Cardiff Oncology Reports Fourth Quarter and Full Year 2023 Results and Provides Business Update - First patient dosed in Phase 2 first-line trial in patients with RAS-mutated mCRC for new lead program with the support of FDA and clinical execution from Pfizer Ignite - - Interim topline data from first-line RAS-mutated mCRC trial is expected in mid-2024 - - New clinical data from second-line randomized ONSEMBLE trial provides further evidence of the efficacy of onvansertib in combination with FOLFIRI/bev in ...

Our business is subject to significant risks and uncertainties that make an investment in us speculative and risky. Below we summarize what we believe are the principal risk factors but these risks are not the only ones we face, and you should carefully review and consider the full discussion of our risk factors in the section titled "Risk Factors", together with the other information in this Annual Report on Form 10-K. If any of the following risks actually occurs (or if any of those listed elsewhere in th ...

Financial Data and Key Metrics Changes - As of September 30, 2023, the company's cash and short-term investments totaled $81.4 million, with net cash used in operating activities for Q3 2023 approximately $8 million, indicating sufficient cash resources to fund operations into 2025 [26][66]. Business Line Data and Key Metrics Changes - The lead program in KRAS-mutated metastatic colorectal cancer showed a threefold increase in response rate and a doubling in median progression-free survival (PFS) in bevacizumab-naive patients compared to historical controls [36][37]. - In the CRDF-001 trial for pancreatic ductal adenocarcinoma (PDAC), four out of 21 patients achieved an objective partial response (PR), with one confirmed PR reported [19][29]. Market Data and Key Metrics Changes - The company reported a median PFS of five months for evaluable patients in the pancreatic cancer trials, approaching the benchmark of 5.5 months for first-line treatment [44]. Company Strategy and Development Direction - The primary focus is on the lead program in RAS-mutated metastatic colorectal cancer, with plans to execute the CRDF-004 clinical trial in collaboration with Pfizer Ignite [34][62]. - The company aims to explore new therapeutic indications for onvansertib, including combinations with FDA-approved treatments for various cancers [59]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment for publicly listed biotech companies but emphasized the strengths of Cardiff Oncology, including strong clinical data and financial resources [8][62]. - The company remains confident in generating interim data from the CRDF-004 trial by mid-2024, despite the trial not yet starting patient dosing [69]. Other Important Information - The company is conducting a preclinical program to investigate the underlying science of onvansertib and its combination with bevacizumab, which has shown promising results [14][15]. Q&A Session Summary Question: Can you discuss the expense trajectory as the first-line trial and colorectal starts to ramp up? - Management expects overall expenses to increase but not significantly, with current cash resources sufficient to extend operations into 2025 [55][66]. Question: Have any of the unconfirmed PDAC responses been confirmed recently? - Management confirmed that one additional patient has shown a deepening response, resulting in a second confirmed PR [29][63]. Question: What is the confidence level in generating interim data by mid-2024? - Management expressed confidence in being able to provide information by mid-next year, as the trial is open-label and progress can be monitored [69][71]. Question: Is there a strategy to minimize adverse events in the new trials? - The strategy to minimize adverse events from switching between bolus and infusional 5-FU will continue in the new trials [74][78].

Clinical Development & Efficacy - Onvansertib demonstrates a clinical signal of efficacy and tolerability [2, 18] - The company plans to generate data from the first-line RAS-mutated mCRC CRDF-004 trial in mid-2024 [3, 5, 11, 14, 32, 36] - In a mCRC study of 135 patients, data identified resistance mechanisms [7] - Onvansertib/paclitaxel combination achieved significant tumor regression [9] - In BC1117 mice models, complete response was observed in 6 out of 11 mice (54%) [10] - In BC1080 mice models, complete response was observed in 5 out of 8 mice (62%) [10] - Phase 1b/2 data from second-line KRAS-mutated mCRC showed a 73% ORR in bev naïve patients versus approximately 25% for historical controls, and a 15-month median PFS in bev naïve patients versus approximately 7-8 months for historical controls [31] Financial Position - The company's financial position is strong as of Q3 2023, with a cash runway extending into 2025 [11, 18, 33] - As of September 30, 2023, the company had $814 million in cash and investments [17] - Net cash used in Operating Activities for Q3 2023 was $8 million [17] Strategic Objectives - The company is focused on generating data from the first-line RAS-mutated mCRC [5, 14] - The company is developing earlier-stage programs in Pancreatic, SCLC, and TNBC through investigator-initiated trials [30, 37] - The company is expanding its pipeline through preclinical studies of new combinations and indications [35, 37]

[Filing Information](index=1&type=section&id=Filing_Information) This section provides details on the Form 10-Q filing, registrant, and filer status for Cardiff Oncology, Inc [Form Type and Registrant Details](index=1&type=section&id=Form_Type_and_Registrant_Details) This document is a Quarterly Report on Form 10-Q for Cardiff Oncology, Inc., a Delaware-incorporated clinical-stage biotechnology company - The filing is a **Quarterly Report on Form 10-Q** for the period ended September 30, 2023[4](index=4&type=chunk) - Cardiff Oncology, Inc. is a Delaware corporation, headquartered in San Diego, California[3](index=3&type=chunk) - The company's common stock is listed on the Nasdaq Capital Market under the ticker symbol **'CRDF'**[183](index=183&type=chunk) Filer Status as of September 30, 2023 | Filer Status | Indication | | :---------------------- | :--------- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☐ | [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART_I_FINANCIAL_INFORMATION) This part presents the unaudited condensed financial statements and management's discussion and analysis for the company [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed financial statements for Cardiff Oncology, Inc., highlighting continued net losses and negative operating cash flows [Condensed Balance Sheets](index=3&type=section&id=Condensed_Balance_Sheets) This section provides a snapshot of the company's financial position, showing a decrease in total assets and stockholders' equity Condensed Balance Sheet Highlights (in thousands) | Metric | September 30, 2023 | December 31, 2022 | | :-------------------------- | :----------------- | :---------------- | | Total Assets | $88,452 | $116,191 | | Total Current Assets | $83,905 | $111,284 | | Cash and cash equivalents | $15,233 | $16,347 | | Short-term investments | $66,130 | $88,920 | | Total Liabilities | $10,625 | $9,848 | | Total Stockholders' Equity | $77,827 | $106,343 | - Total assets decreased from **$116.2 million** at December 31, 2022, to **$88.5 million** at September 30, 2023, primarily due to a reduction in short-term investments[10](index=10&type=chunk) - Total stockholders' equity decreased from **$106.3 million** to **$77.8 million** over the same period, largely due to accumulated deficit from net losses[10](index=10&type=chunk) [Condensed Statements of Operations](index=4&type=section&id=Condensed_Statements_of_Operations) This section details the company's financial performance, showing increased net losses and higher research and development expenses Condensed Statements of Operations Highlights (in thousands, except per share) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Royalty revenues | $141 | $93 | $332 | $258 | | Research and development | $8,022 | $6,009 | $25,094 | $20,665 | | Selling, general and administrative | $2,939 | $3,077 | $10,318 | $10,103 | | Total operating expenses | $10,961 | $9,086 | $35,412 | $30,768 | | Loss from operations | $(10,820) | $(8,993) | $(35,080) | $(30,510) | | Interest income, net | $1,068 | $458 | $3,061 | $841 | | Net loss | $(9,731) | $(8,571) | $(32,104) | $(30,007) | | Net loss per common share — basic and diluted | $(0.22) | $(0.20) | $(0.72) | $(0.69) | - Net loss increased to **$(9.731) million** for the three months ended September 30, 2023, from **$(8.571) million** in the prior year, and to **$(32.104) million** for the nine months ended September 30, 2023, from **$(30.007) million** in the prior year[11](index=11&type=chunk) - Research and development expenses increased significantly, by **$2.0 million** for the three-month period and **$4.4 million** for the nine-month period, primarily due to clinical program costs and increased headcount[11](index=11&type=chunk)[115](index=115&type=chunk)[141](index=141&type=chunk) [Condensed Statements of Comprehensive Loss](index=5&type=section&id=Condensed_Statements_of_Comprehensive_Loss) This section presents the total comprehensive loss, reflecting net loss and unrealized gains or losses on available-for-sale securities Condensed Statements of Comprehensive Loss Highlights (in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss | $(9,731) | $(8,571) | $(32,104) | $(30,007) | | Unrealized gain (loss) on securities available-for-sale | $24 | $203 | $(12) | $(637) | | Total comprehensive loss | $(9,707) | $(8,368) | $(32,116) | $(30,644) | | Comprehensive loss attributable to common stockholders | $(9,713) | $(8,374) | $(32,134) | $(30,662) | - Total comprehensive loss for the nine months ended September 30, 2023, was **$(32.116) million**, compared to **$(30.644) million** for the same period in 2022[24](index=24&type=chunk) [Condensed Statements of Stockholders' Equity](index=6&type=section&id=Condensed_Statements_of_Stockholders_Equity) This section outlines changes in stockholders' equity, primarily driven by net losses and stock-based compensation Condensed Statements of Stockholders' Equity Highlights (in thousands) | Metric | Balance, January 1, 2023 | Stock-based compensation | Other comprehensive gain (loss) | Net loss | Balance, September 30, 2023 | | :----------------------------------- | :----------------------- | :----------------------- | :------------------------------ | :---------- | :-------------------------- | | Preferred Stock Shares | 61 | — | — | — | 61 | | Common Stock Shares | 44,677 | — | — | — | 44,677 | | Additional Paid-In Capital | $404,834 | $1,064 | — | — | $408,434 | | Accumulated Other Comprehensive Loss | $(395) | — | $319 | — | $(407) | | Accumulated Deficit | $(298,100) | — | — | $(11,223) | $(330,204) | | Total Stockholders' Equity | $106,343 | $1,064 | $319 | $(11,223) | $77,827 | - Total stockholders' equity decreased from **$106.343 million** at January 1, 2023, to **$77.827 million** at September 30, 2023, primarily due to net losses[1](index=1&type=chunk) - Additional paid-in capital increased by **$3.6 million** during the nine months ended September 30, 2023, mainly due to stock-based compensation[1](index=1&type=chunk)[68](index=68&type=chunk) [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed_Statements_of_Cash_Flows) This section details cash flow activities, showing continued cash usage in operations and changes in investing activities Condensed Statements of Cash Flows Highlights (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(23,748) | $(24,430) | | Net cash provided by investing activities | $22,634 | $31,129 | | Net cash provided by financing activities | $0 | $75 | | Net change in cash and cash equivalents | $(1,114) | $6,774 | | Cash and cash equivalents—End of period | $15,233 | $18,717 | - Net cash used in operating activities was **$(23.7) million** for the nine months ended September 30, 2023, a slight decrease from **$(24.4) million** in the prior year, primarily driven by net loss[12](index=12&type=chunk)[165](index=165&type=chunk) - Net cash provided by investing activities decreased to **$22.6 million** in 2023 from **$31.1 million** in 2022, mainly due to changes in sales and maturities of short-term investments[12](index=12&type=chunk)[144](index=144&type=chunk) [Notes to Condensed Financial Statements](index=9&type=section&id=Notes_to_Condensed_Financial_Statements) This section provides detailed explanations and disclosures supporting the condensed financial statements, covering accounting policies, fair value, and equity [1. Organization and Basis of Presentation](index=9&type=section&id=1_Organization_and_Basis_of_Presentation) Cardiff Oncology, Inc. is a clinical-stage biotechnology company focused on developing novel cancer therapies, with sufficient cash for the next 12 months - Cardiff Oncology is a clinical-stage biotechnology company leveraging PLK1 inhibition to develop cancer therapies, with **onvansertib** as its lead asset[37](index=37&type=chunk) - The company has incurred net losses and negative operating cash flows since inception[38](index=38&type=chunk) - As of September 30, 2023, the company had **$81.4 million** in cash, cash equivalents, and short-term investments, sufficient for at least the next 12 months[38](index=38&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2_Summary_of_Significant_Accounting_Policies) This note confirms GAAP and SEC compliance for interim financial statements, with no significant accounting policy changes, and ongoing evaluation of ASU 2020-06 - Unaudited interim condensed financial statements are prepared in accordance with **GAAP** and **SEC rules** for Form 10-Q[55](index=55&type=chunk) - No changes to significant accounting policies were made during the nine months ended September 30, 2023[56](index=56&type=chunk) - The company is evaluating **ASU 2020-06** regarding convertible instruments and diluted EPS, with adoption planned for January 1, 2024[80](index=80&type=chunk) Potentially Dilutive Securities Excluded from Diluted Net Loss Per Share (as of September 30, 2023 and December 31, 2022) | Security Type | September 30, 2023 | December 31, 2022 | | :----------------------------------- | :----------------- | :---------------- | | Options to purchase Common Stock | 6,652,427 | 5,101,572 | | Warrants to purchase Common Stock | 2,807,948 | 4,490,159 | | Series A Convertible Preferred Stock | 877 | 877 | | Series E Convertible Preferred Stock | — | 1,342,250 | | Total Potentially Dilutive Securities| 9,461,252 | 10,934,858 | [3. Fair Value Measurements](index=10&type=section&id=3_Fair_Value_Measurements) This note details fair value measurements of assets, primarily cash equivalents and available-for-sale investments, mostly classified as Level 2 Fair Value Measurements at September 30, 2023 (in thousands) | Asset Category | Level 1 (Quoted Prices) | Level 2 (Observable Inputs) | Level 3 (Unobservable Inputs) | Total | | :---------------------------------- | :---------------------- | :-------------------------- | :---------------------------- | :------- | | Money market fund | $14,928 | — | — | $14,928 | | Total included in cash and cash equivalents | $14,928 | — | — | $14,928 | | Available for sale investments: | | | | | | Certificate of deposit | — | $9,181 | — | $9,181 | | Corporate debt securities | — | $22,368 | — | $22,368 | | Commercial paper | — | $7,613 | — | $7,613 | | U.S. government agencies | — | $6,821 | — | $6,821 | | U.S. treasury securities | $20,147 | — | — | $20,147 | | Total available for sale investments| $20,147 | $45,983 | — | $66,130 | | Total assets measured at fair value on a recurring basis | $35,075 | $45,983 | — | $81,058 | - No transfers into or out of Level 3 of the fair value hierarchy occurred during the nine months ended September 30, 2023[83](index=83&type=chunk) [4. Supplementary Balance Sheet Information](index=12&type=section&id=4_Supplementary_Balance_Sheet_Information) This note provides detailed breakdowns of investments, property, and accrued liabilities, noting unrealized losses due to interest rates Investments Available for Sale at September 30, 2023 (in thousands) | Investment Type | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | | :-------------------------- | :------------- | :--------------------- | :---------------------- | :---------------- | | Maturity less than 1 year: | | | | | | Certificate of deposit | $9,181 | $3 | $(3) | $9,181 | | Corporate debt securities | $12,194 | $3 | $(28) | $12,169 | | Commercial paper | $7,616 | — | $(3) | $7,613 | | U.S. government agencies | $6,852 | — | $(31) | $6,821 | | U.S. treasury securities | $1,935 | — | $(13) | $1,922 | | Total maturity less than 1 year | $37,778 | $6 | $(78) | $37,706 | | Maturity 1 to 2 years: | | | | | | Corporate debt securities | $10,281 | $3 | $(85) | $10,199 | | U.S. treasury securities | $18,478 | — | $(253) | $18,225 | | Total maturity 1 to 2 years | $28,759 | $3 | $(338) | $28,424 | | Total short-term investments| $66,537 | $9 | $(416) | $66,130 | - Unrealized losses on available-for-sale debt securities at September 30, 2023, were primarily due to **increases in interest rates**, not credit risks[85](index=85&type=chunk) Accrued Liabilities (in thousands) | Accrued Liability | September 30, 2023 | December 31, 2022 | | :-------------------------- | :----------------- | :---------------- | | Accrued compensation | $2,455 | $1,849 | | Clinical trials | $2,878 | $2,333 | | Research agreements and services | $591 | $509 | | Director fees | $125 | $125 | | Patent, license and other fees | $33 | $24 | | Other accrued liabilities | $69 | $337 | | Total accrued liabilities | $6,151 | $5,177 | [5. Stockholders' Equity](index=13&type=section&id=5_Stockholders_Equity) This note details stock-based compensation, option and warrant activity, and preferred stock changes, including a modification for a departing employee Stock-based Compensation Expense (in thousands) | Expense Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Included in research and development expense | $294 | $286 | $985 | $746 | | Included in selling, general and administrative expense | $661 | $751 | $2,615 | $2,498 | | Total stock-based compensation expense | $955 | $1,037 | $3,600 | $3,244 | - Unrecognized compensation cost for non-vested stock options was **$7.5 million** as of September 30, 2023, to be recognized over a weighted-average remaining vesting period of **2.3 years**[88](index=88&type=chunk) Stock Option Activity (as of September 30, 2023) | Metric | Total Options | Weighted-Average Exercise Price Per Share | | :-------------------------------------- | :------------ | :---------------------------------------- | | Balance outstanding, December 31, 2022 | 5,069,458 | $5.92 | | Granted | 2,138,624 | $1.70 | | Forfeited and expired | (555,655) | $8.40 | | Balance outstanding, September 30, 2023 | 6,652,427 | $4.36 | - The company modified stock options for a departing employee in June 2023, resulting in an incremental stock-based compensation expense of **$0.6 million**[93](index=93&type=chunk) - On August 8, 2023, the company filed a Certificate of Elimination for Series B, C, D, and E Convertible Preferred Stock, returning previously designated but unissued shares to authorized but undesignated status[73](index=73&type=chunk) [6. Commitments and Contingencies](index=15&type=section&id=6_Commitments_and_Contingencies) This note outlines commitments under research and development agreements, including onvansertib licensing, and confirms no material legal liabilities - The company has a license agreement for **onvansertib** with Nerviano, involving potential development and commercial milestones, and sales-based royalties[96](index=96&type=chunk) - No milestone or royalty payments were made under the onvansertib license agreement during the nine months ended September 30, 2023 and 2022[96](index=96&type=chunk) - Management believes there are no legal liabilities that are probable or reasonably possible requiring accrual or disclosure, nor any claims that would result in a material adverse effect[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, operations, business strategy, clinical trials, and liquidity [Forward-Looking Statements](index=16&type=section&id=Forward-Looking_Statements) This section highlights that the report contains forward-looking statements subject to risks and uncertainties, and actual results may differ - The report contains forward-looking statements regarding future financial position, business strategy, and operational plans, identified by words like 'believe,' 'may,' 'will,' 'estimate,' 'continue,' 'anticipate,' 'intend,' 'should,' 'plan,' and 'expect'[77](index=77&type=chunk) - These statements are based on current expectations and projections but are subject to risks, uncertainties, and assumptions, and actual results may differ materially[77](index=77&type=chunk)[99](index=99&type=chunk) [Overview](index=16&type=section&id=Overview) Cardiff Oncology is a clinical-stage biotechnology company developing novel cancer therapies by inhibiting PLK1, with onvansertib as its lead asset - Cardiff Oncology is a clinical-stage biotechnology company focused on developing novel therapies for various cancers by inhibiting **PLK1**, a validated oncology drug target[122](index=122&type=chunk) - The company's strategy involves combining **onvansertib**, an oral and highly selective PLK1 inhibitor, with standard-of-care therapeutics to target tumor vulnerabilities[122](index=122&type=chunk) - Clinical programs are focused on **RAS-mutated metastatic colorectal cancer (mCRC)**, **metastatic pancreatic ductal adenocarcinoma (mPDAC)**, **small cell lung cancer (SCLC)**, and **triple negative breast cancer (TNBC)**[122](index=122&type=chunk) [Our Lead Drug Candidate, Onvansertib](index=16&type=section&id=Our_Lead_Drug_Candidate,_Onvansertib) Onvansertib is an oral, highly specific PLK1 inhibitor with high potency and selectivity, showing synergistic effects in studies - Onvansertib is an oral, small molecule drug candidate that is highly specific for **PLK1 inhibition** with a **24-hour half-life**[123](index=123&type=chunk) - It demonstrates high potency and selectivity against the PLK1 enzyme (**IC50 = 2nM**), with low or no activity on other PLK members or a panel of 63 other kinases[124](index=124&type=chunk) - In vitro and in vivo studies show **synergistic effects** when onvansertib is combined with various cytotoxic agents and standard-of-care cancer agents[103](index=103&type=chunk)[125](index=125&type=chunk) [RAS-mutated mCRC Program](index=17&type=section&id=RAS-mutated_mCRC_Program) The CRDF-004 Phase 2 trial evaluates onvansertib in first-line RAS-mutated mCRC, with enrollment starting in Q4 2023 and interim data in mid-2024 - **CRDF-004** is a Phase 2 open-label, randomized multi-center clinical trial evaluating onvansertib in combination with FOLFIRI and bevacizumab or FOLFOX and bevacizumab for first-line treatment of **RAS-mutated mCRC**[126](index=126&type=chunk) - Primary objectives include evaluating safety, efficacy, and two doses (**20mg and 30mg**) of onvansertib against standard-of-care alone, with **objective response rate (ORR)** as the primary endpoint[126](index=126&type=chunk) - Enrollment is expected to begin in **Q4 2023**, with interim data anticipated in **mid-2024**, and Pfizer Ignite is responsible for clinical execution[126](index=126&type=chunk) [Phase 1b/2 Clinical Trial in KRAS-mutated mCRC](index=17&type=section&id=Phase_1b/2_Clinical_Trial_in_KRAS-mutated_mCRC) The TROV-054 trial for KRAS-mutated mCRC showed a 29% ORR and 9.3 months mPFS, with bevacizumab-naïve patients achieving 73% ORR and 15 months mPFS - **TROV-054** is a Phase 1b/2 open-label multi-center clinical trial of onvansertib with FOLFIRI and bevacizumab for second-line treatment of **KRAS-mutated mCRC**, which completed enrollment in October 2022[46](index=46&type=chunk) - Data presented on August 7, 2023, showed an **Objective Response Rate (ORR) of 29%** and median **Progression-Free Survival (mPFS) of 9.3 months** across all evaluable patients[107](index=107&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - A subgroup analysis revealed that bevacizumab-naïve patients (n=15) had a **73% ORR** and **15 months mPFS**, significantly higher than historical controls and patients previously treated with bevacizumab[108](index=108&type=chunk) [mDPAC Program](index=18&type=section&id=mDPAC_Program) The CRDF-001 Phase 2 trial for mPDAC showed a 19% ORR and 5.0 months mPFS, with an ongoing biomarker discovery trial - **CRDF-001** is a Phase 2 open-label multi-center clinical trial of onvansertib in combination with nanoliposomal irinotecan, leucovorin, and fluorouracil for second-line treatment of **mPDAC**, with enrollment closing in October 2023[47](index=47&type=chunk)[131](index=131&type=chunk) - Preliminary data from September 26, 2023, showed a **19% Objective Response Rate (ORR)** compared to a historical control of 7.7% in the second-line setting, and a median **Progression-Free Survival (mPFS) of 5.0 months** compared to 3.1 months for standard of care[109](index=109&type=chunk)[132](index=132&type=chunk) - A biomarker discovery trial for onvansertib monotherapy in mPDAC patients is ongoing, with preliminary data showing an **86% decrease in Ki67** and a **28% decrease in CA 19-9** in one patient[109](index=109&type=chunk)[156](index=156&type=chunk) [Other Clinical Programs](index=19&type=section&id=Other_Clinical_Programs) Ongoing Phase 2 trials include onvansertib monotherapy for SCLC, showing a 57% disease control rate, and combination therapy for TNBC - A single-arm, two-stage, Phase 2 investigator-initiated trial of onvansertib monotherapy in patients with relapsed **Small Cell Lung Cancer (SCLC)** is open for enrollment, with a primary endpoint of **Objective Response Rate (ORR)**[48](index=48&type=chunk)[134](index=134&type=chunk) - Preliminary efficacy data for seven SCLC patients showed **1 confirmed partial response**, **3 stable disease**, and **3 progressive disease**, resulting in a **57% disease control rate**[111](index=111&type=chunk) - A Phase 1b/2 investigator-initiated trial of onvansertib in combination with paclitaxel for unresectable locally advanced or metastatic **Triple Negative Breast Cancer (TNBC)** is open for enrollment[135](index=135&type=chunk)[158](index=158&type=chunk) [Critical Accounting Policies](index=19&type=section&id=Critical_Accounting_Policies) This section confirms no changes to the company's critical accounting policies since December 31, 2022 - There have been no changes to the company's critical accounting policies since December 31, 2022, as described in its Annual Report on Form 10-K[136](index=136&type=chunk) [Results of Operations - Three Months Ended September 30, 2023 and 2022](index=19&type=section&id=Results_of_Operations_-_Three_Months_Ended_September_30,_2023_and_2022) This section analyzes the company's financial performance for the three-month period, detailing changes in revenues and expenses [Revenues](index=19&type=section&id=Revenues_3M) Royalty revenues for the three months ended September 30, 2023, increased to $141,000 from $93,000 in the prior year Royalty Revenues (in thousands) | Period | 2023 | 2022 | Change | | :------------------------------------ | :--- | :--- | :----- | | Three Months Ended September 30, 2023 | $141 | $93 | +$48 | - Revenue recognition depends on the timing and overall sales activities of the licensees[113](index=113&type=chunk) [Research and Development Expenses](index=19&type=section&id=Research_and_Development_Expenses_3M) Research and development expenses increased by $2.0 million for the three months ended September 30, 2023, due to clinical program costs and headcount growth Research and Development Expenses (in thousands) | Expense Category | 2023 | 2022 | Increase (Decrease) | | :------------------------------------ | :----- | :----- | :------------------ | | Salaries and staff costs | $1,615 | $1,000 | $615 | | Stock-based compensation | $294 | $286 | $8 | | Clinical trials, outside services, and lab supplies | $5,603 | $4,279 | $1,324 | | Facilities and other | $510 | $444 | $66 | | Total research and development | $8,022 | $6,009 | $2,013 | - Average headcount in research and development grew by **50%** over the comparative period[115](index=115&type=chunk) [Selling, General and Administrative Expenses](index=20&type=section&id=Selling,_General_and_Administrative_Expenses_3M) Selling, general and administrative expenses decreased by $0.1 million for the three months, mainly due to lower headcount and reduced stock-based compensation Selling, General and Administrative Expenses (in thousands) | Expense Category | 2023 | 2022 | Increase (Decrease) | | :------------------------------------ | :----- | :----- | :------------------ | | Salaries and staff costs | $731 | $808 | $(77) | | Stock-based compensation | $661 | $751 | $(90) | | Outside services and professional fees | $1,011 | $840 | $171 | | Facilities and other | $536 | $678 | $(142) | | Total selling, general and administrative | $2,939 | $3,077 | $(138) | - The decrease was primarily due to lower headcount, reduced stock-based compensation, and lower insurance costs[138](index=138&type=chunk) - Outside services and professional fees increased due to additional legal fees for contract reviews[138](index=138&type=chunk) [Interest Income, Net](index=20&type=section&id=Interest_Income,_Net_3M) Net interest income increased to $1.1 million for the three months ended September 30, 2023, driven by higher interest rates Interest Income, Net (in thousands) | Period | 2023 | 2022 | Change | | :------------------------------------ | :----- | :----- | :----- | | Three Months Ended September 30, 2023 | $1,068 | $458 | +$610 | - The increase was primarily due to **higher interest rates** on the short-term investments portfolio[139](index=139&type=chunk) [Results of Operations - Nine Months Ended September 30, 2023 and 2022](index=20&type=section&id=Results_of_Operations_-_Nine_Months_Ended_September_30,_2023_and_2022) This section analyzes the company's financial performance for the nine-month period, detailing changes in revenues and expenses [Revenues](index=20&type=section&id=Revenues_9M) Total royalty revenues for the nine months ended September 30, 2023, increased to $332,000 from $258,000 in the prior year Royalty Revenues (in thousands) | Period | 2023 | 2022 | Change | | :----------------------------------- | :--- | :--- | :----- | | Nine Months Ended September 30, 2023 | $332 | $258 | +$74 | - Revenues are from sales-based or usage-based royalties on other intellectual property licenses, unrelated to onvansertib[161](index=161&type=chunk) [Research and Development Expenses](index=20&type=section&id=Research_and_Development_Expenses_9M) Research and development expenses increased by $4.4 million for the nine months ended September 30, 2023, due to clinical program costs and headcount growth Research and Development Expenses (in thousands) | Expense Category | 2023 | 2022 | Increase (Decrease) | | :------------------------------------ | :------ | :------ | :------------------ | | Salaries and staff costs | $4,475 | $3,131 | $1,344 | | Stock-based compensation | $985 | $746 | $239 | | Clinical trials, outside services, and lab supplies | $18,118 | $15,699 | $2,419 | | Facilities and other | $1,516 | $1,089 | $427 | | Total research and development | $25,094 | $20,665 | $4,429 | - Average headcount in research and development grew by **37%** over the comparative period[141](index=141&type=chunk) [Selling, General and Administrative Expenses](index=21&type=section&id=Selling,_General_and_Administrative_Expenses_9M) Selling, general and administrative expenses increased by $0.2 million for the nine months, mainly due to higher salaries and staff costs Selling, General and Administrative Expenses (in thousands) | Expense Category | 2023 | 2022 | Increase (Decrease) | | :------------------------------------ | :------ | :------ | :------------------ | | Salaries and staff costs | $2,888 | $2,460 | $428 | | Stock-based compensation | $2,615 | $2,498 | $117 | | Outside services and professional fees | $3,102 | $3,119 | $(17) | | Facilities and other | $1,713 | $2,026 | $(313) | | Total selling, general and administrative | $10,318 | $10,103 | $215 | - Salaries and staff costs increased due to an employee severance agreement[142](index=142&type=chunk) [Interest Income, Net](index=21&type=section&id=Interest_Income,_Net_9M) Net interest income significantly increased to $3.1 million for the nine months ended September 30, 2023, due to higher interest rates Interest Income, Net (in thousands) | Period | 2023 | 2022 | Change | | :----------------------------------- | :----- | :--- | :----- | | Nine Months Ended September 30, 2023 | $3,061 | $841 | +$2,220 | - The increase was primarily due to **higher interest rates** on the short-term investments portfolio[143](index=143&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity_and_Capital_Resources) The company has $81.4 million in cash and investments, sufficient for at least 12 months, but expects continued losses and need for additional capital - As of September 30, 2023, the company had working capital of **$74.9 million** and **$81.4 million** in cash, cash equivalents, and short-term investments[145](index=145&type=chunk) - The company believes it has sufficient cash to meet its funding requirements for at least the next 12 months and expects capital resources to fund operations into **2025**[145](index=145&type=chunk) - The company expects to continue incurring losses and negative operating cash flows, requiring additional capital to advance clinical trial programs[147](index=147&type=chunk)[165](index=165&type=chunk) - There is uncertainty regarding the availability of additional funding on acceptable terms, and future equity issuances could dilute stockholders[147](index=147&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that the information regarding quantitative and qualitative disclosures about market risk is not applicable to the company - This item is not applicable to Cardiff Oncology, Inc[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures, confirming their effectiveness and no material changes to internal control [Evaluation of Disclosure Controls and Procedures](index=22&type=section&id=Evaluation_of_Disclosure_Controls_and_Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, providing reasonable assurance for information reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were **effective** as of September 30, 2023[149](index=149&type=chunk) - Disclosure controls are designed to provide reasonable assurance that information required to be disclosed is recorded, processed, summarized, and reported within specified time periods[149](index=149&type=chunk)[169](index=169&type=chunk) [Changes in Internal Control over Financial Reporting](index=22&type=section&id=Changes_in_Internal_Control_over_Financial_Reporting) There were no material changes in internal control over financial reporting during the three months ended September 30, 2023 - There was **no change** in internal control over financial reporting during the three months ended September 30, 2023, that materially affected, or is reasonably likely to materially affect, internal control over financial reporting[170](index=170&type=chunk) [PART II. OTHER INFORMATION](index=23&type=section&id=PART_II_OTHER_INFORMATION) This part covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) This section states no material changes from the legal proceedings disclosed in the company's prior Form 10-K - No material changes from the legal proceedings disclosed in the Form 10-K for the year ended December 31, 2022[177](index=177&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) This section indicates no material changes from the risk factors disclosed in the company's prior Form 10-K - No material changes from the risk factors disclosed in the Form 10-K for the year ended December 31, 2022[177](index=177&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there is no information to report regarding unregistered sales of equity securities and use of proceeds - None to report for unregistered sales of equity securities and use of proceeds[36](index=36&type=chunk) [Item 3. Defaults Upon Senior Securities](index=23&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there is no information to report regarding defaults upon senior securities - Not applicable for defaults upon senior securities[152](index=152&type=chunk) [Item 4. Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that there is no information to report regarding mine safety disclosures - None to report for mine safety disclosures[178](index=178&type=chunk) [Item 5. Other Information](index=23&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - None to report for other information[172](index=172&type=chunk) [Item 6. Exhibits](index=23&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications and XBRL documents List of 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 | | 101.SCH | Inline XBRL Taxonomy Extension Schema | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | | 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | | 104 | Cover Page Interactive Data File - the cover page from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, is formatted in Inline XBRL | [SIGNATURES](index=24&type=section&id=SIGNATURES) This section confirms the official signing of the Quarterly Report on Form 10-Q by the company's executive officers [Signatories](index=24&type=section&id=Signatories) The Quarterly Report on Form 10-Q was duly signed on November 2, 2023, by the Chief Financial Officer and Chief Executive Officer - The report was signed on **November 2, 2023**[176](index=176&type=chunk)[181](index=181&type=chunk) - Signed by **James Levine**, Chief Financial Officer[176](index=176&type=chunk) - Signed by **Mark Erlander**, Chief Executive Officer[181](index=181&type=chunk)

Clinical Trial Results - The Ph1b/2 trial showed an Overall Response Rate (ORR) of 29% (19 out of 66 patients) for all evaluable patients [12], with a median Duration of Response (mDoR) of 12 months [12] - In Bev Naive patients, the ORR was significantly higher at 73% (11 out of 15 patients) [12], with a mDoR of 13 months [12] - In Bev Exposed patients, the ORR was 16% (8 out of 51 patients) [12], with a mDoR of 89 months [12] - The median Progression-Free Survival (mPFS) for all patients was 93 months [1], while for Bev Naive patients it was 15 months [1] Safety and Tolerability - The trial reported various Treatment-Emergent Adverse Events (TEAEs), with Fatigue being the most common at 72% [2] - Other common TEAEs included Dyspepsia at 43%, Hypocalcemia at 37%, Dehydration and Hypokalemia each at 34% [2] Strategic Direction - The company is advancing its RAS-mutated mCRC program to the 1st line setting, based on FDA agreement [30, 82, 99] - A Phase 2 trial (CRDF-004) is underway for 1st line RAS-mutated mCRC with 90 patients randomized across different treatment arms [32, 87]

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 June 30, 2023 ☐ 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 | | --- | --- | | ...

Certain statements in this presentation are | --- | --- | --- | |----------------------------|---------------------------------|-----------------------------------------------------------------------------------------| | | | | | Our Drug: Onvansertib | WHAT Onvansertib has achieved | Robust clinical proof-of-concept results in Ph 1b/2 KRAS-mutated mCRC trial | | Highly selective and well- | | | | tolerated PLK1-inhibitor | WHERE Cardiff Oncology is going | Onvansertib has opportunity to become part of SOC i ...

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 March 31, 2023 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 CARDIFF ONCOLOGY, INC. (Exact Name of registrant as specified in its charter) | Delaware | 27-2004382 | | --- | --- | | (State or other jurisdiction of incorporation or organization) | ( ...

PART I [ITEM 1. BUSINESS](index=7&type=section&id=Item%201.%20Business) Cardiff Oncology is a clinical-stage biotechnology company developing novel cancer therapies using PLK1 inhibition, with onvansertib as its lead drug candidate - Cardiff Oncology is a clinical-stage biotechnology company leveraging PLK1 inhibition to develop novel therapies for cancers with high unmet medical need, focusing on combinations of onvansertib with standard of care therapeutics[19](index=19&type=chunk) - The company's clinical program for onvansertib targets indications such as **KRAS/NRAS-mutated metastatic colorectal cancer (mCRC)**, **metastatic pancreatic ductal adenocarcinoma (mPDAC)**, **triple negative breast cancer (TNBC)**, and **small cell lung cancer (SCLC)**[19](index=19&type=chunk)[22](index=22&type=chunk) - Onvansertib is an oral, highly selective PLK1 inhibitor with a **24-hour half-life**, showing synergistic effects in vitro and in vivo when combined with various cytotoxic and targeted agents[20](index=20&type=chunk)[21](index=21&type=chunk)[24](index=24&type=chunk) [Our Lead Drug Candidate, Onvansertib](index=7&type=section&id=Our%20Lead%20Drug%20Candidate%2C%20Onvansertib) Onvansertib, an oral PLK1 inhibitor, demonstrates favorable safety and efficacy in ongoing clinical trials for various cancers - Onvansertib is an oral, small molecule drug candidate highly specific for PLK1 inhibition with a **24-hour half-life**, demonstrating favorable safety and efficacy in clinical evidence[20](index=20&type=chunk)[24](index=24&type=chunk) - In vitro and in vivo studies show synergistic effects when onvansertib is combined with various cytotoxic agents (e.g., irinotecan, 5-FU, paclitaxel) and targeted therapies (e.g., PARP inhibitors, venetoclax)[20](index=20&type=chunk)[21](index=21&type=chunk) - Five ongoing clinical trials for onvansertib include two in **KRAS-mutated mCRC** (TROV-054 and ONSEMBLE), one in **mPDAC**, and two investigator-initiated trials in **TNBC** and **SCLC**[22](index=22&type=chunk) - TROV-054 Phase 1b/2 Clinical Trial (KRAS-mutated mCRC) Preliminary Data (September 12, 2022) | Metric | All Evaluable Patients | Bevacizumab Naïve Subgroup (n=13) | Prior Bevacizumab Subgroup (n=35) | | :----- | :--------------------- | :--------------------------------- | :-------------------------------- | | Objective Response Rate (ORR) | 35% (17 of 48 patients) | 69% | 23% | | Median Duration of Response (mDoR) | 11.7 months (95% CI: 8.9 – not reached) | N/A | N/A | | Median Progression Free Survival (mPFS) | 9.3 months (95% CI: 7.6 – 13.5) | 13.5 months | 7.8 months | | Historical Control ORR | 5 – 13% | N/A | N/A | | Historical Control mPFS | ~4.5 – 5.7 months | N/A | N/A | - The ONSEMBLE trial (CRDF-003) is a Phase 2 randomized, multi-center clinical trial for KRAS/NRAS-mutated mCRC, expected to enroll **~150 patients**, with topline data anticipated in **2H 2024**[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - Preliminary data from the CRDF-001 Phase 2 trial in mPDAC showed **1 partial response** and **3 stable diseases** among 5 evaluable patients, with additional data expected in **mid-2023**[30](index=30&type=chunk) [Identifying Biomarkers that Predict Patient Benefit](index=9&type=section&id=Identifying%20Biomarkers%20that%20Predict%20Patient%20Benefit) The company utilizes biomarker analyses, such as KRAS mutational burden, to optimize onvansertib dosing and identify responsive patient populations - The company uses correlative biomarker analyses, such as quantitative assessment of **KRAS mutational burden** via ctDNA blood tests, to inform dose-response, optimal regimen, and identify patient populations likely to respond to onvansertib[33](index=33&type=chunk)[34](index=34&type=chunk) - In the TROV-054 trial, decreases in **KRAS Mutant Allelic Frequency (MAF)** in ctDNA after the first treatment cycle were highly predictive of subsequent radiographic tumor shrinkage[34](index=34&type=chunk) [Operating Segment and Geographic Information](index=9&type=section&id=Operating%20Segment%20and%20Geographic%20Information) Cardiff Oncology operates as a single business segment with all principal operations and decision-making functions located in the U.S - Cardiff Oncology operates in a **single business segment**, with all principal operations, assets, and decision-making functions located in the U.S[35](index=35&type=chunk)[36](index=36&type=chunk) [The Market](index=10&type=section&id=The%20Market) Colorectal cancer, particularly KRAS-mutated mCRC, represents a significant unmet medical need, driving the exploration of onvansertib in various indications - Colorectal Cancer (CRC) is a leading cause of cancer death in the US, with over **50% of tumors harboring a RAS mutation** (**43% KRAS**, **9% NRAS**)[37](index=37&type=chunk) - The efficacy of second-line therapy for metastatic CRC remains limited, highlighting a critical need for improved treatment options for **KRAS-mutated patients**[38](index=38&type=chunk) - Signal-finding clinical trials are exploring onvansertib's potential in additional cancer indications, including **mPDAC**, **SCLC**, and **TNBC**[39](index=39&type=chunk) [Collaborative Relationship](index=10&type=section&id=Collaborative%20Relationship) Pfizer Inc. invested $15.0 million in Cardiff Oncology, establishing a collaboration that includes information rights and a Scientific Advisory Board seat - In November 2021, Pfizer Inc. invested approximately **$15.0 million** in Cardiff Oncology as part of the Pfizer Breakthrough Growth Initiative, purchasing **2.4 million shares** of common stock[40](index=40&type=chunk) - The collaboration includes an Information Rights Agreement granting Pfizer first access to pre-clinical or final clinical data from the onvansertib development program until **May 17, 2024**, and a Pfizer representative joining the Scientific Advisory Board[40](index=40&type=chunk) [Intellectual Property](index=10&type=section&id=Intellectual%20Property) Cardiff Oncology maintains a robust intellectual property portfolio, including 52 issued patents and exclusive licenses for onvansertib, with protections extending up to 2043 - As of December 31, 2022, Cardiff Oncology's intellectual property portfolio included **52 issued patents** and **37 pending patent applications**[41](index=41&type=chunk) - Onvansertib is exclusively licensed from Nerviano Medical Sciences, covering composition of matter, methods of use, and synergistic combinations with antineoplastic agents, with patents expiring between **2027 and 2030** (U.S. patents up to **2035** with extension)[42](index=42&type=chunk) - An exclusive license agreement with MIT covers combination therapies of PLK inhibitors (like onvansertib) with anti-androgens for cancer treatment, with patents expiring in **2035** (up to **2040** with extension)[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - The company also owns eighteen patent families related to onvansertib, covering various cancer treatments, biomarker-based efficacy prediction, and combination therapies, with patents expiring between **2039 and 2043**[45](index=45&type=chunk) [Manufacturing and Distribution](index=11&type=section&id=Manufacturing%20and%20Distribution) Cardiff Oncology relies on third-party manufacturers and distributors for the supply and distribution of onvansertib for its clinical and nonclinical development programs - Cardiff Oncology relies on **third-party manufacturers and distributors** for the supply and distribution of onvansertib for its clinical studies and nonclinical development programs[48](index=48&type=chunk) [Government Regulation](index=11&type=section&id=Government%20Regulation) The company operates in a highly regulated industry, subject to extensive federal, state, local, and foreign regulations governing drug development, approval, and commercialization - The company operates in a highly regulated industry, subject to extensive federal, state, local, and foreign regulations, including the **Federal Food, Drug, and Cosmetic Act (FDC Act)** and **Public Health Service Act**[49](index=49&type=chunk)[50](index=50&type=chunk) - The FDA approval process involves preclinical tests, Investigational New Drug Application (IND), and multi-phase clinical trials (Phase 1, 2, 3) to establish safety and effectiveness, followed by a New Drug Application (NDA) or Biologics License Application (BLA) submission[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - Post-approval, products are subject to ongoing requirements including marketing and promotion regulations, adverse event reporting, periodic reports, and compliance with **Current Good Manufacturing Practices (CGMPs)**[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) - The company is subject to federal and state fraud and abuse laws (e.g., **Anti-Kickback Statute**, **False Claims Act**, **HIPAA**, **Physician Payments Sunshine Act**) that regulate interactions with healthcare providers and payment for products[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - Healthcare reform measures, such as the **Patient Protection and Affordable Care Act (PPACA)** and state-level initiatives, aim to reduce healthcare costs and could impact drug pricing, reimbursement, and market access[80](index=80&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) [Competition](index=17&type=section&id=Competition) Onvansertib is uniquely positioned as the only oral, highly selective PLK1 inhibitor in active clinical development, differentiating it from prior pan-PLK inhibitors - Onvansertib is positioned as the **only oral PLK1 inhibitor** in active clinical development that delivers highly selective PLK1 inhibition, distinguishing it from prior pan-PLK inhibitors like volasertib[91](index=91&type=chunk)[92](index=92&type=chunk) - Volasertib, a pan-PLK inhibitor, failed to meet its primary endpoint in Phase 3 AML trials due to an unfavorable safety profile, contrasting with onvansertib's **well-tolerated profile** in five clinical trials[92](index=92&type=chunk) - Another early-stage PLK1 inhibitor, plogosertib by Cyclacel, also shows primary selectivity for PLK1 but secondary selectivity for PLK2 and PLK3[93](index=93&type=chunk) [Human Capital](index=17&type=section&id=Human%20Capital) Cardiff Oncology employs 26 individuals, focusing on attracting and retaining diverse talent through competitive compensation and an inclusive workplace - As of February 23, 2023, Cardiff Oncology had **26 employees** (**25 full-time**), with **50% identifying as women** and **38% as racial or ethnic minorities**[95](index=95&type=chunk) - The company focuses on attracting, developing, and retaining key personnel through competitive compensation, benefits, and a safe, inclusive workplace, considering employee relations to be good[94](index=94&type=chunk)[95](index=95&type=chunk) [Corporation Information](index=18&type=section&id=Corporation%20Information) Cardiff Oncology, Inc., re-incorporated in Delaware in 2010 and formerly Trovagene, Inc., is listed on Nasdaq under the ticker 'CRDF' - Cardiff Oncology, Inc. was re-incorporated in Delaware in **2010** (formerly Trovagene, Inc.) and changed its name to Cardiff Oncology, Inc. in **May 2020**, with its common stock listed on Nasdaq under '**CRDF**'[96](index=96&type=chunk) [ITEM 1A. RISK FACTORS](index=18&type=section&id=Item%201A.%20Risk%20Factors) Investing in Cardiff Oncology's securities is highly speculative due to its clinical-stage status, substantial capital requirements, and uncertainties in product development and regulatory approval - An investment in Cardiff Oncology securities involves a high degree of risk due to its clinical-stage nature and accumulated deficit of approximately **$298.1 million** as of December 31, 2022[97](index=97&type=chunk)[98](index=98&type=chunk) - The company will require substantial additional capital to develop and commercialize onvansertib, and failure to obtain funding could force delays or elimination of product development programs[100](index=100&type=chunk)[101](index=101&type=chunk) - The commercial viability of onvansertib is uncertain, subject to successful preclinical studies, clinical trials, and regulatory approvals, with potential for delays, setbacks, or failures at any stage[102](index=102&type=chunk)[103](index=103&type=chunk)[107](index=107&type=chunk) [Risks Related to Our Business](index=18&type=section&id=Risks%20Related%20to%20Our%20Business) Cardiff Oncology faces significant business risks, including substantial accumulated deficits, uncertainties in product development, potential adverse side effects, and reliance on third-party vendors - Cardiff Oncology is a clinical-stage company with an accumulated deficit of **$298.1 million** as of December 31, 2022, and has incurred net losses of **$38.7 million** and **$28.3 million** for the years ended December 31, 2022 and 2021, respectively[98](index=98&type=chunk) - The company's product candidate, onvansertib, is in early clinical development and its commercial viability is uncertain, requiring extensive and expensive preclinical studies and clinical trials[102](index=102&type=chunk)[103](index=103&type=chunk) - Undesirable side effects or safety risks from onvansertib, alone or in combination, could delay or prevent regulatory approval or limit its use if approved[105](index=105&type=chunk)[106](index=106&type=chunk) - Reliance on third-party vendors for preclinical studies and clinical trials poses risks of delays, termination, or increased expenses if they fail to perform or comply with regulations[109](index=109&type=chunk) - The company has limited experience in therapeutic product development and relies heavily on outsourcing, requiring continuous supplementation of capabilities and retention of key personnel[115](index=115&type=chunk)[116](index=116&type=chunk) - Delays in clinical testing, due to factors like patient recruitment or regulatory approvals, could increase costs and delay revenue generation[121](index=121&type=chunk) - The regulatory approval process is lengthy, unpredictable, and may result in failure to obtain approval or approval for limited indications, substantially harming the business[122](index=122&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - If approved, onvansertib may not gain market acceptance among physicians, patients, and the medical community, limiting revenue potential[149](index=149&type=chunk)[150](index=150&type=chunk) - Reliance on third-party manufacturers for onvansertib production exposes the company to risks of supply disruptions, quality control issues, and non-compliance with GMP regulations[141](index=141&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - Breaching the Nerviano Licensing Agreement could lead to termination of critical license rights for onvansertib, materially harming the business[159](index=159&type=chunk) - Business disruptions, including natural disasters or global pandemics like COVID-19, could severely disrupt operations, increase costs, and adversely affect clinical trials and supply chains[165](index=165&type=chunk)[166](index=166&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) [Risks Related to Our Intellectual Property](index=36&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company faces risks related to intellectual property protection, including potential failure to obtain or enforce patents, and the high costs of IP litigation - Failure to effectively protect intellectual property through patents, trademarks, copyrights, and trade secrets could impair competitive advantage and allow third parties to use proprietary technologies[185](index=185&type=chunk)[186](index=186&type=chunk) - Pending patent applications may not result in issued patents, and existing patents may be challenged, invalidated, or deemed unenforceable, potentially reducing protection[187](index=187&type=chunk)[188](index=188&type=chunk) - The company may incur substantial costs from litigation or other proceedings related to intellectual property rights, diverting resources and potentially leading to significant liabilities or injunctions[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) - Loss of in-licensed rights from third parties, such as Nerviano, due to termination or invalidity, could negatively impact the ability to commercialize products[196](index=196&type=chunk) [Risks Related to Ownership of Our Common Stock](index=38&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Ownership of common stock carries risks including limitations on NOL carryforwards, stock price volatility, lack of dividends, and anti-takeover provisions - The company's ability to use net operating loss (NOL) carryforwards and other tax attributes is limited by **Internal Revenue Code Sections 382 and 383** due to cumulative ownership changes, potentially increasing future tax liabilities[197](index=197&type=chunk) - The **Tax Cuts and Jobs Act of 2017 (TCJA)** reforms U.S. federal tax rates and limits, including a reduction in tax credits for orphan drug clinical testing expenses to **25%**, which could affect future taxable income[199](index=199&type=chunk) - The market price of common stock is volatile and can fluctuate widely due to various factors, including clinical trial results, regulatory decisions, competition, and economic conditions, potentially resulting in substantial losses for investors[201](index=201&type=chunk)[204](index=204&type=chunk) - The company has never paid dividends and does not expect to in the foreseeable future, meaning any return on investment will depend solely on stock price appreciation[205](index=205&type=chunk) - Delaware law and corporate charter/bylaws contain anti-takeover provisions, such as the board's ability to issue preferred stock, which could delay or discourage takeover attempts[207](index=207&type=chunk)[208](index=208&type=chunk) - A substantial sale of common stock by stockholders could cause the stock price to decline and impair the company's ability to raise future capital[209](index=209&type=chunk)[211](index=211&type=chunk) - Failure to comply with Nasdaq's continued listing requirements could lead to delisting, negatively impacting stock price and access to capital markets[213](index=213&type=chunk) [General Risk Factors](index=41&type=section&id=General%20Risk%20Factors) General risks include potential material weaknesses in internal controls and the significant legal and compliance costs associated with operating as a public company - Discovery of material weaknesses in internal control and accounting procedures could significantly decline stock price and make capital raising more difficult[214](index=214&type=chunk) - Operating as a public company incurs significant legal, accounting, and compliance costs, including **Sarbanes-Oxley Act** and **Dodd-Frank Act** requirements, diverting management time and resources[215](index=215&type=chunk)[216](index=216&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=42&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments from the SEC - No unresolved staff comments were reported[217](index=217&type=chunk) [ITEM 2. PROPERTIES](index=42&type=section&id=Item%202.%20Properties) Cardiff Oncology leases adequate laboratory and office space for its San Diego headquarters, with the current agreement expiring in February 2027 - The company leases its headquarters, including laboratory and office space, in San Diego, California, with the current lease agreement expiring in **February 2027**[218](index=218&type=chunk) - The current facilities are considered adequate for the company's present and near-term operational requirements[218](index=218&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=42&type=section&id=Item%203.%20Legal%20Proceedings) Cardiff Oncology is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - Management believes there are no current claims against the company that will result in a material adverse effect on its business or financial condition[219](index=219&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Cardiff Oncology - Mine Safety Disclosures are not applicable to the registrant[220](index=220&type=chunk) PART II [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=43&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Cardiff Oncology's common stock trades on Nasdaq under 'CRDF', with approximately 58 stockholders of record, and the company does not anticipate paying dividends in the foreseeable future - Cardiff Oncology's common stock has traded on The Nasdaq Capital Market under the symbol '**CRDF**' since **May 8, 2020**[223](index=223&type=chunk) - As of **February 23, 2023**, the company had approximately **58 stockholders of record**[223](index=223&type=chunk) - The company has never paid cash dividends on its common stock and does not expect to in the foreseeable future, with dividend payments restricted as long as any dividends on Series A Convertible Preferred Stock remain unpaid[224](index=224&type=chunk) [ITEM 6. [Reserved]](index=43&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=43&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Cardiff Oncology, a clinical-stage biotechnology company, continues to incur significant losses, with increased R&D expenses in 2022, but projects sufficient liquidity for the next 12 months - Cardiff Oncology is a clinical-stage biotechnology company developing novel cancer therapies using PLK1 inhibition, with onvansertib as its lead asset in clinical programs for mCRC, mPDAC, TNBC, and SCLC[226](index=226&type=chunk) - The company has an accumulated deficit of **$298.1 million** as of December 31, 2022, and expects to incur additional losses due to ongoing research and development[227](index=227&type=chunk)[228](index=228&type=chunk) - As of December 31, 2022, the company had **$105.3 million** in cash, cash equivalents, and short-term investments, projecting sufficient funds for at least the next **12 months** and into **2025**[237](index=237&type=chunk)[241](index=241&type=chunk) - The company is evaluating options to raise additional capital, increase revenue, and reduce costs, including public/private equity offerings, business development initiatives, internal synergies, and strategic partnerships[243](index=243&type=chunk) [Company Updates](index=43&type=section&id=Company%20Updates) Cardiff Oncology announced key executive appointments in early 2023 and 2022, strengthening its medical and scientific leadership - **Fairooz Kabbinavar, M.D., FACP**, was appointed Chief Medical Officer on **February 2, 2023**[227](index=227&type=chunk) - **Tod Smeal, Ph.D.**, was appointed Chief Scientific Officer and **Charles Monahan, R.Ph.**, as Senior Vice President, Regulatory Affairs on **January 11, 2022**[227](index=227&type=chunk) [Critical Accounting Estimate](index=44&type=section&id=Critical%20Accounting%20Estimate) Accrued clinical trial expenses represent the most significant critical accounting estimate, based on services received from CROs and other vendors - The most significant critical accounting estimate involves accrued clinical trial expenses, which are estimated based on services received and expenses incurred from CROs and other vendors[230](index=230&type=chunk)[231](index=231&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Cardiff Oncology reported an increased net loss in 2022, primarily driven by a significant rise in research and development expenses due to expanded clinical trial activities - Revenue (in thousands) | Year Ended December 31, | 2022 | 2021 | | :---------------------- | :--- | :--- | | Royalty revenues | $386 | $359 | - Revenues are primarily from annual minimum or sales-based royalties on intellectual property licenses unrelated to onvansertib[232](index=232&type=chunk) - Research and Development Expenses (in thousands) | Category | 2022 | 2021 | Increase/(Decrease) | | :-------------------------------- | :----- | :----- | :------------------ | | Salaries and staff costs | $4,031 | $1,745 | $2,286 | | Stock-based compensation | $1,035 | $491 | $544 | | Clinical trials, outside services, and lab supplies | $20,556 | $14,174 | $6,382 | | Facilities and Other | $1,485 | $966 | $519 | | **Total R&D Expenses** | **$27,107** | **$17,376** | **$9,731** | - Research and development expenses increased by **$9.7 million (56%)** in 2022, primarily due to increased CMC, clinical pharmacology, and studies for onvansertib, along with a **93% growth in R&D headcount**[233](index=233&type=chunk) - Selling, General and Administrative Expenses (in thousands) | Category | 2022 | 2021 | Increase/(Decrease) | | :-------------------------------- | :----- | :----- | :------------------ | | Salaries and staff costs | $3,134 | $2,491 | $643 | | Stock-based compensation | $3,221 | $2,743 | $478 | | Outside services and professional fees | $4,192 | $4,439 | $(247) | | Facilities and other | $2,634 | $2,165 | $469 | | **Total SG&A Expenses** | **$13,181** | **$11,838** | **$1,343** | - Selling, general and administrative expenses increased by **$1.3 million (11%)** in 2022, driven by higher salaries, staff costs (**30% headcount growth**), stock-based compensation, and facilities costs, partially offset by a decrease in strategic valuation consulting[235](index=235&type=chunk) - Net Loss and Per Share Amounts (in thousands, except per share) | Metric | 2022 | 2021 | Increase/(Decrease) | | :-------------------------------- | :------- | :------- | :------------------ | | Net loss | $(38,704) | $(28,291) | $10,413 | | Preferred stock dividend | $(24) | $(24) | — | | Net loss attributable to common stockholders | $(38,728) | $(28,315) | $10,413 | | Net loss per common share — basic and diluted | $(0.89) | $(0.73) | $0.16 | | Weighted-average shares outstanding — basic and diluted | 43,600 | 39,030 | 4,570 | - The net loss attributable to common shareholders increased by **$10.4 million** in 2022, primarily due to higher operating expenses, resulting in a **$0.16 increase** in basic and diluted net loss per share, partially offset by an increase in weighted average shares outstanding[236](index=236&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Cardiff Oncology's cash, cash equivalents, and short-term investments decreased to $105.3 million in 2022, with increased cash used in operations but a positive shift in investing activities - Liquidity and Capital Resources (in thousands) | Metric | December 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------------ | :------------------ | | Cash and cash equivalents | $16,347 | $11,943 | | Short-term investments | $88,920 | $128,878 | | Total Cash, Cash Equivalents & Short-term Investments | $105,267 | $140,821 | | Working capital | $103,500 | $139,600 | | Net cash used in operating activities | $(33,820) | $(23,040) | | Net cash provided by (used in) investing activities | $38,149 | $(131,448) | | Net cash provided by financing activities | $75 | $35,450 | - Net cash used in operating activities increased to **$33.8 million** in 2022 from **$23.0 million** in 2021, primarily due to the increased net loss[237](index=237&type=chunk) - Net cash provided by investing activities was **$38.1 million** in 2022, a significant change from **$131.4 million** used in 2021, mainly due to sales and maturities of marketable securities exceeding purchases[238](index=238&type=chunk) - Net cash provided by financing activities decreased substantially from **$35.5 million** in 2021 (from common stock sales and warrant exercises) to **$75 thousand** in 2022 (from stock option exercises)[239](index=239&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to Cardiff Oncology - Quantitative and Qualitative Disclosures About Market Risk are not applicable[244](index=244&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=46&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) All required financial statements and supplementary data are attached at the end of the report, starting on page F-1 - Financial statements and supplementary data are provided in a separate section beginning on page **F-1**[245](index=245&type=chunk) [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](index=46&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with accountants on accounting and financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure were reported[246](index=246&type=chunk) [ITEM 9A. CONTROLS AND PROCEDURES](index=46&type=section&id=Item%209A.%20Controls%20and%20Procedures) Cardiff Oncology's management concluded that its disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - As of **December 31, 2022**, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[247](index=247&type=chunk)[248](index=248&type=chunk) - Management assessed the effectiveness of internal control over financial reporting based on the **COSO framework (2013)** and concluded it was effective as of **December 31, 2022**[249](index=249&type=chunk)[250](index=250&type=chunk) - There have been no material changes in internal control over financial reporting during the quarter ended **December 31, 2022**[251](index=251&type=chunk) [ITEM 9B. OTHER INFORMATION](index=47&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - No other information was reported[252](index=252&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=47&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) There are no disclosures regarding foreign jurisdictions that prevent inspections - No disclosures regarding foreign jurisdictions that prevent inspections were reported[253](index=253&type=chunk) PART III [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](index=47&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the **2023 Proxy Statement** under the heading 'Election of Directors'[255](index=255&type=chunk) [ITEM 11. EXECUTIVE COMPENSATION](index=47&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the **2023 Proxy Statement** under the heading 'Executive Compensation'[255](index=255&type=chunk) [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](index=47&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management, and related stockholder matters, is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the **2023 Proxy Statement** under the heading 'Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters'[256](index=256&type=chunk) [ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](index=48&type=section&id=Item%2013.%20Certain%20Relationship%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships and related transactions, and director independence, is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the **2023 Proxy Statement** under the heading 'Family Relationships and other Arrangements'[257](index=257&type=chunk) [ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES](index=48&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the **2023 Proxy Statement** under the heading 'Proposal 2: Ratification of the Appointment of Our Independent Registered Public Accounting Firm for Fiscal Year Ending December 31, 2023'[257](index=257&type=chunk) PART IV [ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES](index=49&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules required to be filed as part of the Annual Report on Form 10-K, including the financial statements themselves and various corporate documents, agreements, and certifications - The financial statements required by this item are submitted in a separate section beginning on page **F-1**[260](index=260&type=chunk) - The exhibits include corporate documents (e.g., Certificate of Incorporation, By-Laws), equity incentive plans, warrant forms, license agreements, employment agreements, and certifications (e.g., Sarbanes-Oxley Act certifications)[261](index=261&type=chunk)[263](index=263&type=chunk) [ITEM 16. FORM 10-K SUMMARY](index=51&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K Summary is provided - No Form 10-K Summary is included[265](index=265&type=chunk) [SIGNATURES](index=52&type=section&id=SIGNATURES) The report is duly signed on behalf of Cardiff Oncology, Inc. by its principal executive officer and principal financial and accounting officer, along with the Board of Directors, as of March 2, 2023 - The report is signed by **Mark Erlander (Chief Executive Officer)** and **James Levine (Chief Financial Officer)**, along with the Board of Directors, on **March 2, 2023**[270](index=270&type=chunk)[273](index=273&type=chunk) FINANCIAL STATEMENTS [Report of Independent Registered Public Accounting Firm](index=54&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) BDO USA, LLP issued an unqualified opinion on Cardiff Oncology's financial statements for 2022 and 2021, highlighting accrued clinical trial expenses as a critical audit matter - **BDO USA, LLP** provided an unqualified opinion, stating that Cardiff Oncology's financial statements for **2022 and 2021** are presented fairly in all material respects[277](index=277&type=chunk) - Accrued clinical trial expenses were identified as a **critical audit matter** due to the challenging, subjective, and complex judgments involved in management's estimation process[281](index=281&type=chunk)[283](index=283&type=chunk) - Audit procedures for accrued clinical trial expenses included inspecting agreements, evaluating trial progress, confirming expenses with third-party providers, and testing for completeness[285](index=285&type=chunk) [Balance Sheets](index=56&type=section&id=Balance%20Sheets) Cardiff Oncology's balance sheet shows a decrease in total assets and stockholders' equity from 2021 to 2022, primarily due to reduced short-term investments and an increased accumulated deficit - Balance Sheet Summary (in thousands) | Item | December 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------------ | :------------------ | | Cash and cash equivalents | $16,347 | $11,943 | | Short-term investments | $88,920 | $128,878 | | Total current assets | $111,284 | $146,127 | | Total Assets | $116,191 | $149,544 | | Total current liabilities | $7,808 | $6,559 | | Total liabilities | $9,848 | $9,127 | | Total stockholders' equity | $106,343 | $140,417 | | Accumulated deficit | $(298,100) | $(259,810) | - Total assets decreased by **$33.35 million** from **$149.54 million** in 2021 to **$116.19 million** in 2022, primarily due to a reduction in short-term investments[288](index=288&type=chunk) - Total stockholders' equity decreased by **$34.07 million** from **$140.42 million** in 2021 to **$106.34 million** in 2022, largely driven by an increased accumulated deficit[288](index=288&type=chunk) [Statements of Operations](index=57&type=section&id=Statements%20of%20Operations) Cardiff Oncology reported an increased net loss attributable to common stockholders of $38.73 million in 2022, driven by higher research and development and selling, general and administrative expenses - Statements of Operations Summary (in thousands, except per share amounts) | Item | Year Ended December 31, 2022 | Year Ended December 31, 2021 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Royalty revenues | $386 | $359 | | Research and development | $27,107 | $17,376 | | Selling, general and administrative | $13,181 | $11,838 | | Total operating expenses | $40,288 | $29,214 | | Loss from operations | $(39,902) | $(28,855) | | Net loss | $(38,704) | $(28,291) | | Net loss attributable to common stockholders | $(38,728) | $(28,315) | | Net loss per common share — basic and diluted | $(0.89) | $(0.73) | - Net loss attributable to common stockholders increased by **$10.41 million**, from **$(28.32) million** in 2021 to **$(38.73) million** in 2022[290](index=290&type=chunk) - Total operating expenses rose by **$11.07 million**, from **$29.21 million** in 2021 to **$40.29 million** in 2022, driven by increases in both R&D and SG&A[290](index=290&type=chunk) [Statements of Comprehensive Loss](index=58&type=section&id=Statements%20of%20Comprehensive%20Loss) Cardiff Oncology's total comprehensive loss increased to $38.96 million in 2022, primarily due to a higher net loss and increased unrealized losses on available-for-sale securities - Statements of Comprehensive Loss Summary (in thousands) | Item | Year Ended December 31, 2022 | Year Ended December 31, 2021 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(38,704) | $(28,291) | | Unrealized loss on securities available-for-sale | $(253) | $(142) | | Total comprehensive loss | $(38,957) | $(28,433) | | Comprehensive loss attributable to common stockholders | $(38,981) | $(28,457) | - Total comprehensive loss increased by **$10.52 million**, from **$(28.43) million** in 2021 to **$(38.96) million** in 2022[293](index=293&type=chunk) - Unrealized loss on available-for-sale securities increased from **$(142) thousand** in 2021 to **$(253) thousand** in 2022[293](index=293&type=chunk) [Statements of Stockholders' Equity](index=59&type=section&id=Statements%20of%20Stockholders%27%20Equity) Cardiff Oncology's total stockholders' equity decreased to $106.34 million in 2022, primarily due to the net loss and other comprehensive loss, partially offset by stock-based compensation - Statements of Stockholders' Equity Summary (in thousands) | Item | December 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------------ | :------------------ | | Total Stockholders' Equity | $106,343 | $140,417 | | Accumulated Deficit | $(298,100) | $(259,810) | | Additional Paid-In Capital | $404,834 | $400,503 | | Common Stock Shares Outstanding | 44,677 | 41,964 | - Total stockholders' equity decreased by **$34.07 million** from 2021 to 2022[296](index=296&type=chunk) - The accumulated deficit increased by **$38.29 million** in 2022, reflecting the net loss for the year[296](index=296&type=chunk) - Additional paid-in capital increased by **$4.33 million**, mainly due to stock-based compensation[296](index=296&type=chunk) [Statements of Cash Flows](index=60&type=section&id=Statements%20of%20Cash%20Flows) Cardiff Oncology reported a net increase in cash and cash equivalents of $4.40 million in 2022, driven by a positive shift in investing activities despite increased operating cash usage - Statements of Cash Flows Summary (in thousands) | Activity | Year Ended December 31, 2022 | Year Ended December 31, 2021 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(33,820) | $(23,040) | | Net cash provided by (used in) investing activities | $38,149 | $(131,448) | | Net cash provided by financing activities | $75 | $35,450 | | Net change in cash and cash equivalents | $4,404 | $(119,038) | | Cash and cash equivalents—End of period | $16,347 | $11,943 | - Net cash used in operating activities increased to **$33.82 million** in 2022 from **$23.04 million** in 2021, primarily due to the higher net loss[301](index=301&type=chunk) - Investing activities shifted from using **$131.45 million** in 2021 to providing **$38.15 million** in 2022, mainly due to higher maturities and sales of short-term investments[301](index=301&type=chunk) - Financing activities provided significantly less cash in 2022 (**$75 thousand**) compared to 2021 (**$35.45 million**), as major equity sales occurred in the prior year[301](index=301&type=chunk) [Notes to Financial Statements](index=61&type=section&id=Notes%20to%20Financial%20Statements) The notes provide detailed information on Cardiff Oncology's business, accounting policies, financial instruments, equity, and commitments, highlighting its clinical-stage nature and capital needs - Cardiff Oncology is a clinical-stage biotechnology company focused on PLK1 inhibition for cancer therapies, with onvansertib as its lead asset[304](index=304&type=chunk) - The company has incurred net losses since inception and expects to continue incurring losses, requiring additional capital to advance clinical trial programs[304](index=304&type=chunk)[305](index=305&type=chunk) - As of December 31, 2022, the company had **$105.3 million** in cash, cash equivalents, and short-term investments, believed to be sufficient for at least the next **12 months**[304](index=304&type=chunk) [1. Business Overview and Liquidity](index=61&type=section&id=1.%20Business%20Overview%20and%20Liquidity) Cardiff Oncology, a clinical-stage biotechnology company, has an accumulated deficit of $298.1 million but expects its $105.3 million in cash and investments to fund operations for at least 12 months - Cardiff Oncology is a clinical-stage biotechnology company developing novel cancer therapies using PLK1 inhibition, with onvansertib as its lead asset[304](index=304&type=chunk) - The company has incurred net losses and negative operating cash flows since inception, with an accumulated deficit of **$298.1 million** as of December 31, 2022[304](index=304&type=chunk) - Cash, cash equivalents, and short-term investments totaled **$105.3 million** as of December 31, 2022, expected to fund operations for at least the next **12 months**[304](index=304&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=62&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Financial statements adhere to U.S. GAAP, with accrued clinical trial expenses as a key estimate, and investment securities are classified as available-for-sale - Financial statements are prepared in accordance with **U.S. GAAP**, and the company operates as one operating segment in the United States[307](index=307&type=chunk)[308](index=308&type=chunk) - Accrued clinical trial expenses are a significant estimate, based on services received and expenses incurred from service providers, with a balance of **$2.3 million** included in accrued liabilities as of December 31, 2022[308](index=308&type=chunk)[309](index=309&type=chunk) - Investment securities are classified as 'available-for-sale' and carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive loss[311](index=311&type=chunk)[312](index=312&type=chunk) - Revenue from royalty and license agreements (unrelated to onvansertib) is recognized when control of products/services is transferred or when sales-based royalties occur[314](index=314&type=chunk)[315](index=315&type=chunk) - Common stock warrants are classified as derivative liabilities and remeasured at fair value each period, with changes recorded in the statement of operations[317](index=317&type=chunk) - An immaterial error related to the accrual of cumulative preferred dividends on Series A Convertible Preferred Stock was corrected in **Q4 2022**, resulting in a **$0.4 million adjustment** to accumulated deficit and accrued liabilities[332](index=332&type=chunk) [3. Supplementary Balance Sheet Information](index=67&type=section&id=3.%20Supplementary%20Balance%20Sheet%20Information) Supplementary balance sheet details include short-term investments, property and equipment, and accrued liabilities, with changes reflecting investment activity and operational expenses - Short-term Investments Available-for-Sale Securities (in thousands) as of December 31, 2022 | Category | Amortized Cost (thousands) | Gross Unrealized Gains (thousands) | Gross Unrealized Losses (thousands) | Fair Market Value (thousands) | | :-------------------- | :------------- | :--------------------- | :---------------------- | :---------------- | | Maturity less than 1 year: | | | | | | Certificate of deposit | $16,101 | $3 | $(81) | $16,023 | | Corporate debt securities | $44,806 | $8 | $(275) | $44,539 | | Commercial paper | $13,203 | $4 | $(20) | $13,187 | | U.S. government agencies | $2,284 | $4 | $— | $2,288 | | U.S. treasury securities | $7,905 | $— | $(18) | $7,887 | | **Total maturity less than 1 year** | **$84,299** | **$19** | **$(394)** | **$83,924** | | Maturity 1 to 2 years: | | | | | | Corporate debt securities | $5,016 | $1 | $(21) | $4,996 | | **Total maturity 1 to 2 years** | **$5,016** | **$1** | **$(21)** | **$4,996** | | **Total short-term investments** | **$89,315** | **$20** | **$(415)** | **$88,920** | - The net realized loss from the sale of short-term investments was **$0.2 million** for the year ended December 31, 2022[336](index=336&type=chunk) - Unrealized losses in available-for-sale debt securities at December 31, 2022, were primarily due to increases in interest rates, not credit risks[337](index=337&type=chunk) - Property and Equipment, Net (in thousands) | Item | December 31, 2022 (thousands) | December 31, 2021 (thousands) | | :-------------------- | :------------------ | :------------------ | | Furniture and office equipment | $1,066 | $955 | | Leasehold improvements | $2,560 | $1,962 | | Laboratory equipment | $1,056 | $906 | | Less—accumulated depreciation | $(3,413) | $(3,441) | | **Property and equipment, net** | **$1,269** | **$382** | - Property and equipment, net, increased from **$0.38 million** in 2021 to **$1.27 million** in 2022[339](index=339&type=chunk) - Accrued Liabilities (in thousands) | Item | December 31, 2022 (thousands) | December 31, 2021 (thousands) | | :-------------------- | :------------------ | :------------------ | | Accrued compensation | $1,849 | $1,435 | | Preferred stock dividend | $— | $414 | | Clinical trials | $2,333 | $1,639 | | Research agreements and services | $509 | $726 | | Director fees | $125 | $141 | | Patent, license and other fees | $24 | $43 | | Other accrued liabilities | $337 | $129 | | **Total accrued liabilities** | **$5,177** | **$4,527** | - Total accrued liabilities increased by **$0.65 million**, from **$4.53 million** in 2021 to **$5.18 million** in 2022, primarily due to increases in accrued compensation and clinical trials[340](index=340&type=chunk) [4. Leases](index=68&type=section&id=4.%20Leases) Cardiff Oncology's operating leases, primarily for its San Diego facility, resulted in a net operating lease cost of $0.75 million in 2022, with a weighted-average remaining lease term of 4.2 years - Cardiff Oncology's current leases are operating leases, primarily for its master facility in San Diego, which commenced on **January 1, 2022**, and expires on **February 28, 2027**[341](index=341&type=chunk)[342](index=342&type=chunk) - Net Operating Lease Cost (in thousands) | Item | Twelve Months Ended December 31, 2022 (thousands) | Twelve Months Ended December 31, 2021 (thousands) | | :-------------------- | :------------------------------------ | :------------------------------------ | | Operating lease cost | $754 | $745 | | Operating sublease income | $— | $(403) | | **Net operating lease cost** | **$754** | **$342** | - Net operating lease cost increased from **$0.34 million** in 2021 to **$0.75 million** in 2022, largely due to the expiration of sublease agreements[344](index=344&type=chunk) - Operating Lease Liabilities (in thousands) | Item | As of December 31, 2022 (thousands) | As of December 31, 2021 (thousands) | | :-------------------- | :---------------------- | :---------------------- | | Operating lease ROU assets | $2,251 | $2,796 | | Current operating lease liabilities | $675 | $551 | | Non-current operating lease liabilities | $2,040 | $2,568 | | **Total operating lease liabilities** | **$2,715** | **$3,119** | - The weighted-average remaining lease term for operating leases is **4.2 years**, with a weighted-average discount rate of **7%** as of December 31, 2022[344](index=344&type=chunk) [5. Stockholders' Equity](index=71&type=section&id=5.%20Stockholders%27%20Equity) Stockholders' equity details include warrant activity, cumulative preferred stock dividends, and Pfizer's $15.0 million common stock investment in 2021 - Warrant Activity Summary | Item | Number of Warrants (shares) | Weighted-Average Exercise Price Per Share ($) | | :-------------------- | :----------------- | :---------------------------------------- | | Balance outstanding, December 31, 2021 | 4,490,159 | $5.80 | | Expired | (129,191) | $21.60 | | **Balance outstanding, December 31, 2022** | **4,360,968** | **$5.33** | - As of December 31, 2022, **4,360,968 warrants** were outstanding with a weighted-average exercise price of **$5.33 per share** and a remaining contractual term of **2.1 years**[346](index=346&type=chunk) - Holders of Series A Convertible Preferred Stock are entitled to cumulative dividends at **4% per annum**, with **$438,000** in cumulative unpaid dividends as of December 31, 2022[348](index=348&type=chunk)[355](index=355&type=chunk) - All Series E Convertible Preferred Stock shares were converted into common stock by **December 31, 2022**[356](index=356&type=chunk) - In November 2021, Pfizer Inc. purchased **2.4 million shares** of common stock for approximately **$15.0 million** as part of the Pfizer Breakthrough Growth Initiative[359](index=359&type=chunk) [6. Stock-Based Compensation](index=73&type=section&id=6.%20Stock-Based%20Compensation) Stock-based compensation expense increased to $4.26 million in 2022, with 3,087,075 shares available under the 2021 Omnibus Equity Incentive Plan - The **2021 Omnibus Equity Incentive Plan** had **3,087,075 shares** available for issuance as of December 31, 2022, following shareholder approval to increase authorized shares[360](index=360&type=chunk) - Total stock-based compensation expense increased from **$3.23 million** in 2021 to **$4.26 million** in 2022[365](index=365&type=chunk) - Stock-Based Compensation Expense (in thousands) | Category | 2022 (thousands) | 2021 (thousands) | | :-------------------------------- | :----- | :----- | | Research and development expenses | $1,035 | $491 | | Selling, general and administrative expenses | $3,221 | $2,743 | | **Total stock-based compensation** | **$4,256** | **$3,234** | - The weighted-average fair value per share of options granted was **$2.55** in 2022, down from **$5.96** in 2021[369](index=369&type=chunk) - Unrecognized compensation cost for non-vested stock options was **$8.8 million** as of December 31, 2022, with a weighted-average remaining amortization period of **2.6 years**[370](index=370&type=chunk) [7. Derivative Financial Instruments — Warrants](index=74&type=section&id=7.%20Derivative%20Financial%20Instruments%20%E2%80%94%20Warrants) Certain warrants are classified as derivative liabilities and remeasured at fair value using the Black-Scholes model, with a fair value of $0 at December 31, 2022 - Certain warrants are accounted for as derivative liabilities and remeasured at fair value using the **Black-Scholes option pricing model**[372](index=372&type=chunk) - The fair value of these warrants was **$0** at both December 31, 2022, and December 31, 2021, with a change in fair value recognized as a gain of **$(285) thousand** in 2021[375](index=375&type=chunk) - Key assumptions for the Black-Scholes model in 2022 included a fair value of common stock of **$1.40**, an expected warrant term of **0.1 years**, a risk-free interest rate of **4.12%**, and expected volatility of **54%**[373](index=373&type=chunk) [8. Fair Value Measurements](index=76&type=section&id=8.%20Fair%20Value%20Measurements) Financial assets and liabilities measured at fair value are classified into a three-tier hierarchy, with no transfers into or out of Level 3 in 2021 or 2022 - The company classifies its financial assets and liabilities measured at fair value into a three-tier hierarchy: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs), and **Level 3** (unobservable inputs)[320](index=320&type=chunk) - Fair Value Measurements at December 31, 2022 (in thousands) | Item | Level 1 (thousands) | Level 2 (thousands) | Level 3 (thousands) | Total (thousands) | | :-------------------------------- | :------ | :------ | :------ | :------ | | Money market fund | $— | $15,722 | $— | $15,722 | | Certificate of deposit | $— | $16,023 | $— | $16,023 | | Corporate debt securities | $— | $49,535 | $— | $49,535 | | Commercial paper | $— | $13,187 | $— | $13,187 | | U.S. government agencies | $— | $2,288 | $— | $2,288 | | U.S. treasury securities | $7,887 | $— | $— | $7,887 | | **Total assets measured at fair value** | **$23,609** | **$81,033** | **$—** | **$104,642** | - There were no transfers into or out of Level 3 during the years ended December 31, 2022 and 2021[377](index=377&type=chunk) [9. Income Taxes](index=77&type=section&id=9.%20Income%20Taxes) Cardiff Oncology has significant federal and California net operating loss (NOL) carryforwards and R&D tax credits, but their utilization is limited by ownership changes and a full valuation allowance - As of December 31, 2022, Cardiff Oncology had federal net operating loss (NOL) carryforwards of approximately **$5.1 million** (expiring through 2037) and **$85.8 million** (non-expiring), plus California NOLs of **$17.3 million** (expiring from 2029)[378](index=378&type=chunk) - The company also had federal and California research and development tax credits of approximately **$1.0 million** and **$2.3 million**, respectively[378](index=378&type=chunk) - Due to ownership changes under **Code Sections 382 and 383**, the company's NOL and tax credit carryforwards were reduced by **$123.9 million** (federal NOL), **$62.8 million** (state NOL), and **$1.8 million** (federal tax credits) for periods prior to 2022[380](index=380&type=chunk) - A full valuation allowance has been recorded against net deferred tax assets, as their realization is not considered more likely than not[379](index=379&type=chunk)[382](index=382&type=chunk) [10. Commitments and Contingencies](index=78&type=section&id=10.%20Commitments%20and%20Contingencies) Commitments include executive severance provisions and potential milestone payments under the Nerviano license, with no material legal liabilities currently anticipated - Executive agreements include provisions for severance payments in cases of termination without cause or certain change of control scenarios[384](index=384&type=chunk) - The license agreement with Nerviano for onvansertib includes potential development and commercial milestones, and sales-based royalties, though no milestone or royalty payments were made in **2021 or 2022**[385](index=385&type=chunk) - The company does not believe it has legal liabilities that are probable or reasonably possible requiring accrual or disclosure, and management believes no current claims will result in a material adverse effect[386](index=386&type=chunk) [11. Employee Benefit Plan](index=79&type=section&id=11.%20Employee%20Benefit%20Plan) Cardiff Oncology offers a 401(k) defined contribution retirement plan to employees but currently does not make matching contributions - Cardiff Oncology offers a defined contribution retirement plan (**401(k)**) to its employees, but currently does not make matching contributions[387](index=387&type=chunk)