What changed in this filing

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Item 9A. Controls and Procedures

2024-02-29 compared with 2023-03-02 · 97 added, 153 removed, 724 unchanged (26% of the section changed)

2 unchanged sentences

Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023.

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.

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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Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K filed on June 16, 2020).

Employment Agreement, dated February 22, 2021 by and between the Company and Vicki Kelemen (incorporated by reference to Exhibit 10.16 to Form 10-K filed on February 25, 2021).

Employment Agreement, dated July 12, 2021 by and between James Levine and Cardiff Oncology, Inc.

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

Consent of BDO USA, LLP.

Development Agreement between Cardiff Oncology, Inc.

and Pfizer, Inc.

dated June 30, 2023 (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on August 9, 2023).

Consent of BDO USA, P.C.

Power of Attorney (included on signature page hereto).

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Cardiff Oncology, Inc.

Clawback Policy.

101.INS XBRL Instance Document.

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Omitted portions have been filed separately with the SEC.

@ Portions of this exhibit (indicated by asterisks) have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv).

FORM 10-K SUMMARY

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Index to Financial Statements

Report of Independent Registered Public Accounting Firm (BDO USA, LLP;

Report of Independent Registered Public Accounting Firm (BDO USA, P.C.

San Diego, CA;

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

(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”).

(the “Company”) as of December 31, 2023 and 2022, the related statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the years then ended, and the 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, 2023 and 2022, 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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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Accrued clinical trial expenses

As disclosed in Note 2 to the financial statements, the Company expenses research and development expenditures as incurred, which include costs relating to clinical trial activities.

The Company accrues costs for clinical trial activities based upon estimates of the services performed and costs incurred that have not been invoiced by the service providers.

The Company’s clinical trial accrual balance at December 31, 2022 is $2.3 million, and the Company’s related 2022 clinical trial expenses are included in research and development expense of $27.1 million for the year ended December 31, 2022.

We identified accrued clinical trial expenses as a critical audit matter.

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 Company accrues costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by the service providers.

As of December 31, 2023, the Company’s clinical trial accrual balance of $4.3 million is included in accrued liabilities.

The Company’s related 2023 clinical trial expenses are included in research and development expense.

We identified accrued clinical trial expenses as a critical audit matter due to the application of management judgment over the estimate of services provided.

Specifically, evaluating the progress or stage of completion of the clinical trial activities under the Company’s research and development agreements is sensitive to the availability of information from service providers.

The Company considers several factors including the key terms of the clinical trial agreements, budgets, contract amendments, and

the progress of clinical trials toward completion (which includes consideration of patient enrollment).

Auditing these elements involved especially challenging auditor judgment due to the nature of the audit evidence available 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 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

• Testing management’s estimation of accrued clinical trial expenses by;

(i) obtaining and inspecting certain clinical trial agreements, budgets, and contract amendments, (ii) evaluating the Company’s documentation of trial progress and status (including consideration of patient enrollment), (iii) confirming certain amounts invoiced, and amounts paid directly with service providers, and (iv) testing a sample of clinical trial expenses incurred .

• 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), (iii) inquiring of clinical staff outside of finance to gain an understanding of the status of certain on-going clinical trials, and (iv) testing a sample of payments subsequent to year end.

/s/ BDO USA, P.C.

We have served as the Company’s auditor since 2007.

San Diego, California

March 2, 2023

February 29, 2024

Cardiff Oncology, Inc.

17 unchanged sentences

Operating lease liabilities 691 675

Other current liabilities — 42

Total current liabilities 10,440 7,808

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

44,677 and 41,964 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively

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

Additional paid-in capital 409,343 404,834

Service receivable — ( 139 )

Accumulated other comprehensive loss ( 67 ) ( 395 )

15 unchanged sentences

Interest income, net 4,069 1,581

Other income (expense), net ( 383 ) 15

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

Other expense, net ( 98 ) ( 383 )

Total other income, net 3,971 1,198

11 unchanged sentences

Other comprehensive loss:

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

Unrealized gain (loss) on securities available-for-sale 328 ( 253 )

Total comprehensive loss $ ( 41,113 ) $ ( 38,957 )

11 unchanged sentences

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 (1)

— — 4,412 — 34,187 — — — 34,187

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

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

Balance, December 31, 2021 716 1 41,964 4 400,503 ( 139 ) ( 142 ) ( 259,810 ) 140,417

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

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

3 unchanged sentences

Cumulative preferred stock dividend adjustment — — — — — — — 414 414

— — — — — — — 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 $ 0.8 million.

(2) See Note 2 to the financial statements.

Stock-based compensation — — — — 4,509 — — — $ 4,509

Other comprehensive gain — — — — — — 328 — $ 328

Net loss — — — — — — — ( 41,441 ) $ ( 41,441 )

Balance, December 31, 2023 61 $ — 44,677 $ 4 $ 409,343 $ — $ ( 67 ) $ ( 339,541 ) $ 69,739

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

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Stock-based compensation expense 4,509 4,256

Amortization of premiums on short-term investments 632 1,607

Change in fair value of derivative financial instruments—warrants — ( 285 )

(Accretion) amortization of (discounts) and premiums on short-term investments, net ( 921 ) 632

Release of clinical trial funding commitment — 139

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Sales of short-term investments 20,309 53,829

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

Net cash provided by investing activities 36,195 38,149

Financing activities

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

Proceeds from exercise of warrants — 1,263

Proceeds from exercise of options — 75

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Supplemental disclosure of non-cash investing and financing activities:

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

Cumulative preferred stock dividend adjustment $ — $ ( 414 )

$ ( 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” 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.

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 (“mCRC”), as well as investigator-initiated trials in metastatic pancreatic ductal adenocarcinoma (“mPDAC”), small cell lung cancer (“SCLC”), and triple negative breast cancer (“TNBC”).

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.

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Segment Reporting

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 in the United States.

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 regarding resource allocation and assessing performance.

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

Use of Estimates

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As of December 31, 2023 the Company’s clinical trial accrual balance of $ 4.3 million is included in accrued liabilities.

The Company’s related 2022 clinical trial expenses are included in research and development expense of $ 27.1 million.

Certain clinical trial expenses are released from service receivables classified within equity (see Note 5) as clinical trial services are performed.

The Company’s related 2023 clinical trial expenses are included in research and development expense.

Cash and Cash Equivalents

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Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments.

Cash and cash equivalents

The Company maintains deposit accounts at financial institutions that are in excess of federally insured limits.

1 unchanged sentence

The Company limits its exposure to credit loss by generally placing its cash in high credit quality financial institutions and investment in non FDIC insured money market funds denominated and payable in U.S.

Short-term investments

The Company follows an investment policy which requires short-term investments to be diversified across different types of instruments and issuers.

The investment policy also requires investments to be in high quality instruments.

The diversification and credit quality requirements of the Company's investment policy limits its exposure to credit loss.

The Company recognizes revenue when control of its products and services are transferred to its customers in an amount that reflects the consideration it expects to receive from its customers in exchange for those products and services.

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The fair value of warrants is determined using the Black-Scholes option-pricing model using assumptions regarding the historical volatility of Cardiff Oncology’s common stock price, the remaining life of the warrants, and the risk-free interest rates at each period end.

The Company thus uses model-derived valuations where inputs are observable in active markets to determine the fair value.

The Company thus uses model-derived valuations where inputs are observable in active markets to determine the

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

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.

These warrants expired during the first quarter of 2023.

At December 31, 2022, the fair value of these warrants was $ 0 .

Stock-Based Compensation

1 unchanged sentence

Fair Value of Financial Instruments

Financial instruments consist of cash equivalents, accounts receivable, accounts payable and derivative liabilities.

Financial instruments consist of cash equivalents, accounts receivable, and accounts payable.

The Company applies ASC 820 for financial assets and liabilities that are required to be measured at fair value and non-financial assets and liabilities that are not required to be measured at fair value on a recurring basis.

These financial instruments are stated at their

respective historical carrying amounts, which approximate fair value due to their short-term nature as they reflect current market interest rates.

These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature as they reflect current market interest rates.

The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities.

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ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

Operating lease ROU assets and liabilities are recognized at

commencement date based on the present value of lease payments over the lease term.

None of the Company’s operating leases provide an implicit rate, therefore the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

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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

In the normal course of business, Cardiff Oncology is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, stockholder lawsuits, product and environmental liability, and tax matters.

In accordance with FASB ASC Topic 450, Contingencies , Cardiff Oncology records such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

Cardiff Oncology, in accordance with this guidance, does not recognize gain contingencies until realized.

In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, stockholder lawsuits, product and environmental liability, and tax matters.

In accordance with FASB ASC Topic 450, Contingencies , the Company records such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

The Company, in accordance with this guidance, does not recognize gain contingencies until realized.

Research and Development

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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

(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.

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.

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

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.

4 unchanged sentences

Series A Convertible Preferred Stock 877 877

Series E Convertible Preferred Stock — 2,684,607

9,459,779 9,431,303

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

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Early adoption is permitted.

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

The Company will adopt this standard as of January 1, 2024 using the modified-retrospective method.

The Company is currently evaluating the adoption of ASU 2020-06, but does not expect it to have a material impact on the Company's financial statements.

In December 2023, the FASB issued ASU No.

2023-09 ("ASU 2023-09"), “Improvements to Income Tax Disclosures.” ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024 and for private businesses for annual periods beginning after December 15, 2025, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its financial statement disclosures.

Supplementary Balance Sheet Information

7 unchanged sentences

government agencies 835 — ( 1 ) 834

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

Total maturity less than 1 year 26,293 33 ( 17 ) 26,309

1 unchanged sentence

Corporate debt securities 8,437 6 ( 10 ) 8,433

treasury securities 18,505 — ( 79 ) 18,426

Total maturity 1 to 2 years 26,942 6 ( 89 ) 26,859

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

government 728 — — 728

government agencies 2,284 4 — 2,288

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

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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

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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, 2023.

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.

The Company periodically reviews the 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, the Company has 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 December 31, 2023, were substantially due to increases in interest rates, not due to increased credit risks associated with specific securities.

Accordingly, the Company has not recorded an allowance for credit losses.

It is not more likely than not that the Company 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:

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Corporate debt securities $ 397 $ ( 3 )

Total short-term investments $ 397 $ ( 3 )

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 )

Accrued Interest from short-term investments

Accrued interest from short-term investments contained within prepaid expenses and other current assets as of December 31, 2023 and 2022 was $ 0.6 million and $ 0.5 million, respectively.

Property and Equipment

7 unchanged sentences

Laboratory equipment 1,355 1,056

Property and equipment, gross 4,990 4,682

Less—accumulated depreciation ( 3,752 ) ( 3,413 )

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Accrued compensation $ 2,737 $ 1,849

Preferred stock dividend (1)

Clinical trials 4,309 2,333

Research agreements and services 530 509

Director fees 125 141

Patent, license and other fees 24 43

Other accrued liabilities 207 486

Total accrued liabilities $ 7,783 $ 5,177

(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.

As a lessee, the Company’s current lease includes its master facility lease which is considered an operating lease.

Master Facility Lease

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 its vacated space to third parties.

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 $ 63,000 per month with 3 % annual escalation.

The components of lease expense were as follows:

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Operating lease cost $ 714 $ 754

Operating sublease income — ( 403 )

Net operating lease cost $ 714 $ 754

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Cash paid included in operating cash flows $ 737 $ 612

ROU assets obtained in exchange for lease obligations:

Operating leases $ — $ 3,061

Total remaining annual commitments under non-cancelable operating lease agreements as of December 31, 2023, are summarized are as follows:

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Year Ending December 31, Operating Leases

Thereafter 136

Total future minimum lease payments $ 2,398

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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

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Balance outstanding, December 31, 2023 2,807,948 $ 2.45 1.9 years

Preferred Stock

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

Shares issued and outstanding

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

Series A Convertible Preferred Stock

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

The material terms of the Series A Convertible Preferred Stock consist of:

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Liquidation preference - Series A Convertible Preferred Stock $ 1,068 $ 1,044

Series E Convertible Preferred 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.

The Series N Warrants will be exercisable six months following the date of issuance at an exercise price of $ 2.39 per share and will expire on December 16, 2025.

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

Sales Agreement with Jefferies LLC

During May 2021, the Company sold 2.0 million shares of its common stock under the Sales Agreement with Jefferies LLC., for gross proceeds of approximately $ 20.0 million.

Pfizer Breakthrough Growth Initiative

During November 2021, the Company sold 2.4 million shares of its common stock under a Securities Purchase Agreement with Pfizer Inc.

("Pfizer"), in a registered direct offering for gross proceeds of approximately $ 15.0 million.

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 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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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 year ended December 31, 2023.

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

1 unchanged sentence

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 year ended December 31, 2021, related to the modifications.

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

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Years ended December 31,

Risk-free interest rate 1.62 % - 3.75 %

Risk-free interest rate (range) 3.56 % - 4.06 %

1.62 % - 3.75 %

1 unchanged sentence

Expected volatility (range) 105 % - 110 %

107 % - 110 %

Expected volatility (weighted-average) 109 % 106 %

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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 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:

(1) are granted “at-the-money”;

(2) exercisability is conditioned upon service through the vesting date;

(3) termination of service prior to vesting results in forfeiture;

(4) limited exercise period following termination of service;

and (5) are non-transferable and non-hedgeable.

Expected term — 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.

Forfeitures — The Company estimates forfeitures based on its historical experience.

9 unchanged sentences

Granted 2,138,624 $ 1.70

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

Cancelled ( 398,156 ) $ 4.62

Expired ( 13,272 ) $ 32.52

Balance Outstanding, December 31, 2022 5,069,458 $ 5.92 $ 19,322 7.4 years

Forfeited and expired ( 557,128 ) $ 9.43

Balance Outstanding, December 31, 2023

6,650,954 $ 4.27 $ 23,926 7.9 years

Vested and exercisable, December 31, 2023 3,124,492 $ 5.66 $ 22,456 6.9 years

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

Vested and expected to vest, December 31, 2023

6,462,464 $ 4.33 $ 23,853 7.8 years

Derivative Financial Instruments — Warrants

1 unchanged sentence

Accordingly, the warrants are remeasured at each balance sheet date based on their estimated fair value using the Black-Scholes option pricing model.

These warrants expired during the first quarter of 2023.

Changes in fair value are recorded within Company’s statements of operations.

2 unchanged sentences

Fair value of Cardiff Oncology common stock $ 1.40

Expected warrant term 0.1 years 1.1 years

Expected warrant term 0.1 years

Risk-free interest rate 4.12 %

11 unchanged sentences

December 31, 2022 Balance of derivative financial instruments — warrants liability

Expiration of Derivative Financial Instruments ( 64,496 ) —

Change in fair value of derivative financial instruments — warrants during the year recognized as a loss in the statement of operations

30 unchanged sentences

Commercial paper — 13,187 — 13,187

government — 728 — 728

government agencies — 2,288 — 2,288

treasury securities 7,887 — — 7,887

14 unchanged sentences

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.

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:

16 unchanged sentences

Research and development credits ( 515 ) 1 % ( 319 ) 1 %

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

Other ( 126 ) — % ( 1 ) — %

32 unchanged sentences

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.

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

During the years ended December 31, 2023 and 2022, no milestone or royalty payments were made.

13 unchanged sentences

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