0001628280-20-012428 | 10-Q | XBRL Viewer

Issuance of common stock upon exercise of warrants (in shares)

200,067

497,313

Issuance of common stock upon vesting of restricted stock units (in shares)

3,282,266

$ 50

3,282,216

6,362

Issuance of common stock upon vesting of restricted stock units

$ 4

(4)

Preferred stock dividend payable on Series A Convertible Preferred Stock

(6,060)

70,487

Issuance of common stock, preferred stock and warrants for clinical trial funding commitment (in shares)

(3,904,771)

200,000

183,334

Issuance of common stock, preferred stock and warrants for clinical trial funding commitment

(40,000)

$ 200

$ 110

1,634,690

(1,675,000)

Deemed dividend recognized on beneficial conversion features of Series C Convertible Preferred Stock issuance

268,269

(268,269)

Issuance of common stock for share rounding as a result of reverse stock split (in shares)

6,466

Balance, ending (in shares) at Mar. 31, 2019

260,600

4,525,354

Balance, ending at Mar. 31, 2019

9,686,181

$ 260

$ 7,906

207,652,843

(1,604,513)

(196,370,315)

Balance, beginning (in shares) at Dec. 31, 2018

60,600

3,831,879

Balance, beginning at Dec. 31, 2018

10,084,192

$ 60

$ 7,742

202,267,605

(192,191,215)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of warrants (in shares)

156,353

1,564

$ 16

1,548

Balance, ending (in shares) at Jun. 30, 2019

(8,030,074)

60,600

5,441,390

Balance, ending at Jun. 30, 2019

8,848,235

$ 60

$ 7,997

210,706,090

(1,364,234)

(200,501,678)

Balance, beginning (in shares) at Mar. 31, 2019

260,600

4,525,354

Balance, beginning at Mar. 31, 2019

9,686,181

$ 260

$ 7,906

207,652,843

(1,604,513)

(196,370,315)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Sale of common stock and warrants (in shares)

148,834

(421,917)

Sale of common stock and warrants

(2,902,740)

$ (42)

(2,902,698)

Issuance of common stock upon vesting of restricted stock units (in shares)

4,433

Issuance of common stock upon vesting of restricted stock units

$ 0

Preferred stock dividend payable on Series A Convertible Preferred Stock

(6,060)

240,279

Issuance of common stock upon conversion of Series D Convertible Preferred Stock (in shares)

(4,125,303)

(200,000)

333,333

Issuance of common stock upon conversion of Series D Convertible Preferred Stock

$ (200)

$ 33

$ 167

Balance, ending (in shares) at Jun. 30, 2019

60,600

5,441,390

Balance, ending at Jun. 30, 2019

8,848,235

$ 60

$ 7,997

210,706,090

(1,364,234)

(200,501,678)

Balance, beginning (in shares) at Dec. 31, 2019

60,600

8,593,633

Balance, beginning at Dec. 31, 2019

7,311,344

$ 60

$ 8,312

217,172,528

(971,673)

(208,897,883)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Sale of common stock and warrants (in shares)

177,309

(800,000)

Sale of common stock and warrants

(1,000,001)

$ (80)

(999,921)

Issuance of common stock upon exercise of warrants (in shares)

1,610,144

Issuance of common stock upon vesting of restricted stock units (in shares)

1,456,369

$ 161

1,456,208

6,810

Issuance of common stock upon vesting of restricted stock units

$ 1

(1)

Preferred stock dividend payable on Series A Convertible Preferred Stock

(6,060)

293,017

Balance, ending (in shares) at Mar. 31, 2020

(4,088,562)

60,600

11,010,587

Balance, ending at Mar. 31, 2020

6,143,418

$ 60

$ 8,554

219,805,965

(678,656)

(212,992,505)

Balance, beginning (in shares) at Dec. 31, 2019

60,600

8,593,633

Balance, beginning at Dec. 31, 2019

7,311,344

$ 60

$ 8,312

217,172,528

(971,673)

(208,897,883)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Balance, ending (in shares) at Jun. 30, 2020

(8,213,094)

926,424

21,325,076

Balance, ending at Jun. 30, 2020

24,384,039

$ 926

$ 9,585

247,528,273

(2,765,164)

(220,389,581)

Balance, beginning (in shares) at Mar. 31, 2020

60,600

11,010,587

Balance, beginning at Mar. 31, 2020

6,143,418

$ 60

$ 8,554

219,805,965

(678,656)

(212,992,505)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of warrants (in shares)

281,776

3,473,393

Issuance of common stock upon vesting of restricted stock units (in shares)

4,605,017

$ 347

4,604,670

2,250

Issuance of common stock upon vesting of restricted stock units

$ 0

Preferred stock dividend payable on Series A Convertible Preferred Stock

(6,060)

213,492

Issuance of common stock, preferred stock and warrants for clinical trial funding commitment (in shares)

(4,124,532)

154,670

602,833

Issuance of common stock, preferred stock and warrants for clinical trial funding commitment

(7,500)

$ 15

$ 60

2,292,425

(2,300,000)

Deemed dividend recognized on beneficial conversion features of Series C Convertible Preferred Stock issuance

$ 601,767

$ 2,664,717

$ (601,767)

$ (2,664,717)

Sale of common stock, preferred stock and warrants (in shares)

^[1]

865,824

4,689,313

Sale of common stock, preferred stock and warrants

^[1]

(17,278,428)

$ 866

$ 469

17,277,093

Issuance of common stock upon conversion of Series D Convertible Preferred Stock (in shares)

(154,670)

1,546,700

Issuance of common stock upon conversion of Series D Convertible Preferred Stock

$ (15)

$ 155

$ (140)

Balance, ending (in shares) at Jun. 30, 2020

926,424

21,325,076

Balance, ending at Jun. 30, 2020

$ 24,384,039

$ 926

$ 9,585

$ 247,528,273

$ (2,765,164)

$ (220,389,581)

[1]	Net of expenses of $616,143, and fair value of warrants issued as a transaction advisory fee as of the date of issuance of $370,666.

CONDENSED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Stock issuance expenses	$ 92,648	$ 97,260
Warrant exercise costs	393,285	0
Series D Convertible Preferred Stock
Discount of issuance of common stock, preferred stock and warrants for clinical trial funding commitment	$ 488,270
Series C Convertible Preferred Stock
Discount of issuance of common stock, preferred stock and warrants for clinical trial funding commitment		$ 235,640

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Affiliated Entity
Related Party Transaction [Line Items]
Research and development expense	$ 253	$ 258	$ 529	$ 503

Stockholders' Equity

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Stock Options

Stock-based compensation expense related to Cardiff Oncology equity awards have been recognized in operating results as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019

Included in research and development expense	$	70,085	$	86,058	$	146,953	$	196,138
Included in selling, general and administrative expense	211,691		62,776		312,132		152,763


Total stock-based compensation expense	$	281,776	$	148,834	$	459,085	$	348,901

The unrecognized compensation cost related to non-vested stock options outstanding at June 30, 2020 and 2019, net of estimated forfeitures, was $2,732,126 and $1,735,973, respectively, which is expected to be recognized over a weighted-average remaining vesting period of 2.4 and 2.5 years, respectively. The weighted-average remaining contractual term of outstanding options as of June 30, 2020 was approximately 9.4 years. The total fair value of stock options vested during the six months ended June 30, 2020 and 2019 were $764,724 and $279,760, respectively.

The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions during the following periods indicated:


	Six Months Ended June 30,
	2020		2019
Risk-free interest rate	0.44	%	1.8	%
Dividend yield	0	%	0	%
Expected volatility of Cardiff Oncology common stock	105	%	95	%
Expected term	5.9 years		5.9 years

A summary of stock option activity and changes in stock options outstanding is presented below:


	Total Options	Weighted-Average Exercise Price Per Share		Intrinsic Value
Balance outstanding, December 31, 2019	1,015,418	$	12.77	$	—
Granted	969,965	$	2.53

Canceled / Forfeited	(46,069)	$	12.58
Expired	(15,275)	$	8.98
Balance outstanding, June 30, 2020	1,924,039	$	7.64	$	4,675,733
Exercisable at June 30, 2020	441,316	$	24.82	$	973,456

On June 6, 2019, the number of authorized shares in the Cardiff Oncology 2014 Equity Incentive Plan (“2014 EIP”) was increased from 243,056 to 1,243,056. On April 16, 2020 the 2014 EIP was amended to increase the number of shares of common stock reserved for issuance thereunder to 2,243,056 from 1,243,056. As of June 30, 2020, there were 258,497 shares available for issuance under the 2014 EIP.

Restricted Stock Units

A summary of the RSU activity is presented below:


	Total Restricted Stock Units	Weighted-Average Grant Date Fair Value Per Share		Intrinsic Value
Non-vested RSUs outstanding, December 31, 2019	11,301	$	15.38	$	14,013

Vested	(9,060)	$	10.89	$	13,763

Non-vested RSUs outstanding, June 30, 2020	2,241	$	33.49	$	11,227

The total fair value of vested RSUs during the six months ended June 30, 2020 and 2019 were $98,703 and $147,516, respectively.

Warrants

A summary of warrant activity and changes in warrants outstanding, including both liability and equity classifications is presented below:


	Total Warrants	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term
Balance outstanding, December 31, 2019	10,589,482	$	4.08	3.7 years
Granted	5,831,451	$	1.70
Exercised	(4,091,498)	$	1.59

Balance outstanding, June 30, 2020	12,329,435	$	3.78	4.5 years

Preferred Stock

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


						Shares outstanding
Class	Par value		Shares designated	Liquidation preference		As of June 30, 2020	As of December 31, 2019
Series A Convertible Preferred Stock	$	0.001	277,100	$	606,000	60,600	60,600
Series B Convertible Preferred Stock	$	0.001	8,860	None		—	—
Series C Convertible Preferred Stock	$	0.001	200,000	None		—	—
Series D Convertible Preferred Stock	$	0.0001	154,670	None		—	—
Series E Convertible Preferred Stock	$	0.001	865,824	None		865,824	—

Series C Convertible Preferred Stock and Service Receivable

On January 25, 2019, the Company entered into a Master Services Agreement and a Stock and Warrant Subscription Agreement with PoC Capital, LLC (“PoC”), whereby PoC agreed to finance $1.675 million for the development costs associated with Phase 1b/2 study of onvansertib in combination with FOLFIRI and Avastin^® in patients with metastatic Colorectal Cancer (“mCRC”) harboring KRAS mutation in exchange for (i)183,334 shares of common stock, (ii) warrants to purchase an aggregate of 150,000 shares of common stock, with an exercise price of $3.762 per share, expiring on January 25, 2024, and (iii) 200,000 shares of Series C Convertible Preferred Stock, each share of which was convertible into 1.67 shares of common stock. In April of 2019, all 200,000 shares of Series C Convertible Preferred Stock were converted into 333,333 shares of the Company's common stock. As of June 30, 2020, there were no shares of Series C Convertible Preferred Stock outstanding.

The Company evaluated the awards issued under this transaction and determined they should be classified as equity. These equity awards were fully vested and non-forfeitable. Since the equity awards were for clinical trial services yet to be provided, the Company recognized $1.675 million service receivables as contra equity. The Company releases the service receivables as clinical trial services are performed. The conversion feature of the Series C Convertible Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series C Convertible Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from inception, the Company immediately recorded a non-cash deemed dividend of $0.3 million related to the beneficial conversion feature arising from the issuance of Series C Convertible Preferred Stock. This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share.

Series D Convertible Preferred Stock and Service Receivable

On May 8, 2020, the Company entered into a Stock and Warrant Subscription Agreement with PoC, whereby PoC agreed to finance an additional $2.3 million for a clinical trial in exchange for (i) 602,833 shares of its common stock (the “Common Stock”), (ii) 154,670 shares of its Series D Preferred Stock (as defined below) and (iii) a warrant (the “Warrant”) exercisable for 859,813 shares of its Common Stock. In exchange for PoC funding clinical development of onvansertib, the Company’s first-in-class, 3rd generation oral and highly selective PLK1 inhibitor in a Phase 1b/2 clinical trial in patients with metastatic colorectal cancer pursuant to a Master Services Agreement dated as of January 25, 2019 by and among the Company, Integrium, LLC and PoC, as amended. The Series N Warrants will be exercisable six months following the date of issuance at an exercise price of $1.50 per share and will expire on November 7, 2025. In June of 2020, all 154,670 Series D Preferred Stock were converted to 1,546,700 shares of Common Stock. As of June 30, 2020, there were no shares of Series D Convertible Preferred Stock outstanding.

The Company evaluated the awards issued under this transaction and determined they should be classified as equity. These equity awards were fully vested and non-forfeitable. Since the equity awards were for clinical trial services yet to be provided, the Company recognized $2.3 million service receivables as contra equity. The Company releases the service receivables as clinical trial services are performed. The conversion feature of the Series D Convertible Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series D Convertible Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from inception, the Company immediately recorded a non-cash deemed dividend of $0.6 million related to the beneficial conversion feature arising from the issuance of Series D Convertible Preferred Stock. This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share.

Series E Convertible Preferred Stock and Service Receivable

On June 15, 2020 the Company entered into a Securities Purchase Agreement with Acorn Bioventures LP ("Acorn"), CDK Associates, L.L.C. (“CDK”) and Third Street Holdings LLC (“Third Street”), pursuant to which the Company agreed to offer, issue and sell to Acorn, CDK and Third Street, (i) in a registered direct offering, an aggregate of 1,984,328 shares of common stock and (ii) in a concurrent private placement, (a) an aggregate of 865,824 shares of Series E Preferred Stock (“Series E Preferred Stock”) and (b) Series N warrants to purchase up to 2,213,115 shares of Common Stock. The Series E Preferred Stock is convertible at any time determined by dividing the $10 stated value per share of the Series E Preferred Stock by a conversion price of $2.44 per share, subject to adjustment in accordance with the Certificate of Designation. The Series N Warrants will be exercisable six months following the date of issuance at an exercise price of $2.39 per share and will expire on December 16, 2025. As of June 30, 2020, there were 865,824 shares of Series E Convertible Preferred Stock outstanding.

The conversion feature of the Series E Convertible Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series E Convertible Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from inception, the Company immediately recorded a non-cash deemed dividend of $2.7 million related to the beneficial conversion feature arising from the issuance of Series E Convertible Preferred Stock. This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share.

In conjunction with the June 15, 2020 offering, we issued 184,426 warrants as an advisory fee. These warrants are exercisable six months following the date of issuance at an exercise price of $3.05 per share and will expire 5.5 years following the date of issuance. These warrants are classified as equity and its estimated fair value of $370,666 was recognized as additional paid in capital on the issuance date. The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

Securities Purchase Agreements with Lincoln Park Capital Fund, LLC

On March 30, 2020, the Company entered into a Securities Purchase Agreement with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which the Company agreed to offer, issue and sell to LPC, (i) in a registered direct offering, an aggregate of (a) 800,000 shares of common stock and (b) Series I warrants to purchase up to 131,967 shares (the “Series I Warrant Shares”) of common stock. In a concurrent private placement, the Company also sold to LPC Series J warrants (the “Series J Warrants”) to purchase one share of common stock for each Share and for each Series I Warrant purchased for cash in the registered direct offering. The Series J Warrants are exercisable six months following the date of issuance at an exercise price of $0.948 per share and will expire 5.5 years following the date of issuance. The gross proceeds from this purchase were $1.0 million.

On April 9, 2020, the Company entered into a Securities Purchase Agreement with LPC, pursuant to which the Company agreed to offer, issue and sell to LPC, (i) in a registered direct offering, an aggregate of (a) 904,970 shares of common stock and (b) Series K warrants to purchase up to 255,000 shares (the “Series K Warrant Shares”) of common stock. In a concurrent private placement, the Company also sold to LPC Series L warrants (the “Series L Warrants”) to purchase one share of Common Stock for each Share and for each Series K Warrant purchased for cash in the registered direct offering. The Series L Warrants are exercisable six months following the date of issuance at an exercise price of $0.81 per share and will expire 5.5 years following the date of issuance. The gross proceeds form this purchase were $1.1 million.

Securities Purchase Agreement With Certain Directors and Executives

On May 11, 2020 and May 14, 2020, the Company entered into Securities Purchase Agreements with certain directors and executives of the Company pursuant to which the Company sold 447,761 shares of common stock at a purchase price of $1.34 per share and 146,854 shares of common stock at a purchase price of $1.43 per share. The gross proceeds from these purchases were $810,000.

Securities Purchase Agreement with Acorn Bioventures LP

On May 26, 2020, the Company entered into a Securities Purchase Agreement with Acorn, pursuant to which the Company agreed to offer, issue and sell to Acorn, (i) in a registered direct offering, an aggregate of 1,205,400 shares of common stock and (ii) in a concurrent private placement, Series M warrants to purchase up to 482,160 shares of common stock. The Series M Warrants are exercisable six months following the date of issuance at an exercise price of $2.024 per share and will expire 5.5 years following the date of issuance. The gross proceeds from this purchase were $2.5 million.

Leases (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Summary of Lease Expense and Supplemental Cash Flow Information

The components of lease expense were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Operating lease cost	$	139,283	$	112,115	$	246,028	$	225,708
Operating sublease income	(72,793)		(99,937)		(145,587)		(199,874)
Net operating lease cost	$	66,490	$	12,178	$	100,441	$	25,834

Supplemental cash flow and other information related to leases was as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	236,385	$	229,574	$	469,463	$	455,938

Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases was as follows:


	As of June 30, 2020			As of December 31, 2019
Operating lease ROU assets	$	501,894		$	697,418

Current operating lease liabilities	$	877,607		$	865,379
Non-current operating lease liabilities	429,776			860,963
Total operating lease liabilities	$	1,307,383		$	1,726,342

Weighted-average remaining lease term–operating leases	1.5 years			2.0 years
Weighted-average discount rate–operating leases	6.5		%	6.5		%

Summary of Future Minimum Lease Payments

Total remaining annual commitments under non-cancelable lease agreements for each of the years ended December 31 are as follows:


Year Ending December 31,	Operating Leases		Sublease Income		Net Operating Leases

2020 (excluding the six months ended June 30, 2020)	$	395,916	$	(145,587)	$	250,329
2021	968,165		(291,173)		676,992
2022	5,868		—		5,868
2023	3,423		—		3,423
Total future minimum lease payments	1,373,372		$	(436,760)	$	936,612
Less imputed interest	(65,989)
Total	$	1,307,383

Stockholders' Equity - Series D Convertible Preferred Stock (Details) - USD ($)			1 Months Ended
	May 08, 2020	Jan. 25, 2019	Jun. 30, 2020	Apr. 30, 2019	Jun. 15, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Number of shares called by warrants (in shares)					2,213,115
Exercise price of warrants (in USD per share)					$ 3.05
Shares issued upon conversion (in shares)			1,546,700	333,333
Service receivable		$ 1,675,000	$ 2,765,164			$ 971,673
Deemed dividend recognized for beneficial conversion features of Convertible Preferred Stock issuance	$ 2,700,000
Series D Convertible Preferred Stock
Class of Stock [Line Items]
Shares converted (in shares)			154,670
Service receivable	2,300,000
Deemed dividend recognized for beneficial conversion features of Convertible Preferred Stock issuance	600,000
Private Placement
Class of Stock [Line Items]
Amount financed under agreement	$ 2,300,000	$ 1,675,000
Number of shares called by warrants (in shares)	859,813
Exercise price of warrants (in USD per share)	$ 1.50	$ 3.762
Private Placement \| Common Stock
Class of Stock [Line Items]
Shares of common stock issued (in shares)	602,833	183,334
Private Placement \| Series D Convertible Preferred Stock
Class of Stock [Line Items]
Shares of common stock issued (in shares)	154,670

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Components of Property and Equipment

Property and equipment consist of the following:


	As of June 30, 2020		As of December 31, 2019
Furniture and office equipment	$	775,030	$	775,030
Leasehold improvements	1,962,230		1,962,230
Laboratory equipment	756,310		744,856
	3,493,570		3,482,116
Less—accumulated depreciation and amortization	(2,838,203)		(2,604,293)
Property and equipment, net	$	655,367	$	877,823

COVID-19 (Details) - Paycheck Protection Program	Apr. 15, 2020 USD ($)
Unusual or Infrequent Item, or Both [Line Items]
Note payable	$ 305,000
Interest rate	0.98%

Stockholders' Equity - Securities Purchase Agreement (Details) - USD ($)

3 Months Ended

May 26, 2020

May 14, 2020

May 11, 2020

May 08, 2020

Apr. 09, 2020

Mar. 30, 2020

Jun. 30, 2020

^[1]

Jun. 15, 2020

Sale of stock, number of shares issued (in shares)

1,205,400

146,854

447,761

904,970

800,000

2,213,115

6 months

$ 3.05

Proceeds from sale of stock

5 years 6 months

$ 2,500,000

$ 810,000

$ 1,100,000

$ 1,000,000.0

$ 17,278,428

Sale of stock, price per share (in dollars per share)

$ 1.43

$ 1.34

Series I Warrant

131,967

Series J Warrant

Number of shares called by each warrant

6 months

$ 0.948

5 years 6 months

Series K Warrant

255,000

Series L Warrants

Number of shares called by each warrant

6 months

$ 0.81

5 years 6 months

Series M Warrant

482,160

6 months

$ 2.024