Cardiff Oncology(CRDF) - 2020 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements Presents unaudited condensed financial statements for Q1 2020, including Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows, with notes Condensed Balance Sheets Condensed Balance Sheet Summary (Unaudited) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $9,277,025 | $10,195,292 | | Total current assets | $10,282,908 | $11,353,729 | | Total Assets | $11,815,403 | $13,086,546 | | Liabilities & Equity | | | | Total current liabilities | $4,881,300 | $4,781,744 | | Total Liabilities | $5,671,985 | $5,775,202 | | Total stockholders' equity | $6,143,418 | $7,311,344 | Condensed Statements of Operations Condensed Statement of Operations (Unaudited) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Total revenues | $67,704 | $62,021 | | Total operating expenses | $4,191,710 | $4,023,784 | | Loss from operations | ($4,124,006) | ($3,961,763) | | Net loss | ($4,088,562) | ($3,904,771) | | Net loss attributable to common stockholders | ($4,094,622) | ($4,179,100) | | Net loss per common share — basic and diluted | ($0.41) | ($1.02) | | Weighted-average shares outstanding | 9,910,306 | 4,086,561 | Condensed Statements of Stockholders' Equity - Total stockholders' equity decreased from $7,311,344 to $6,143,418 at March 31, 2020, primarily due to a $4.1 million net loss, partially offset by common stock sales and warrant exercises[18] Condensed Statements of Cash Flows Condensed Statement of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,374,637) | ($3,360,046) | | Net cash used in investing activities | $0 | ($5,274) | | Net cash provided by financing activities | $2,456,370 | $3,242,266 | | Net change in cash and cash equivalents | ($918,267) | ($123,054) | | Cash and cash equivalents—End of period | $9,277,025 | $11,330,079 | Notes to Condensed Financial Statements - The company is a clinical-stage biotechnology firm focused on developing new cancer treatments, particularly for KRAS-mutated colorectal cancer, prostate cancer, and acute myeloid leukemia[28] - Management has substantial doubt about the company's ability to continue as a going concern, as existing cash resources are projected to fund operations only into the fourth quarter of 2020, necessitating additional capital[32] - The COVID-19 outbreak is identified as a significant risk that could adversely impact the company's financial condition, clinical trials, and ability to raise capital[77] - Subsequent to the quarter's end, the company raised approximately $1.084 million through a private placement and received a $305,000 loan under the Paycheck Protection Program (PPP)[80][83] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's oncology business, Q1 2020 operating results, liquidity, and highlights significant 'going concern' risks Overview - The company is a clinical-stage oncology therapeutics firm developing drugs targeting cell division, with lead candidate onvansertib, a PLK1 inhibitor[92][93] - Three active clinical trials for onvansertib are underway, targeting KRAS-mutated metastatic colorectal cancer, metastatic castration-resistant prostate cancer, and acute myeloid leukemia[94] - Subsequent to the quarter, the company announced a name change to Cardiff Oncology, Inc. (ticker: CRDF), effective May 8, 2020, and appointed a new CEO[100] - Positive clinical data from the Phase 1b/2 trial in KRAS-mutated mCRC was presented at the AACR conference in April 2020, showing consistent tumor regression and durable response[101] Results of Operations Comparison of Results for Three Months Ended March 31 | Item | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Revenues (Royalties) | $67,704 | $62,021 | $5,683 | | Research and Development Expenses | $2,705,691 | $2,648,599 | $57,092 | | Selling, General and Administrative Expenses | $1,486,019 | $1,375,185 | $110,834 | | Net Loss Attributable to Common Shareholders | ($4,094,622) | ($4,179,100) | ($84,478) | - The increase in R&D expenses was primarily due to costs associated with the three ongoing clinical trials for onvansertib[113] - The increase in SG&A expenses was mainly driven by higher insurance costs and outside professional services[114] Liquidity and Capital Resources - As of March 31, 2020, the company had $9.3 million in cash and cash equivalents and working capital of $5.4 million[121][125] - Net cash used in operating activities was $3.4 million for the three months ended March 31, 2020[121] - Management states that existing resources are only sufficient to fund planned operations into the fourth quarter of 2020, raising substantial doubt about the company's ability to continue as a going concern[126] - The company is evaluating options to strengthen its liquidity, including raising capital through equity offerings, new business initiatives, cost reductions, and strategic partnerships[127] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is deemed not applicable to the company's current operations - The company states that this item is not applicable[131] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2020, with no material changes in internal control over financial reporting - Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[133] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[135] PART II OTHER INFORMATION Item 1. Legal Proceedings The company reported no legal proceedings during the period - The company reports that there are no legal proceedings[138] Item 1A. Risk Factors Introduces a new material risk factor: the COVID-19 pandemic's potential adverse impact on business, operations, and capital access - A new risk factor has been added concerning the potential material and adverse effects of a pandemic, such as COVID-19, on the company's business and operations[139] - The COVID-19 pandemic may disrupt the supply of product candidates, delay clinical trials, affect regulatory reviews, and reduce the company's ability to access capital[140] Other Items (Items 2, 3, 4, 5) Reports no unregistered equity sales, senior security defaults, or other material information; mine safety disclosures are not applicable - Item 2: No unregistered sales of equity securities and use of proceeds are reported[141] - Item 3: No defaults upon senior securities are reported[142] - Item 4: Mine safety disclosures are not applicable[143] - Item 5: No other information is reported[144] Item 6: Exhibits Lists all exhibits filed with Form 10-Q, including securities purchase agreements, warrants, officer certifications, and XBRL data files - The report includes several exhibits, such as securities purchase agreements from March and April 2020, forms of warrants, and certifications by the Principal Executive Officer and Principal Financial Officer[146]