What changed in this filing

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Item 1. Financial Statements

2022-05-05 compared with 2021-11-04 · 131 added, 182 removed, 317 unchanged (50% of the section changed)

4 unchanged sentences

(In thousands, except share data)

September 30,

2022 December 31,

21 unchanged sentences

issued and outstanding, 10,000 shares at

September 30, 2021 and December 31, 2020, respectively

March 31, 2022 and December 31, 2021, respectively

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

issued 60,544,144

and 19,389,413 shares at September 30, 2021 and December 31, 2020, respectively;

outstanding, 59,779,855 and 19,378,333 shares at September 30, 2021 and December 31, 2020,

and 59,800,792 shares at March 31, 2022 and December 31, 2021, respectively;

outstanding, 60,533,064 and 59,789,712 shares at March 31, 2022 and December 31, 2021,

Additional paid-in capital 546,580 545,988

Treasury stock, at cost;

11,080 shares at September 30, 2021 and December 31, 2020

11,080 shares at March 31, 2022 and December 31, 2021

( 708 ) ( 708 )

3 unchanged sentences

stockholders' equity 88,495 92,254

Noncontrolling interests ( 254 ) ( 254 )

Non-controlling interests ( 254 ) ( 254 )

Total stockholders' equity 88,241 92,000

Total liabilities and stockholders' equity $ 102,538 $ 36,002

Total liabilities, non-controlling interests and stockholders' equity $ 91,463 $ 97,008

See accompanying notes to consolidated financial statements.

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Operating Expenses:

6 unchanged sentences

Other expense, net ( 148 ) —

Total other income (expense) 41 25 21 118

Total other (expense) income ( 85 ) 23

Net loss before benefit from income taxes and noncontrolling interests ( 6,705 ) ( 8,063 )

Benefit from income taxes ( 2,479 ) —

Net loss $ ( 6,927 ) $ ( 5,325 ) $ ( 20,672 ) $ ( 2,709 )

Less - net income attributable to noncontrolling interests

Net loss attributable to Caladrius Biosciences, Inc.

12 unchanged sentences

(In thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Net loss $ ( 4,226 ) $ ( 8,063 )

2 unchanged sentences

Total other comprehensive loss ( 126 ) ( 59 )

Comprehensive loss ( 6,974 ) ( 5,339 ) ( 20,723 ) ( 2,723 )

Comprehensive income attributable to noncontrolling interests — 2 — 10

Comprehensive loss attributable to Caladrius Biosciences, Inc.

common stockholders $ ( 4,352 ) $ ( 8,122 )

$ ( 6,974 ) $ ( 5,341 ) $ ( 20,723 ) $ ( 2,733 )

See accompanying notes to consolidated financial statements.

13 unchanged sentences

Shares Amount Shares Amount

Balance at June 30, 2021 10 $ — 59,529 $ 60 $ 544,893 $ ( 17 ) $ ( 439,295 ) $ ( 708 ) $ 104,933 $ ( 254 ) $ 104,679

Net loss — — — — — — ( 6,927 ) — ( 6,927 ) — ( 6,927 )

Unrealized loss on marketable securities — — — — — ( 47 ) — — ( 47 ) — ( 47 )

Share-based compensation — — 262 — 708 — — — 708 — 708

Balance at September 30, 2021 10 $ — 59,791 $ 60 $ 545,601 $ ( 64 ) $ ( 446,222 ) $ ( 708 ) $ 98,667 $ ( 254 ) $ 98,413

Series B Convertible

Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Treasury

Caladrius Biosciences,

Stockholders'

Subsidiary Total

Shares Amount Shares Amount

Balance at December 31, 2021 10 $ — 59,801 $ 60 $ 545,988 $ ( 70 ) $ ( 453,016 ) $ ( 708 ) $ 92,254 $ ( 254 ) $ 92,000

2 unchanged sentences

Share-based compensation — — 743 1 592 — — — 593 — 593

Net proceeds from issuances of common stock and warrants — — 39,860 41 85,438 — — — 85,479 — 85,479

Proceeds from option exercises — — 7 — 24 — — — 24 — 24

Balance at September 30, 2021 10 $ — 59,791 $ 60 $ 545,601 $ ( 64 ) $ ( 446,222 ) $ ( 708 ) $ 98,667 $ ( 254 ) $ 98,413

Series B Convertible

Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Treasury

Caladrius Biosciences,

Stockholders'

Subsidiary Total

Shares Amount Shares Amount

Balance at June 30, 2020 10 $ — 15,585 $ 16 $ 449,302 $ ( 7 ) $ ( 414,792 ) $ ( 708 ) $ 33,811 $ ( 255 ) $ 33,556

Net loss — — — — — — ( 5,327 ) — ( 5,327 ) 2 ( 5,325 )

Unrealized loss on marketable securities — — — — — ( 5 ) — — ( 5 ) — ( 5 )

Share-based compensation — — ( 25 ) — 229 — — — 229 — 229

Net proceeds from issuances of common stock and warrants — — 3,847 3 9,029 — — — 9,032 — 9,032

Balance at September 30, 2020 10 $ — 19,407 $ 19 $ 458,560 $ ( 12 ) $ ( 420,119 ) $ ( 708 ) $ 37,740 $ ( 253 ) $ 37,487

Balance at March 31, 2022 10 $ — 60,544 $ 61 $ 546,580 $ ( 196 ) $ ( 457,242 ) $ ( 708 ) $ 88,495 $ ( 254 ) $ 88,241

Series B Convertible

13 unchanged sentences

Net proceeds from issuances of common stock and warrants — — 39,841 41 85,416 — — — 85,457 — 85,457

Balance at September 30, 2020 10 $ — 19,407 $ 19 $ 458,560 $ ( 12 ) $ ( 420,119 ) $ ( 708 ) $ 37,740 $ ( 253 ) $ 37,487

Proceeds from option exercises — — 7 — 24 — — — 24 — 24

Balance at March 31, 2021 10 $ — 59,510 $ 60 $ 544,601 $ ( 72 ) $ ( 433,613 ) $ ( 708 ) $ 110,268 $ ( 254 ) $ 110,014

See accompanying notes to consolidated financial statements.

3 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

12 unchanged sentences

Sale of marketable securities 20,456 10,821

Purchase of property and equipment ( 60 ) ( 14 )

Net cash used in investing activities ( 6,090 ) ( 65,090 )

3 unchanged sentences

Net proceeds from issuance of common stock — 85,457

Net cash provided by financing activities 85,255 18,567

Net cash (used in) provided by financing activities ( 168 ) 85,297

Net (decrease) increase in cash and cash equivalents ( 11,900 ) 12,232

10 unchanged sentences

Its technology is intended to leverage 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.

The Company's leadership team has decades of collective biopharmaceutical product development experience in a variety of therapeutic categories.

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:

• XOWNA ® (CLBS16), the subject of both a recently completed positive Phase 2a study (ESCaPE-CMD) and a newly initiated Phase 2b (FREEDOM Trial) study in the United States for the treatment of coronary microvascular dysfunction (“CMD”);

• 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 a clinical trial being executed in Japan.

Additionally, CLBS12 was the recipient of orphan drug designation in March 2021 from the U.S.

• XOWNA ® (CLBS16), the subject of both a completed positive Phase 2a study (ESCaPE-CMD) and an ongoing follow on Phase 2b study (FREEDOM Trial) in the United States for the treatment of coronary microvascular dysfunction (“CMD”);

• HONEDRA® (CLBS12), recipient of SAKIGAKE designation pursuant to which early conditional approval in Japan for the treatment of critical limb ischemia (“CLI”) and Buerger’s disease is being sought based on the current results of a clinical trial executed in Japan.

HONEDRA® was the recipient of orphan drug designation in March 2021 from the U.S.

Food and Drug Administration (“FDA”) for Buerger's disease;

• CLBS201, designed to assess the safety and efficacy of CD34+ cell therapy as a treatment for patients with chronic kidney disease related to type 2 diabetes (diabetic kidney disease or “DKD”).

• CLBS201, the subject of a study designed to assess the safety and efficacy of CD34+ cell therapy as a treatment for patients with chronic kidney disease related to type 2 diabetes (diabetic kidney disease or “DKD”).

• On April 26, 2022, the Company and Cend Therapeutics, Inc., a Delaware corporation (“Cend”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, a wholly-owned subsidiary of Caladrius will merge with and into Cend, with Cend surviving as a wholly-owned subsidiary of the Company (the “Merger”), subject to the terms of the Merger Agreement and stockholder approval of the transaction.

Under the exchange ratio formula, as of immediately after the Merger, the former Cend stockholders are expected to own approximately 50 % of the outstanding shares of Caladrius Common Stock and the Company’s stockholders as of immediately prior to the Merger are expected to own approximately 50 % of the outstanding shares of Caladrius Common Stock.

The actual allocation will be subject to adjustment based on our net cash balance at the time of closing and the amount of any transaction expenses of Cend in excess of $ 250 thousand at the time of closing.

See Note 12 below for more information regarding the Merger and related transactions.

Ischemic Repair (CD34 Cell Technology)

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The Company's proprietary cell technology using autologous (a patient’s own naturally occurring) CD34+ cells 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.

The Company believes that a number of conditions caused by underlying ischemic injury can be improved through our CD34+ cell technology including but not limited to Buerger's disease, CLI, CMD, and DKD.

Ischemia occurs when the supply of oxygenated blood to healthy tissue is restricted or reduced.

Through the administration of CD34+ cells, Caladrius seeks to promote the development and formation of new microvasculature and thereby increase blood flow to the impacted area.

The Company believes that a number of conditions caused by underlying ischemic injury can be improved through its CD34+ cell technology including but not limited to Buerger's disease, CLI, CMD, and DKD.

XOWNA ® 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), the Company initiated its program for XOWNA ® for the treatment of CMD, a disease that afflicts as many as 1.5 million patients in the U.S.

alone, with no current targeted treatment options.

In 2017, with the assistance of a $ 1.9 million grant from the National Institutes of Health (Award Number R44HL135889), the Company initiated its program for XOWNA® for the treatment of CMD, a disease that afflicts as many as 1.6 million patients in the United States alone, with no current targeted treatment options.

That study, the ESCaPE-CMD Trial, was a Phase 2a proof-of-concept open label study that enrolled patients at the Mayo Clinic in Rochester, MN and Cedars-Sinai Medical Center in Los Angeles, CA.

Those data showed a positive therapeutic effect with a statistically significant improvement in angina frequency, coronary flow reserve, Canadian Cardiovascular Society Angina Class and Seattle Angina Questionnaire scores, as well as an acceptable safety profile.

Those data showed a positive therapeutic effect with a statistically significant improvement in

angina frequency, coronary flow reserve, Canadian Cardiovascular Society Angina Class and Seattle Angina Questionnaire scores, as well as an acceptable safety profile.

The full data set from that study was presented at the SCAI 2020 Scientific Sessions Virtual Conference on May 14, 2020 by Dr.

Timothy Henry, FACC, of the Christ Hospital in Cincinnati, Ohio.

In December 2020, the Company commenced enrollment in its Phase 2b FREEDOM Trial of XOWNA ® , a double-blind, randomized and placebo-controlled clinical trial designed to further evaluate the efficacy and safety of intracoronary delivery of autologous CD34+ cells in subjects with CMD and without obstructive coronary artery disease.

While early enrollment proceeded to plan with the first patient treated in January 2021, the impact of the COVID-19 pandemic contributed to a general slowing of enrollment.

In December 2020, the Company commenced enrollment in its Phase 2b FREEDOM Trial of XOWNA®, a double-blind, randomized and placebo-controlled clinical trial designed to further evaluate the efficacy and safety of intracoronary artery delivery of autologous CD34+ cells in subjects with CMD and without obstructive coronary artery disease.

While early enrollment proceeded to plan with the first patient treated in January 2021, the impact of the COVID-19 pandemic contributed to a general slowing of enrollment, including supply chain disruptions affecting the availability of qualified catheters used in the diagnosis of CMD and/or administration of XOWNA®.

Protocol amendments to the initial FREEDOM Trial protocol, as agreed to by the FDA, were implemented with the goal of enhancing breadth and speed of subject enrollment.

Actual improvement in enrollment rate will be assessed during the fourth quarter of 2021.

As part of program optimization, the Company convened an advisory board meeting of key opinion leaders in the fields

of cardiology, drug development, and payer access and reimbursement in mid-October 2021 with the objective of assuring the most efficient and effective development program for XOWNA ® .

HONEDRA ® for Treatment of Critical Limb Ischemia

The Company's randomized, open-label, registration-eligible study of HONEDRA ® in Japan for the treatment of CLI and Buerger's disease has, to date, demonstrated positive trends in both safety and efficacy.

The HONEDRA ® study's enrollment, however, has been significantly curtailed by the COVID-19 pandemic's impact in Japan, including the States of Emergency in Japan that have persisted for much of 2020 and 2021.

Such a partnership may become the basis for the completion of development and registration of HONEDRA ® in Japan and may include the completion of enrollment of the four remaining no-option CLI subjects stipulated in the original protocol, if necessary, and/or exploration of the possibility of submitting the existing data to Japan's Pharmaceuticals and Medical Devices Agency (“PMDA”) under Japan's regenerative medicine regulations, which allow for conditional approval of innovative regenerative medicine products.

Despite receipt from FDA in March 2021 of orphan designation in the U.S.

for CLBS12 as a potential treatment for Buerger's disease, based on a response from the FDA in October 2021 regarding a development plan for U.S.

registration the Company decided not to pursue United States development in Buerger's disease at this time.

CLBS201 for Treatment of Diabetic Kidney Disease

1 unchanged sentence

Pre-clinical studies in kidney disease and injury models have demonstrated that protection or replenishment of the microcirculation results in improved kidney function.

Based on these observations, the Company proposed an initial development plan for CLBS201 contemplating an adaptive design.

However, after multiple conversations with key opinion leaders in the fields of nephrology and drug development, the Company has elected to move forward with a Phase 1, open-label, proof-of-concept trial evaluating CLBS201 dosed via intra-renal artery injections in subjects with DKD.

This new protocol, pending approval of the Institutional Review Board (the "IRB"), is expected to include six subjects in total with the first two subjects sequentially dosed and followed for a two-week safety observation period.

Clearance by the independent Data Safety Monitoring Board overseeing the study will then permit the treatment of the next four patients, with all patients being followed for safety and therapeutic effect.

A key read-out of data will occur at the six-month follow-up visit for all patients.

The Company projects enrollment of this study will begin in the first quarter of 2022.

Based on these observations, the Company has elected to move forward with a Phase 1b, open-label, proof-of-concept trial evaluating CLBS201 dosed via intra-renal artery injections in subjects with DKD.

This protocol is expected to include six subjects in total with the first two subjects sequentially dosed and followed for a two-week safety observation period.

Clearance by the independent Data Safety Monitoring Board (“DSMB”) overseeing the study will then permit the treatment of the next four patients, with all patients being followed for safety and therapeutic effect.

A read-out of data will occur after at the six-month follow-up visit for all patients.

A key criterion for continued development of CLBS201 will be its ability to demonstrate a therapeutic effect that will make it competitive in the field of DKD treatment, i.e., kidney function regeneration, as indicated by increased glomerular filtration rate.

HONEDRA ® for Treatment of Critical Limb Ischemia

The Company's randomized, open-label, registration-eligible study of HONEDRA ® in Japan for the treatment of CLI and Buerger's disease continues to demonstrate positive trends in both safety and efficacy.

These data remain consistent with the efficacy and safety from previously published clinical trials in Japan.

Due to the significant and continued operational and financial burden incurred as a result of these COVID-19 delays, coupled with the unpredictability of the timing of site enrollment re-initiation, the Company is suspending further enrollment and focusing its efforts on consummating a partnership with a Japanese company that could complete the study enrollment of the three remaining no-option CLI subjects and/or explore the possibility of submitting the existing data to Japan's Pharmaceuticals and Medical Devices Agency ("PMDA") under the SAKIGAKE designation, which allows for accelerated approval of innovative medical products.

Also, as previously noted, in March 2021 CLBS12 was awarded an orphan designation in the U.S.

by FDA as a potential treatment for Buerger's disease.

However, based on a recent response from the FDA regarding a development plan for U.S.

registration, the Company has decided not to pursue U.S.

development in Buerger's disease at this time.

Additional Out-licensing Opportunities

As announced recently, the Company has treated the first patient in the CLBS201 proof-of-concept study and targets treatment completion for all six subjects during the third quarter of 2022.

Additional Out-licensing Opportunities and Pipeline Diversification

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.

1 unchanged sentence

The Company believes that it is well-positioned to realize potentially meaningful value increases within its own proprietary pipeline if it is successful in advancing its product candidates to their next significant development milestones.

In addition, the Company further desires to diversify its pipeline of development products candidates and is exploring a range of strategic transactions in furtherance of that goal.

The Company has taken, and intends to continue to take, active steps to identify assets and/or companies for acquisition and/or partnership that would enhance and de-risk its current development portfolio.

Such assets could target indications beyond cardiovascular disease as well as product categories outside of cell therapy.

The range of possible transactions includes an acquisition, merger, business combination, in-license or other strategic transaction, any of which could result in the issuance of securities that could significantly dilute the shares of its existing stockholders.

There can be no assurance that this exploration of strategic alternatives will result in Caladrius entering into or completing any transaction or that such transaction, if completed, will add to shareholder value.

Coronavirus Considerations

2 unchanged sentences

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 reasonably be estimated at this time.

In response to the COVID-19 pandemic, the Company has implemented universal work from home as well as stringent social distancing and other hygiene policies for employees when they must be in the office.

The Company's clinical study of HONEDRA ® in Japan has experienced significant delays in enrollment due to the “State of Emergency” in effect in Japan for most of 2020 and reimplemented in Japan on January 7, 2021 through March 21, 2021 covering Tokyo and other regions in response to an increased number of COVID-19 patients.

Due to reported increases in COVID-19 cases and a low rate of vaccination in Japan, a "State of Emergency" was renewed on April 25, 2021 through May 11, 2021 and then

reimplemented in Tokyo from July 12, 2021 through September 30, 2021.

We expect that COVID-19 in Japan will continue to negatively impact enrollment of the HONEDRA ® clinical trial.

In response to the COVID-19 pandemic, the Company implemented a universal work from home policy as well as stringent social distancing and other hygiene policies for employees when they must be in the office.

The Company's clinical study of HONEDRA ® in Japan has experienced significant delays in enrollment due to the States of Emergency in effect in Japan for most of 2020 2021 covering Tokyo and other regions in response to an increased number of COVID-19 infections.

With the Company's expectation that COVID-19 in Japan would continue to impact negatively clinical site operations and enrollment of patients in the HONEDRA ® clinical trial, it elected to suspend trial enrollment, seek a development partner and consult with the Japanese regulatory authorities regarding the submission of patient data already accrued.

Caladrius' phase 2b trial of XOWNA ® in the U.S.

has also experienced delays in enrolling patients as a result of COVID-19.

Basis of Presentation

1 unchanged sentence

Accordingly, they do 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 September 30, 2021, and the results of its operations and its cash flows for the periods presented.

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 March 31, 2022, 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, 2021 and 2020 included in our 2021 Form 10-K.

Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

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.

Estimates also affect the reported amounts 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.

7 unchanged sentences

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 2021 Form 10-K.

There were no changes to these policies during the three and nine months ended September 30, 2021.

There were no changes to these policies during the three months ended March 31, 2022.

Concentration of Risks

10 unchanged sentences

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

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 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 determined that the adoption of this new accounting guidance did not have a material impact on its consolidated 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):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

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

5 unchanged sentences

The following table summarizes the classification of the available-for-sale securities in our Consolidated Balance Sheets (in thousands):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Cash equivalents $ 10,647 $ 21,129

2 unchanged sentences

The following table summarizes our portfolio of available-for-sale securities by contractual maturity (in thousands):

September 30, 2021

March 31, 2022

Amortized Cost Estimated Fair Value

3 unchanged sentences

Note 4 – Income (Loss) Per Share

For the three and nine months ended September 30, 2021 and 2020, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share as they are anti-dilutive.

At September 30, 2021 and 2020, the Company excluded the following potentially dilutive securities (in thousands):

September 30,

For the three months ended March 31, 2022 and 2021, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share as they are anti-dilutive.

At March 31, 2022 and 2021, the Company excluded the following potentially dilutive securities (in thousands):

Stock Options 2,640 1,022

9 unchanged sentences

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

The following table sets forth by level within the fair value hierarchy the Company's financial assets that were accounted for at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 (in thousands).

September 30, 2021 December 31, 2020

The following table sets forth by level within the fair value hierarchy the Company's financial assets that were accounted for at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 (in thousands).

March 31, 2022 December 31, 2021

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

2 unchanged sentences

Note 6 – Accrued Liabilities

Accrued liabilities as of September 30, 2021 and December 31, 2020 were as follows (in thousands):

September 30, 2021 December 31, 2020

Accrued liabilities as of March 31, 2022 and December 31, 2021 were as follows (in thousands):

March 31, 2022 December 31, 2021

Salaries, employee benefits and related taxes $ 1,005 $ 2,034

3 unchanged sentences

Note 7 – Operating Leases

The Company has operating leases for two offices 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.

The Company has operating leases for two offices with terms that expire in 2023 and 2025, respectively.

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

The Company recognizes lease expense on a straight-line basis over the lease term.

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.

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

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):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Right-of Use Assets:

5 unchanged sentences

Total Operating Lease Liabilities $ 626 $ 714

As of September 30, 2021, the weighted average remaining lease term for our operating leases was 1.1 years, and the weighted average discount rate for our operating leases was 9.625 %.

Future minimum lease payments under the lease agreements as of September 30, 2021 were as follows (in thousands):

As of March 31, 2022, the weighted average remaining lease term for our operating leases was 2.3 years, and the weighted average discount rate for our operating leases was 9.625 %.

Future minimum lease payments under the lease agreements as of March 31, 2022 were as follows (in thousands):

Years ended Operating Leases

13 unchanged sentences

The Company controls the timing and amount of any sales of its common stock to Lincoln Park.

There is no upper limit on the price per share that Lincoln Park must pay for its common stock under the Purchase Agreement, but in no event will shares

be sold to Lincoln Park on a day the closing price is less than the floor price specified in the Purchase Agreement.

There is no upper limit on the price per share that Lincoln Park must pay for its common stock under the Purchase Agreement, but in no event will shares be sold to Lincoln Park on a day the closing price is less than the floor price specified in the Purchase Agreement.

In all instances, the Company may not sell shares of its common stock to Lincoln Park under the purchase agreement if it would result in Lincoln Park beneficially owning more than 9.99 % of its common stock.

1 unchanged sentence

The Company has the right to terminate the Purchase Agreement at any time, at no cost to the Company.

As of September 30, 2021, the Company had not made any sales of common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

Common Stock Sales Agreement

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 could offer and sell shares of its common stock having an aggregate offering price of not more than $ 25.0 million.

The Company provided HCW with customary indemnification rights, and HCW was entitled to a commission at a fixed commission rate equal to 3.0 % of the gross proceeds per share sold.

On February 12, 2021, the Company suspended the use of the at-the-market transactions facility and terminated the continuous offering pursuant to the Sales Agreement.

As of the termination of the Sales Agreement on February 12, 2021, the Company had sold an aggregate of 3,784,912 shares of its common stock pursuant to the Sales Agreement for net proceeds of $ 9.5 million.

During the nine months ended September 30, 2021, the Company had no t issued any shares under the Sales Agreement.

As of March 31, 2022, the Company had not made any sales of common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

The agreement expired on April 1, 2022.

At The Market Offering Agreement

On June 4, 2021, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with HCW, as sales agent, 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 up to $ 50.0 million.

During the nine months ended September 30, 2021, the Company had no t issued any shares under the ATM Agreement.

Registered Direct Offerings

In February 2021, the Company 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, the Company sold to the Institutional Purchasers in a registered direct offering an aggregate of 24,906,134 shares of its common stock and warrants to purchase an aggregate of 12,453,067 shares of its 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, the Company 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, the Company sold to the Additional Purchasers an aggregate of 1,632,652 shares of its common stock and warrants to purchase an aggregate of 816,326 shares of its 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.

In connection with the registered direct offerings, the Company received gross proceeds of approximately $ 65.0 million.

Private Placement

In January 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

In January 2021, 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 23, 2020 securities purchase agreement and the May 25, 2020 securities purchase agreement.

During the three months ended March 31, 2022 and since inception the Company had no t issued any shares under the ATM Agreement.

Having received a listing deficiency notice from Nasdaq on February 18, 2022 after the Company’s shares traded below $1.00 for 30 consecutive trading days, the Company will not be permitted to sell additional shares under the ATM Agreement until it re-establishes timely compliance.

Compliance may be reestablished by various mechanisms, including stock price appreciation at or above $1.00 for a requisite period of time and reverse stock split.

Stock Options and Warrants

The following table summarizes the activity for stock options and warrants for the nine months ended September 30, 2021:

The following table summarizes the activity for stock options and warrants for the three months ended March 31, 2022:

Stock Options Warrants

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Expired ( 23,275 ) 26.00 — —

Outstanding at September 30, 2021 2,142,199 $ 5.63 8.26 $ — 21,356,600 $ 2.84 4.63 $ —

Vested at September 30, 2021

Outstanding at March 31, 2022 2,639,609 $ 4.51 7.83 $ — 21,356,600 $ 2.84 4.13 $ —

Vested at March 31, 2022

or expected to vest in the future 2,594,630 $ 4.57 7.80 $ — 21,356,600 $ 2.84 4.13 $ —

Vested at September 30, 2021 1,122,583 $ 9.26 7.04 $ — 21,356,600 $ 2.84 4.63 $ —

Vested at March 31, 2022 1,408,083 $ 7.36 6.41 $ — 21,356,600 $ 2.84 4.13 $ —

Restricted Stock

During the nine months ended September 30, 2021 and 2020, the Company issued restricted stock for services as follows ($ in thousands):

Nine Months Ended September 30,

During the three months ended March 31, 2022 and 2021, the Company issued restricted stock for services as follows ($ in thousands):

Three Months Ended March 31,

Number of restricted stock issued 1,061,175 300,450

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Restricted Stock Units

During the nine months ended September 30, 2021 and 2020, the Company issued restricted stock units for services as follows ($ in thousands, except share data):

Nine Months Ended September 30,

During the three months ended March 31, 2022 and 2021, the Company issued restricted stock units for services as follows ($ in thousands, except share data):

Three Months Ended March 31,

Number of restricted stock units issued 1,379,860 458,245

Value of restricted stock units issued $ 1,265 $ 729

The weighted average estimated fair value of restricted stock issued for services in the nine months ended September 30, 2021 and 2020 was $ 1.59 and $ 3.02 per share, respectively.

The weighted average estimated fair value of restricted stock issued for services in the three months ended March 31, 2022 and 2021 was $ 0.92 and $ 1.59 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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We utilize share-based compensation in the form of stock options, restricted stock, and restricted stock units.

The following table summarizes the components of share-based compensation expense for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

The following table summarizes the components of share-based compensation expense for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

Research and development $ 218 $ 96

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Total share-based compensation expense $ 760 $ 597

Total compensation cost related to non-vested awards not yet recognized and the weighted-average periods over which the awards were expected to be recognized at September 30, 2021 were as follows (in thousands):

Total compensation cost related to non-vested awards not yet recognized and the weighted-average periods over which the awards were expected to be recognized at March 31, 2022 were as follows (in thousands):

Stock Options Restricted Stock Units Restricted Stock

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Expected weighted-average period in years of compensation cost to be recognized 1.77 0.96 2.25

Total fair value of shares vested and the weighted average estimated fair values of shares granted for the nine months ended September 30, 2021 and 2020 were as follows (in thousands):

Total fair value of shares vested and the weighted average estimated fair values of shares granted for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

Stock Options

Nine Months Ended September 30,

Three Months Ended March 31,

Total fair value of shares vested $ 377 $ 397

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The expected term for the warrants is based upon the contractual term of the warrants.

Note 10– Research Funding

California Institute of Regenerative Medicine Grant Award

In February 2017, the California Institute for Regenerative Medicine ("CIRM") awarded the Company funds of up to $ 12.2 million to support The Sanford Project:

T-Rex Study, a prospective, randomized, placebo-controlled, double-blind Phase 2 clinical trial to evaluate the safety and efficacy of CLBS03 as a treatment for recent-onset type 1 diabetes.

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 three and nine months ended September 30, 2021, the Company amortized and recognized $ 0.0 million and $ 0.0 million in credits, respectively, to research and development related to CIRM funds received.

During the three and nine months ended September 30, 2020, the Company amortized and recognized $ 0.3 million and $ 1.6 million in credits, respectively, to research and development related to CIRM funds received.

Note 10 – Income Taxes

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Based on its assessment, the Company has provided a full valuation allowance against its net deferred tax assets as their future utilization remains uncertain at this time.

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

As of December 31, 2020, the Company had State NOLs available in New Jersey of $ 99 million, California of $ 70 million, and New York City of $ 13 million 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.

As of December 31, 2021 and 2020, the Company had approximately $ 281 million and $ 264 million, respectively of federal NOLs available to offset future taxable income expiring from 2030 through 2036.

The Company performed an analysis and determined that they had an ownership change of greater than 50% over a 3-year testing period on January 25, 2021.

As a result, $ 169 million of the $ 281 million of federal NOLs will expire unutilized.

The Company wrote off that portion of the deferred tax asset and reduced the corresponding valuation allowance resulting in $ 112 million of remaining federal NOL.

The write off of the deferred tax asset and the corresponding reduction in valuation allowance has no impact to the balance sheet or income statement.

Losses incurred before the ownership change on January 25, 2021 will be subject to an annual limitation of $173k under Internal Revenue Code Section 382, while losses incurred after January 25, 2021 will not be subject to limitations.

The Company may be able to utilize additional NOLs of approximately $ 1.1 million per year for the first five years after this ownership change as a result of the application of the Net Unrealized Built-in Gain rules.

As of December 31, 2021 and 2020 the Company had State NOLs available in New Jersey of $ 97 million and $ 99 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 2031 through 2041.

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

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period when those temporary differences become deductible.

The Company performed an analysis and determined that they did not have an ownership change of greater than 50% over a 3-year testing period.

The last ownership change was determined to be on June 3, 2015.

Based on a market capitalization of $ 125 million and using an applicable federal rate of 2.5%, the annual limitation would be approximately $ 3.0 million.

Post change losses generated after June 3, 2015 would not be subject to 382 limitations.

The Company applies the FASB’s provisions for uncertain tax positions.

The Company utilizes the two-step process to determine the amount of recognized tax benefit.

For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

For tax positions meeting the more-likely-than-not threshold, the amount

recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense.

As of September 30, 2021, management does not believe the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability of a position on audit in its financial statements.

As of March 31, 2022, management does not believe the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability of a position on audit in its financial statements.

The Company will continue to evaluate its uncertain tax positions in future periods to determine if measurement and recognition in its financial statements is necessary.

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

In February 2021, 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").

In December 2021, 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 12, 2021, the Company received final approval from NJEDA to sell a portion of our NJ NOLs, which were subsequently sold to a qualifying and approved buyer pursuant to the Program for net proceeds of $ 1.4 million.

The $ 1.5 million of our NJ NOL related tax benefits ("NJ NOL Tax Benefits") have been recorded as a benefit from income taxes and the loss on sale of $ 0.1 million recorded in other income (expense) in the consolidated financial statements.

On February 22, 2022, the Company received final approval from NJEDA to sell $ 2.5 million of its NJ NOLs related tax benefits ("NJ NOL Tax Benefits"), which was subsequently sold to a qualifying and approved buyer pursuant to the Program for net proceeds of $ 2.3 million.

The gross proceeds of $ 2.5 million have been recorded as a benefit from income taxes and the loss on sale of NJ NOLs of $ 0.1 million recorded in other income (expense) in the consolidated financial statements.

Note 11 – 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 12 – Subsequent Event

Cend Merger Agreement

On April 26, 2022, the Company and Cend Therapeutics, Inc., a Delaware corporation (“Cend”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, a wholly-owned subsidiary of Caladrius will merge with and into Cend, with Cend surviving as a wholly-owned subsidiary of the Company (the “Merger”), subject to the terms of the Merger Agreement and stockholder approval of the transaction.

The actual allocation will be subject to adjustment based on the Company’s net cash balance at the time of closing and the amount of any transaction expenses of Cend in excess of $ 250 thousand at the time of closing.

Consummation of the Merger is subject to certain closing conditions, including, among other things, approval by the stockholders of the Company and Cend, and the Company’s satisfaction of a minimum net cash threshold at closing, expected to be approximately $ 64.9 million assuming a closing at the end of the third quarter of 2022, and as described further in the Merger Agreement.

The Merger Agreement contains certain termination rights for both the Company and Cend, and further provides that, upon termination of the Merger Agreement under specified circumstances, the Company may be required to pay Cend a termination fee of $ 1.0 million, Cend may be required to pay the Company a termination fee of $ 4.0 million, or in some circumstances reimburse the other party’s expenses up to a maximum of $ 1.0 million.

At the effective time of the Merger, the Company’s Board of Directors is expected to consist of nine members, four of whom will be designated by the Company, four of whom will be designated by Cend and one member who will be mutually agreed between the Company and Cend.

Stock Purchase Agreement

In order to provide Cend with capital for its development programs prior to the closing of the Merger, the Company and Cend entered into a Series D Preferred Stock Purchase Agreement (the “Purchase Agreement”), pursuant to which the

Company agreed to purchase from Cend 1,135,628 shares of Series D Preferred Stock, $ 0.00001 par value per share (the “Series D Preferred Stock”), of Cend at a purchase price per share equal to $ 8.8057 per share (the “Series D Original Issue Price”), or approximately $ 10 million in the aggregate.

The Series D Preferred Stock ranks senior to Cend’s common stock and the other series of preferred stock with respect to rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of Cend.

The Series D Preferred Stock has a liquidation preference equal to the Series D Original Issue Price plus an amount equal to any accrued and unpaid dividends to the date of payment and will participate with Cend’s common stockholders and other preferred stockholders thereafter on an as-converted basis.

The Series D Preferred Stock shall vote with the common stock on an as-converted basis on any matters presented to the stockholders of Cend.

Each share of Series D Preferred Stock is convertible, at the option of the holder thereof, into such number of shares of Cend common stock as is determined by dividing the Original Issue Price by the conversion price in effect at the time of conversion, which conversion price shall be the Original Issue Price as appropriately adjusted for stock splits, stock dividends, combinations, and subdivisions of Cend common stock, and as adjusted pursuant to a weighted-average antidilution adjustment.

The Series D Preferred Stock will automatically convert into shares of Cend common stock upon the closing of a firm-commitment underwritten initial public offering implying a pre-equity offering value of at least $ 250 million, resulting in at least $ 50 million of gross proceeds to Cend.

Collaboration Agreement

In connection with such Purchase Agreement, Cend entered into a Collaboration Agreement (the “Collaboration Agreement”), pursuant to which the Company agreed to collaborate with Cend on certain developmental and clinical activities prior to the closing of the Merger.

Under the Collaboration Agreement, the Company and Cend will form a joint steering committee (the “Committee”) comprised of individuals from both entities.

The Committee will meet regularly and be responsible for monitoring ongoing studies and making recommendations for development activity and trial planning.

Cend has agreed to pay each member of the Committee from the Company an hourly consulting fee for such service.

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-Q

Item 1. Financial Statements