What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-02 compared with 2022-02-24 · 156 added, 188 removed, 721 unchanged (32% of the section changed)

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Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2022.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Securities and Exchange Commission’s rules and forms.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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OTHER INFORMATION

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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(incorporated by reference to Exhibit 10.1 to Form 8-K filed on July 12,2021).

Employment Agreement, dated August 4, 2021 by and between Katherine Ruffner and Cardiff Oncology, Inc.

(incorporated by reference to Exhibit 10.2 to Form 10-Q filed on August 5, 2021).

Securities Purchase Agreement, dated November 17, 2021 (incorporated by reference to Exhibit 10.1 to Form 8-K filed on November 18, 2021).

Employment Agreement, dated January 30, 2023 by and between Dr.

Fairooz Kabbinavar and Cardiff Oncology, Inc.

(incorporated by reference to Exhibit 10.1 to Form 8-K filed on February 2,2023).

Consent of BDO USA, LLP.

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Armitage Director 3/2/2023

/s/ John Brancaccio Director 2/24/2022

John Brancaccio

/s/ Mani Mohindru Director 3/2/2023

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We have audited the accompanying balance sheets of Cardiff Oncology, Inc.

(the “Company”) as of December 31, 2021 and 2020, the related statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

(the “Company”) as of December 31, 2022 and 2021, the related statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the years then ended, and related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

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When estimating clinical trial expenses, the Company considers several factors including clinical trial budgets, contract amendments and the progress toward completion.

factors are our principal considerations due to the level of management estimation involved.

Auditing these elements involves especially challenging auditor judgment due to the nature and extent of audit effort required to address these matters.

The primary procedures we performed to address the critical audit matter included:

• Testing management’s estimation of accrued clinical trial expenses by (i) obtaining and inspecting significant agreements, clinical trial budgets, and contract amendments, (ii) evaluating the Company’s documentation of trial progress and status (including consideration of patient enrollment and milestones achieved), (iii) confirming clinical trial billings with third party service providers, and (iv) testing a sample of transactions by comparing the costs against the related invoices and agreements.

• Testing the completeness of the Company’s clinical trial accruals by (i) evaluating publicly available information (such as press releases, investor presentations and public databases that track clinical trials) and board of directors’ minutes which discuss the status of clinical trials, (ii) inquiring of clinical staff outside of finance to gain an understanding of the status of significant on-going clinical trials, and (iii) testing a sample of payments subsequent to year end to evaluate the completeness of clinical trial accruals.

• Testing management’s estimation of accrued clinical trial expenses by (i) obtaining and inspecting significant agreements, clinical trial budgets, and contract amendments, (ii) evaluating the Company’s documentation of trial progress and status (including consideration of patient enrollment and milestones achieved), (iii) confirming clinical trial expenses incurred, cash paid by the Company, and any unbilled amounts directly with third party service providers, and (iv) agreeing clinical trial accruals to the terms within the clinical trial agreements, budgets, and amendments.

• Testing the completeness of the Company’s clinical trial accruals by (i) inspecting board of directors’ minutes to identify clinical trials, (ii) evaluating publicly available information (such as press releases, investor presentations and public databases that track clinical trials) which identify and discuss the status of clinical trials, (iii) inquiring of clinical staff outside of finance to gain an understanding of the status of significant on-going clinical trials, and (iv) testing a sample of payments subsequent to year end to evaluate the completeness of clinical trial accruals.

/s/ BDO USA, LLP

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San Diego, California

February 24, 2022

March 2, 2023

Cardiff Oncology, Inc.

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Total current liabilities 7,808 6,559

Derivative financial instruments—warrants — 285

Operating lease liabilities, net of current portion 2,040 2,568

Other liabilities — 156

Total liabilities 9,848 9,127

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Preferred stock, $ 0.001 par value, 20,000 shares authorized;

Series A Convertible Preferred Stock liquidation preference $ 1,044 and $ 1,020 at December 31, 2022 and December 31, 2021, respectively;

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

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Other income (expense), net:

Interest income 264 90

Interest expense — ( 2 )

Other gain (loss), net 15 ( 28 )

Gain (loss) from changes in fair value of derivative financial instruments—warrants 285 ( 281 )

Total other income (expense), net 564 ( 221 )

Interest income, net 1,581 264

Other income (expense), net ( 383 ) 15

Gain from changes in fair value of derivative financial instruments—warrants — 285

Total other income, net 1,198 564

Net loss ( 38,704 ) ( 28,291 )

Preferred stock dividend payable on Series A Convertible Preferred Stock ( 24 ) ( 24 )

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 $ ( 38,728 ) $ ( 28,315 )

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Net loss $ ( 38,704 ) $ ( 28,291 )

Other comprehensive loss:

Unrealized loss on securities available-for-sale ( 253 ) ( 142 )

Comprehensive loss $ ( 28,433 ) $ ( 19,307 )

Total comprehensive loss $ ( 38,957 ) $ ( 28,433 )

Preferred stock dividend payable on Series A Convertible Preferred Stock ( 24 ) ( 24 )

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 $ ( 38,981 ) $ ( 28,457 )

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Balance, December 31, 2020 716 $ 1 36,781 $ 4 $ 361,819 $ ( 2,171 ) $ — $ ( 231,495 ) $ 128,158

Sale of common stock, preferred stock and warrants, net of expenses (1)

866 1 12,964 1 112,298 — — — 112,300

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

Stock-based compensation — — — — 3,234 — — — 3,234

— — — 1,765 — — — 1,765

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

— — 12,138 1 24,870 — — — 24,871

Issuance of common stock upon vesting of restricted stock units

Sale of common stock, net of expenses (1)

— — 4,412 — 34,187 — — — 34,187

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 ) —

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

Issuance of common stock upon conversion of Series E Convertible Preferred Stock ( 211 ) — 864 — — — — — —

Other comprehensive loss — — — — — — ( 142 ) — ( 142 )

Preferred stock dividend payable on Series A Convertible Preferred Stock — — — — — — — ( 24 ) ( 24 )

Release of clinical trial funding commitment — — — — — 2,032 — — 2,032

Common Stock par value adjustment — — — ( 6 ) 6 — — — —

Issuance of common stock upon exercise of stock options — — 60 — 148 — — — 148

Net loss — — — — — — — ( 28,291 ) ( 28,291 )

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Stock-based compensation — — — — 4,256 — — — 4,256

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

Sale of common stock, net of expenses (2)

— — 4,412 — 34,187 — — — 34,187

Unrealized loss on available-for-sale securities — — — — — — ( 142 ) — ( 142 )

Preferred stock dividend payable on Series A Convertible Preferred Stock — — — — — — — ( 24 ) ( 24 )

Issuance of common stock upon exercise of stock options — — 29 — 75 — — — 75

Issuance of common stock upon conversion of Series E Convertible Preferred Stock ( 655 ) ( 1 ) 2,684 — — — — — ( 1 )

Other comprehensive loss — — — — — ( 253 ) — ( 253 )

Release of clinical trial funding commitment — — — — 139 — — 139

Cumulative preferred stock dividend adjustment (2)

— — — — — — — 414 414

Net loss — — — — — — ( 38,704 ) ( 38,704 )

Balance, December 31, 2022 61 $ — 44,677 $ 4 $ 404,834 $ — $ ( 395 ) $ ( 298,100 ) $ 106,343

(1) Net of expenses of $ 7.5 million, and fair value of warrants issued as a transaction advisory fee as of the date of issuance of $ 0.4 million.

(1) Net of expenses of $ 0.8 million.

(2) See Note 2 to the financial statements.

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

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Loss on disposal of assets 1 1

Impairment loss — 34

Depreciation 236 451

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Capital expenditures ( 1,006 ) ( 205 )

Insurance proceeds from casualty loss 114 —

Maturities of short-term investments 76,445 28,391

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Sales of short-term investments 53,829 14,751

Net cash used in investing activities ( 131,448 ) ( 211 )

Net cash provided by (used in) investing activities 38,149 ( 131,448 )

Financing activities

Proceeds from sale of common stock, preferred stock and warrants, net of expenses of $ 0 and $ 813 respectively

34,187 112,300

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

Proceeds from exercise of warrants — 1,263

Proceeds from exercise of options 75 —

Borrowings under note payable — 305

Repayments of note payable — ( 305 )

Net cash provided by financing activities 75 35,450

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Supplemental disclosure of non-cash investing and financing activities:

Preferred stock dividend payable on Series A Convertible Preferred Stock $ 24 $ 24

Year ended December 31,

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

Accretion of Series A Convertible Preferred Stock dividend $ — $ 24

Cumulative preferred stock dividend adjustment (1)

$ ( 414 ) $ —

(1) See Note 2 to the financial statements.

The accompanying notes are an integral part of these 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.

The Company’s lead asset is onvansertib, a PLK1 inhibitor that is being evaluated in combination with standard of care therapies in clinical programs targeting indications such as KRAS/NRAS-mutated metastatic colorectal cancer, metastatic pancreatic cancer, as well as investigator-initiated trials in triple negative breast cancer and small cell lung cancer.

These programs and the Company’s broader development strategy are designed to target tumor vulnerabilities in order to overcome treatment resistance and deliver superior clinical benefit compared to the standard of care alone.

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

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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 13 to the financial statements for further information.

Basis of Presentation and Summary of Significant Accounting Policies

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Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

The Company views its operations as, and manages its business in, one operating segment.

The Company views its operations as, and manages its business in, one operating segment in the United States.

Use of Estimates

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The Company licenses and sublicenses its patent rights to healthcare companies, medical laboratories and biotechnology partners.

These patents are from the Company's legacy portfolio and unrelated to onvasertib.

These patents are from the Company's legacy portfolio and unrelated to onvansertib.

Agreements may involve multiple elements such as license fees, minimum royalties, usage-based royalties and milestone payments.

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The use of the Black-Scholes model classifies such warrants as Level 3 (See " Fair Value of Financial Instruments" below).

At December 31, 2021 and 2020, the fair value of these warrants was $ 0 and $ 285,000 , respectively, and was recorded as a liability under the caption “derivative financial instruments — warrants” on the balance sheets.

At December 31, 2022 and 2021, the fair value of these warrants was $ 0 , for both periods.

These warrants expire in the first quarter of 2023.

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The assessment of whether or not a valuation allowance is required often requires significant judgment.

Revision of Previously Disclosed Amounts

During the course of preparing the Company’s financial statements as of and for the year ended December 31 2022, the Company completed an Internal Revenue Code Section 382 and 383 analysis of its historical net operating loss and tax credit carryforward amounts.

As a result, a portion of the prior year net operating loss and tax credit carryforwards were determined to be limited.

See Note 9 - Income Taxes, for further details.

Contingencies

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As the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided, the deferred amounts are recognized as an expense.

Upfront and milestone payments to acquire contractual rights to licensed technology are expensed when incurred if there is uncertainty in the Company receiving future economic benefit from the acquired contractual rights.

Certain contractual rights may require the Company to make additional milestone payments based on development and commercial milestones, and royalties based on sales volume.

See Note 10 - Commitments and Contingencies, for further details.

These potential development milestones include:

dosing of the first subject in the first Phase III Clinical Trial for the first Product or after completion of a Phase II Clinical Trial that is used as the basis for an NDA submission;

and upon filing of the first NDA or equivalent for the first product

Net Loss Per Share

Basic and diluted net loss per common share is determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period.

Preferred dividends and deemed dividends recognized in connection with certain preferred share issuances are included in net loss attributable to common stockholders in the computation of basic and diluted earnings per share.

The accretion of Series A Convertible Preferred Stock dividends and deemed dividends recognized in connection with certain preferred share issuances are included in net loss attributable to common stockholders in the computation of basic and diluted earnings per share.

For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities would be antidilutive.

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Warrants to purchase Common Stock 4,360,968 4,490,159

Restricted Stock Units — 491

Series A Convertible Preferred Stock 877 877

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9,431,303 10,947,627

Correction of Series A Convertible Preferred Stock cumulative dividend liability

During the fourth quarter of 2022, the Company identified an immaterial error related to the accrual of a liability for the accretion of cumulative preferred dividends on the Company's Series A Convertible Preferred Stock.

These cumulative preferred dividends do not meet the definition of a liability, as they have not been declared by the Company's Board of Directors.

The Company has recorded an adjustment of $ 0.4 million within accumulated deficit and accrued liabilities for the year ended December 31, 2022 to correct this immaterial error.

Recently Adopted Accounting Pronouncement

In May 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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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In addition, ASU 2020-06 modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation.

The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2021 (or December 15, 2023 for companies who meet the SEC definition of Smaller Reporting Companies), and interim periods within those fiscal years.

The amendments in this update are effective for the Company on January 1, 2024.

The amendment is to be adopted through either a fully retrospective or modified retrospective method of transition.

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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 will adopt this standard on January 1, 2022 and does not expect that the adoption of this standard will have a material impact on its financial statements and related disclosures.

Supplementary Balance Sheet Information

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Commercial paper 13,203 4 ( 20 ) 13,187

government agencies 2,284 4 — 2,288

treasury securities 7,905 — ( 18 ) 7,887

Total maturity less than 1 year 84,299 19 ( 394 ) 83,924

Maturity 1 to 2 years:

Corporate debt securities 5,016 1 ( 21 ) 4,996

Total maturity 1 to 2 years 5,016 1 ( 21 ) 4,996

Total short-term investments $ 89,315 $ 20 $ ( 415 ) $ 88,920

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

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

For the year ending December 31, 2021 the realized loss on the sale of short-term investments was $ 0 .

The Company did not have short-term investments during the year ending December 31, 2020.

None of the Company’s short-term investments available for sale were in a material unrealized loss position at December 31, 2021.

The Company reviewed its investment holdings as of December 31, 2021 and determined that its unrealized losses were not considered to be other-than-temporary based upon (i) the financial strength of the issuing institution and (ii) the fact that no securities have been in an unrealized loss position for twelve months or more.

As such, the Company has not recognized any impairment in its financial statements related to its available-for-sale investment securities.

For the year ended December 31, 2022 the net realized loss recorded within the Company's statement of operations from the sale of short-term investments was $ 0.2 million.

The amount of gains and losses reclassified out of other comprehensive income for the period related to the sales of short-term investments was not material for the year ended December 31, 2022.

Unrealized losses in investments available for sale debt securities at December 31, 2022, were primarily due to increases in interest rates, not due to increased credit risks associated with specific securities.

It is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.

Investments available for sale that have been in a continuous unrealized loss position for greater than one-year consist of the following:

As of December 31, 2022

(in thousands) Fair Market Value Gross Unrealized Loss

Corporate debt securities $ 17,084 $ ( 161 )

treasury securities 3,666 ( 14 )

Total short-term investments $ 20,750 $ ( 175 )

Property and Equipment

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Director fees 125 141

Professional fees and outside services 63 38

Patent, license and other fees 24 43

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Total accrued liabilities $ 5,177 $ 4,527

(1) See Note 2 to the financial statements.

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 expired 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 expired 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 were approximately $ 80,000 per month.

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

Under the Company's prior master facility lease which expired on December 31, 2021, the Company was leasing additional suites in which it was not occupying and subleasing to third parties.

The amended lease agreement retained the space that the Company was occupying, and a portion of office and lab space that was previously subleased to a third party.

The remaining additional suites subleased to third parties were not included in the Company's amended sublease.

The Company currently leases office and lab space in San Diego which expires on February 28, 2027.

The lease currently required payments of approximately $ 61,000 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 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.

Prior to the expiration of the sublease agreements, the Company as a sublessor was leasing its vacated space to third parties.

The components of lease expense were as follows:

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$ 2,715 $ 3,119

Weighted-average remaining lease term–operating leases 5.2 years 1.0 year

Weighted-average remaining lease term–operating leases 4.2 years 5.2 years

Weighted-average discount rate–operating leases 7 % 7 %

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Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ 949 $ 944

Cash paid included in operating cash flows $ 612 $ 949

ROU assets obtained in exchange for lease obligations:

Operating leases $ — $ 3,061

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

Total remaining annual commitments under non-cancelable operating lease agreements as of December 31, 2022, are summarized are as follows:

(in thousands)

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Balance outstanding, December 31, 2020 5,260,992 $ 5.19 4.1 years

Granted 5,831,451 $ 1.70

Exercised ( 770,833 ) $ 1.64

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

Exercised ( 770,833 ) $ 1.64

Expired ( 129,191 ) $ 21.60

Balance outstanding, December 31, 2022 4,360,968 $ 5.33 2.1 years

The above table excludes pre-funded warrants with a nominal exercise price of $ .01 per share:

605,072 pre-funded warrants outstanding as of December 31, 2019;

386,967 pre-funded warrants which were issued during the twelve months ending December 31, 2020;

All 992,039 pre-funded warrants were exercised in full during the twelve months ending December 31, 2020.

Preferred Stock

A summary of our Company's classes of preferred stock is presented below:

Shares outstanding

Class Par value Shares designated Liquidation preference As of December 31, 2021 As of December 31, 2020

Shares issued and outstanding

Class Par value Shares designated As of December 31, 2022 As of December 31, 2021

Series A Convertible Preferred Stock $ 0.001 277,100 60,600 60,600

Series B Convertible Preferred Stock $ 0.001 8,860 None — —

Series C Convertible Preferred Stock $ 0.001 200,000 None — —

Series D Convertible Preferred Stock $ 0.0001 154,670 None — —

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

Series B Convertible Preferred Stock $ 0.001 8,860 — —

Series C Convertible Preferred Stock $ 0.001 200,000 — —

Series D Convertible Preferred Stock $ 0.0001 154,670 — —

Series E Convertible Preferred Stock $ 0.001 865,824 — 655,044

Series A Convertible Preferred Stock

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Dividends are payable, at the Company’s sole election, in cash or shares of common stock.

As of December 31, 2021 and 2020, the Company had $ 414,000 and $ 390,000 , respectively in accrued cumulative unpaid preferred stock dividends, included in accrued liabilities in the Company’s balance sheets, and $ 24,000 and $ 24,000 of accrued dividends were recorded during the years ended December 31, 2021 and 2020, respectively.

As of December 31, 2022 and 2021, the Company had $ 438,000 and $ 414,000 , respectively in cumulative unpaid preferred stock dividends, included in the liquidation preference of the Series A Convertible Preferred Stock, and $ 24,000 and $ 24,000 of cumulative dividends were added to the liquidation preference of the Series A Convertible Preferred Stock during the years ended December 31, 2022 and 2021, respectively.

2) Voting Rights.

Shares of the Series A Convertible Preferred Stock have no voting rights.

However, so long as any shares of Series A Convertible Preferred Stock are outstanding, the Company may not, without the affirmative vote of the holders of the shares of Series A Convertible Preferred Stock then outstanding, (a) adversely change the powers, preferences or rights given to the Series A Convertible Preferred Stock, (b) authorize or create any class of stock senior or equal to the Series A Convertible Preferred Stock, (c) amend its certificate of incorporation or other charter

documents, so as to affect adversely any rights of the holders of Series A Convertible Preferred Stock or (d) increase the authorized number of shares of Series A Convertible Preferred Stock.

3) Liquidation.

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As of the date of these financial statements, such conditions have not been met.

Series D Convertible Preferred Stock and Service Receivable

On May 8, 2020, the Company entered into a Stock and Warrant Subscription Agreement with PoC, whereby PoC agreed to finance an additional $ 2.3 million for a clinical trial in exchange for (i) 602,833 shares of its common stock (the “Common Stock”), (ii) 154,670 shares of its Series D Preferred Stock and (iii) a warrant exercisable for 859,813 shares of its Common Stock.

In exchange, PoC is funding our clinical development of onvansertib in metastatic colorectal cancer pursuant to a Master Services Agreement dated as of January 25, 2019, as amended.

The warrant will be exercisable six months following the date of issuance at an exercise price of $ 1.50 per share and will expire on November 7, 2025.

In June of 2020, all 154,670 Series D Preferred Stock were converted to 1,546,700 shares of Common Stock.

The Company evaluated the awards issued under this transaction and determined they should be classified as equity.

These equity awards were fully vested and non-forfeitable.

Since the equity awards were for clinical trial services yet to be provided, the Company recognized $ 2.3 million service receivables as contra equity.

The Company releases the service receivables as clinical trial services are performed.

The conversion feature of the Series D Convertible Preferred Stock at the time of issuance was determined to be beneficial on the commitment date.

Because the Series D Convertible Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from inception, the Company immediately recorded a non-cash deemed dividend of $ 0.6 million related to the beneficial conversion feature arising from the issuance of Series D Convertible Preferred Stock.

This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share for the year-ending December 31, 2020.

The components of the liquidation preference for the Series A Convertible Preferred Stock were as follows:

As of December 31,

(in thousands) 2022 2021

Stated Value per share liquidation $ 606 $ 606

Cumulative unpaid preferred stock dividends 438 414

Liquidation preference - Series A Convertible Preferred Stock $ 1,044 $ 1,020

Series E Convertible Preferred Stock

On June 15, 2020 the Company entered into a Securities Purchase Agreement with Acorn Bioventures LP ("Acorn"), CDK Associates, L.L.C.

(“CDK”) and Third Street Holdings LLC (“Third Street”), pursuant to which the Company agreed to offer, issue and sell to Acorn, CDK and Third Street, (i) in a registered direct offering, an aggregate of 1,984,328 shares of common stock and (ii) in a concurrent private placement, (a) an aggregate of 865,824 shares of Series E Preferred Stock (“Series E Preferred Stock”) and (b) Series N warrants to purchase up to 2,213,115 shares of Common Stock.

On June 15, 2020 the Company entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which the Company agreed to offer, issue and sell to Acorn, CDK and Third Street, (i) in a registered direct offering, an aggregate of 1,984,328 shares of common stock and (ii) in a concurrent private placement, (a) an aggregate of 865,824 shares of Series E Preferred Stock (“Series E Preferred Stock”) and (b) Series N warrants to purchase up to 2,213,115 shares of Common Stock.

The Series E Preferred Stock is convertible at any time determined by dividing the $ 10 stated value per share of the Series E Preferred Stock by a conversion price of $ 2.44 per share, subject to adjustment in accordance with the Certificate of Designation.

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Certain investors converted 210,780 shares of Series E Convertible Preferred stock to 863,852 shares of Common Stock during December 2020.

The conversion feature of the Series E Convertible Preferred Stock at the time of issuance was determined to be beneficial on the commitment date.

Because the Series E Convertible Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from inception, the Company immediately recorded a non-cash deemed dividend of $ 2.7 million related to the beneficial conversion feature arising from the issuance of Series E Convertible Preferred Stock.

This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share for the year-ending December 31, 2020.

Certain investors converted 327,535 shares of Series E Convertible Preferred stock to 1,342,357 shares of Common Stock during January 2022.

Certain investors converted 327,509 shares of Series E Convertible Preferred stock to 1,342,250 shares of Common Stock during October 2022.

As of December 31, 2022 no shares of Series E Convertible Preferred stock were outstanding.

In conjunction with the June 15, 2020 offering, we issued 184,426 warrants as an advisory fee.

These warrants are exercisable six months following the date of issuance at an exercise price of $ 3.05 per share and will expire 5.5 years following the date of issuance.

These warrants are classified as equity and its estimated fair value of $ 370,666 was recognized as additional paid in capital on the issuance date.

The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

Securities Purchase Agreements with Lincoln Park Capital Fund, LLC

On March 30, 2020, the Company entered into a Securities Purchase Agreement with Lincoln Park Capital Fund, LLC ("LPC") which the company sold a combination of common stock and warrants for gross proceeds of $ 1.0 million.

Under this agreement 800,000 shares of common stock, 131,967 pre-funded warrants and 931,967 Series J Warrants were sold.

On April 9, 2020, the Company entered into a Securities Purchase Agreement with LPC, which the company sold a combination of common stock and warrants for gross proceeds of $ 1.1 million.

Under this agreement 904,970 shares of common stock, 255,000 pre-funded warrants and 1,159,970 Series L Warrants were sold.

Securities Purchase Agreement with Certain Directors and Executives

On May 11, 2020 and May 14, 2020, the Company entered into Securities Purchase Agreements with certain directors and executives of the Company pursuant to which the Company sold 447,761 shares of common stock at a purchase price of $ 1.34 per share and 146,854 shares of common stock at a purchase price of $ 1.43 per share.

The gross proceeds from these purchases were $ 810,000 .

Securities Purchase Agreement with Acorn Bioventures LP

On May 26, 2020, the Company entered into a Securities Purchase Agreement with Acorn which the Company sold a combination of common stock and warrants for gross proceeds of $ 2.5 million.

Under the agreement the Company sold 1,205,400 shares of common stock and 482,160 Series M Warrants.

Underwritten Public Offering

On October 2, 2020 the Company completed an underwritten public offering of 6,500,000 shares of its common stock at a price to the public of $ 13.50 per share.

In addition, the underwriters exercised in full an option to purchase an additional 975,000 shares of common stock at the public offering price, less the underwriting discounts and commissions.

All of the shares in the offering were sold by the Company, with gross proceeds of approximately $ 100.9 million, and net proceeds of approximately $ 94.0 million, after deducting underwriting discounts, commissions and estimated offering expenses.

These warrants were classified as equity.

Sales Agreement with Jefferies LLC

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The investment is part of the Pfizer Breakthrough Growth Initiative, which includes an information rights agreement and Pfizer's participation on a Scientific Advisory Board for the Company.

Pfizer has agreed to not sell or transfer any shares for 180 days from the closing date of the agreement.

Pfizer agreed to not sell or transfer any shares for 180 days from the closing date of the agreement, which expired during May 2022.

Stock-Based Compensation

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

On June 9, 2022 the shareholders approved an increase of shares authorized in the 2021 Plan to 5,150,000 .

As of December 31, 2022, there were 3,087,075 shares available for issuance under the 2021 Plan.

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Modification of Stock Options

In June 2022 one of the Company's directors did not seek another term on the Board of Directors.

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

The Company recorded incremental reduction to stock compensation expense of $ 0.1 million during the year ended December 31, 2022, related to the modifications.

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 twelve months ending December 31, 2021, related to the modifications.

The Company recorded incremental stock compensation expenses of $ 0.6 million during the year ended December 31, 2021, related to the modifications.

Stock-based compensation has been recognized in operating results as follows:

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Expected volatility — Based on the historical volatility of Cardiff Oncology’s common stock.

Expected term — The expected option term represents the period that stock-based awards are expected to be outstanding based on the simplified method, which averages an award’s weighted-average vesting period and expected term for “plain vanilla” share options.

Expected term — The expected option term represents the period that stock-based awards are expected to be outstanding based on the simplified method, which represents the Company's best estimate following the Company's restructuring in 2018.

This method averages an award’s weighted-average vesting period and expected term for “plain vanilla” share options.

Options are considered to be “plain vanilla” if they have the following basic characteristics:

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The total fair value of shares vested during the years ended December 31, 2022 and 2021 was $ 4.7 million and $ 1.2 million, respectively.

The intrinsic value of stock options exercised during the year ended December 31, 2020 was $ 1.0 million.

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

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Granted 1,737,760 $ 3.15

Forfeited ( 10,770 ) $ 2.55

Exercised ( 28,858 ) $ 2.60 $ 1,443

Cancelled ( 398,156 ) $ 4.62

Expired ( 13,272 ) $ 32.52

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Vested and expected to vest, December 31, 2022 4,990,351 $ 5.94 $ 18,752 7.4 years

Restricted Stock Units

RSU's are measured at the grant date based on the closing market price of the Company’s common stock at the grant date and recognized ratably over the service period through the vesting date.

All RSU's were granted with no purchase price.

Vesting of the RSU's is generally subject to service conditions.

A summary of the RSU's activity is presented below:

Number of Shares Weighted Average

Grant Date Fair Value

Per Share Intrinsic

Non-vested RSU's outstanding, December 31, 2019 11,301 $ 15.38 $ 14,013

Vested ( 10,810 ) $ 9.37

Non-vested RSU's outstanding, December 31, 2020 491 $ 147.60 $ 7,641

Vested ( 491 ) $ 147.60

Non-vested RSU's outstanding, December 31, 2021 — $ — $ —

The total fair values of RSU's vested during the year ended December 31, 2021 and 2020 were $ 0.1 million and $ 0.1 million, respectively.

Derivative Financial Instruments — Warrants

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Commercial paper — 13,187 — 13,187

government — 728 — 728

government agencies — 2,288 2,288

treasury securities 7,887 — — 7,887

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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 $ 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 (2)

$ — $ — $ 285 $ 285

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

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

(2) 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 7 to the financial statements for further information.

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.

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If limited, the related tax asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance.

The Company has not completed such an analysis pursuant to Sections 382 and 383 and has established a valuation allowance as the realization of such deferred tax assets has not met the more likely than not threshold requirement.

The Company has established a valuation allowance as the realization of such deferred tax assets has not met the more likely than not threshold requirement.

Due to the existence of the valuation allowance, further changes in the Company’s unrecognized tax benefits will not impact the Company’s effective tax rate.

The provision for income taxes based on losses from continuing operations consists of the following at December 31 (in thousands):

During 2022, the Company completed an assessment of the available net operating loss and tax credit carryforwards under Section 382 and 383 and determined that the Company underwent two ownership changes during the period from 2014 to 2022.

As a result, net operating loss and tax credit carryforwards attributable to the pre-ownership changes are subject to substantial annual limitations under Section 382 and 383 of Code due to the ownership changes.

The Company has adjusted their net operating loss and tax credit carryforwards to address the impact of the ownership changes.

This resulted in a reduction of available gross federal and state net operating loss carryforwards of approximately $ 123.9 million and $ 62.8 million, respectively which related to the year ended December 31, 2021 and prior.

The tax effected federal and state NOL amounts were $ 26.0 million and $ 4.4 million respectively.

This also resulted in a reduction of federal tax credit carryforwards of approximately $ 1.8 million related to the years ended December 31, 2021 and prior.

Accordingly, the net operating loss and tax credit carryforwards presented below for the year ending December 31, 2021 were reduced by $ 30.4 million and $ 1.8 million, respectively, with a corresponding reduction to the valuation allowance of $ 32.2 million.

The provision for income taxes based on losses from continuing operations consists of the following at December 31:

Years ended December 31,

(in thousands) 2022 2021

State $ — $ 1

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Total income tax provision $ — $ —

Significant components of the Company’s taxes and the rates as of December 31 are shown below (in thousands, except percentages):

Significant components of the Company’s taxes and the rates as of December 31 are shown below:

Years ended December 31,

(in thousands, except percentages) 2022 2021

Tax computed at the federal statutory rate $ ( 8,128 ) 21 % $ ( 5,941 ) 21 %

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Stock based compensation 553 ( 1 ) % 325 ( 1 ) %

Tax credits ( 366 ) 1 % ( 300 ) 2 %

Research and development credits ( 319 ) 1 % ( 366 ) 1 %

Return to provision and true ups — — % — — %

Other ( 1 ) — % 72 — %

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Years ended December 31,

(in thousands) 2022 2021

Deferred tax assets:

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Stock-based compensation 1,317 962

Capitalized research and development 4,794 —

Other 1,431 1,750

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Operating lease right-of-use assets ( 492 ) ( 611 )

Other — ( 6 )

Total deferred tax liabilities ( 492 ) ( 611 )

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In March 2017, the Company entered into a license agreement with Nerviano which granted the Company development and commercialization rights to NMS-1286937, which Cardiff Oncology refers to as onvansertib.

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.

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

These potential development milestones include:

dosing of the first subject in the first Phase III Clinical Trial for the first Product or after completion of a Phase II Clinical Trial that is used as the basis for an NDA submission;

and upon filing of the first NDA or equivalent for the first product.

During the years ended December 31, 2022 and 2021, no milestone or royalty payments were made.

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

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The Company does not currently make matching contributions.

Related Party Transactions

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 the late 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 years ended December 31, 2021 and 2020, the Company incurred and recorded approximately $ 0.0 million and $ 1.1 million, respectively, of research and development expenses for services performed by Leucadia and Tommy Adams.

Gary Pace Securities Purchase Agreement

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

Pace, Ph.D, 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 .

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.

Repayment of Small Business Administration Payroll Protection Program Loan

On April 15, 2020, the Company was granted a loan (the “Loan”) from JPMorgan Chase Bank, N.A.

in the aggregate amount of $ 305,000 , pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act with an interest rate of 0.98 % per annum.

On October 19, 2020 the Company repaid in full the outstanding principal and interest of the PPP Loan.

Subsequent Events

Conversion of Series E Convertible Preferred Stock

327,535 Series E Convertible Preferred Shares were converted into 1,342,357 shares of common stock on January 5, 2022.

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-K

Item 9A. Controls and Procedures