SEC Form 10-Q filed by Cardiff Oncology Inc.

11/7/24 4:00:30 PM ET

$CRDF

Biotechnology: Biological Products (No Diagnostic Substances)

Health Care

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10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NUMBER 001-35558

CARDIFF ONCOLOGY, INC.

(Exact Name of registrant as specified in its charter)


Delaware		27-2004382
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11055 Flintkote Avenue, San Diego, California		92121
(Address of principal executive offices)		(Zip Code)

(858) 952-7570
(Registrant’s telephone number, including area code)


Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
Common Stock	CRDF	The Nasdaq Stock Market LLC

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

    Large accelerated filer ☐

    Accelerated filer ☐

    Non-accelerated filer ☒
 
    Smaller reporting company ☒

    Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 4, 2024, the issuer had 51,133,747 shares of Common Stock issued and outstanding.

Table of Contents

CARDIFF ONCOLOGY, INC.

Table of Contents


		Page
PART I	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (unaudited)	3

	Condensed Balance Sheets	3

	Condensed Statements of Operations	4

	Condensed Statements of Comprehensive Loss	5

	Condensed Statements of Stockholders’ Equity	6

	Condensed Statements of Cash Flows	8

	Notes to Condensed Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4.	Controls and Procedures	23

PART II	OTHER INFORMATION	24

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Mine Safety Disclosures	24

Item 5.	Other Information	24

Item 6.	Exhibits	24

SIGNATURES		25

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARDIFF ONCOLOGY, INC.

CONDENSED BALANCE SHEETS

(in thousands, except par value)

(Unaudited)


	September 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	13,038		$	21,655
Short-term investments		44,629			53,168
Accounts receivable and unbilled receivable		618			288
Prepaid expenses and other current assets		1,047			2,301
Total current assets		59,332			77,412
Property and equipment, net		993			1,238
Operating lease right-of-use assets		1,304			1,708
Other assets		1,267			1,279
Total Assets	$	62,896		$	81,637

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,643		$	1,966
Accrued liabilities		7,175			7,783
Operating lease liabilities		707			691
Total current liabilities		12,525			10,440
Operating lease liabilities, net of current portion		979			1,458
Total Liabilities		13,504			11,898

Commitments and contingencies (Note 6)

Stockholders’ equity
Preferred stock, 20,000 shares authorized; 277 designated as Series A Convertible Preferred Stock; 61 shares outstanding at September 30, 2024 and December 31, 2023 with liquidation preference of $1,086 and $1,068 at September 30, 2024 and December 31, 2023, respectively		—			—
Common stock, $0.0001 par value, 150,000 shares authorized; 48,731 and 44,677 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		5			4
Additional paid-in capital		421,697			409,343
Accumulated other comprehensive gain (loss)		82			(67	)
Accumulated deficit		(372,392	)		(339,541	)
Total stockholders’ equity		49,392			69,739
Total liabilities and stockholders’ equity	$	62,896		$	81,637

See accompanying notes to the unaudited condensed financial statements.

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CARDIFF ONCOLOGY, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Royalty revenues	$	165		$	141		$	532		$	332
Costs and expenses:
Research and development		9,640			8,022			27,140			25,094
Selling, general and administrative		3,126			2,939			9,471			10,318
Total operating expenses		12,766			10,961			36,611			35,412

Loss from operations		(12,601	)		(10,820	)		(36,079	)		(35,080	)

Other income (expense), net:
Interest income, net		741			1,068			2,472			3,061
Other income (expense), net		5			21			(37	)		(85	)
Total other income, net		746			1,089			2,435			2,976

Net loss		(11,855	)		(9,731	)		(33,644	)		(32,104	)

Preferred stock dividend payable on Series A Convertible Preferred Stock		(6	)		(6	)		(18	)		(18	)

Net loss attributable to common stockholders	$	(11,861	)	$	(9,737	)	$	(33,662	)	$	(32,122	)

Net loss per common share — basic and diluted	$	(0.25	)	$	(0.22	)	$	(0.74	)	$	(0.72	)

Weighted-average shares outstanding — basic and diluted		46,865			44,677			45,461			44,677

See accompanying notes to the unaudited condensed financial statements.

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CARDIFF ONCOLOGY, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net loss	$	(11,855	)	$	(9,731	)	$	(33,644	)	$	(32,104	)
Other comprehensive loss:
Unrealized gain (loss) on securities available-for-sale		179			24			149			(12	)
Total comprehensive loss		(11,676	)		(9,707	)		(33,495	)		(32,116	)

Preferred stock dividend payable on Series A Convertible Preferred Stock		(6	)		(6	)		(18	)		(18	)

Comprehensive loss attributable to common stockholders	$	(11,682	)	$	(9,713	)	$	(33,513	)	$	(32,134	)

See accompanying notes to the unaudited condensed financial statements.

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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, December 31, 2023		61	$	—		44,677	$	4	$	409,343		$	(67	)	$	(339,541	)	$	69,739
Modified-retrospective adoption of ASU 2020-06(1)		—		—		—		—		(793	)		—			793			—
Stock-based compensation		—		—		—		—		1,124			—			—			1,124
Issuance of common stock upon exercise of stock options		—		—		33		—		107			—			—			107
Other comprehensive loss		—		—		—		—		—			(65	)		—			(65	)
Net loss		—		—		—		—		—			—			(10,011	)		(10,011	)
Balance, March 31, 2024		61		—		44,710		4		409,781			(132	)		(348,759	)		60,894
Issuance of common stock, net of expenses(2)		—		—		792		1		1,804			—			—			1,805
Stock-based compensation		—		—		—		—		1,179			—			—			1,179
Issuance of common stock upon exercise of stock options		—		—		100		—		253			—			—			253
Other comprehensive gain		—		—		—		—		—			35			—			35
Net loss		—		—		—		—		—			—			(11,778	)		(11,778	)
Balance, June 30, 2024		61		—		45,602		5		413,017			(97	)		(360,537	)		52,388
Issuance of common stock, net of expenses(3)		—		—		3,129		—		7,427			—			—			7,427
Stock-based compensation		—		—		—		—		1,253			—			—			1,253
Other comprehensive gain		—		—		—		—		—			179			—			179
Net loss		—		—		—		—		—			—			(11,855	)		(11,855	)
Balance, September 30, 2024		61	$	—		48,731	$	5	$	421,697		$	82		$	(372,392	)	$	49,392

(1)

See Note 2.

(2)

Net of expenses of $197,000.

(3)

Net of expenses of $285,000.

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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, December 31, 2022		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 loss		—		—		—		—		—		24			—			24
Net loss		—		—		—		—		—		—			(9,731	)		(9,731	)
Balance, September 30, 2023		61	$	—		44,677	$	4	$	408,434	$	(407	)	$	(330,204	)	$	77,827

See accompanying notes to the unaudited condensed financial statements.

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CARDIFF ONCOLOGY, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Nine Months Ended September 30,
	2024			2023
Operating activities
Net loss	$	(33,644	)	$	(32,104	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		308			295
Stock-based compensation expense		3,556			3,600
Accretion of discounts on short-term investments, net		(440	)		(716	)
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivable		(330	)		573
Prepaid expenses and other current assets		1,084			3,188
Operating lease right-of-use assets		404			408
Other assets		12			—
Accounts payable and accrued liabilities		2,087			1,428
Operating lease liabilities		(463	)		(420	)
Net cash used in operating activities		(27,426	)		(23,748	)

Investing activities
Capital expenditures		(80	)		(574	)
Maturities of short-term investments		22,595			80,534
Purchases of short-term investments		(23,563	)		(67,491	)
Sales of short-term investments		10,265			10,165
Net cash provided by investing activities		9,217			22,634

Financing activities
Proceeds from sales of common stock, net of expenses of $482 and $0, respectively		9,232			—
Proceeds from exercise of options		360			—
Net cash provided by financing activities		9,592			—
Net change in cash and cash equivalents		(8,617	)		(1,114	)
Cash and cash equivalents—Beginning of period		21,655			16,347
Cash and cash equivalents—End of period	$	13,038		$	15,233

See accompanying notes to the unaudited condensed financial statements.

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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 ("SoC") therapeutics in clinical programs targeting indications such as RAS-mutated metastatic colorectal cancer (“mCRC”), as well as ongoing or planned 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 SoC 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, 2023, 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, 2023, included in the Company’s annual report on Form 10-K filed with the SEC on February 29, 2024.

Liquidity

The Company has incurred net losses since its inception and has negative operating cash flows. As of September 30, 2024, the Company had $57.7 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, 2024, 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, 2023.

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.

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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,
	2024		2023
Options to purchase Common Stock		8,348,344		6,652,427
Warrants to purchase Common Stock		2,807,353		2,807,948
Series A Convertible Preferred Stock		877		877
		11,156,574		9,461,252

Recently Adopted Accounting Pronouncement

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. This update was 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. Early adoption is permitted. The Company adopted this standard as of January 1, 2024 using the modified-retrospective method. As a result of the adoption the Company reversed the accretion of preferred stock dividends originally recorded in 2005 related to the Series A Convertible Preferred Stock of $793,000.

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, 2024, and December 31, 2023:


	Fair Value Measurements at September 30, 2024
(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	$	12,591	$	—	$	—	$	12,591
U.S. treasury securities		298		—		—		298
Total included in cash and cash equivalents		12,889		—		—		12,889

Available for sale investments:
Certificate of deposit		—		334		—		334
Corporate debt securities		—		25,091		—		25,091
Commercial paper		—		310		—		310
U.S. treasury securities		18,894		—		—		18,894
Total available for sale investments		18,894		25,735		—		44,629

Total assets measured at fair value on a recurring basis	$	31,783	$	25,735	$	—	$	57,518

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	Fair Value Measurements at December 31, 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	$	21,606	$	—	$	—	$	21,606
Total included in cash and cash equivalents		21,606		—		—		21,606

Available for sale investments:
Certificate of deposit		—		8,333		—		8,333
Corporate debt securities		—		19,373		—		19,373
Commercial paper		—		6,202		—		6,202
U.S. government agencies		—		834		—		834
U.S. treasury securities		18,426		—		—		18,426
Total available for sale investments		18,426		34,742		—		53,168

Total assets measured at fair value on a recurring basis	$	40,032	$	34,742	$	—	$	74,774

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, 2024.

4. Supplementary Balance Sheet Information

Investments available for sale

Investments available for sale consisted of the following:


	As of September 30, 2024
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Maturity less than 1 year:
Certificate of deposit	$	334	$	—	$	—		$	334
Corporate debt securities		16,213		36		(2	)		16,247
Commercial paper		308		2		—			310
U.S. treasury securities		18,896		8		(10	)		18,894
Total maturity less than 1 year		35,751		46		(12	)		35,785
Maturity 1 to 2 years:
Corporate debt securities		8,796		49		(1	)		8,844
Total maturity 1 to 2 years		8,796		49		(1	)		8,844

Total short-term investments	$	44,547	$	95	$	(13	)	$	44,629

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	As of December 31, 2023
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Maturity less than 1 year:
Certificate of deposit	$	8,317	$	16	$	—		$	8,333
Corporate debt securities		10,948		8		(16	)		10,940
Commercial paper		6,193		9		—			6,202
U.S. government agencies		835		—		(1	)		834
Total maturity less than 1 year		26,293		33		(17	)		26,309
Maturity 1 to 2 years:
Corporate debt securities		8,437		6		(10	)		8,433
U.S. treasury securities		18,505		—		(79	)		18,426
Total maturity 1 to 2 years		26,942		6		(89	)		26,859

Total short-term investments	$	53,235	$	39	$	(106	)	$	53,168

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, 2024, were substantially due to changes 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 consisted of the following:


	As of September 30, 2024
(in thousands)	Fair Market Value		Gross Unrealized Loss
Total	$	—	$	—


	As of December 31, 2023
(in thousands)	Fair Market Value		Gross Unrealized Loss
Corporate debt securities	$	397	$	(3	)

Property and equipment

Property and equipment consisted of the following:


(in thousands)	As of September 30, 2024			As of December 31, 2023
Furniture and office equipment	$	1,067		$	1,067
Leasehold improvements		2,568			2,568
Laboratory equipment		1,414			1,355
Property and equipment, gross		5,049			4,990
Less—accumulated depreciation and amortization		(4,056	)		(3,752	)
Property and equipment, net	$	993		$	1,238

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Accrued Liabilities

Accrued liabilities consisted of the following:


(in thousands)	As of September 30, 2024		As of December 31, 2023
Clinical trials	$	4,271	$	4,309
Accrued compensation		1,993		2,737
Research agreements and services		637		530
Other accrued liabilities		274		207
Total accrued liabilities	$	7,175	$	7,783

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)	2024		2023		2024		2023
Included in research and development expense	$	436	$	294	$	1,223	$	985
Included in selling, general and administrative expense		817		661		2,333		2,615
Total stock-based compensation expense	$	1,253	$	955	$	3,556	$	3,600

The unrecognized compensation cost related to non-vested stock options outstanding at September 30, 2024, net of estimated forfeitures, was $8.1 million, which is expected to be recognized over a weighted-average remaining vesting period of 2.4 years. The weighted-average remaining contractual term of outstanding options as of September 30, 2024, was approximately 7.7 years. The total fair value of stock options vested during the nine months ended September 30, 2024 and 2023, were $3.6 million and $4.0 million, 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,
	2024			2023
Risk-free interest rate		4.06	%		3.62	%
Dividend yield		0	%		0	%
Expected volatility of Cardiff Oncology common stock		106	%		109	%
Expected term	5.8 years			5.3 years

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, 2023		6,650,954		$	4.27	$	23,926
Granted		1,899,096		$	3.40
Exercised		(133,614	)	$	2.69
Forfeited and expired		(68,092	)	$	23.06
Balance outstanding, September 30, 2024		8,348,344		$	3.94	$	2,542,885
Exercisable at September 30, 2024		4,431,853		$	4.64	$	1,235,936
Vested and expected to vest at September 30, 2024		8,132,900		$	3.97	$	2,451,731

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2021 Equity Incentive Plan

In June 2021 the Company's stockholders approved the 2021 Omnibus Equity Incentive Plan ("2021 Plan"). As of September 30, 2024 the number of authorized shares in the 2021 Plan is equal to the sum of (i) 8,150,000 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. As of September 30, 2024, there were 3,155,783 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, 2024, an aggregate of 1,380,248 shares were issuable upon the exercise of inducement grant stock options approved by the Company.

Rescinding and reissuance of March 2024 stock options

On May 30, 2024, the Board of Directors of the Company approved the rescinding of an aggregate of 1,697,712 shares of common stock issuable upon exercise of stock options granted on March 7, 2024 at an exercise price of $3.51 per share to employees and officers of the Company. On May 30, 2024, the Board of Directors of the Company approved the grant of an aggregate of 1,697,712 shares of common stock issuable upon exercise of stock options at an exercise price of $3.51 per share to employees and officers of the Company, subject to stockholder approval of an increase in the shares of common stock available for issuance pursuant to the Company’s 2021 Equity Incentive Plan at the Company’s annual meeting on June 20, 2024. The increase of shares available was approved by shareholders at the June 20, 2024 meeting, thus completing the requirements for the reissuance of the grant. The terms of the reissued grant were identical to the rescinded grant, therefore the transaction does not represent a stock option modification.

Warrants

A summary of warrant activity and changes in warrants outstanding, classified as equity is presented below:


	Total Warrants			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term
Balance outstanding, December 31, 2023		2,807,948		$	2.45	1.9 years
Expired		(595	)	$	252.72
Balance outstanding, September 30, 2024		2,807,353		$	2.40	1.2 years

Sale of Common Stock

During the three months ended September 30, 2024, the Company received net proceeds of $7.4 million from the sale of 3.1 million shares of its common stock under the Sales Agreement with Jefferies LLC.

During the nine months ended September 30, 2024, the Company received net proceeds of $9.2 million from the sale of 3.9 million shares of its common stock under the Sales Agreement with Jefferies LLC.

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.

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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, 2024 and 2023 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. For the nine months ended September 30, 2024 and 2023, payments have not been material. The Company also has a legacy license agreement in the field of oncology diagnostics under which royalty payments are due to the Company. These royalty payments are calculated as a percent of revenue.

Litigation

On May 13, 2024, a purported stockholder of the Company filed a putative class action in the Court of Chancery of the State of Delaware captioned Vrana v. James O. Armitage et al., C.A. No. 2024-0507-MTZ (Del. Ch.) (“Action”). The Action was mooted on June 20, 2024 when the Company’s stockholders voted: (i) to elect all 7 nominees for director to serve until the 2025 Annual Meeting of Stockholders; and (ii) to approve an amendment to the Company’s 2021 Equity Incentive Plan to increase the number of shares issuable thereunder to 8,150,000 shares. On June 26, 2024, the Court entered an order dismissing the Action but retained jurisdiction solely for the purpose of resolving the plaintiff’s counsel’s anticipated motion for an award of attorneys’ fees and expenses. Without admitting any fault or wrongdoing, the Company agreed to pay $400,000 in attorneys’ fees and expenses to the plaintiff’s counsel in connection with the mooted claims. In entering the order, the Court did not review, and did not pass judgment on, the payment of the attorneys’ fees and expenses. The Company paid the plaintiff’s counsel fees and expenses during September 2024, which was recorded within selling general and administrative expense.

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 could result in a material adverse effect on the Company’s business or financial condition.

7. Subsequent Events

Sale of Common Stock

From October 1, 2024 through November 4, 2024, the Company sold 2.4 million shares of its common stock under the Sales Agreement with Jefferies LLC. Gross proceeds from these sales was $7.0 million.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding the future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions.

In addition, our business and financial performance may be affected by the factors that are discussed under “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 29, 2024. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

The following discussion and analysis is qualified in its entirety by, and should be read in conjunction with, the more detailed information set forth in the financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Overview

We are a clinical-stage biotechnology company leveraging PLK1 inhibition, a well-validated oncology drug target, to develop novel therapies across a range of cancers with the greatest unmet medical need. Our goal is to target tumor vulnerabilities with treatment combinations of onvansertib, our oral and highly selective PLK1 inhibitor, and standard-of-care ("SoC") therapeutics. We are focusing our clinical program in indications such as RAS-mutated metastatic colorectal cancer ("mCRC"), as well as in investigator-initiated ongoing or planned trials in metastatic pancreatic ductal adenocarcinoma ("mPDAC"), small cell lung cancer ("SCLC"), and triple negative breast cancer ("TNBC"). Our clinical development programs incorporate tumor genomics and biomarker assays to refine assessment of patient response to treatment.

Our Lead Drug Candidate, Onvansertib

Onvansertib is an oral, small molecule drug candidate that is highly specific for PLK1 inhibition with a 24-hour half-life.

We believe the attributes of onvansertib described below, as well as early clinical evidence of favorable safety and efficacy, with expected on-target, manageable and transient side effects, may prove beneficial in addressing clinical therapeutic needs across a variety of cancers:

•

Onvansertib is highly potent and highly selective against the PLK1 enzyme (IC50 = 2nM; IC50 is the concentration for 50% inhibition), compared to prior PLK1 inhibitors that were pan-inhibitors of several PLK targets. Low or no activity of onvansertib was observed on a panel of 63 kinases (IC50>500 nM), including the PLK members PLK2 and PLK3 (IC50>10,000 nM);

•

Onvansertib is orally bioavailable, allowing for relative ease and flexibility of dosing;

•

Onvansertib has a relatively short drug half-life of 24 hours, allowing for flexible dosing and scheduling which has shown favorable safety and tolerability across multiple clinical trials.

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In vitro studies have shown synergistic effects when onvansertib was administered in combination with different cytotoxic agents including microtubule-targeting agents, topoisomerase 1 inhibitors, antimetabolites, alkylating agents, proteasome inhibitors, kinase inhibitors, PARP inhibitors, BCL-2 inhibitors, and androgen biosynthesis inhibitors.

In addition, in vivo combination studies have confirmed the positive results obtained in vitro and additive or synergistic effects on efficacy have been observed in xenograft models of onvansertib in combination with irinotecan, 5-fluorouracil ("5-FU"), abiraterone, PARP inhibitors, venetoclax, paclitaxel, or bevacizumab. Combining onvansertib with SoC cancer agents provides opportunities for synergy with many cancer therapies.

There are several ongoing and planned clinical trials of onvansertib in multiple indications: one trial (CRDF-004) in first-line treatment in patients with RAS-mutated mCRC, and investigator-initiated trials in first-line mPDAC, relapsed SCLC and unresectable locally advanced or metastatic TNBC.

RAS-mutated mCRC Program:

CRDF-004 Randomized Clinical Trial in First-Line RAS-mutated mCRC

CRDF-004 is a Phase 2 open-label, randomized multi-center clinical trial of onvansertib in combination with SoC FOLFIRI and bevacizumab or FOLFOX and bevacizumab for the first-line treatment of patients with RAS-mutated mCRC. The primary objectives of the CRDF-004 trial are to evaluate onvansertib’s safety and efficacy in combination with the SoC, as well as to evaluate two doses of onvansertib, 20mg and 30mg, given in combination with SoC, against SoC alone. The primary endpoint of the trial is objective response rate ("ORR"). Progression-free survival and duration of response will be secondary endpoints. We anticipate releasing initial data from the CRDF-004 trial in the fourth quarter of 2024. This trial is conducted in partnership with Pfizer Ignite, an end-to-end service for biotech companies, and it is expected to enroll approximately 90 evaluable patients. In February 2024 it was announced that the first patient dosed for this trial. For more information, please visit NCT06106308 at www.clinicialtrials.gov.

Contingent upon the results of CRDF-004, we plan to initiate CRDF-005, a Phase 3, randomized trial with registrational intent. The FDA has agreed that a seamless trial with ORR at an interim point is an acceptable endpoint to pursue accelerated approval, with progression-free survival and trend in overall survival being the endpoints for full approval.

Phase 1b/2 Clinical Trial in Second-Line KRAS-mutated mCRC

TROV-054, a Phase 1b/2 open-label multi-center clinical trial of onvansertib in combination with SoC FOLFIRI and bevacizumab for the second-line treatment of patients with KRAS-mutated mCRC, completed enrollment in October 2022.

The primary objectives of this trial were to evaluate the Dose-Limiting Toxicities ("DLTs"), maximum tolerated dose ("MTD") and recommended Phase 2 dose ("RP2D") of onvansertib in combination with FOLFIRI and bevacizumab (Phase 1b) and to continue to assess the safety and preliminary efficacy of onvansertib in combination with FOLFIRI and bevacizumab patients with KRAS-mutated mCRC (Phase 2). For more information, please visit NCT03829410 at www.clinicialtrials.gov.

Data presented on August 7, 2023, provided an update of the ongoing TROV-054 Phase 1b/2 single arm clinical trial in KRAS-mutated metastatic colorectal cancer:

•

ORR across all evaluable patients was 29%, with 19 of 66 evaluable patients achieving an objective response. Responses have been observed across multiple KRAS variants;

•

Median duration of response ("mDoR") across all evaluable patients was 12.0 months (95% confidence interval ("CI"): 8.9 – not reached);

•

Median progression free survival ("mPFS") across all evaluable patients was 9.3 months (95% CI: 7.8 – 14). Historical control trials of different drug combinations, including the SoC of FOLFIRI with bevacizumab, in similar patient populations have shown ORR and mPFS of 5 – 13% and ~4.5 – 6.7 months, respectively;

•

A subgroup analysis of patients who were bevacizumab naïve when they entered second-line therapy vs. patients who had received prior bevacizumab in first-line therapy showed that patients who were bevacizumab naïve (n=15) had an ORR of 73% and mPFS of 15 months, which is well above historical controls. In contrast, patients previously treated with bevacizumab (n=51) had an ORR of 16% and mPFS of 7.8 months;

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•

Data on Treatment Emergent Adverse Events ("TEAEs") on the trial showed that onvansertib is well-tolerated when used in combination with FOLFIRI and bevacizumab. The more severe, grade 4 TEAEs are either neutropenia or leukopenia, which are common events in patients treated with FOLFIRI and bevacizumab. None of the patients with grade 4 TEAEs discontinued treatment due to their condition and all resolved without issue. There were no major or unexpected toxicities seen in the trial;

•

Data from the Phase 1b portion of this trial was published in the peer-reviewed journal Clinical Cancer Research, February 6, 2024 edition;

•

Data from the Phase 2 portion of this trial was published online in the peer-reviewed journal of Clinical Oncology on October 30, 2024.

Based on the interim results of the TROV-054 trial, we previously designed the ONSEMBLE trial (CRDF-003) as the next phase of our mCRC program. Upon further review of the clinical data from the bevacizumab naïve subgroup (those patients who did not receive bevacizumab in their first-line therapy), the preclinical data on the mechanism of action and the feedback from the FDA on our clinical development strategy, we made the decision to discontinue enrollment in the ONSEMBLE trial and to initiate the CRDF-004 clinical trial.

Phase 2 Clinical Trial in Second-Line RAS-mutated mCRC

The ONSEMBLE trial (CRDF-003) is a Phase 2 randomized, open-label multi-center clinical trial of onvansertib in combination with SoC FOLFIRI and bevacizumab for the second-line treatment of patients with RAS-mutated mCRC. The primary objectives of the ONSEMBLE trial are to evaluate onvansertib’s safety and efficacy in combination with FOLFIRI and bevacizumab, as well as to evaluate two doses of onvansertib, 20mg and 30mg, given in combination with FOLFIRI and bevacizumab, against FOLFIRI and bevacizumab alone. The primary endpoint of the trial is ORR. For more information, please visit NCT05593328 at www.clinicialtrials.gov.

The ONSEMBLE trial enrollment was closed in August 2023 as part of our shift to a first-line mCRC program, and the 23 patients enrolled continued treatment per protocol.

Data presented on February 29, 2024, provided the first update of the ongoing ONSEMBLE Phase 2 randomized clinical trial in RAS-mutated mCRC:

•

ORR data for each arm of the trial and for the two experimental arms combined are shown in the table below. The table also presents ORR data for two subgroups of patients: those who were bevacizumab naïve when they entered second-line therapy vs. patients who had received prior bevacizumab in first-line therapy.


Objective Response Rate	Bevacizumab Naïve Patients(1)	Bevacizumab Exposed Patients	All Patients
FOLFIRI/bev (SoC alone); (N=6)	0% (0 of 3)	0% (0 of 3)	0% (0 of 6)
Onvansertib 20mg + SoC; (N=8)	50% (1 of 2)	0% (0 of 6)	13% (1 of 8)
Onvansertib 30mg + SoC; (N=7)	50% (1 of 2)	0% (0 of 5)	14% (1 of 7)
Onvansertib (all doses) + SoC; (N=15)	50% (2 of 4)	0% (0 of 11)	13% (2 of 15)

(1)

The two partial responses were confirmed on the patients' subsequent scans.

•

Data on TEAEs on the trial showed that onvansertib is well-tolerated when used in combination with FOLFIRI and bevacizumab. No Grade 4 TEAEs were observed for the arms of FOLFIRI and bevacizumab alone and onvansertib 30mg given in combination with FOLFIRI and bevacizumab. Two Grade 4 TEAEs of neutropenia were seen in patients receiving 20mg onvansertib given in combination with FOLFIRI and bevacizumab. Both patients recovered within 7 and 10 days after withholding the study treatment and no dose reductions in subsequent treatment cycles were needed. There were no major or unexpected toxicities seen in the trial.

The ORR data from the randomized ONSEMBLE trial validates the findings observed in our earlier single-arm Phase 1b/2 KRAS-mutated mCRC trial (TROV-054). In the ONSEMBLE trial, objective responses were observed only in bevacizumab naïve patients versus bevacizumab exposed patients. In addition, these objective responses were present only in bevacizumab naïve patients randomized to the experimental arms of onvansertib in combination with FOLFIRI and bevacizumab vs. bevacizumab naïve patients randomized to the FOLFIRI and bevacizumab alone control arm.

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mPDAC Program:

Phase 2 Investigator-Initiated Clinical Trial in First-Line mPDAC

In February 2024, the FDA approved NALIRIFOX as a first-line treatment option for mPDAC. As a result, we are currently planning to support a new investigator-initiated mPDAC Phase 2 trial of onvansertib in combination with first-line SoC NALIRIFOX, details of which we will announce when available. The trial would replace a previously planned two-cohort, non-randomized Phase 2 trial of onvansertib in combination with first-line SoC Gemzar® and Abraxane® which was to be conducted at the OHSU Knight Cancer Institute.

Phase 2 Clinical Trial in mPDAC

CRDF-001 is a Phase 2 open-label multi-center clinical trial of onvansertib in combination with nanoliposomal irinotecan (Onivyde®), leucovorin, and fluorouracil for 2nd line treatment of patients with mPDAC, which is being conducted at six clinical trial sites across the U.S. – The Mayo Clinic Cancer Centers (Arizona, Minnesota, and Florida), Kansas University Medical Center, Inova Schar Cancer Institute, and the University of Nebraska Medical Center. Enrollment for this trial closed in October 2023.

The objective of this trial is to assess the safety and preliminary efficacy of onvansertib in combination with nanoliposomal irinotecan (Onyvide®), 5-FU and leucovorin as a 2nd line treatment in patients with mPDAC who have failed first-line gemcitabine-based therapy. For more information, please visit NCT04752696 at www.clinicialtrials.gov.

Preliminary data presented on September 26, 2023 provided an update of the ongoing CRDF-001 Phase 2 open label clinical trial in mPDAC:

•

Preliminary data from 21 patients evaluable for radiographic response showed 1 patient achieving a confirmed partial response (“PR”) and 3 patients achieving unconfirmed PR that were awaiting confirmatory scans;

•

19% objective response rate ORR achieved compared to historical control of 7.7% in second-line setting;

•

5.0 months mPFS achieved compared to historical control of 3.1 months with SoC;

An update provided on February 29, 2024 indicated 3 of the 4 PRs are confirmed PRs and 1 of the 4 PRs did not confirm on their subsequent scan.

Other Clinical Programs:

Phase 2 Investigator-Initiated Clinical Trial in SCLC

A single-arm, two-stage, Phase 2 trial of onvansertib monotherapy in patients with relapsed SCLC at the University of Pittsburgh Medical Center ("UPMC"), completed enrollment in July 2023.In October 2024, the trial was re-opened for enrollment at the University of Maryland Greenebaum Comprehensive Cancer Center (“UMGCCC”) following the investigator’s relocation to this location. The primary endpoint of the trial is ORR, while key secondary endpoints include PFS and overall survival. For more information, please visit NCT05450965 at www.clinicialtrials.gov.

An examination of the safety data from the first six patients by the institutional review board confirmed the trial can continue to enroll as planned. Preliminary efficacy data for seven patients presented on September 26, 2023, showed one confirmed PR, three stable disease (“SD”) and three progressive disease (“PD”). The disease control rate (“DCR”), including PR and SD, is 57% (4 of 7 patients).

Phase 1b/2 Investigator-Initiated Clinical Trial in TNBC

A single-arm, Phase 1b/2 trial of onvansertib in combination with paclitaxel in patients with unresectable locally advanced or metastatic TNBC is open for enrollment at Dana Farber Cancer Institute ("DFCI"). In Phase 1b, approximately 14-16 patients will be treated with different doses of onvansertib in combination with a fixed dose of paclitaxel to determine the maximum tolerated dose and RP2D of onvansertib. In Phase 2, approximately 34 patients will be treated with the selected onvansertib RP2D in combination with paclitaxel.

The primary endpoint of Phase 2 of the trial is ORR, with PFS included as a secondary endpoint. For more information, please visit NCT05383196 at www.clinicialtrials.gov.

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Critical Accounting Policies

Our accounting policies are described in ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS of our Annual Report on Form 10-K as of and for the year ended December 31, 2023, filed with the SEC on February 29, 2024. There have been no changes to our critical accounting policies since December 31, 2023.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2024 and 2023

Revenues

Total revenues were $0.2 million for the three months ended September 30, 2024, as compared to $0.1 million for the prior period. Revenues are from our sales-based or usage-based royalties on other intellectual property licenses, unrelated to onvansertib. Revenue recognition of the royalty depends on the timing and overall sales activities of the licensees.

Research and Development Expenses

Research and development expenses consisted of the following:


	Three Months Ended September 30,
(in thousands)	2024		2023		Increase (Decrease)
Salaries and staff costs	$	1,579	$	1,615	$	(36	)
Stock-based compensation		436		294		142
Clinical trials, outside services, and lab supplies		7,153		5,603		1,550
Facilities and other		472		510		(38	)
Total research and development	$	9,640	$	8,022	$	1,618

Research and development expenses increased by $1.6 million for the three months ended September 30, 2024, compared to the same period in 2023. The overall increase in expenses was primarily due to costs associated with clinical programs and outside service costs related to the development of our lead drug candidate, onvansertib.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consisted of the following:


	Three Months Ended September 30,
(in thousands)	2024		2023		Increase (Decrease)
Salaries and staff costs	$	733	$	731	$	2
Stock-based compensation		817		661		156
Outside services and professional fees		1,176		1,011		165
Facilities and other		400		536		(136	)
Total selling, general and administrative	$	3,126	$	2,939	$	187

Selling, general and administrative expenses increased by $0.2 million for the three months ended September 30, 2024, compared to the same period in 2023. The overall increase in expenses was primarily from outside services and professional fees, due to the settlement of litigation during the quarter, offset by a decreases in corporate legal expenses. Stock-based compensation expense increased due to new grants issued during the current year. The decrease in facilities and other costs was primarily due to reduced insurance costs compared to the prior period.

Interest Income, Net

Interest income, net was $0.7 million for the three months ended September 30, 2024 as compared to $1.1 million for the same period of 2023. Our interest income is primarily from our our short-term investment portfolios and money market accounts. The amount of interest income earned varies each period based on the balance of our accounts and interest rates.

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Nine Months Ended September 30, 2024 and 2023

Revenues

Total revenues were $0.5 million for the nine months ended September 30, 2024, as compared to $0.3 million for the same period in 2023. Revenues are from our sales-based or usage-based royalties on other intellectual property licenses, unrelated to onvansertib. Revenue recognition of the royalty depends on the timing and overall sales activities of the licensees.

Research and Development Expenses

Research and development expenses consisted of the following:


	Nine Months Ended September 30,
(in thousands)	2024		2023		Increase (Decrease)
Salaries and staff costs	$	5,161	$	4,475	$	686
Stock-based compensation		1,223		985		238
Clinical trials, outside services, and lab supplies		19,355		18,118		1,237
Facilities and other		1,401		1,516		(115	)
Total research and development	$	27,140	$	25,094	$	2,046

Research and development expenses increased by $2.0 million for the nine months ended September 30, 2024, compared to the same period in 2023. The overall increase in expenses was primarily due to costs associated with clinical programs and outside service costs related to the development of our lead drug candidate, onvansertib. Salaries and staff costs increased generally from key hires in research and development and clinical operations (research and development average headcount grew by 19% over the comparative period).

Selling, General and Administrative Expenses

Selling, general and administrative expenses consisted of the following:


	Nine Months Ended September 30,
(in thousands)	2024		2023		Increase (Decrease)
Salaries and staff costs	$	2,447	$	2,888	$	(441	)
Stock-based compensation		2,333		2,615		(282	)
Outside services and professional fees		3,326		3,102		224
Facilities and other		1,365		1,713		(348	)
Total selling, general and administrative	$	9,471	$	10,318	$	(847	)

Selling, general and administrative expenses decreased by $0.8 million for the nine months ended September 30, 2024, compared to the same period in 2023. The overall decrease in expenses was primarily within salaries and staff costs due to an employee severance agreement which was expensed during the prior period. Stock-based compensation expense decreased due to a modification of stock options that occurred during the prior period. The decrease in facilities and other costs was primarily due to reduced insurance costs compared to the prior period. The increase in outside services and professional fees, was due to the settlement of litigation during the current period, offset by a decreases in corporate legal expenses.

Interest Income, Net

Interest income, net was $2.5 million for the nine months ended September 30, 2024 as compared to $3.1 million for the same period of 2023. Our interest income is primarily from our our short-term investment portfolios and money market accounts. The amount of interest income earned varies each period based on the balance of our accounts and interest rates.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2024, and December 31, 2023, we had working capital of $46.8 million and $67.0 million, respectively.

We have incurred net losses since our inception and have negative operating cash flows. As of September 30, 2024, we had $57.7 million in cash, cash equivalents and short-term investments and we believe we have sufficient cash to meet our funding

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requirements for at least the next 12 months following the issuance date of this Quarterly Report on Form 10-Q. Based on our current projections we expect that our capital resources are sufficient to fund our operations into the first quarter of 2026.

From October 1, 2024 through November 4, 2024, we raised gross proceeds of $7.0 million from the sale of 2.4 million shares of our Common Stock.

Our drug development efforts are in their early stages, and we cannot make estimates of the costs or the time that our development efforts will take to complete, or the timing and amount of revenues related to the sale of our drug candidates. The risk of completion of any program is high because of the many uncertainties involved in developing new drug candidates to market, including the long duration of clinical testing, the specific performance of proposed products under stringent clinical trial protocols, extended regulatory approval and review cycles, our ability to raise additional capital, the nature and timing of research and development expenses, and competing technologies being developed by organizations with significantly greater resources.

For the foreseeable future, we expect to continue to incur losses and require additional capital to further advance our clinical trial programs and support our other operations. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we can raise additional funds by issuing equity securities, our stockholders may experience additional dilution.

Cash Flow Summary


	Nine Months Ended September 30,
(in thousands)	2024			2023
Net cash used in operating activities	$	(27,426	)	$	(23,748	)
Net cash provided by investing activities		9,217			22,634
Net cash provided by financing activities		9,592			—
Net change in cash and equivalents	$	(8,617	)	$	(1,114	)

Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2024, was $27.4 million. Our primary use of cash was from our net loss of $33.6 million, adjusted for non-cash items of $3.4 million primarily related to stock-based compensation. The net change in our operating assets and liabilities decreased cash used in operations by $2.8 million.

Net cash used in operating activities for the nine months ended September 30, 2023, was $23.7 million. Our primary use of cash was from our net loss of $32.1 million, adjusted for non-cash items of $3.2 million primarily related to stock-based compensation. The net change in our operating assets and liabilities decreased cash used in operations by $5.2 million.

At our current and anticipated level of operating loss, we expect to continue to incur an operating cash outflow for the next several years.

Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2024 was $9.2 million, primarily related to maturities and sales in excess of purchases of marketable securities.

Net cash provided by investing activities for the nine months ended September 30, 2023 was $22.6 million, primarily related to maturities and sales in excess of purchases of marketable securities.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2024 was $9.6 million, from the sale of common stock and employee stock options exercises.

Net cash provided by financing activities for the nine months ended September 30, 2023 was $0.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We have performed an evaluation under the supervision and with the participation of our management, including our principal executive officer (CEO) and principal financial officer (CFO), of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2024, to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures will prevent or detect all errors and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the three months ended September 30, 2024, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in our Form 10-K for the year ended December 31, 2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the three months ended September 30, 2024, none of the Company’s directors or officers adopted or terminated any “Rule 10b5-1 trading arrangements” or any “non-Rule 10b5-1 trading arrangements,” as each term is defined in Item 408 of Regulation S-K.

ITEM 6. EXHIBITS


Exhibit Number		Description of Exhibit

31.1		Certification of Principal Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act.

31.2		Certification of Principal Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act.

32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	CARDIFF ONCOLOGY, INC.

November 7, 2024	By:	/s/ Mark Erlander
		Mark Erlander
		Chief Executive Officer

	CARDIFF ONCOLOGY, INC.

November 7, 2024	By:	/s/ James Levine
		James Levine
		Chief Financial Officer

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Date	Price Target	Rating	Analyst
1/5/2026	$12.00	Outperform	Noble Capital Markets
7/8/2025	$19.00	Buy	Ladenburg Thalmann
6/24/2025	$3.50	Hold	Jefferies
9/6/2024	$8.00	Buy	Craig Hallum
2/28/2022	$26.00 → $25.00	Buy	HC Wainwright & Co.
1/5/2022		Outperform	William Blair
12/8/2021	$19.00	Outperform	Robert W. Baird
12/8/2021	$19.00	Outperform	Baird

SEC Form 10-Q filed by Cardiff Oncology Inc.

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