What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-25 compared with 2020-03-05 · 187 added, 114 removed, 405 unchanged (43% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Board of Directors and Stockholders

Caladrius Biosciences, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Caladrius Biosciences, Inc., (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the two years in the period ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”).

We have audited the accompanying consolidated balance sheets of Caladrius Biosciences, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

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Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2011.

New York, New York

March 5, 2020

February 25, 2021

CALADRIUS BIOSCIENCES, INC.

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(In thousands, except share data)

2020 December 31,

Current Assets

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Property and equipment, net 57 100

Other assets 614 1,081

Total assets $ 36,002 $ 27,153

LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY

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Common stock, $ 0.001 par value, authorized 500,000,000 shares;

issued and outstanding, 10,528,689 and 9,865,735 shares, at December 31, 2019 and December 31, 2018, respectively

issued 19,389,413 and 10,528,689 shares, at December 31, 2020 and December 31, 2019, respectively;

and outstanding, 19,378,333 and 10,517,609 shares, at December 31, 2020 and December 31, 2019, respectively

Additional paid-in capital 458,748 438,911

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11,080 shares at December 31, 2020 and December 31, 2019 respectively

( 708 ) ( 708 )

Accumulated deficit ( 425,550 ) ( 417,400 )

Accumulated other comprehensive income (loss)

Accumulated other comprehensive (loss) income ( 13 ) 2

Total Caladrius Biosciences, Inc.

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Noncontrolling interests ( 254 ) ( 263 )

Total equity 32,242 20,553

Total liabilities, non-controlling interests and equity $ 36,002 $ 27,153

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Operating loss ( 19,145 ) ( 20,092 )

Other income (expense):

Other income:

Other income, net 132 740

Interest expense

Total other income (expense), net

Less - net income (loss) attributable to noncontrolling interests

Total other income, net 132 740

Net loss before benefit from income taxes and noncontrolling interests ( 19,013 ) ( 19,352 )

Benefit from income taxes ( 10,872 ) —

Net loss $ ( 8,141 ) $ ( 19,352 )

Less - net income attributable to noncontrolling interests 9 9

Net loss attributable to Caladrius Biosciences, Inc.

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common shareholders

$ ( 0.53 ) $ ( 1.88 )

Weighted average common shares outstanding:

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Year Ended December 31,

Net loss $ ( 8,141 ) $ ( 19,352 )

Other comprehensive loss:

Available for sale securities - net unrealized income (loss)

Total other comprehensive income (loss)

Available for sale securities - net unrealized (loss) income ( 15 ) 34

Total other comprehensive (loss) income ( 15 ) 34

Comprehensive loss ( 8,156 ) ( 19,318 )

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income attributable to noncontrolling interests 9 9

Comprehensive loss attributable to Caladrius Biosciences, Inc.

common stockholders

$ ( 8,165 ) $ ( 19,327 )

See accompanying notes to consolidated financial statements.

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Series B Convertible

Preferred Stock

Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Income (Loss)

Income (Loss) Accumulated

Deficit Treasury

Caladrius Biosciences,

Stockholders'

Subsidiary Total

Shares Amount Shares Amount

Balance at December 31, 2018 10 $ — 9,866 $ 10 $ 436,433 $ ( 32 ) $ ( 397,977 ) $ ( 708 ) $ 37,726 $ ( 272 ) $ 37,454

Unrealized loss on marketable securities

Adoption of accounting standard — — — — — — ( 62 ) — ( 62 ) — ( 62 )

Net loss — — — — — — ( 19,361 ) — ( 19,361 ) 9 ( 19,352 )

Unrealized gain on marketable securities — — — — — 34 — — 34 — 34

Share-based compensation — — 94 — 1,165 — — — 1,165 — 1,165

Net proceeds from issuance of common stock — — 569 1 1,313 — — — 1,314 — 1,314

Proceeds from option exercises

Change in ownership in subsidiary

Balance at December 31, 2019 10 $ — 10,529 $ 11 $ 438,911 $ 2 $ ( 417,400 ) $ ( 708 ) $ 20,816 $ ( 263 ) $ 20,553

Adoption of accounting standard

Net loss — — — — — — ( 8,150 ) — ( 8,150 ) 9 ( 8,141 )

Unrealized loss on marketable securities — — — — — ( 15 ) — — ( 15 ) — ( 15 )

Share-based compensation — — 53 — 1,117 — — — 1,117 — 1,117

Net proceeds from issuance of common stock

Net proceeds from issuance of common stock and warrants — — 8,807 8 18,720 — — — 18,728 — 18,728

Balance at December 31, 2020 10 $ — 19,389 $ 19 $ 458,748 $ ( 13 ) $ ( 425,550 ) $ ( 708 ) $ 32,496 $ ( 254 ) $ 32,242

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Cash flows from operating activities:

Net loss $ ( 8,141 ) $ ( 19,352 )

Adjustments to reconcile net loss to net cash used in operating activities:

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Depreciation and amortization 63 65

Gain on disposal of assets

Amortization/accretion on marketable securities 307 232

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Prepaid and other current assets 56 238

Other assets 466 504

Accounts payable, accrued liabilities and other liabilities ( 2,839 ) ( 1,864 )

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Sales of marketable securities 27,542 54,370

Proceeds from CFC device sale

Acquisition of property and equipment

Net cash provided by (used in) investing activities

Purchases of property and equipment ( 20 ) —

Net cash (used in) provided by investing activities ( 7,277 ) 21,432

Cash flows from financing activities:

Proceeds from exercise of options

Tax withholding payments on net share settlement equity awards ( 148 ) ( 130 )

Net proceeds from issuance of capital stock 18,728 1,313

Repayment of notes payable

Net cash provided by financing activities 18,580 1,183

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents 2,480 3,733

Cash and cash equivalents at beginning of year 14,032 10,299

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Cash paid during the period for:

Interest $ — $ —

See accompanying notes to consolidated financial statements.

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Caladrius Biosciences, Inc.

(“we,” “us,” "our," “Caladrius” or the “Company”) is a clinical-stage biopharmaceutical company dedicated to the development of cellular therapies designed to reverse cardiovascular disease.

The Company is developing first-in-class therapy products that are based on the notion that our body contains finely tuned mechanisms for self-repair.

The Company's technology leverages and enables these mechanisms in the form of specific, naturally-occurring, minimally manipulated cells, using formulations unique to each indication.

The Company's leadership team collectively has decades of biopharmaceutical development experience and world-recognized scientific achievement in the field of cardiovascular disease, among other fields.

Its goal is to build a broad portfolio of novel and versatile products that address important unmet medical needs.

The Company's current product candidates include three 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, in a Phase 2 clinical trial in the U.S.

(“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 autologous 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 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:

CLBS16, the subject of both a recently completed positive Phase 2a study and a newly initiated Phase 2b study 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").

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.

HONEDRA® (CLBS12), recipient of SAKIGAKE designation and eligible for early conditional approval in Japan for the treatment of critical limb ischemia (“CLI”) and Buerger’s Disease based on the results of an ongoing clinical trial;

CLBS201, designed to assess the safety and efficacy of CD34+ cell therapy as a treatment for pre-dialysis patients with chronic kidney disease (“CKD”) and OLOGO™ (CLBS14), a Regenerative Medicine Advanced Therapy (“RMAT”) designated therapy for which the Company is in discussion with the U.S.

Food and Drug Administration (the “FDA”) to finalize a Phase 3 protocol of reduced size and scope for a confirmatory trial in subjects with no-option refractory disabling angina (“NORDA”).

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.

Despite the FDA approval of multiple COVID-19 vaccines in late 2020, there remains uncertainty around the extent and duration of disruption and any future related financial impact cannot be reasonably estimated at this time.

In response to the pandemic, we have implemented work from home as well as social distancing and other hygiene policies for employees when they must be in the office.

Our clinical study of HONEDRA® in Japan has experienced delays in enrollment due to the “State of Emergency” in effect in Japan for most of 2020 and re-implemented in Japan on Jan 7, 2021 and now extending through March 7, 2021 covering Tokyo and other regions in response to increased number of COVID-19 patients.

Basis of Presentation

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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.

The Company makes critical estimate and assumptions in determining stock-based awards values.

Accordingly, actual results could differ from those estimates and assumptions.

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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:

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.

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The Company determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation at each balance sheet date.

All of the Company's marketable securities are considered as available-for-sale and carried at estimated fair values and reported in cash equivalents.

All of the Company's marketable securities are considered as available-for-sale and carried at estimated fair values and reported in cash equivalents and marketable securities.

Unrealized gains and losses on available-for-sale securities are excluded from net income and reported in accumulated other comprehensive income (loss) as a separate component of stockholders' equity.

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The estimated useful lives of property and equipment are as follows:

Furniture and fixtures

Computer equipment

Leasehold improvements

Life of lease

Furniture and fixtures 10 years

Computer equipment 3 years

Software 3 years

Leasehold improvements Life of lease

Long-lived Assets

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Basic loss per share is based on the weighted effect of all common shares issued and outstanding and is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period.

Diluted loss per share, which is calculated by dividing net loss attributable to common stockholders by the weighted average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding.

Diluted loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding.

Diluted loss per share is not presented as such potentially dilutive securities are anti-dilutive to losses incurred in all periods presented.

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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 optional 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 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 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 collectibility.

The guidance will be effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted.

The adoption of this guidance is not expected to have a material impact on our 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 is 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 financial statements and footnote disclosures.

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 our consolidated financial statements.

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 financial statements and footnote disclosures.

For public companies, the amendments are effective upon issuance.

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.

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The following table is a summary of available-for-sale securities recorded in cash and cash equivalents in the Company's Consolidated Balance Sheets (in thousands):

December 31, 2019

December 31, 2018

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

December 31, 2020 December 31, 2019

Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

Corporate debt securities $ 8,406 $ — $ ( 7 ) $ 8,399 $ 11,673 $ 3 $ ( 1 ) $ 11,675

Money market funds 7,591 — 7,591 11,093 11,093

Municipal debt securities $ 14,753 — $ ( 6 ) 14,747 $ — — $ — —

Total $ 30,750 $ — $ ( 13 ) $ 30,737 $ 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 debt securities on the Company's Consolidated Balance Sheets (in thousands):

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Cash and cash equivalents $ 12,676 $ 11,643

Marketable securities 18,061 11,125

Total $ 30,737 $ 22,768

The following table summarizes the Company's portfolio of available-for-sale securities by contractual maturity (in thousands):

December 31, 2019

December 31, 2018

Amortized Cost

Estimated Fair Value

Amortized Cost

Estimated Fair Value

December 31, 2020 December 31, 2019

Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value

Less than one year $ 30,750 $ 30,737 $ 22,766 $ 22,768

Greater than one year — — — —

Total $ 30,750 $ 30,737 $ 22,766 $ 22,768

Note 4 – Property and Equipment

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Note 5 – Loss Per Share

For the years ended December 31, 2019 and 2018 , the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of loss per share as they are anti-dilutive in the periods presented.

For the years ended December 31, 2020 and 2019, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of loss per share a s they are anti-dilutive in the periods presented.

At December 31, 2020 and 2019, the Company excluded the following potentially dilutive securities (in thousands):

Stock Options 964 1,044

Warrants 2,638 30

Restricted Stock Units 340 118

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The Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2020 and December 31, 2019 were as follows (in thousands):

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Marketable securities - available for sale $ — $ 18,061 $ — $ 18,061 $ — $ 11,125 $ — $ 11,125

$ — $ 18,061 $ — $ 18,061 $ — $ 11,125 $ — $ 11,125

The carrying values of cash, cash equivalents, accounts payable and accrued expenses approximate fair value at December 31, 2020 and December 31, 2019, due to the short maturity nature of these items.

Note 7 – Accrued Liabilities

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CIRM upfront funding - current — 1,600

Other 400 698

$ 2,486 $ 4,486

Note 8 – Operating Leases

The Company has operating leases for two offices with terms that expire in 2022 and 2023.

In addition, the Company pays for facility space through a third-party manufacturing contract that contains an embedded operating lease, with an estimated expiration in 2020.

The Company adopted ASU No.

2016-02, Leases (Topic 842) on January 1, 2019 and recognized leases with duration greater than 12 months on the balance sheet using the modified retrospective approach.

The Company has operating leases for two o ffices with terms that expire in 2022 and 2023.

The Company estimates its incremental borrowing rate at lease commencement to determine the present value of lease payments since most of the Company's leases do not provide an implicit rate of return.

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For lease agreements entered into or reassessed after the adoption of Topic 842, the Company elected to account for non-lease components associated with its leases and lease components as a single lease component.

Upon adoption of Topic 842 on January 1, 2019, the Company recognized $1.4 million of operating lease liabilities and $1.3 million of operating lease right-of-use assets for its existing operating leases in its balance sheet.

As of December 31, 2019 , the Company's operating lease liabilities and right-of-use assets were $1.0 million and $0.9 million , respectively.

Each of the Company's leases includes options for the Company to extend the lease term and/or sub-lease space in whole or in part.

Operating lease liabilities and right-of-use assets were recorded in the following captions of our balance sheet were as follows (in thousands):

December 31, 2019

Operating lease liabilities and right-of-use assets were recorded in the following captions of our balance sheet as follows (in thousands):

December 31, 2020 December 31, 2019

Right-of Use Assets:

Other assets $ 574 906

Total Right-of-Use Asset $ 574 906

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Future minimum lease payments under the lease agreements as of December 31, 2020 were as follows (in thousands):

Operating Leases

Years ended Operating Leases

Total lease payments 679

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The Participants may receive awards as determined by a committee of independent members of the Company's board of directors or, to the extent authorized by such committee with respect to certain Participants, a duly authorized employee (collectively, the "Committee").

The incentive plan currently used by the Company is the 2018 Equity Incentive Compensation Plan (the "2018 Plan"), which was adopted by the stockholders of the Company in June 2018, with 1,500,000 shares authorized for issuance thereunder, plus any shares awarded under the 2015 Equity Compensation Plan (the "2015 Plan") or the Amended and Restated 2009 Equity Compensation Plan (the "2009 Plan") that are not issued due to their subsequent forfeiture, cancellation, or other settlement thereof.

The incentive plan currently used by the Company is the 2018 Equity Incentive Compensation Plan (the "2018 Plan"), which was adopted by the stockholders of the Company in June 2018, and subsequently increased by the stockholders of the Company in June of 2020 with 2,500,000 shares authorized for issuance thereunder, plus any shares awarded under the 2015 Equity Compensation Plan (the "2015 Plan") or the Amended and Restated 2009 Equity Compensation Plan (the "2009 Plan") that are not issued due to their subsequent forfeiture, cancellation, or other settlement thereof.

Concurrent with the adoption of the 2018 Plan, no future awards will occur under the 2015 Plan or the 2009 Plan.

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Stock options vest either on the date of grant, ratably over a period determined at time of grant, or upon the accomplishment of specified business milestones, and generally expire 2 , 3 , or 10 years from the grant date depending on the status of the recipient as a nonemployee, employee or director of the Company.

As of December 31, 2019 , there were 700,966 shares available for future grants under the 2018 Plan.

As of December 31, 2020, there

were 1,376,030 shares available for future grants under the 2018 Plan.

No additional awards may be made under the 2015 Plan or the 2009 Plan.

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In February 2018, the Company entered into a common stock sales agreement with H.C.

Wainwright & Co., LLC ("HCW") as sales agent, which was subsequently amended in August 2018 (the "Sales Agreement"), in connection with an “at the market offering” under which the Company from time to time may offer and sell shares of its common stock, having an aggregate offering price of not more than $25.0 million .

aggregate offering price of not more than $ 25.0 million.

In March 2019, subsequent to the filing of the Company's 2018 Form 10-K, the aggregate market value of its outstanding common stock held by non-affiliates was approximately $ 52.8 million.

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During the year-ended December 31, 2020, the Company issued 3,558,778 shares of common stock under the Sales Agreement for net proceeds of $ 8.5 million.

As of year-ended December 31, 2020, the Company issued 3,784,912 shares of common stock under the Sales Agreement for net proceeds of $ 9.5 million since inception.

On February 12, 2021, we suspended the use of the at-the-market transactions facility (the “ATM”) and terminated the continuous offering pursuant to Sales Agreement entered into in February 2018 with HCW.

We will no longer make any sales of our common stock pursuant to the Sales Agreement unless and until a new prospectus supplement is filed with the Securities and Exchange Commission.

Registered Direct Offerings

In April 2020, the Company entered into a securities purchase agreement (the “April Purchase Agreement”) with certain investors (the “April Purchasers”).

Pursuant to the terms of the April Purchase Agreement, the Company agreed to sell to the Purchasers an aggregate of 2,162,166 shares of its common stock at a purchase price equal to $ 2.3125 per share.

In a concurrent private placement, the Company issued to the April Purchasers warrants to purchase an aggregate of 1,081,083 shares of its common stock.

In connection with the registered direct offering and concurrent private placement, the Company received gross proceeds of $ 5.0 million.

Each warrant is exercisable for one share of common stock and features an exercise price equal to $ 2.2500 per share.

The warrants are exercisable immediately upon issuance and will expire five and one-half years from the issuance date.

In May 2020, the Company entered into a securities purchase agreement (the “May Purchase Agreement”) with certain investors (the “May Purchasers”).

Pursuant to the terms of the May Purchase Agreement, the Company agreed to sell to the May Purchasers an aggregate of 2,084,850 shares of its common stock at a purchase price equal to $ 2.0625 per share.

In a concurrent private placement, the Company issued to the Purchasers warrants to purchase an aggregate of 1,042,425 shares of its common stock.

In connection with the registered direct offering and concurrent private placement, the Company received gross proceeds of $ 4.3 million.

Each warrant is exercisable for one share of common stock and features an exercise price equal to $ 2.0625 per share.

The warrants are exercisable immediately upon issuance and will expire five and one-half years from the issuance date.

Private Placement

On July 10, 2020, the Company entered into a securities purchase agreement (the “Private Placement”) with certain investors (the “Private Placement Purchasers”).

Pursuant to the terms of the Private Placement, the Company agreed to sell to the Private Placement Purchasers an aggregate of 969,694 shares of its common stock at a purchase price equal to $ 2.0625 per share, along with warrants to purchase an aggregate of 484,847 shares of its common stock.

In connection with the Private Placement, the Company received gross proceeds of $ 2.0 million.

Each warrant is exercisable for one share of common stock and features an exercise price equal to $ 2.0625 per share.

The warrants are exercisable immediately upon issuance and will expire five and one-half years from the issuance date.

Stock Options and Warrants

The following table summarizes the activity for stock options and warrants for the year ended December 31, 2020:

Stock Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (Years)

Aggregate Intrinsic Value (In Thousands)

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (Years)

Aggregate Intrinsic Value (In Thousands)

Stock Options Warrants

Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In Thousands) Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In Thousands)

Outstanding at December 31, 2019 1,044,417 $ 18.31 6.06 $ — 30,000 $ 5.89 3.19 $ —

Changes during the Year:

Granted 248,176 $ 3.20 2,608,355 $ 2.14

Exercised — $ — — $ —

Forfeited ( 86,251 ) $ 3.83 — $ —

Expired ( 242,642 ) $ 22.57 — $ —

Outstanding at December 31, 2020 963,700 $ 14.64 5.86 $ — 2,638,355 $ 2.18 4.98 $ —

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Value of Restricted Stock Units Issued $ 863.0 $ 908.6

The weighted average estimated fair value of restricted stock issued for services in the years ended December 31, 2019 and 2018 was $4.93 and $5.10 per share, respectively.

The weighted average estimated fair value of restricted stock units issued for services in the years ended December 31, 2020 and 2019 was $ 2.65 and $ 4.93 per share, respectively.

The fair value of the restricted stock units was determined using the Company’s closing stock price on the date of issuance.

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Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized at December 31, 2020 were as follows ($ in thousands):

Stock Options

Restricted Stock Units

Restricted Stock

Stock Options Restricted Stock Units Restricted Stock

Unrecognized compensation cost $ 356 $ 244 $ 308

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In February 2017, the California Institute for Regenerative Medicine ("CIRM") awarded the Company funds of up to $ 12.2 million to support the T-Rex Study.

The funding will be based upon the achievement of certain milestones related to the proportion of subjects enrolled in California, as well as manufacturing and development costs incurred in California.

In March 2018, CIRM calculated the precise amount of the funding award as $8.1 million , based on the actual number of subjects enrolled in California.

The Company received $5.7 million in initial funding in May 2017, and a $1.9 million milestone payment in December 2017,

$0.3 million progress payment in March 2018, and $200,000 progress payment in May 2019, of which the total will be amortized over the estimated award period through July 2020 as a reduction to the related research and development expenses.

As of December 31, 2019 , $1.6 million of the funding received is recorded in accrued liabilities, representing the amount expected to be recognized over the next 12 months.

During the years ended December 31, 2019 and December 31, 2018 , the Company amortized and recognized a $2.7 million and $2.6 million credit to research and development related to CIRM funds received.

The funding is based upon the achievement of certain milestones related to the proportion of subjects enrolled in California, as well as manufacturing and development costs incurred in California.

Based on the actual number of subjects enrolled in California, the total amount of funding was revised to $ 8.6 million, of which $ 8.2 million has been received through the grant project period completion.

The Company received $ 5.7 million in initial funding in May 2017, a $ 1.9 million milestone payment in December 2017, a $ 0.3 million progress payment in March 2018, and a $ 0.2 million progress payment in May 2019, of which the total was amortized over the estimated award period through July 2020 as a reduction to the related research and development expenses, with the final true up payment of $ 46 thousand received in September 2020 and recorded as a reduction to the related research and development expenses.

During the year ended December 31, 2020 and December 31, 2019, the Company amortized and recognized $ 1.6 million and $ 2.7 million in credits, respectively, in research and development related to CIRM funds received.

Note 12 – Income Taxes

The provision for income taxes is based on loss from operations before provision for income taxes and noncontrolling interests as follows ($ in thousands):

The provision (benefit) for income taxes is based on loss from operations before provision for income taxes and noncontrolling interests as follows ($ in thousands):

Years Ended December 31,

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United States $ ( 19,013 ) $ ( 19,352 )

The provision for income taxes is determined by applying the U.S.

$ ( 19,013 ) $ ( 19,352 )

The provision (benefit) from income taxes was as follows ($ in thousands):

Years Ended December 31,

Federal $ — $ —

State and local — —

Federal $ — $ —

State and local ( 10,872 ) —

$ ( 10,872 ) $ —

Federal $ — $ —

State and local ( 10,872 ) —

$ ( 10,872 ) $ —

The provision (benefit) for income taxes is determined by applying the U.S.

Federal statutory rate of 21 % to income before income taxes as a result of the following ($ in thousands):

2 unchanged sentences

State and local (benefit) / expense net of U.S.

federal tax — —

Permanent non deductible expenses for U.S.

4 unchanged sentences

Effect of change in deferred tax rate — —

Sale of New Jersey State NOL's ( 10,872 ) —

Valuation allowance for deferred tax assets ( 1,521 ) 6,846

Tax provision

Tax provision (benefit) $ ( 10,872 ) $ —

Deferred income taxes at December 31, 2020 and 2019 consist of the following ($ in thousands):

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Accumulated net operating losses (tax effected) $ 68,286 $ 70,747

CIRM funding — 336

Right of use liability 176 205

Share-based compensation 5,025 3,584

Charitable contributions

Intangibles 131 141

Accumulated depreciation 19 9

Accrued payroll 167 121

Other 526 737

Deferred tax assets 74,330 75,880

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Deferred tax liabilities ( 161 ) ( 190 )

74,169 75,690

Valuation allowance ( 74,169 ) ( 75,690 )

3 unchanged sentences

As of December 31, 2020, and 2019, the Company had approximately $ 264 million and $ 246 million, respectively, of Federal NOLs available to offset future taxable income expiring from 2030 through 2036.

As of December 31, 2020 and 2019, the Company had State NOLs available in New Jersey of $ 99 million and $ 187 million, respectively, California of $ 70 million and $ 70 million, respectively, and New York City of $ 13 million and $ 13 million, respectively, to offset future taxable income expiring from 2030 through 2040.

In accordance with Section 382 of the Internal Revenue code, the usage of the Company’s NOLs could be limited in the event of a change in ownership.

13 unchanged sentences

The Company’s state tax returns remain open to examination for a period of three to four years from date of filing.

In December 2019, the Company received preliminary approval from the New Jersey Economic Development Authority ("NJEDA") to participate in the Technology Business Tax Certificate Transfer Program (the "Program").

The Program permits qualified companies to sell a percentage of their New Jersey net operating losses ("NJ NOLs") to unrelated profitable corporations.

On April 21, 2020, the Company received final approval from NJEDA to sell $ 11.5 million of its NJ NOLs, which was subsequently sold to a qualifying and approved buyer pursuant to the Program for net proceeds of $ 10.9 million.

The net proceeds have been recorded as a benefit from income taxes in the consolidated financial statements.

Note 13 – Contingencies

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While the outcome of pending claims cannot be predicted with certainty, the Company does not believe that the outcome of any pending claims will have a material adverse effect on the Company's financial condition or operating results.

Note 14 – Subsequent Events

Registered Direct Offerings

On February 12, 2021, we entered into a Securities Purchase Agreement (the “Institutional Purchase Agreement”) with certain institutional investors (the “Institutional Purchasers”).

Pursuant to the terms of the Institutional Purchase Agreement, we sold to the Institutional Purchasers in a registered direct offering an aggregate of 24,906,134 shares of our common stock and warrants to purchase an aggregate of 12,453,067 shares of our common stock at a combined purchase price equal to $ 2.45 per share and associated warrant.

Each warrant features an exercise price equal to $ 2.90 per share, is exercisable immediately upon issuance and will expire five years from the issuance date.

Additionally, in a concurrent non-brokered registered direct offering, we entered into a Securities Purchase Agreement (the “Additional Purchase Agreement”) with certain accredited investors (the “Additional Purchasers”).

Pursuant to the terms of the Additional Purchase Agreement, we sold to the Additional Purchasers an aggregate of 1,632,652 shares of our common stock and warrants to purchase an aggregate of 816,326 shares of our common stock at a combined purchase price equal to $ 2.45 per share and associated warrant.

Each warrant features an exercise price equal to $ 2.90 per share, is exercisable immediately upon issuance and will expire five years from the issuance date.

The closing of the offerings occurred on February 17, 2021.

In connection with the registered direct offerings, we received net proceeds of approximately $ 60.7 million.

Sales Pursuant to Common Stock Sales Agreement

On February 12, 2021, we suspended the use of the at-the-market transactions facility (the “ATM”) and terminated the continuous offering pursuant to the Common Stock Sales Agreement (“Sales Agreement”) entered into in February 2018 with H.C.

Wainwright & Co., LLC (“HCW”).

In accordance with the terms of the Sales Agreement, we could offer and sell shares of our common stock having an aggregate offering price of up to $ 25.0 million from time to time through HCW pursuant to the ATM program.

As of February 12, 2021, we had sold an aggregate of 3,784,912 shares of our common stock pursuant to the Sales Agreement for aggregate gross proceeds of $ 9.5 million.

We will no longer make any sales of our common stock pursuant to the Sales Agreement unless and until a new prospectus supplement is filed with the Securities and Exchange Commission.

Private Placement Offering

On January 21, 2021, the Company entered into a securities purchase agreement (the “January Private Placement”) with certain investors (the “January Purchasers”).

Pursuant to the terms of the January Private Placement, the Company agreed to sell to the January Purchasers an aggregate of 12,500,000 shares of its common stock at a purchase price equal to $ 2.00 per share, along with warrants to purchase an aggregate of 6,250,000 shares of its common stock.

In connection with the January Private Placement, the Company received gross proceeds of $ 25.0 million.

Each warrant is exercisable for one share of common stock and features an exercise price equal to $ 2.90 per share.

The warrants are exercisable immediately upon issuance and will expire five and one-half years from the issuance date.

Warrant Exercises

Subsequent to December 31, 2020 the company issued 801,148 shares of common stock for net proceeds of $ 1.8 million in connection with warrant exercises associated with the April Purchase Agreement and May Purchase Agreement.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data