Cardiff Oncology, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS CARDIFF ONCOLOGY, INC. CONDENSED BALANCE SHEETS (in thousands, except par value) (Unaudited) September 30, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 15,233 $ 16,347 Short-term investments 66,130 88,920 Accounts receivable and unbilled receivable 198 771 Prepaid expenses and other current assets 2,344 5,246 Total current assets 83,905 111,284 Property and equipment, net 1,317 1,269 Operating lease right-of-use assets 1,843 2,251 Other assets 1,387 1,387 Total Assets $ 88,452 $ 116,191 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 2,179 $ 1,956 Accrued liabilities 6,151 5,177 Operating lease liabilities 688 675 Total current liabilities 9,018 7,808 Operating lease liabilities, net of current portion 1,607 2,040 Total Liabilities 10,625 9,848 Commitments and contingencies (Note 6) Stockholders’ equity Preferred stock, 20,000 shares authorized; 277,100 designated as Series A Convertible Preferred Stock; 60,600 shares outstanding at September 30, 2023 and December 31, 2022 with liquidation preference of $ 1,062 and $ 1,044 at September 30, 2023 and December 31, 2022, respectively (Note 5) — — Common stock, $ 0.0001 par value, 150,000 shares authorized; 44,677 shares issued and outstanding at September 30, 2023 and December 31, 2022 4 4 Additional paid-in capital 408,434 404,834 Accumulated other comprehensive loss ( 407 ) ( 395 ) Accumulated deficit ( 330,204 ) ( 298,100 ) Total stockholders’ equity 77,827 106,343 Total liabilities and stockholders’ equity $ 88,452 $ 116,191 See accompanying notes to the unaudited condensed financial statements. 3 Table of Contents CARDIFF ONCOLOGY, INC. CONDENSED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Royalty revenues $ 141 $ 93 $ 332 $ 258 Costs and expenses: Research and development 8,022 6,009 25,094 20,665 Selling, general and administrative 2,939 3,077 10,318 10,103 Total operating expenses 10,961 9,086 35,412 30,768 Loss from operations ( 10,820 ) ( 8,993 ) ( 35,080 ) ( 30,510 ) Other income (expense), net: Interest income, net 1,068 458 3,061 841 Other income (expense), net 21 ( 36 ) ( 85 ) ( 338 ) Total other income (expense), net 1,089 422 2,976 503 Net loss ( 9,731 ) ( 8,571 ) ( 32,104 ) ( 30,007 ) Preferred stock dividend payable on Series A Convertible Preferred Stock ( 6 ) ( 6 ) ( 18 ) ( 18 ) Net loss attributable to common stockholders $ ( 9,737 ) $ ( 8,577 ) $ ( 32,122 ) $ ( 30,025 ) Net loss per common share — basic and diluted $ ( 0.22 ) $ ( 0.20 ) $ ( 0.72 ) $ ( 0.69 ) Weighted-average shares outstanding — basic and diluted 44,677 43,333 44,677 43,291 See accompanying notes to the unaudited condensed financial statements. 4 Table of Contents CARDIFF ONCOLOGY, INC. CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net loss $ ( 9,731 ) $ ( 8,571 ) $ ( 32,104 ) $ ( 30,007 ) Other comprehensive loss: Unrealized gain (loss) on securities available-for-sale 24 203 ( 12 ) ( 637 ) Total comprehensive loss ( 9,707 ) ( 8,368 ) ( 32,116 ) ( 30,644 ) Preferred stock dividend payable on Series A Convertible Preferred Stock ( 6 ) ( 6 ) ( 18 ) ( 18 ) Comprehensive loss attributable to common stockholders $ ( 9,713 ) $ ( 8,374 ) $ ( 32,134 ) $ ( 30,662 ) See accompanying notes to the unaudited condensed financial statements. 5 Table of Contents CARDIFF ONCOLOGY, INC. CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) (Unaudited) Preferred Stock Shares Preferred Stock Amount Common Stock Shares Common Stock Amount Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Balance, January 1, 2023 61 $ — 44,677 $ 4 $ 404,834 $ ( 395 ) $ ( 298,100 ) $ 106,343 Stock-based compensation — — — — 1,064 — — 1,064 Other comprehensive gain — — — — — 319 — 319 Net loss — — — — — — ( 11,223 ) ( 11,223 ) Balance, March 31, 2023 61 $ — 44,677 $ 4 $ 405,898 $ ( 76 ) $ ( 309,323 ) $ 96,503 Stock-based compensation — — — — 1,581 — — 1,581 Other comprehensive loss — — — — — ( 355 ) — ( 355 ) Net loss — — — — — — ( 11,150 ) ( 11,150 ) Balance, June 30, 2023 61 $ — 44,677 $ 4 $ 407,479 $ ( 431 ) $ ( 320,473 ) $ 86,579 Stock-based compensation — — — — 955 — — 955 Other comprehensive gain — — — — — 24 — 24 Net loss — — — — — — ( 9,731 ) ( 9,731 ) Balance, September 30, 2023 61 $ — 44,677 $ 4 $ 408,434 $ ( 407 ) $ ( 330,204 ) $ 77,827 6 Table of Contents Preferred Stock Shares Preferred Stock Amount Common Stock Shares Common Stock Amount Additional Paid-In Capital Service Receivable Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Balance, January 1, 2022 716 $ 1 41,964 $ 4 $ 400,503 $ ( 139 ) $ ( 142 ) $ ( 259,810 ) $ 140,417 Stock-based compensation — — — — 1,152 — — — 1,152 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 — — — — — — 203 — 203 Preferred stock dividend — — — — — — — ( 6 ) ( 6 ) Net loss — — — — — — — ( 8,571 ) ( 8,571 ) Balance, September 30, 2022 388 $ — 43,335 $ 4 $ 403,822 $ — $ ( 779 ) $ ( 289,835 ) $ 113,212 See accompanying notes to the unaudited condensed financial statements. 7 Table of Contents CARDIFF ONCOLOGY, INC. CONDENSED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Nine Months Ended September 30, 2023 2022 Operating activities Net loss $ ( 32,104 ) $ ( 30,007 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 295 150 Stock-based compensation expense 3,600 3,244 Amortization of premiums (discounts) on short-term investments ( 716 ) 672 Release of clinical trial funding commitment — 139 Changes in operating assets and liabilities: Other assets — 55 Accounts receivable and unbilled receivable 573 ( 115 ) Prepaid expenses and other current assets 3,188 4 Operating lease right-of-use assets 408 408 Accounts payable and accrued expenses 1,428 1,325 Operating lease liabilities ( 420 ) ( 271 ) Other liabilities — ( 34 ) Net cash used in operating activities ( 23,748 ) ( 24,430 ) Investing activities: Capital expenditures ( 574 ) ( 931 ) Insurance proceeds from casualty loss — 114 Maturities of short-term investments 80,534 61,229 Purchases of short-term investments ( 67,491 ) ( 80,428 ) Sales of short-term investments 10,165 51,145 Net cash provided by investing activities 22,634 31,129 Financing activities: Proceeds from exercise of options — 75 Net cash provided by financing activities — 75 Net change in cash and cash equivalents ( 1,114 ) 6,774 Cash and cash equivalents—Beginning of period 16,347 11,943 Cash and cash equivalents—End of period $ 15,233 $ 18,717 Supplementary disclosure of cash flow activity: Supplemental disclosure of non-cash investing and financing activities: Acquisition of property and equipment included in accounts payable and accrued expenses $ — $ 255 See accompanying notes to the unaudited condensed financial statements. 8 Table of Contents CARDIFF ONCOLOGY, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. Organization and Basis of Presentation Business Organization and Overview Cardiff Oncology, Inc. (“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 RAS-mutated metastatic colorectal cancer, metastatic pancreatic cancer, as well as investigator-initiated trials in small cell lung cancer and triple negative breast 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". Basis of Presentation The accompanying unaudited interim condensed financial statements of Cardiff Oncology have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and the results of its operations and cash flows for the periods presented. The unaudited condensed balance sheet at December 31, 2022, has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by GAAP for annual financial statements. 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, 2022, included in the Company’s annual report on Form 10-K filed with the SEC on March 2, 2023. Liquidity The Company has incurred net losses since its inception and has negative operating cash flows. As of September 30, 2023, the Company had $ 81.4 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. The Company cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that the Company can raise additional funds by issuing equity securities, the Company’s stockholders may experience additional dilution. 2. Summary of Significant Accounting Policies During the nine months ended September 30, 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 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 are included in net loss attributable to common stockholders in the computation of basic and diluted earnings per share. 9 Table of Contents 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, 2023 2022 Options to purchase Common Stock 6,652,427 5,101,572 Warrants to purchase Common Stock 2,807,948 4,490,159 Series A Convertible Preferred Stock 877 877 Series E Convertible Preferred Stock — 1,342,250 9,461,252 10,934,858 Recent Accounting Pronouncement Not Yet Adopted In August 2020, the FASB issued ASU No. 2020-06 ("ASU 2020-06"), Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. 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 amendment is to be adopted through either a fully retrospective or modified retrospective method of transition. Early adoption is permitted. 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. 3. 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, 2023, and December 31, 2022: Fair Value Measurements at September 30, 2023 (in thousands) Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Money market fund $ 14,928 $ — $ — $ 14,928 Total included in cash and cash equivalents 14,928 — — 14,928 Available for sale investments: Certificate of deposit — 9,181 — 9,181 Corporate debt securities — 22,368 — 22,368 Commercial paper — 7,613 — 7,613 U.S. government agencies — 6,821 — 6,821 U.S. treasury securities 20,147 — — 20,147 Total available for sale investments 20,147 45,983 — 66,130 Total assets measured at fair value on a recurring basis $ 35,075 $ 45,983 $ — $ 81,058 10 Table of Contents Fair Value Measurements at December 31, 2022 (in thousands) Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Money market fund $ 15,722 $ — $ — $ 15,722 Total included in cash and cash equivalents 15,722 — — 15,722 Available for sale investments: Certificate of deposit — 16,023 — 16,023 Corporate debt securities — 49,535 — 49,535 Commercial paper — 13,187 — 13,187 U.S. government agencies — 2,288 — 2,288 U.S. treasury securities 7,887 — — 7,887 Total available for sale investments 7,887 81,033 — 88,920 Total assets measured at fair value on a recurring basis $ 23,609 $ 81,033 $ — $ 104,642 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, 2023 . 11 Table of Contents 4. Supplementary Balance Sheet Information Investments available for sale Investments available for sale consist of the following: As of September 30, 2023 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Maturity less than 1 year: Certificate of deposit $ 9,181 $ 3 $ ( 3 ) $ 9,181 Corporate debt securities 12,194 3 ( 28 ) 12,169 Commercial paper 7,616 — ( 3 ) 7,613 U.S. government agencies 6,852 — ( 31 ) 6,821 U.S. treasury securities 1,935 — ( 13 ) 1,922 Total maturity less than 1 year 37,778 6 ( 78 ) 37,706 Maturity 1 to 2 years: Corporate debt securities 10,281 3 ( 85 ) 10,199 U.S. treasury securities 18,478 — ( 253 ) 18,225 Total maturity 1 to 2 years 28,759 3 ( 338 ) 28,424 Total short-term investments $ 66,537 $ 9 $ ( 416 ) $ 66,130 As of December 31, 2022 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Maturity less than 1 year: Certificate of deposit $ 16,101 $ 3 $ ( 81 ) $ 16,023 Corporate debt securities 44,806 8 ( 275 ) 44,539 Commercial paper 13,203 4 ( 20 ) 13,187 Non U.S. government 2,284 4 — 2,288 U.S. 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 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 September 30, 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. 12 Table of Contents 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, 2023 (in thousands) Fair Market Value Gross Unrealized Loss Corporate debt securities $ 1,794 $ ( 10 ) Property and equipment Property and equipment consist of the following: (in thousands) As of September 30, 2023 As of December 31, 2022 Furniture and office equipment $ 1,081 $ 1,066 Leasehold improvements 2,568 2,560 Laboratory equipment 1,332 1,056 4,981 4,682 Less—accumulated depreciation and amortization ( 3,664 ) ( 3,413 ) Property and equipment, net $ 1,317 $ 1,269 Accrued Liabilities Accrued liabilities consisted of the following: (in thousands) As of September 30, 2023 As of December 31, 2022 Accrued compensation $ 2,455 $ 1,849 Clinical trials 2,878 2,333 Research agreements and services 591 509 Director fees 125 125 Patent, license and other fees 33 24 Other accrued liabilities 69 337 Total accrued liabilities $ 6,151 $ 5,177 5. Stockholders’ Equity Stock Options 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, (in thousands) 2023 2022 2023 2022 Included in research and development expense $ 294 $ 286 $ 985 $ 746 Included in selling, general and administrative expense 661 751 2,615 2,498 Total stock-based compensation expense $ 955 $ 1,037 $ 3,600 $ 3,244 The unrecognized compensation cost related to non-vested stock options outstanding at September 30, 2023, net of estimated forfeitures, was $ 7.5 million, which is expected to be recognized over a weighted-average remaining vesting period of 2.3 years. The weighted-average remaining contractual term of outstanding options as of September 30, 2023, was approximately 8.1 years. The total fair value of stock options vested during the nine months ended September 30, 2023 and 2022, were $ 4.0 million and $ 4.0 million, respectively. 13 Table of Contents 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, 2023 2022 Risk-free interest rate 3.62 % 1.87 % Dividend yield 0 % 0 % Expected volatility of Cardiff Oncology common stock 109 % 106 % 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: Total Options Weighted-Average Exercise Price Per Share Intrinsic Value Balance outstanding, December 31, 2022 5,069,458 $ 5.92 $ 19,322 Granted 2,138,624 $ 1.70 Forfeited and expired ( 555,655 ) $ 8.40 Balance outstanding, September 30, 2023 6,652,427 $ 4.36 $ 18,747 Exercisable at September 30, 2023 2,944,474 $ 5.88 $ 18,169 Vested and expected to vest at September 30, 2023 6,459,779 $ 4.42 $ 18,718 2021 Equity Incentive Plan In June 2021 the Company's stockholders approved the 2021 Omnibus Equity Incentive Plan ("2021 Plan"). The number of authorized shares in the 2021 Plan is equal to the sum of (i) 3,150,000 shares, plus (ii) the number of shares of Common Stock reserved, but unissued under the 2014 Plan; and (iii) the number of shares of Common Stock underlying forfeited awards under the 2014 Plan. 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, 2023, there were 2,013,871 shares available for issuance under the 2021 Plan. 2014 Equity Incentive Plan Subsequent to the adoption of the 2021 Plan, no additional equity awards can be made under the terms of the 2014 Plan. Inducement Grants The Company issues equity awards to certain new employees as inducement grants outside of its 2021 Plan. As of September 30, 2023, an aggregate of 1,435,256 shares were issuable upon the exercise of inducement grant stock options approved by the Company. Modification of Stock Options In June 2023 the Company modified stock options for a departing employee. The modification resulted in an incremental stock-based compensation expense of $ 0.6 million during the nine month period ended September 30, 2023. 14 Table of Contents Warrants A summary of warrant activity and changes in warrants outstanding, including both liability and equity classifications is presented below: Total Warrants Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term Balance outstanding, December 31, 2022 4,360,968 $ 5.33 2.1 years Expired ( 1,553,020 ) $ 10.54 Balance outstanding, September 30, 2023 2,807,948 $ 2.45 2.2 years Preferred Stock On August 8, 2023, the Company filed, with the Secretary of State of the State of Delaware, a Certificate of Elimination (the “Certificate of Elimination”) of Series B, Series C, Series D and Series E Convertible Preferred Stock removing the designation and other references to its Series B, Series C, Series D and Series E Convertible Preferred Stock from the Company’s Amended and Restated Certificate of Incorporation, as amended. The Certificate of Elimination eliminates and returns the 8,860 Series B, 200,000 Series C, 154,670 Series D and 865,824 Series E shares of preferred stock previously designated, and no longer issued and outstanding, to the status of authorized but unissued shares of preferred stock, without designation. 6. Commitments and Contingencies Executive Agreements Certain executive agreements provide for severance payments in case of terminations without cause or certain change of control scenarios. Research and Development Agreements 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. 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 nine months ended September 30, 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. These agreements include License fees, Royalties and Milestone payments. The Company also has a legacy license agreement in the field of oncology diagnostics under which royalty payments are due. These royalty payments are calculated as a percent of revenue. For the nine months ended September 30, 2023 and 2022, payments have not been material. Litigation 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. 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. 15 Table of Contents