What changed in this filing

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Item 1. Financial Statements

2023-05-04 compared with 2022-11-03 · 65 added, 121 removed, 317 unchanged (37% of the section changed)

3 unchanged sentences

(in thousands, except par value)

September 30,

2023 December 31,

14 unchanged sentences

Operating lease liabilities 679 675

Other current liabilities 8 42

Total current liabilities 8,148 7,808

4 unchanged sentences

Preferred stock, 20,000 shares authorized;

Series A Convertible Preferred Stock liquidation preference $ 1,050 and $ 1,044 at March 31, 2023 and December 31, 2022, respectively (Note 6)

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

43,335 and 41,964 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

44,677 and 44,677 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 405,898 404,834

Service receivables — ( 139 )

Accumulated other comprehensive loss ( 76 ) ( 395 )

6 unchanged sentences

(in thousands, except per share amounts)

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

2022 2021 2022 2021

Three Months Ended March 31,

Royalty revenues $ 83 $ 74

6 unchanged sentences

Interest income, net 940 130

Gain from change in fair value of derivative financial instruments—warrants — 12 — 280

Other income (expense), net ( 111 ) ( 49 )

9 unchanged sentences

(in thousands)

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

2022 2021 2022 2021

Three Months Ended March 31,

Net loss $ ( 11,223 ) $ ( 10,993 )

13 unchanged sentences

Amount Additional

Paid-In Capital Service Receivable Accumulated Other Comprehensive Loss Accumulated Deficit Total

Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total

Stockholders’ Equity

1 unchanged sentence

Stock-based compensation — — — — 1,064 — — 1,064

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 )

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

Net loss — — — — — — — ( 10,993 ) ( 10,993 )

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

Stock-based compensation — — — — 1,055 — — — 1,055

Other comprehensive loss — — — — — — ( 234 ) — ( 234 )

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

Net loss — — — — — — — ( 10,443 ) ( 10,443 )

Balance, June 30, 2022 388 — 43,306 4 402,710 — ( 982 ) ( 281,258 ) 120,474

Stock-based compensation — — — — 1,037 — — — 1,037

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

Other comprehensive gain — — — — — 319 — 319

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

Net loss — — — — — — ( 11,223 ) ( 11,223 )

Balance, September 30, 2022 388 $ — 43,335 $ 4 $ 403,822 $ — $ ( 779 ) $ ( 289,835 ) $ 113,212

CARDIFF ONCOLOGY, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

Balance, March 31, 2023 61 $ — 44,677 $ 4 $ 405,898 $ ( 76 ) $ ( 309,323 ) $ 96,503

Preferred Stock

7 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.

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities

1 unchanged sentence

Adjustments to reconcile net loss to net cash used in operating activities:

Loss on disposal of assets — 1

Depreciation 90 31

Stock-based compensation expense 1,064 1,152

Amortization of premiums on short-term investments 672 1,160

Change in fair value of derivative financial instruments—warrants — ( 280 )

Amortization of premiums (discounts) on short-term investments ( 163 ) 346

Release of clinical trial funding commitment — 139

10 unchanged sentences

Capital expenditures ( 8 ) ( 171 )

Insurance proceeds from casualty loss 114 —

Maturities of short-term investments 42,983 38,217

1 unchanged sentence

Sales of short-term investments 1,681 17,085

Net cash provided by (used in) investing activities 31,129 ( 122,654 )

Net cash provided by investing activities 7,329 18,358

Financing activities:

Proceeds from sales of common stock, net of expenses of $ 0 and $ 776 , respectively

Proceeds from exercise of options 75 —

Proceeds from exercise of warrants — 1,263

Net cash provided by financing activities — —

6 unchanged sentences

Acquisition of property and equipment included in accounts payable and accrued expenses $ 133 $ 27

Preferred stock dividend payable on Series A Convertible Preferred Stock $ 18 $ 18

See accompanying notes to the unaudited condensed financial statements.

14 unchanged sentences

The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for any future periods.

These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2021, included in the Company’s annual report on Form 10-K filed with the SEC on February 24, 2022.

These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2022, included in the Company’s annual report on Form 10-K filed with the SEC on March 2, 2023.

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

As of September 30, 2022, the Company had $ 114.3 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, 2023, the Company had $ 97.0 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.

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.

2 unchanged sentences

Summary of Significant Accounting Policies

During the nine months ended September 30, 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.

During the three months ended March 31, 2023, 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, 2022.

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 6,396,895 5,467,611

3 unchanged sentences

10,694,244 11,300,897

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

7 unchanged sentences

Early adoption is permitted.

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

The Company is currently evaluating the impact of this standard on its financial statements and related disclosures, and will adopt this standard on January 1, 2024.

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, 2022 and December 31, 2021:

Fair Value Measurements at

September 30, 2022

March 31, 2023

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

8 unchanged sentences

Commercial paper — 10,398 — 10,398

government agencies — 7,842 7,842

treasury securities 16,958 — — 16,958

13 unchanged sentences

Commercial paper — 13,187 — 13,187

government — 728 — 728

government agencies — 2,288 — 2,288

treasury securities 7,887 — — 7,887

3 unchanged sentences

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 nine months ended September 30, 2022 .

There were no transfers into or out of Level 3 during the three months ended March 31, 2023 .

Supplementary Balance Sheet Information

1 unchanged sentence

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

3 unchanged sentences

Commercial paper 10,402 3 ( 7 ) 10,398

treasury securities 15,348 — ( 94 ) 15,254

government agencies 4,049 4 — 4,053

Total maturity less than 1 year 50,673 12 ( 165 ) 50,520

1 unchanged sentence

Corporate debt securities 10,687 24 ( 27 ) 10,684

government agencies 3,781 8 — 3,789

treasury securities 16,886 72 — 16,958

12 unchanged sentences

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

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

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

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

Unrealized losses in investments available for sale debt securities at September 30, 2022, were primarily due to increases in interest rates, not due to increased credit risks associated with specific securities.

We do not intend to sell these investments and 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.

We periodically review our portfolio of debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns.

For debt securities where the fair value of the investment is less than the amortized cost basis, we have assessed at the individual security level for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment.

Unrealized losses in investments available for sale debt securities at March 31, 2023, were substantially due to increases in interest rates, not due to increased credit risks associated with specific securities.

Accordingly, we have not recorded an allowance for credit losses.

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 September 30,

As of March 31,

(in thousands) Fair Market Value Gross Unrealized Loss

Corporate debt securities $ 8,151 $ ( 58 )

treasury securities 1,839 ( 22 )

Total short-term investments $ 2,590 $ ( 28 )

Property and equipment

Property and equipment consist of the following:

(in thousands) As of September 30,

(in thousands) As of March 31,

2023 As of December 31,

6 unchanged sentences

Accrued liabilities consisted of the following:

(in thousands) As of September 30,

(in thousands) As of March 31,

2023 As of December 31,

Accrued compensation $ 983 $ 1,849

Preferred stock dividend 432 414

Clinical trials 2,709 2,333

1 unchanged sentence

Director fees 125 125

Professional fees and outside services 29 63

Patent, license and other fees 59 24

3 unchanged sentences

Master Facility Lease

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

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

The lease currently requires monthly payments of approximately $ 61,000 per month with 3 % annual escalation.

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) 2023 2022

Operating lease cost $ 183 $ 191

Operating sublease income — ( 101 ) — ( 303 )

Net operating lease cost $ 183 $ 191

Supplemental balance sheet information related to leases was as follows:

(in thousands) As of September 30,

(in thousands) As of March 31,

2023 As of December 31,

6 unchanged sentences

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) 2023 2022

1 unchanged sentence

Operating cash flows from operating leases $ 185 $ 70

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:

1 unchanged sentence

Year Ending December 31, Operating Leases

2022 (excluding the nine months ended September 30, 2022)

2023 (excluding the three months ended March 31, 2023)

Thereafter 136

5 unchanged sentences

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) 2023 2022

2 unchanged sentences

Total stock-based compensation expense $ 1,064 $ 1,152

The unrecognized compensation cost related to non-vested stock options outstanding at September 30, 2022, net of estimated forfeitures, was $ 9.8 million, which is expected to be recognized over a weighted-average remaining vesting period of 2.8 years.

The weighted-average remaining contractual term of outstanding options as of September 30, 2022, was approximately 7.6 years.

The total fair value of stock options vested during the nine months ended September 30, 2022 and 2021, were $ 4.0 million and $ 1.2 million, respectively.

The unrecognized compensation cost related to non-vested stock options outstanding at March 31, 2023, net of estimated forfeitures, was $ 10.1 million, which is expected to be recognized over a weighted-average remaining vesting period of 2.7 years.

The weighted-average remaining contractual term of outstanding options as of March 31, 2023, was approximately

The total fair value of stock options vested during the three months ended March 31, 2023 and 2022, were $ 1.9 million and $ 1,000 , 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 3.58 % 1.84 %

1 unchanged sentence

Expected volatility of Cardiff Oncology common stock 110 % 106 %

Expected term 6.0 years 6.0 years

Expected term (1)

5.3 years 6.0 years

(1) The expected term for options granted after January 1, 2023 is estimated based on the Company's historical employee data.

Prior to January 1, 2023, the Company used the "simplified method" to estimate expected term.

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

4 unchanged sentences

Granted 1,806,008 $ 1.73

Exercised ( 28,858 ) $ 2.60

Canceled / Forfeited ( 1,725 ) $ 7.98

Expired ( 476,846 ) $ 6.93

Balance outstanding, September 30, 2022 5,101,572 $ 5.92 $ 30,739

Exercisable at September 30, 2022 2,178,676 $ 7.44 $ 16,013

Vested and expected to vest at September 30, 2022 5,017,818 $ 5.94 $ 29,723

Balance outstanding, March 31, 2023 6,396,895 $ 4.66 $ 34,107

Exercisable at March 31, 2023 2,427,304 $ 6.57 $ 20,517

Vested and expected to vest at March 31, 2023 6,187,656 $ 4.73 $ 33,160

2021 Equity Incentive Plan

3 unchanged sentences

On June 9, 2022, the shareholders approved an increase of shares authorized in the 2021 Plan to 5,150,000 from 3,150,000 .

As of September 30, 2022, there were 3,055,281 shares available for issuance under the 2021 Plan.

As of March 31, 2023, there were 2,180,898 shares available for issuance under the 2021 Plan.

2014 Equity Incentive Plan

1 unchanged sentence

Inducement Grants

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, 2022, an aggregate of 920,208 shares were issuable upon the exercise of inducement grant stock options approved by the Company.

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 nine months ended September 30, 2022, related to the modifications.

The Company issues equity awards to certain new employees as inducement grants outside of its 2021 Plan.

As of March 31, 2023, an aggregate of 1,345,208 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:

4 unchanged sentences

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

Balance outstanding, September 30, 2022 4,490,159 $ 5.80 2.2 years

Expired ( 64,496 ) $ 101.52

Balance outstanding, March 31, 2023 4,296,472 $ 3.89 1.8 years

Preferred Stock

1 unchanged sentence

Shares outstanding

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

Class Par value Shares designated As of March 31,

2023 As of December 31,

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 327,509 655,044

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 — —

Commitments and Contingencies

3 unchanged sentences

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.

Onvansertib, an investigational drug, is an oral, and a highly selective adenosine triphosphate competitive inhibitor of the serine/threonine PLK1.

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

Terms of the agreement 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:

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

and (b) upon filing of the first NDA or equivalent for the first product candidate.

During the three months ended March 31, 2023 and 2022 no milestone or royalty payments were made.

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

2 unchanged sentences

These royalty payments are calculated as a percent of revenue.

For the nine months ended September 30, 2022 and 2021, payments have not been material.

For the three months ended March 31, 2023 and 2022, 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.

From time to time, the Company may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business.

Litigation is subject to inherent uncertainties, and an adverse result in matters may arise from time to time that may harm the Company’s business.

Litigation is subject to inherent uncertainties, and an adverse result in matters may arise

from time to time that may harm the Company’s business.

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.

Subsequent Events

Conversion of Series E Convertible Preferred Stock

327,509 Series E Convertible Preferred Shares were converted into 1,342,250 shares of common stock on October 11, 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-Q

Item 1. Financial Statements