchanged sentences

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their effect was anti-dilutive:

September 30,

Options to purchase Common Stock 5,467,611 1,849,737

Warrants to purchase Common Stock 4,490,159 4,490,159

Restricted Stock Units — 991

Series A Convertible Preferred Stock 877 877

1 unchanged sentence

11,300,897 9,025,380

Recently Adopted Accounting Pronouncement

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 has prospectively adopted this standard as of January 1, 2022 for periods presented after the adoption.

The adoption of ASU 2021-04 did not have a material impact on the Company's financial statements.

Recent Accounting Pronouncement Not Yet Adopted

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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 September 30, 2021 and December 31, 2020:

Fair Value Measurements at

September 30, 2021

March 31, 2022

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

3 unchanged sentences

Money market fund $ 15,824 $ — $ — $ 15,824

Corporate debt securities — 3,205 — 3,205

Total included in cash and cash equivalents 15,824 3,205 — 19,029

3 unchanged sentences

Commercial paper — 10,468 — 10,468

government — 732 — 732

treasury securities 19,939 — — 19,939

1 unchanged sentence

Total assets measured at fair value on a recurring basis $ 35,763 $ 92,576 $ — $ 128,339

Derivative financial instruments — warrants (3)

$ — $ — $ 5 $ 5

Total liabilities measured at fair value on a recurring basis $ — $ — $ 5 $ 5

Fair Value Measurements at

5 unchanged sentences

Money market fund $ 10,990 $ — $ — $ 10,990

Total included in cash and cash equivalents 10,990 $ — $ — 10,990

Available for sale investments:

Certificate of deposit — 1,260 — 1,260

Corporate debt securities — 88,390 — 88,390

Commercial paper — 14,454 — 14,454

government — 728 — 728

treasury securities 24,046 — — 24,046

Total available for sale investments (1) 24,046 104,832 $ — 128,878

Total assets measured at fair value on a recurring basis $ 35,036 $ 104,832 $ — $ 139,868

Derivative financial instruments — warrants (3)

$ — $ — $ 285 $ 285

Total liabilities measured at fair value on a recurring basis $ — $ — $ 285 $ 285

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

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.

At each reporting period, all assets and liabilities for which the fair value

measurement is based on significant unobservable inputs or instruments that trade infrequently and therefore have little or no price transparency are classified as Level 3.

See Note 6 to the condensed financial statements for further information.

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

The Company’s policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer.

There were no transfers into or out of Level 3 during the three months ended March 31, 2022 and 2021.

Supplementary Balance Sheet Information

Investments available for sale consist of the following:

As of September 30,

As of March 31,

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

Maturity less than 1 year:

Certificate of deposit $ 9,250 $ 4 $ ( 15 ) $ 9,239

1 unchanged sentence

Commercial paper 10,539 — ( 71 ) 10,468

treasury securities 20,061 — ( 122 ) 19,939

Total maturity less than 1 year 94,906 5 ( 501 ) 94,410

Maturity 1 to 2 years:

Corporate debt securities 15,152 — ( 252 ) 14,900

Total maturity 1 to 2 years 15,152 — ( 252 ) 14,900

Total short-term investments $ 110,058 $ 5 $ ( 753 ) $ 109,310

As of December 31, 2021

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

Maturity less than 1 year:

Certificate of deposit $ 1,260 $ — $ — $ 1,260

Corporate debt securities 58,822 2 ( 38 ) 58,786

Commercial paper 14,453 4 ( 3 ) 14,454

government 728 — — 728

treasury securities 20,380 — ( 24 ) 20,356

Total maturity less than 1 year 95,643 6 ( 65 ) 95,584

Maturity 1 to 2 years:

Corporate debt securities 29,676 1 ( 73 ) 29,604

treasury securities 3,701 — ( 11 ) 3,690

Total maturity 1 to 2 years 33,377 1 ( 84 ) 33,294

Total short-term investments $ 129,020 $ 7 $ ( 149 ) $ 128,878

Property and equipment consist of the following:

(in thousands) As of September 30,

(in thousands) As of March 31,

2022 As of December 31,

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Property and equipment, net $ 550 $ 382

Accrued Liabilities

Accrued liabilities consisted of the following:

(in thousands) As of March 31,

2022 As of December 31,

Accrued compensation $ 878 $ 1,435

Preferred stock dividend 420 414

Clinical trials 2,110 1,639

Research agreements and services 992 726

Director fees 141 141

Professional fees and outside services 53 63

Patent, license and other fees 75 43

Other accrued liabilities 69 66

Total accrued liabilities $ 4,738 $ 4,527

As a lessee, the Company’s current leases include its master facility lease and immaterial equipment leases, all of which are considered operating leases.

The Company (as a sublessor) also subleases portions of its facility to third parties under three separate subleases.

All of these subleases have been determined to be operating leases and are accounted for separately from the head lease.

Master Facility Lease

The Company currently occupies 9,500 square feet of office and lab space in San Diego.

During July 2021, the Company entered into an amended lease agreement to increase its occupied space to 12,300 square feet which commences on January 1, 2022 and expires on February 28, 2027.

Under the current master facility lease, which expires on December 31, 2021, the Company leases 26,100 square feet of office and lab space.

This includes 16,600 square feet of space that is subleased to third parties, all of which expires on December 31, 2021.

The minimum monthly rent under the amended lease is $ 55,000 with an annual rent escalation of 3 % per year beginning on January 1, 2022.

Through December 31, 2021 rent payments are approximately $ 80,000 per month.

The Company currently leases 12,300 square feet of office and lab space in San Diego that expires on February 28, 2027.

The lease currently requires monthly payments of approximately $ 60,000 per month with 3 % annual escalation.

Facility Subleases

As a result of corporate restructurings in previous years, the Company vacated a portion of its facility and has subleased the space to third parties under three separate sublease agreements, which all expire on December 31, 2021.

The Company as a sublessor is leasing approximately 16,600 square feet of space to third parties as of September 30, 2021.

As a result of corporate restructurings in previous years, the Company vacated a portion of its facility and subleased the space to third parties under three separate sublease agreements, which all expired on December 31, 2021.

Prior to the expiration of the sublease agreements, the Company as a sublessor was leasing approximately 16,600 square feet of space to third parties.

The components of lease expense were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2022 2021

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Supplemental balance sheet information related to leases was as follows:

(in thousands) As of September 30,

(in thousands) As of March 31,

2022 As of December 31,

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Total operating lease liabilities $ 3,103 $ 3,119

Weighted-average remaining lease term–operating leases 5.3 years 1.0 year

Weighted-average remaining lease term–operating leases 4.9 years 5.2 years

Weighted-average discount rate–operating leases 7.0 % 7.0 %

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

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2022 2021

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Operating cash flows from operating leases $ 70 $ 240

ROU assets obtained in exchange for lease liabilities:

Operating leases $ 3,061 $ — $ 3,061 $ —

Total remaining annual commitments under non-cancelable lease agreements for each of the years ended December 31 are as follows:

(in thousands)

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

2021 (excluding the nine months ended September 31, 2021) $ 163 $ ( 101 ) $ 62

2022 610 — 610

2023 737 — 737

2024 754 — 754

2025 775 — 775

Year Ending December 31, Operating Leases

2022 (excluding the three months ended March 31, 2022)

Thereafter 137

2 unchanged sentences

Total $ 3,103

Derivative Financial Instruments — Warrants

Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”) or ASC Topic 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”), Cardiff Oncology determined that certain warrants issued in connection with the execution of certain equity financings must be recorded as derivative liabilities.

In accordance with ASC 815-40 and ASC 480-10, the warrants are also being re-measured at each balance sheet date based on estimated fair value, and any resultant change in fair value is being recorded in the Company’s condensed statements of operations.

The Company estimates the fair value of these warrants using the Black-Scholes option pricing model.

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

As of September 30,

2021 As of December 31,

Fair value of Cardiff Oncology common stock $ 6.66 $ 17.99

Expected warrant term 1.3 years 2.1 years

Risk-free interest rate 0.15 % 0.13 %

Expected volatility of Cardiff Oncology common stock 100 % 116 %

Dividend yield 0 % 0 %

Expected volatility is based on historical volatility of Cardiff Oncology’s common stock.

The warrants have a transferability provision, accordingly, Cardiff Oncology used the remaining contractual term as the expected term of the warrants.

The risk-free rate is based on the U.S.

Treasury security rates consistent with the expected remaining term of the warrants at each balance sheet date.

The following table sets forth the components of changes in the Company’s derivative financial instruments — warrants liability balance, valued using the Black-Scholes option pricing method, for the periods indicated.

(in thousands, except for number of warrants)

Date Description Number of Warrants Derivative

December 31, 2020 Balance of derivative financial instruments — warrants liability

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

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

Stockholders’ Equity

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

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2022 2021

2 unchanged sentences

Total stock-based compensation expense $ 1,152 $ 268

The unrecognized compensation cost related to non-vested stock options outstanding at September 30, 2021, net of estimated forfeitures, was $ 10.1 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 September 30, 2021 was

approximately 8.9 years.

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

The unrecognized compensation cost related to non-vested stock options outstanding at March 31, 2022, net of estimated forfeitures, was $ 13.3 million, which is expected to be recognized over a weighted-average remaining vesting period of 3.2 years.

The weighted-average remaining contractual term of outstanding options as of March 31, 2022 was approximately 8.3 years.

The total fair value of stock options vested during the three months ended March 31, 2022 and 2021 were $ 1,000 and $ 24,000 , 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:

Nine Months Ended September 30,

Three Months Ended March 31,

Risk-free interest rate 1.84 %

1 unchanged sentence

Expected volatility of Cardiff Oncology common stock 106 %

Expected term 6.0 years 5.9 years

Expected term 6.0 years

No stock options were granted during the three months ended March 31, 2021.

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

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Expired ( 800 ) $ 165.84

Balance outstanding, September 30, 2021 3,566,832 $ 7.22 $ 7,522,769

Exercisable at September 30, 2021 1,281,604 $ 8.96 $ 5,103,890

Vested and expected to vest at September 30, 2021 3,466,323 $ 7.28 $ 7,344,075

Balance outstanding, March 31, 2022 5,467,611 $ 5.88 $ 65,189

Exercisable at March 31, 2022 1,281,362 $ 8.83 $ 25,108

Vested and expected to vest at March 31, 2022 5,331,850 $ 5.91 $ 61,800

2021 Equity Incentive Plan

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

As of September 30, 2021, there were 2,289,902 shares available for issuance under the 2021 Plan.

As of March 31, 2022, there were 918,865 shares available for issuance under the 2021 Plan.

2014 Equity Incentive Plan

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In July 2021, the Company began issuing equity awards to certain new employees as inducement grants outside of its 2021 Plan.

As of September 30, 2021, an aggregate of 590,000 shares were issuable upon the exercise of inducement grant stock options approved by the Company.

Modification of Stock Options

In June 2021 two of the Company's directors' terms ended.

At the conclusion of their term, the Compensation Committee passed a resolution to extend the expiration date 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 expenses of$ 0.6 million during the nine months ended September 30, 2021, related to the modifications.

Restricted Stock Units

A summary of the RSU activity is presented below:

Total Restricted Stock Units Weighted-Average

Grant Date Fair Value

Per Share Intrinsic Value

Non-vested RSUs outstanding, December 31, 2020 491 $ 147.60 $ 8,833

Vested ( 491 ) $ 147.60

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

The total fair value of vested RSUs during the nine months ended September 30, 2021 and 2020 were $ 0.1 million and $ 0.1 million, respectively.

As of March 31, 2022, an aggregate of 1,120,208 shares were issuable upon the exercise of inducement grant stock options approved by the Company.

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

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Balance outstanding, December 31, 2021 4,490,159 $ 5.80 3.0 years

Exercised ( 770,833 ) $ 1.64

Balance outstanding, September 30, 2021 4,490,159 $ 5.80 3.2 years

Balance outstanding, March 31, 2022 4,490,159 $ 5.80 2.7 years

Preferred Stock

1 unchanged sentence

Shares outstanding

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

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

2022 As of December 31,

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The Company is developing onvansertib in cancer indications with the greatest medical need for new treatment options.

The Company was committed to order $ 1.0 million of future services provided by Nerviano, such as the cost to manufacture drug product, no later than June 30, 2019, and these services have been purchased.

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

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

Terms of the agreement 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 oncology therapeutics.

These agreements include License fees, Royalties and Milestone payments.

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These royalty payments are calculated as a percent of revenue.

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

For the three months ended March 31, 2022 and 2021, 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.

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As of the date of this report, management believes that there are no claims against the Company, which it believes will result in a material adverse effect on the Company’s business or financial condition.

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.

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 September 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 nine months ended September 30, 2021 and 2020 the Company incurred and recorded research and development expenses of approximately $ 0 and $ 0.8 million, respectively, for services performed by Leucadia and Tommy Adams.

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

Thus far COVID-19 has not caused material disruptions to the Company's operational and financial performance.

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.

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