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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED June 30, 2020
 
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Transition Period from __________________   to _________________________
 
Commission File Number 001-33650
 
CALADRIUS BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware22-2343568
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
110 Allen Road, 2nd Floor, Basking Ridge, New Jersey
07920
(Address of principal executive offices)(zip code)
 
Registrant’s telephone number, including area code: 908-842-0100
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareCLBS
The Nasdaq Capital Market
Securities registered pursuant to Section 12(g) of the Act: None
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐


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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
ClassOutstanding as of Aug 13th, 2020
Common stock, $0.001 par value per share19,323,107  shares




Index
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report (this "Quarterly Report") contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as well as historical information. When used in this Quarterly Report, statements that are not statements of current or historical fact may be deemed to be forward-looking statements, including, without limitation, all statements  related to any expectations of revenues, expenses, cash flows, earnings or losses from operations, cash required to maintain current and planned operations, capital or other financial items; any statements of the plans, strategies and objectives of management for future operations; any plans or expectations with respect to product research, development and commercialization, including regulatory approvals; any other statements of expectations, plans, intentions or beliefs; and any statements of assumptions underlying any of the foregoing. Without limiting the foregoing, the words “plan,” “project,” “forecast,” “outlook,” “intend,” “may,” “will,” “expect,” “likely,” “believe,” “could,” “anticipate,” “estimate,” “continue” or similar expressions or other variations or comparable terminology are intended to identify such forward-looking statements, although some forward-looking statements are expressed differently. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity or our achievements or industry results, to be materially different from any future results, performance, levels of activity or our achievements or industry results expressed or implied by such forward-looking statements. Factors that could cause our actual results to differ materially from anticipated results expressed or implied by forward-looking statements include, among others:

our ability to obtain sufficient capital or strategic business arrangements to fund our operations and expansion plans, including meeting our financial obligations under various licensing and other strategic arrangements, the funding of our clinical trials for product candidates, and the commercialization of the relevant technology;
our ability to build and maintain the management and human resources infrastructure necessary to support the growth of our business;
whether a market is established for our cell-based products and services and our ability to capture a meaningful share of this market;
scientific, regulatory and medical developments beyond our control;
our ability to obtain and maintain, as applicable, appropriate governmental licenses, accreditations or certifications or to comply with healthcare laws and regulations or any other adverse effect or limitations caused by government regulation of our business;
whether any of our current or future patent applications result in issued patents, the scope of those patents and our ability to obtain and maintain other rights to technology required or desirable for the conduct of our business; and our ability to commercialize products without infringing upon the claims of third-party patents;
whether any potential strategic or financial benefits of various licensing agreements will be realized;
the results of our development activities;
our ability to complete our other planned clinical trials (or initiate other trials) in accordance with our estimated timelines due to delays associated with enrolling patients due to the novelty of the treatment, the size of the patient population and the need of patients to meet the inclusion criteria of the trial or otherwise;
the extent to which the COVID-19 coronavirus may impact our business, including our clinical trials and financial condition; and
other factors discussed in "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 5, 2020 (our "2019 Form 10-K").

The factors discussed herein, including those risks described in "Item 1A. Risk Factors" and elsewhere in our 2019 Form 10-K and in our other periodic filings with the SEC, which are available for review at www.sec.gov, could cause actual results and developments to be materially different from those expressed or implied by such statements. All forward-looking statements attributable to us are expressly qualified in their entirety by these and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. Except as required by law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

2

Index
TABLE OF CONTENTS
PART I- FINANCIAL INFORMATION
Page No.
Item 1.
 
 
 
 
 
Notes to Unaudited Consolidated Financial Statements
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Item 4.
Controls and Procedures
PART II- OTHER INFORMATION
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.
Defaults Upon Senior Securities
Item 4.
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
 
Signatures
3

Index
PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

Item 1. CONSOLIDATED FINANCIAL STATEMENTS

CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 30,
2020
December 31,
2019
ASSETS(Unaudited)
Cash and cash equivalents$26,684  $14,032  
Marketable securities
8,207  11,125  
Prepaid and other current assets1,735  815  
Total current assets36,626  25,972  
Property and equipment, net83  100  
Other assets772  1,081  
Total assets$37,481  $27,153  
LIABILITIES AND STOCKHOLDERS' EQUITY  
Liabilities  
Accounts payable$592  $1,490  
Accrued liabilities2,888  4,486  
Total current liabilities3,480  5,976  
Other long-term liabilities445  624  
Total liabilities3,925  6,600  
Commitments and Contingencies
Stockholders' Equity 
Preferred stock, authorized, 20,000,000 shares
Series B convertible redeemable preferred stock liquidation value, 0.001 share of common stock, $0.01 par value; 825,000 shares designated; issued and outstanding, 10,000 shares at June 30, 2020 and December 31, 2019, respectively
    
Common stock, $0.001 par value, authorized 500,000,000 shares; issued and outstanding, 15,585,194 and 10,528,689 shares at June 30, 2020 and December 31, 2019, respectively
16  11  
Additional paid-in capital449,302  438,911  
Treasury stock, at cost; 11,080 shares at June 30, 2020 and December 31, 2019
(708) (708) 
Accumulated deficit(414,792) (417,400) 
Accumulated other comprehensive (loss) income(7) 2  
Total Caladrius Biosciences, Inc. stockholders' equity33,811  20,816  
Noncontrolling interests(255) (263) 
Total stockholders' equity33,556  20,553  
Total liabilities and stockholders' equity$37,481  $27,153  
See accompanying notes to consolidated financial statements.
4

Index
CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
(In thousands, except per share data)
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Operating Expenses:
Research and development$1,818  $2,988  $3,317  $5,026  
General and administrative2,474  2,358  5,032  4,912  
Total operating expenses4,292  5,346  8,349  9,938  
Operating loss(4,292) (5,346) (8,349) (9,938) 
Other income:
Investment income, net22  209  93  436  
Total other income22  209  93  436  
Loss before benefit from income taxes and noncontrolling interests
(4,270) (5,137) (8,256) (9,502) 
Benefit from income taxes(10,872)   (10,872)   
Net income (loss)$6,602  $(5,137) $2,616  $(9,502) 
Less - net income attributable to noncontrolling interests
4  3  8  5  
Net income (loss) attributable to Caladrius Biosciences, Inc. common stockholders
$6,598  $(5,140) $2,608  $(9,507) 
Basic and diluted income (loss) per share
Caladrius Biosciences, Inc. common stockholders
$0.50  $(0.49) $0.22  $(0.93) 
Weighted average common shares outstanding
Basic and diluted shares
13,151  10,393  11,880  10,211  

See accompanying notes to consolidated financial statements.
5

Index
CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited) 
(In thousands)
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Net income (loss)$6,602  $(5,137) $2,616  $(9,502) 
Other comprehensive (loss) income:
Available for sale securities - net unrealized (loss) income(9) 17  (9) 31  
Total other comprehensive (loss) income(9) 17  (9) 31  
Comprehensive income (loss)6,593  (5,120) 2,607  (9,471) 
Comprehensive income attributable to noncontrolling interests4  3  8  5  
Comprehensive income (loss) attributable to Caladrius Biosciences, Inc. common stockholders
$6,589  $(5,123) $2,599  $(9,476) 
 
See accompanying notes to consolidated financial statements.
6

Index
CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited) 
(In thousands)
 Series B Convertible
Preferred Stock
Common StockAdditional
Paid in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Treasury
Stock
Total
Caladrius Biosciences,
Inc.
Stockholders'
Equity
Non-
Controlling
Interest in
Subsidiary
Total
Equity
 SharesAmountSharesAmount
Balance at December 31, 201910  $  10,529  $11  $438,911  $2  $(417,400) $(708) $20,816  $(263) $20,553  
Net income—  —  —  —  —  —  2,608  —  2,608  8  2,616  
Unrealized gain on marketable securities—  —  —  —  —  (9) —  —  (9) —  (9) 
Share-based compensation—  —  106  —  713  —  —  —  713  —  713  
Net proceeds from issuance of common stock and warrants—  —  4,950  5  9,678  —  —  —  9,683  —  9,683  
Balance at June 30, 202010  $  15,585  $16  $449,302  $(7) $(414,792) $(708) $33,811  $(255) $33,556  
 Series B Convertible
Preferred Stock
Common StockAdditional
Paid in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Treasury
Stock
Total
Caladrius Biosciences,
Inc.
Stockholders'
Equity
Non-
Controlling
Interest in
Subsidiary
Total
Equity
 SharesAmountSharesAmount
Balance at December 31, 201810  $  9,866  $10  $436,433  $(32) $(397,977) $(708) $37,726  $(272) $37,454  
Adoption of accounting standard—  —  —  —  —  —  (62) —  (62) —  (62) 
Net loss—  —  —  —  —  —  (9,507) —  (9,507) 5  (9,502) 
Unrealized gain on marketable securities—  —  —  —  —  32  —  —  32  —  32  
Share-based compensation—  —  96  —  663  —  —  —  663  —  663  
Net proceeds from issuance of common stock—  —  451  —  1,037  —  —  —  1,037  —  1,037  
Balance at June 30, 201910  $  10,413  $10  $438,133  $  $(407,546) $(708) $29,889  $(267) $29,622  
 



7

Index
 Series B Convertible
Preferred Stock
Common StockAdditional
Paid in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Treasury
Stock
Total
Caladrius Biosciences,
Inc.
Stockholders'
Equity
Non-
Controlling
Interest in
Subsidiary
Total
Equity
 SharesAmountSharesAmount
Balance at March 31, 202010  $  10,639  $11  $439,330  $  $(421,390) (708) $17,243  $(259) $16,984  
Net income—  —  —  —  —  —  6,598  —  6,598  4  6,602  
Unrealized gain on marketable securities—  —  —  —  —  (7) —  —  (7) —  (7) 
Share-based compensation—  —  (4) —  294  —  —  —  294  —  294  
Net proceeds from issuance of common stock and warrants—  —  4,950  5  9,678  —  —  —  9,683  —  9,683  
Balance at June 30, 202010  $  15,585  $16  $449,302  $(7) $(414,792) (708) $33,811  $(255) $33,556  
 Series B Convertible
Preferred Stock
Common StockAdditional
Paid in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Treasury
Stock
Total
Caladrius Biosciences,
Inc.
Stockholders'
Equity
Non-
Controlling
Interest in
Subsidiary
Total
Equity
 SharesAmountSharesAmount
Balance at March 31, 201910  $  10,393  $10  $437,850  $(18) $(402,406) $(708) $34,728  $(270) $34,458  
Net loss—  —  —  —  —  —  (5,140) —  (5,140) 3  (5,137) 
Unrealized gain on marketable securities—  —  —  —  —  18  —  —  18  —  18  
Share-based compensation—  —    —  246  —  —  —  246  —  246  
Net proceeds from issuance of common stock—  —  20  —  37  —  —  —  37  —  37  
Balance at June 30, 201910  $  10,413  $10  $438,133  $  $(407,546) $(708) $29,889  $(267) $29,622  


See accompanying notes to consolidated financial statements.
 
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CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 
 Six Months Ended June 30,
 20202019
Cash flows from operating activities:  
Net income (loss)$2,616  $(9,502) 
Adjustments to reconcile net income (loss) to net cash used in operating activities:  
Share-based compensation
861  793  
Depreciation and amortization30  35  
Accretion on marketable securities40  133  
Changes in operating assets and liabilities:  
Prepaid and other current assets(920) (110) 
Other assets308  181  
Accounts payable, accrued liabilities and other liabilities(2,673) (1,735) 
Net cash provided by (used in) operating activities262  (10,205) 
Cash flows from investing activities:  
Purchase of marketable securities(8,235) (25,969) 
Sale of marketable securities11,104  36,721  
Purchase of property and equipment(14)   
Net cash provided by investing activities2,855  10,752  
Cash flows from financing activities:  
Tax withholding payments on net share settlement equity awards(148) (130) 
Net proceeds from issuance of common stock9,683  1,038  
Net cash provided by financing activities9,535  908  
Net increase in cash and cash equivalents12,652  1,455  
Cash and cash equivalents at beginning of period14,032  10,299  
Cash and cash equivalents at end of period$26,684  $11,754  
See accompanying notes to consolidated financial statements.
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CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
 
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – The Business
        
Overview

        Caladrius Biosciences, Inc. (“we,” “us,” "our," “Caladrius” or the “Company”) is a clinical-stage biopharmaceutical company dedicated to the development and commercialization of cellular therapies designed to reverse disease and/or promote the regeneration of damaged tissue. The Company is developing first-in-class therapeutics based on the characteristics of naturally occurring CD34+ cells and their ability to stimulate the growth of new microvasculature. The Company's technology leverages these cells to enable the body's natural repair mechanisms using formulations unique to each medical indication.

        The Company's leadership team has decades of collective biopharmaceutical development experience and world-recognized scientific achievement in the field of cardiovascular disease, among other therapeutic areas. Its goal is to develop and commercialize products that address important unmet medical needs based on a broad and versatile portfolio of candidates. The Company's current product candidates include CLBS119, an emergent CD34+ stem cell therapy responding to the COVID-19 pandemic and the potentially permanent damage the virus inflicts on the lungs of many patients, as well as three other developmental treatments for ischemic diseases based on its CD34+ cell therapy platform: CLBS12, recipient of SAKIGAKE designation and eligible for early conditional approval in Japan for the treatment of critical limb ischemia ("CLI") based on the results of an ongoing clinical trial; CLBS16, the subject of a recently completed positive Phase 2 clinical trial in the U.S. for the treatment of coronary microvascular dysfunction ("CMD"); and CLBS14, a Regenerative Medicine Advanced Therapy ("RMAT") designated therapy for which the Company has finalized with the U.S. Food and Drug Administration (the "FDA") a protocol for a Phase 3 confirmatory trial in subjects with no-option refractory disabling angina ("NORDA").

Ischemic Repair (CD34 Cell Technology)

The CD34+ cell was discovered as a result of the deliberate search for a stem cell capable of stimulating the development and/or repair of blood vessels. All tissues in the body maintain their function by replacing cells over time. In addition to the maintenance function, the body must also be capable of building new blood vessels after injury. A CD34+ cell is a stem cell that has the ability to stimulate new blood vessel formation. No other native cell discovered to date has demonstrated this same capability.

The Company’s proprietary CD34+ cell technology has led to the development of therapeutic product candidates designed to address diseases and conditions caused by ischemia. Ischemia occurs when the supply of oxygenated blood to healthy tissue is restricted. Through the administration of CD34+ cells, the Company seeks to promote the development and formation of new microvasculature and thereby increase blood flow to the impacted area. Caladrius believes that a number of conditions caused by underlying ischemic injury can be improved through its CD34+ cell technology, including but not limited to, CLI, CMD, NORDA and COVID-19 induced lung damage.

CLBS119 for Treatment of COVID -19 Induced Lung Damage

COVID-19 appears to damage the vasculature of the lungs and Caladrius believes that repair of that vasculature will prove necessary for patients to achieve a full recovery. Survivors of COVID-19 often remain debilitated even after leaving the hospital due to the damage caused to their lungs, and while many developmental therapies responding to the COVID-19 pandemic are appropriately targeting the SARS-CoV-2 virus itself or the manifestations of the acute phase of the illness, Caladrius is aware of no therapy that has demonstrated the ability to repair COVID-19 induced lung damage. With consistent clinical and pre-clinical evidence that CD34+ cells can repair multiple organs, including models of severe lung inflammation, the Company sought and received FDA authorization for its investigational new drug (“IND”) application for the study of CLBS119, a CD34+ cell therapy for repair of COVID-19 induced lung damage. The planned study, with enrollment expected to commence in the second half of 2020, will target patients with severe SARS-CoV-2 infection who, after ventilatory support due to respiratory failure, had otherwise recovered but remained debilitated due to persistent pulmonary damage.

CLBS12 for Treatment of Critical Limb Ischemia

The Company's open-label, registration-eligible study of CLBS12 in Japan for the treatment of critical limb ischemia ("CLI"), a disease with no currently available approved therapy and a higher combined incidence and mortality rate than all cancers but lung cancer, has shown strong results to date. The initial responses observed in the subjects who have reached an
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endpoint in this open label study are consistent with a positive therapeutic effect and safety profile as reported by previously published clinical trials in Japan. Although the study's enrollment, which is targeted for completion this year, has been slowed by the pandemic's impact in Japan, the Company is encouraged by the patient pre-screening pipeline that has been identified and hopes to conclude trial enrollment rapidly once the coronavirus abates. While the final outcome of the trial will depend on all data from all subjects, data from the concluded Buerger's Disease cohort and the data to date in the no-option CLI cohort remain very encouraging.

CLBS16 for Treatment of Coronary Microvascular Dysfunction

In 2017, with the assistance of a $1.9 million grant from the National Institutes of Health (Award Number R44HL135889), Caladrius initiated its program for CLBS16 for the treatment of coronary microvascular dysfunction ("CMD"), a disease that potentially afflicts millions of patients with no current targeted treatment options. That study, titled ESCaPE-CMD, was a Phase 2 proof-of-concept study that enrolled patients at the Mayo Clinic in Rochester, MN and Cedars-Sinai Medical Center in Los Angeles, CA. In June 2019, the Company announced the completion of enrollment in this study. Results of the first 17 of 20 patients enrolled in this trial who reached 6-month follow-up were presented as a rapid fire oral presentation on November 16, 2019 at the annual meeting of the American Heart Association in Philadelphia, PA by one of the principal investigators, Dr. Noel Bairey Merz, FACC, FAHA, FESC, the director of the Barbra Streisand Women's Heart Center at Cedars-Sinai in Los Angeles, CA. That data set showed a positive therapeutic effect with a statistically significant improvement in angina frequency, coronary flow reserve, Canadian Cardiovascular Society Angina Class and Seattle Questionnaire score, as well as an acceptable safety profile. The full data from that study was presented at the SCAI 2020 Scientific Sessions Virtual Conference on May 14, 2020 and we now expect to initiate the next CMD trial, a Phase 2b study, by the end of 2020.

CLBS14 for Treatment of No Option Refractory Disabling Angina (NORDA)

The Company acquired the rights to data and regulatory filings for a CD34+ cell therapy program for refractory angina that had been advanced to Phase 3 by a previous sponsor.

Based on the clinical evidence from the completed studies that a single administration of CLBS14 reduces mortality, improves angina and increases exercise capacity in patients with otherwise untreatable angina, this product received Regenerative Medicine Advanced Therapy (“RMAT”) designation from the FDA. The Company, working closely with the FDA, has finalized the design of a confirmatory Phase 3 trial which, in combination with previously filed Phase 1, 2 and 3 data, will be considered for the registration of CLBS14. Notably, this study design includes a 6-month primary endpoint and, with the benefit of the RMAT designation, the biologics license application ("BLA"), once submitted, is expected to receive a 6-month review. The Company has substantially completed the preparatory work for initiation of this trial. Caladrius will not, however, commence enrollment of patients until sufficient capital is acquired and dedicated to this program such that the Company has confidence that it can fund the trial uninterrupted through completion.

Additional Out-licensing Opportunities

The Company's broad intellectual property portfolio of cell therapy assets includes notable programs available for out-licensing in order to continue their clinical development. Its current long-term strategy focuses on advancing its therapies through development with the ultimate objective of obtaining market authorizations and entering commercialization, either alone or with partners, to provide treatment options to patients suffering from life-threatening medical conditions. The Company believes that it is well-positioned to realize potentially meaningful value increases within its own proprietary pipeline if the Company is successful in advancing its product candidates to their next significant development milestones.

Coronavirus Considerations

In December 2019, a novel strain of coronavirus (SARS-CoV-2), which causes COVID-19, was reported to have surfaced in China. In March 2020, the World Health Organization declared the outbreak of COVID-19 to be a pandemic, and the world's economies began to experience pronounced effects. While the disruption currently is expected to be temporary, there is uncertainty around the extent and duration of disruption, and any future related financial impact cannot be reasonably estimated at this time.

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC for interim financial information. Accordingly, they do
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not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of June 30, 2020, and the results of its operations and its cash flows for the periods presented. The unaudited consolidated financial statements herein should be read together with the historical consolidated financial statements of the Company for the years ended December 31, 2019 and 2018 included in our 2019 Form 10-K. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.
        
Use of Estimates
 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amount of expenses during the reporting period. The Company bases its estimates on historical experience and other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company makes critical estimates and assumptions in determining stock-based awards values. Accordingly, actual results could differ from those estimates and assumptions.
 
Principles of Consolidation
 
The Consolidated Financial Statements include the accounts of Caladrius Biosciences, Inc. and its wholly owned and majority owned subsidiaries and affiliates. All intercompany activities have been eliminated in consolidation.

Note 2 – Summary of Significant Accounting Policies
 
In addition to the policies below, the Company's significant accounting policies are described in Note 2 of the Notes to Consolidated Financial Statements included in its 2019 Form 10-K. There were no changes to these policies during the three and six months ended June 30, 2020.

Concentration of Risks
        The Company is subject to credit risk from its portfolio of cash, cash equivalents and marketable securities. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. Cash is held at major banks in the United States. Therefore, the Company is not exposed to any significant concentrations of credit risk from these financial instruments. The goals of the Company's investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements, and a competitive after-tax rate of return.

Share-Based Compensation  

The Company expenses all share-based payment awards to employees, directors, and consultants, including grants of stock options, warrants, and restricted stock, over the requisite service period based on the grant date fair value of the awards. Consultant awards are remeasured each reporting period through vesting. For awards with performance-based vesting criteria, the Company estimates the probability of achievement of the performance criteria and recognizes compensation expense related to those awards expected to vest. The Company determines the fair value of option awards using the Black-Scholes option-pricing model which uses both historical and current market data to estimate the fair value. This method incorporates various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield and expected life of the options or warrants. The fair value of the Company’s restricted stock and restricted stock units is based on the closing market price of the Company’s common stock on the date of grant.

New Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize lease assets and lease liabilities for those leases classified as operating leases. The guidance was effective for interim and annual periods beginning after December 15, 2018 and was adopted as of January 1, 2019. The Company adopted the standard using the modified retrospective transition method, with an immaterial adjustment to accumulated deficit upon adoption. The comparative information has not been restated and continues to be reported under the accounting standards that were in effect
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for those periods. The Company concluded that the adoption of ASU 2016-02 was non-cash in nature, did not affect the Company's cash position, and did not have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses, which will require companies to present assets held at amortized cost and available for sale debt securities net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. The guidance was effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption was permitted. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, "Improvements to Nonemployee Share-Based Payment Accounting," which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption was permitted, but no earlier than a company's adoption date of ASC 606. The Company determined that the adoption of this new accounting guidance did not have a material impact on its consolidated financial statements and footnote disclosures.

In July 2019, the FASB issued ASU 2019-07, "Codification Updates to SEC Sections", to codify the SEC releases that clarify and improve the disclosure and presentation requirements of a variety of codification topics, thereby eliminating certain disclosure requirements that were redundant, duplicative, overlapping, outdated, or superseded. The Company determined that the adoption of this new accounting guidance did not have a material impact on its consolidated financial statements and footnote disclosures.

In October 2019, the FASB issued ASU 2019-12, which affects general principles within Topic 740, Income Taxes. The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company believes that the adoption of this new accounting guidance will not have a material impact on its financial statements and footnote disclosures.

Note 3 – Available-for-Sale-Securities
 
The following table is a summary of available-for-sale securities recorded in cash and cash equivalents or marketable securities in our Consolidated Balance Sheets (in thousands):
June 30, 2020December 31, 2019
CostGross Unrealized GainsGross Unrealized LossesEstimated Fair ValueCostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Corporate debt securities$6,430  $1  $(6) $6,425  $11,673  $3  $(1) $11,675  
Money market funds5,019      5,019  11,093      11,093  
Municipal debt securities20,975    (2) 20,973          
Sovereign government securities197      197          
Total$32,621  $1  $(8) $32,614  $22,766  $3  $(1) $22,768  

Estimated fair values of available-for-sale securities are generally based on prices obtained from commercial pricing services. The following table summarizes the classification of the available-for-sale securities in our Consolidated Balance Sheets (in thousands):
June 30, 2020December 31, 2019
Cash and cash equivalents$24,407  $11,643  
Marketable securities8,207  11,125  
Total$32,614  $22,768  

The following table summarizes our portfolio of available-for-sale securities by contractual maturity (in thousands):
 
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June 30, 2020
Amortized CostEstimated Fair Value
Less than one year$32,621  $32,614  
Greater than one year    
Total$32,621  $32,614  


Note 4 – Income (Loss) Per Share