Financial Performance - Net loss for the three months ended March 31, 2024, was $5.4 million, a decrease of $0.8 million compared to a net loss of $6.2 million for the same period in 2023[121] - Total operating expenses for Q1 2024 were $6.6 million, down 3.6% from $6.8 million in Q1 2023[122] - Net cash used in operating activities for Q1 2024 was $7.0 million, an improvement from $8.2 million in Q1 2023[128] Expenses Breakdown - Research and development expenses increased by $62,000 or 2.0% to approximately $3.2 million in Q1 2024, primarily due to enrollment activities for the certepetide Phase 2a trial[124] - General and administrative expenses decreased by $0.3 million or 8.3% to approximately $3.4 million in Q1 2024, attributed to staffing cost reductions and decreased consulting fees[124] Clinical Trials and Development - Certepetide demonstrated an Objective Response Rate (ORR) of 59% in a Phase 1b/2a trial for mPDAC, compared to 23% in the MPACT trial[115] - The Disease Control Rate (DCR) for the certepetide trial was over 79%, significantly higher than the 48% DCR observed in the MPACT trial[115] - Certepetide is currently involved in multiple ongoing and planned clinical trials across various solid tumor types globally[116] Cash and Market Value - As of March 31, 2024, the company had cash, cash equivalents, and marketable securities totaling approximately $43.3 million[127] - As of May 1, 2024, the aggregate market value of the company's outstanding common stock held by non-affiliates was approximately $26.7 million[135] Financing and Capital - The company entered into an At The Market Offering Agreement with H.C. Wainwright & Co. for an aggregate offering price of up to $50.0 million[135] - Due to the Baby Shelf Limitation, the company is permitted to offer and sell $8,915,094, which is one-third of the aggregate market value of its common stock held by non-affiliates as of March 21, 2024[135] - There were no issuances of common stock under the ATM Agreement for the three months ended March 31, 2024[135] - Since inception, the company has issued 64,394 shares of common stock under the ATM Agreement for net proceeds of $270,774[135] - The company continues to seek capital through various means, but there is no assurance that additional financing will be available on acceptable terms[136] - Additional equity financing may be dilutive to stockholders, and debt financing may involve significant cash payment obligations[136] Accounting and Risk - The company does not have any off-balance sheet arrangements[137] - There have been no material changes in critical accounting policies and estimates during the three months ended March 31, 2024[138] - There are no applicable quantitative and qualitative disclosures about market risk[139]

Exhibit 99.1 Lisata Therapeutics Reports First Quarter 2024 Financial Results and Provides Business Update Projected available cash to fund planned operations into early 2026 covering all studies through data Conference call scheduled for today at 4:30 p.m. Eastern Time BASKING RIDGE, NJ (May 9, 2024) – Lisata Therapeutics, Inc. (Nasdaq: LSTA) ("Lisata" or the "Company"), a clinical-stage pharmaceutical company developing innovative therapies for the treatment of advanced solid tumors and other serious dise ...

BASKING RIDGE, N.J., May 02, 2024 (GLOBE NEWSWIRE) -- Lisata Therapeutics, Inc. (NASDAQ:LSTA) ("Lisata" or the "Company"), a clinical-stage pharmaceutical company developing innovative therapies for the treatment of advanced solid tumors and other serious diseases, today announced that the Company will report its financial results for three months ended March 31, 2024, on Thursday, May 9, 2024, after the close of trading and will host a conference call at 4:30 p.m. Eastern time. Those wishing to participate ...

BASKING RIDGE, N.J. and JINAN, China, April 23, 2024 (GLOBE NEWSWIRE) --  Lisata Therapeutics, Inc. (NASDAQ:LSTA) ("Lisata" or the "Company"), a clinical-stage pharmaceutical company developing innovative therapies for the treatment of advanced solid tumors and other serious diseases, and Qilu Pharmaceutical Co., Ltd. ("Qilu"), one of the leading vertically integrated pharmaceutical companies in China that develops, manufactures, and distributes both finished products and active pharmaceutical ingredients, ...

Financial Data and Key Metrics Changes - For the year ended December 31, 2023, operating expenses totaled $25.7 million, a decrease of $31.9 million or 55.4% compared to $57.6 million in 2022 [47] - Net losses were $20.8 million for 2023, down from $54.2 million in 2022 [50] - Cash, cash equivalents, and marketable securities as of December 31, 2023, were approximately $50.5 million, expected to fund operations into early 2026 [51] Business Line Data and Key Metrics Changes - Research and development expenses were approximately $12.7 million for 2023, a slight decrease of $300,000 or 2.5% from $13.1 million in 2022, primarily due to lower costs associated with LSTA1 programs [49] - General and administrative expenses were approximately $13 million for 2023, down from $14.1 million in 2022, representing a decrease of approximately $1.2 million or 8.3% [67] Market Data and Key Metrics Changes - The ASCEND trial has achieved full enrollment of 98 patients, with top-line data expected in Q4 2024 and complete data by mid-2025 [27] - The BOLSTER trial is on track for enrollment completion by the end of 2024, with the U.S. being the largest contributor to enrollment so far [30][36] Company Strategy and Development Direction - The company is focused on advancing LSTA1 rapidly toward registration in metastatic pancreatic ductal adenocarcinoma (mPDAC) and demonstrating its broad application in combination with various anti-cancer agents [24] - The strategy includes efficient and timely study execution to achieve meaningful clinical data readouts as soon as possible [25] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of generating meaningful clinical data efficiently, which is critical in the oncology field [52] - The company is optimistic about the potential of LSTA1 to become an integral part of revised standard care treatment regimens for difficult-to-treat cancers [46] Other Important Information - LSTA1 has received multiple orphan drug designations, including for pancreatic cancer and malignant glioma [60] - The company is conducting nearly a dozen planned or active clinical trials globally for various solid tumors [39] Q&A Session Summary Question: Insights on BOLSTER trial enrollment - Management confirmed that BOLSTER is on track to meet its enrollment goal by the end of 2024, with the U.S. being the largest contributor so far [36] Question: R&D credits and runway guidance - R&D credits are included in the runway guidance, with an expectation of about $1 million in 2024 based on the 2023 tax year [78] Question: Milestone payments from Qilu - A contractual milestone of $10 million is expected when Qilu initiates a Phase 3 trial, anticipated to start soon [80]

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section advises readers that forward-looking statements in the report are subject to inherent uncertainties and risks, and actual results may differ materially - Forward-looking statements are predictions subject to uncertainties and known/unknown risks, and actual results may differ materially[14](index=14&type=chunk) - Factors that could cause actual results to differ include the ability to obtain sufficient capital, build management infrastructure, establish market for products, scientific/regulatory developments, intellectual property protection, realization of strategic benefits, diversification of pipeline, results of development activities, and completion of clinical trials[15](index=15&type=chunk) [PART I](index=5&type=section&id=PART%20I) [ITEM 1. Business](index=5&type=section&id=ITEM%201.%20Business) Lisata Therapeutics' business overview details its lead product **LSTA1** for solid tumors, corporate history, development, IP, and regulatory context [Overview](index=5&type=section&id=Overview) Lisata Therapeutics is a clinical-stage pharmaceutical company developing **LSTA1** to enhance anti-cancer drug penetration for solid tumors, currently in **Phase 2a** and **Phase 2b** studies - **Lisata Therapeutics** is a clinical-stage pharmaceutical company focused on innovative therapies for solid tumors and other major diseases[17](index=17&type=chunk) - **LSTA1**, the lead investigational product, activates a novel uptake pathway to enhance co-administered anti-cancer drug penetration into solid tumors and can modify the tumor microenvironment[17](index=17&type=chunk) - **LSTA1** is currently in **Phase 2a** and **Phase 2b** clinical studies globally for various solid tumor types, including metastatic pancreatic ductal adenocarcinoma (**mPDAC**), cholangiocarcinoma, head and neck cancer, appendiceal cancer, colon cancer, and glioblastoma multiforme[17](index=17&type=chunk) - Legacy **CD34+** cell therapy programs require significant capital and strategic partners for further development[18](index=18&type=chunk) [Corporate Information](index=5&type=section&id=Corporate%20Information) Incorporated in Delaware in 1980, the company's principal offices are in Basking Ridge, NJ, with SEC filings available online - **Lisata Therapeutics**, Inc. was incorporated in **1980** as a Delaware corporation[20](index=20&type=chunk) - The principal executive offices are located at **110 Allen Road**, Second Floor, Basking Ridge, NJ **07920**[20](index=20&type=chunk) - Annual Reports on Form **10-K**, Quarterly Reports on Form **10-Q**, Current Reports on Form **8-K**, and amendments are available free of charge through the Investors section of www.lisata.com and www.sec.gov[21](index=21&type=chunk) [Merger with Cend Therapeutics, Inc. and Name Change](index=5&type=section&id=Merger%20with%20Cend%20Therapeutics%2C%20Inc.%20and%20Name%20Change) Caladrius Biosciences acquired Cend Therapeutics on September 15, 2022, becoming Lisata Therapeutics after a **1:15 reverse stock split**, expensing **IPR&D** as an asset acquisition - Merger with **Cend Therapeutics**, Inc. completed on September **15**, **2022**, with Caladrius Biosciences, Inc. changing its name to **Lisata Therapeutics**, Inc[22](index=22&type=chunk) - A **1:15 reverse stock split** was effected prior to the merger, and **3,772,768 shares** of common stock were issued to Cend holders[23](index=23&type=chunk) - Caladrius was the accounting acquirer, and the merger was accounted for as an asset acquisition, with **IPR&D** expensed[25](index=25&type=chunk) [Development Programs](index=6&type=section&id=Development%20Programs) Lisata's **LSTA1** program activates the **CendR** system to enhance anti-cancer drug penetration in solid tumors, showing favorable safety and activity in **mPDAC Phase 1b**, with ongoing **Phase 2a/2b** studies - **LSTA1** activates the **C-end rule (CendR)** active transport system in a tumor-specific manner, enhancing drug penetration and accumulation in solid tumors[29](index=29&type=chunk) - **LSTA1** has demonstrated favorable safety, tolerability, and activity in a completed **Phase 1b** clinical trial for first-line **mPDAC** patients[32](index=32&type=chunk) LSTA1 Phase 1b mPDAC Clinical Trial Results vs. MPACT Trial | Metric | LSTA1 Phase 1b | MPACT Trial (SoC) | | :-------------------------------- | :------------- | :------------------ | | Objective Response Rate (ORR) | 59% | 23% | | Disease Control Rate (DCR) | >79% | 48% | | CA19-9 Reduction | 96% | 61% | | Median Progression-Free Survival | ~10 months | <6 months | | Median Overall Survival | >13 months | <9 months | - **LSTA1** is currently the subject of multiple ongoing and planned **Phase 2a** and **Phase 2b** clinical trials globally in various solid tumor types, combining with chemotherapy and immunotherapy regimens[33](index=33&type=chunk) [TECHNOLOGY COLLABORATION AND OUT-LICENSING OPPORTUNITIES](index=9&type=section&id=TECHNOLOGY%20COLLABORATION%20AND%20OUT-LICENSING%20OPPORTUNITIES) The company seeks collaborations to leverage its **CendR Platform** and **LSTA1** for enhancing solid tumor treatments, including nucleic acid, immunotherapy, and targeted therapies - **Lisata** plans to enter partnerships to exploit the **CendR Platform** for enhancing solid tumor cancer treatments[37](index=37&type=chunk) - Collaboration opportunities include nucleic acid-based treatments (antisense, siRNA, mRNA, gene editing), immunotherapies (adoptive cell, checkpoint inhibitors), and additional targeted therapies[37](index=37&type=chunk) [Intellectual Property Platform](index=9&type=section&id=Intellectual%20Property%20Platform) Lisata's **IP** portfolio for **LSTA1** and the **CendR Platform** includes three pending U.S. and fourteen international patent applications covering tumor reduction and treatment methods - The **LSTA1** and **CendR Platform** patent portfolio includes three pending patent applications in the United States and fourteen pending patent applications outside the United States[43](index=43&type=chunk) - Pending claims cover methods for reducing tumor volume using **LSTA1** with anti-cancer agents, treating pancreatic cancer with **LSTA1** in combination with gemcitabine and/or nab-paclitaxel, and treating tumors with **iRGD** and a cytokine[43](index=43&type=chunk) [Pancreatic Cancer & Advanced Solid Tumors (PDAC)](index=9&type=section&id=Pancreatic%20Cancer%20%26%20Advanced%20Solid%20Tumors%20(PDAC)) Pancreatic ductal adenocarcinoma (**PDAC**) is a highly aggressive and lethal malignancy characterized by a low **5-year survival rate** and significant global incidence Pancreatic Cancer Statistics | Metric | United States | Worldwide | | :-------------------- | :------------ | :---------- | | New Cases Annually | ~64,000 | ~434,000 | | PDAC Annual Incidences| N/A | ~397,000 | | 5-Year Survival Rate | 11% | N/A | | Deaths Annually | ~50,000 | ~466,000 | [SEASONALITY](index=9&type=section&id=SEASONALITY) The company does not believe that its operations are seasonal in nature - The company does not believe that its operations are seasonal in nature[39](index=39&type=chunk) [GOVERNMENT REGULATION](index=9&type=section&id=GOVERNMENT%20REGULATION) The highly regulated healthcare industry impacts all stages of product development, manufacturing, and commercialization, with extensive U.S., EU, and UK compliance requirements and potential penalties [U.S. Government Regulation](index=9&type=section&id=U.S.%20Government%20Regulation) U.S. pharmaceutical products are extensively regulated by the **FDA**, covering development, manufacturing, and marketing through preclinical studies, multi-phase clinical trials, **NDA** submission, and **cGMP** standards, with non-compliance leading to severe sanctions - Pharmaceutical products are subject to extensive pre- and post-market regulation by the U.S. **Food and Drug Administration (FDA)** and other global agencies[41](index=41&type=chunk) - The premarket approval process involves preclinical studies, Investigational New Drug (**IND**) application, Institutional Review Board (**IRB**) approval, Good Clinical Practices (**GCPs**), multi-phase clinical trials (**Phase 1**, **2**, **3**, **4**), New Drug Application (**NDA**) submission, and compliance with Good Manufacturing Practices (**cGMPs**)[48](index=48&type=chunk)[49](index=49&type=chunk)[55](index=55&type=chunk) - Expedited review programs like **Fast Track**, **Breakthrough Therapy**, and **Priority Review** are available for drugs treating serious or life-threatening conditions with unmet medical needs, potentially accelerating development and review but not guaranteeing approval[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - Accelerated approval pathway allows approval based on surrogate or intermediate clinical endpoints for serious conditions, but requires post-marketing confirmatory studies[64](index=64&type=chunk)[67](index=67&type=chunk) - **Orphan Drug Designation** provides **7-year market exclusivity**, fee waivers, and tax credits for drugs treating rare diseases (affecting <**200,000** individuals in the U.S.)[72](index=72&type=chunk)[73](index=73&type=chunk)[75](index=75&type=chunk) - **Rare Pediatric Disease Designation (RPDD)** can lead to **Priority Review Vouchers (PRVs)** for drugs treating serious pediatric diseases, which are transferable[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Post-approval, drugs and manufacturers are subject to ongoing **FDA** regulation, including monitoring, adverse event reporting, promotion restrictions (off-label use), and **cGMP** compliance, with potential sanctions for non-compliance[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) [Other Health Care Laws and Regulations](index=16&type=section&id=Other%20Health%20Care%20Laws%20and%20Regulations) The company must comply with various U.S. federal and state healthcare fraud and abuse laws, including **Anti-Kickback**, **False Claims**, and **HIPAA**, where violations can lead to severe criminal and civil sanctions - Compliance with U.S. federal and state healthcare fraud and abuse laws is mandatory, including the **Anti-Kickback Law**, **False Claims Act**, **HIPAA**, and the **Physician Payments Sunshine Act**[84](index=84&type=chunk)[86](index=86&type=chunk) - Violations can result in criminal and civil sanctions, exclusion from federal healthcare programs (**Medicare**, **Medicaid**), corporate integrity agreements, fines, and penalties[84](index=84&type=chunk)[85](index=85&type=chunk)[88](index=88&type=chunk) [Coverage, Pricing, and Reimbursement](index=17&type=section&id=Coverage%2C%20Pricing%2C%20and%20Reimbursement) Approved drug sales depend on third-party payor coverage and reimbursement, facing challenges from drug pricing, cost-effectiveness evaluations, and the **Inflation Reduction Act's** impact on **Medicare** drug price negotiation - Sales of approved drug products depend on coverage and adequate reimbursement from third-party payors, who increasingly challenge drug prices and examine medical necessity and cost-effectiveness[89](index=89&type=chunk)[90](index=90&type=chunk) - The **Inflation Reduction Act of 2022 (IRA)** introduces **Medicare** drug price negotiation and rebates for price increases exceeding inflation, creating uncertainty and potential revenue decreases[94](index=94&type=chunk) - Federal and state governments continue to consider legislation aimed at lowering healthcare costs, including **PBM** reforms, which could affect the pharmaceutical supply chain and the company's business[95](index=95&type=chunk) [Patent Term Extension](index=18&type=section&id=Patent%20Term%20Extension) **FDA**-approved prescription drug patents may qualify for a limited **five-year** extension under the **Hatch-Waxman Act**, compensating for regulatory review time, subject to specific conditions - A patent for an **FDA**-approved prescription drug may be eligible for a limited patent term extension of up to **five years** under the **FD&C Act (Hatch-Waxman Amendments)**[97](index=97&type=chunk) - The extension period is related to the time the drug is under regulatory review, cannot exceed **14 years** from approval, and applies to only one patent per approved drug product[97](index=97&type=chunk) [Data Privacy and the Protection of Personal Information](index=18&type=section&id=Data%20Privacy%20and%20the%20Protection%20of%20Personal%20Information) The company is subject to evolving data privacy laws like **HIPAA**, **CCPA**, and **GDPR**, with non-compliance risking penalties, sanctions, reputational harm, and complex compliance issues - The company is subject to numerous and evolving data privacy laws, including state security breach notification laws, **HIPAA**, the **FTC Act**, **CCPA**, and **CPRA** in the U.S.[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - International regulations like the **GDPR** in the EU also impose stringent data protection requirements and significant fines for breaches[99](index=99&type=chunk) - Failure to comply with these laws can result in penalties, sanctions, reputational harm, and complex compliance issues due to varying interpretations and non-preempted state laws[99](index=99&type=chunk)[101](index=101&type=chunk) [Environmental, Health and Safety Regulation](index=19&type=section&id=Environmental%2C%20Health%20and%20Safety%20Regulation) The company is subject to federal, state, and local **EHS** laws governing hazardous materials and waste, requiring licenses and permits, with non-compliance risking substantial fines or operational limitations - The company is subject to federal, state, and local environmental, health, and safety (**EHS**) laws and regulations[102](index=102&type=chunk) - These regulations govern safe working conditions, product stewardship, environmental protection, and the handling/disposal of hazardous or potentially hazardous materials[102](index=102&type=chunk) - Non-compliance or failure to obtain/comply with permits could lead to substantial fines, permit revocation, or limitations on operations[102](index=102&type=chunk) [U.S. Foreign Corrupt Practices Act](index=20&type=section&id=U.S.%20Foreign%20Corrupt%20Practices%20Act) The **FCPA** prohibits bribing foreign officials for improper business advantages and mandates accurate record-keeping, with healthcare professionals often considered 'foreign officials' requiring strict compliance - The **Foreign Corrupt Practices Act (FCPA)** prohibits bribery of foreign officials to influence decisions or secure improper advantages[104](index=104&type=chunk) - Healthcare professionals in foreign public health systems are often deemed 'foreign officials' under the **FCPA**, requiring strict policies for interactions[105](index=105&type=chunk) - The **FCPA** also mandates accurate books and records and adequate internal accounting controls for international operations[105](index=105&type=chunk) [Government Regulation Outside the U.S.](index=20&type=section&id=Government%20Regulation%20Outside%20the%20U.S.) International operations subject the company to diverse foreign regulations for clinical trials and sales, with varying, often complex approval processes, and non-compliance risking fines or withdrawal of approvals - The company is subject to foreign regulations governing clinical trials, commercial sales, and distribution, which vary significantly by country[106](index=106&type=chunk) - Foreign regulatory approval processes can be longer and differ from U.S. requirements, and approval in one country does not ensure approval in another[106](index=106&type=chunk) - Failure to comply with foreign regulatory requirements can result in fines, suspension or withdrawal of approvals, product recalls, and criminal prosecution[106](index=106&type=chunk) [Regulation of Pharmaceutical Products in the European Union](index=21&type=section&id=Regulation%20of%20Pharmaceutical%20Products%20in%20the%20European%20Union) The EU regulates pharmaceutical products via clinical trial approvals and marketing authorizations, streamlining applications through **CTIS**, with **MAAs** following centralized or decentralized procedures, and post-authorization promotion restrictions - The EU's **Clinical Trials Regulation (EU) No 536/2014**, effective January **31**, **2022**, streamlines clinical trial approvals via the **Clinical Trial Information System (CTIS)**[108](index=108&type=chunk)[109](index=109&type=chunk) - **Marketing Authorization Applications (MAA)** can be submitted via a centralized procedure (single authorization for all EU states) or a decentralized procedure (for specific member states)[110](index=110&type=chunk)[111](index=111&type=chunk) - Marketing authorizations are generally valid for **five years** and subject to renewal, with a 'sunset clause' for products not placed on the market within **three years**[112](index=112&type=chunk) - Promotion of prescription-only medicines in the EU is restricted to healthcare professionals and must comply with product characteristics and industry codes of conduct[113](index=113&type=chunk) [Regulation of Pharmaceutical Products in the United Kingdom](index=22&type=section&id=Regulation%20of%20Pharmaceutical%20Products%20in%20the%20United%20Kingdom) Post-Brexit, the UK's **MHRA** handles licensing decisions, and the **Windsor Framework**, effective January 1, 2025, will make **MHRA** responsible for all medicines marketed in the UK, independent of the **EMA** - Post-Brexit, UK licensing decisions transferred from the **EMA** to the **Medicines and Healthcare Products Regulatory Agency (MHRA)**[115](index=115&type=chunk) - The **Windsor Framework**, effective January **1**, **2025**, will make **MHRA** responsible for approving all medicines marketed in the UK (Great Britain and Northern Ireland), with **EMA** no longer involved for Northern Ireland[116](index=116&type=chunk) [ITEM 1A. RISK FACTORS](index=22&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section outlines significant risks and uncertainties that could materially affect the company's business, financial condition, operating results, and cash flows, spanning financial stability, product development, manufacturing, and regulatory compliance [SUMMARY OF RISK FACTORS](index=22&type=section&id=SUMMARY%20OF%20RISK%20FACTORS) The company faces numerous risks including substantial losses, financing needs, high dependence on **LSTA1**, unknown commercial potential, clinical trial challenges, side effects, reliance on **CMOs/CROs**, competition, growth management, litigation, and **IP** challenges - The company has incurred substantial losses and negative cash flow, requiring significant additional financing[119](index=119&type=chunk) - High dependence on lead product candidate **LSTA1**; failure in clinical development or regulatory approval would be materially harmful[119](index=119&type=chunk) - Risks include unknown commercial potential, lack of marketing/sales organization, challenges in managing multiple late-stage clinical trials, potential for serious side effects, and reliance on contract manufacturing and research organizations[119](index=119&type=chunk)[121](index=121&type=chunk) - Other risks involve potential litigation, product liability claims, inability to retain key employees, international operating risks, cybersecurity threats, extensive government regulation, and intellectual property protection challenges[121](index=121&type=chunk)[126](index=126&type=chunk) [RISKS RELATED TO OUR FINANCIAL CONDITION AND CAPITAL REQUIREMENTS](index=25&type=section&id=RISKS%20RELATED%20TO%20OUR%20FINANCIAL%20CONDITION%20AND%20CAPITAL%20REQUIREMENTS) The company's history of substantial net losses and negative cash flow necessitates significant additional financing, with revenue generation uncertain and further financial risks from litigation, **NOL** limitations, and financial services industry instability - The company has incurred aggregate net losses of approximately **$528.1 million** since inception through December **31**, **2023**[128](index=128&type=chunk) Net Losses from Continuing Operations Attributable to Common Stockholders | Year Ended December 31, | Net Loss (in millions) | | :---------------------- | :--------------------- | | 2023 | $(20.8) | | 2022 | $(54.2) | - Substantial additional capital is required to fund continued development of product candidates and clinical activities, with no guarantee of obtaining financing on acceptable terms[129](index=129&type=chunk)[133](index=133&type=chunk) - The ability to utilize net operating loss (**NOL**) carryforwards and tax credit carryforwards may be limited due to an 'ownership change' under Section **382** of the Code[140](index=140&type=chunk)[141](index=141&type=chunk) - Adverse developments in the financial services industry could impair access to funding sources and credit arrangements, potentially leading to delayed access to deposits, loss of credit facilities, or breaches of contractual obligations[142](index=142&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk) [RISKS RELATED TO OUR PRODUCT DEVELOPMENT EFFORTS](index=28&type=section&id=RISKS%20RELATED%20TO%20OUR%20PRODUCT%20DEVELOPMENT%20EFFORTS) The company's success depends heavily on **LSTA1's** clinical development, with trials being expensive, lengthy, and uncertain, facing risks from delays, side effects, manufacturing issues, and regulatory non-acceptance of foreign data, while expedited designations offer no guarantee of faster approval - The company is substantially dependent on the successful clinical development and commercialization of its lead product candidate, **LSTA1**, and other future product candidates[148](index=148&type=chunk) - Clinical testing is expensive, difficult, and can take many years, with a high risk of failure at any stage due to negative or inconclusive results, adverse side effects, or delays in patient enrollment[155](index=155&type=chunk)[160](index=160&type=chunk)[178](index=178&type=chunk) - Regulatory authorities may not accept data from clinical trials conducted outside the United States, potentially requiring additional costly and time-consuming trials[171](index=171&type=chunk) - Expedited designations (**Fast Track**, **Breakthrough Therapy**, **Accelerated Approval**) do not guarantee a faster development, regulatory review, or approval process, nor do they increase the likelihood of marketing approval[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) - Initiation of pivotal **Phase 3** clinical trials requires validation and establishment of manufacturing controls, and failure to address chemistry, manufacturing, and control (**CMC**) issues could delay or prevent regulatory submission[174](index=174&type=chunk) [RISKS RELATED TO MANUFACTURING OUR DEVELOPMENT PRODUCT CANDIDATES](index=38&type=section&id=RISKS%20RELATED%20TO%20MANUFACTURING%20OUR%20DEVELOPMENT%20PRODUCT%20CANDIDATES) The company relies entirely on **CMOs** for product candidates, lacking internal manufacturing or redundant suppliers, exposing it to risks of limited capacity, disruptions, **cGMP** compliance issues, and challenges in achieving commercial manufacturing efficiency, with geopolitical tensions also impacting the supply chain - The company has no internal manufacturing capacity and relies on contract manufacturing organizations (**CMOs**) for product candidates, with no redundant suppliers[189](index=189&type=chunk)[207](index=207&type=chunk)[212](index=212&type=chunk) - Risks include finite manufacturing capacity, potential disruptions, inability to meet **cGMP** compliance standards, and challenges in improving manufacturing efficiency to achieve commercially viable cost of goods[190](index=190&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[213](index=213&type=chunk) - Geopolitical tensions and conflicts could adversely affect the global supply chain, impacting raw material availability and prices[191](index=191&type=chunk) [RISKS RELATED TO SALES, MARKETING, AND COMPETITION](index=40&type=section&id=RISKS%20RELATED%20TO%20SALES%2C%20MARKETING%2C%20AND%20COMPETITION) The company lacks internal marketing and sales, requiring reliance on third parties or building new capabilities, facing risks in international markets from differing regulations and **IP** enforcement, with uncertain market acceptance even post-approval due to efficacy, safety, cost, and competition - The company currently has no internal marketing and sales organization and no experience in marketing products, requiring significant capital and time to develop or reliance on third-party collaborators[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - International marketing efforts are subject to risks such as differing regulatory requirements, economic instability, foreign taxes, difficulties in managing foreign operations, and challenges in enforcing intellectual property rights[217](index=217&type=chunk)[219](index=219&type=chunk) - Market acceptance of approved products is uncertain and depends on factors like clinical indications, physician acceptance, perceived advantages over alternatives, side effects, cost, and reimbursement policies[218](index=218&type=chunk)[220](index=220&type=chunk) - The company faces intense competition from pharmaceutical, biopharmaceutical, and biotechnology companies with greater financial resources and experience[197](index=197&type=chunk)[198](index=198&type=chunk)[225](index=225&type=chunk) [RISKS RELATED TO GOVERNMENT REGULATION](index=42&type=section&id=RISKS%20RELATED%20TO%20GOVERNMENT%20REGULATION) Product candidate development and commercialization are subject to extensive **FDA** and global regulation, with failure to obtain/maintain approvals, comply with post-marketing obligations, or adhere to promotion restrictions severely impacting the business, alongside financial and operational risks from evolving healthcare laws and reimbursement uncertainties - The development and commercialization of product candidates are subject to extensive regulation by the **FDA** and other regulatory agencies, with no guarantee of obtaining or maintaining approvals[228](index=228&type=chunk)[229](index=229&type=chunk) - Post-approval, the company will be subject to ongoing regulatory obligations, including surveillance, **REMS**, **cGMP** compliance, and restrictions on advertising and promotion, with potential penalties for non-compliance[231](index=231&type=chunk)[233](index=233&type=chunk)[235](index=235&type=chunk) - Improper promotion of off-label uses could lead to significant liability, fines, and government enforcement actions[236](index=236&type=chunk) - Compliance with complex and frequently changing federal, state, and international healthcare fraud and abuse laws (e.g., **Anti-Kickback Statute**, **False Claims Act**, **HIPAA**) is critical, with violations leading to severe sanctions[237](index=237&type=chunk)[242](index=242&type=chunk)[245](index=245&type=chunk) - Uncertainty exists regarding coverage and reimbursement from government and private payors, with cost-containment measures and legislation like the **Inflation Reduction Act** potentially limiting demand and pricing[253](index=253&type=chunk)[258](index=258&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - Inadequate funding for regulatory agencies (**FDA**, **SEC**) could delay product review and approval, negatively impacting business operations[266](index=266&type=chunk)[267](index=267&type=chunk) [RISKS RELATED TO OUR INTELLECTUAL PROPERTY](index=51&type=section&id=RISKS%20RELATED%20TO%20OUR%20INTELLECTUAL%20PROPERTY) Commercial success depends on obtaining and maintaining robust patent protection, which is uncertain and costly, facing risks from validity challenges, infringement claims, enforcement difficulties, loss of licensed rights, and challenges in protecting trade secrets, with changes in patent law potentially diminishing **IP** value - Commercial success depends on obtaining and maintaining patent protection, which is highly uncertain, costly, and subject to challenges regarding validity, enforceability, and scope[271](index=271&type=chunk)[272](index=272&type=chunk)[285](index=285&type=chunk) - Intellectual property litigation is expensive, time-consuming, and could result in substantial damages, licensing requirements, or cessation of activities if infringement claims by third parties are successful[274](index=274&type=chunk)[275](index=275&type=chunk)[317](index=317&type=chunk) - Failure to comply with obligations under license agreements, such as the **SBP License Agreement** for **LSTA1**, could lead to the loss of critical development and commercialization rights[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk)[281](index=281&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - Protecting the confidentiality of unpatented trade secrets and know-how is difficult, and unauthorized disclosure or independent development by competitors could impair the company's competitive position[308](index=308&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk) - Changes to U.S. patent law and the existence of compulsory licensing laws in some countries could weaken the ability to obtain or enforce patents and limit potential revenues[312](index=312&type=chunk)[313](index=313&type=chunk) [RISKS RELATED TO OUR RELIANCE ON THIRD PARTIES](index=58&type=section&id=RISKS%20RELATED%20TO%20OUR%20RELIANCE%20ON%20THIRD%20PARTIES) The company's reliance on collaborations, alliances, and licensing arrangements carries risks from collaborators' discretion, competing products, and **IP** disputes, while reliance on third-party manufacturers for **cGMP** compliance and hazardous materials exposes it to delays, sanctions, and liabilities - Collaborations and strategic alliances are subject to risks including collaborators' discretion in resource allocation, potential for developing competing products, and disputes over intellectual property rights[321](index=321&type=chunk) - Reliance on third-party manufacturers requires compliance with **cGMP** regulations, and any failure to comply could lead to delays, clinical program termination, or withdrawal of regulatory approvals[322](index=322&type=chunk) - The use of hazardous and biological materials by third-party manufacturers exposes the company to liability for damages or fines if injury or violations of applicable law occur[323](index=323&type=chunk) [RISKS RELATED TO MANAGING GROWTH AND EMPLOYEE MATTERS](index=59&type=section&id=RISKS%20RELATED%20TO%20MANAGING%20GROWTH%20AND%20EMPLOYEE%20MATTERS) Anticipated significant growth requires hiring and retaining qualified personnel and expanding facilities, with difficulties in managing growth, overseeing outsourced activities, or recruiting key employees impeding goals, and inherent product liability risks posing substantial liabilities and reputational damage - The company expects to grow its organization, requiring additional managerial, operational, sales, marketing, financial, and other personnel, as well as facilities[324](index=324&type=chunk) - Difficulties in recruiting and retaining key officers and employees, or effectively managing outsourced activities, could delay research and development and harm business operations[204](index=204&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk) - The company faces inherent product liability risks from clinical testing and potential commercial sales, which could result in substantial liabilities, decreased demand, and reputational injury[200](index=200&type=chunk)[202](index=202&type=chunk)[328](index=328&type=chunk) [GENERAL RISK FACTORS](index=60&type=section&id=GENERAL%20RISK%20FACTORS) General risks include **EHS** non-compliance, restrictive data privacy regulations (**CCPA**, **GDPR**), cyberattacks threatening information systems, highly volatile stock price influenced by clinical development and financial results, and risks of **Nasdaq** delisting or significant dilution - Failure to comply with environmental, health, and safety laws and regulations could result in fines, penalties, or significant costs[330](index=330&type=chunk)[331](index=331&type=chunk) - The company is subject to restrictive data privacy regulations (e.g., **CCPA**, **GDPR**), and non-compliance could lead to government enforcement actions, private litigation, or adverse publicity[333](index=333&type=chunk)[334](index=334&type=chunk) - Cyberattacks and security breaches on internal or third-party information systems could result in disclosure of confidential information, operational disruption, reputational damage, and significant financial and legal exposure[335](index=335&type=chunk)[337](index=337&type=chunk) - The company's stock price has been and is likely to remain highly volatile, influenced by clinical trial results, financial performance, and broader economic/geopolitical events[338](index=338&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk) - Risks include potential delisting from the **Nasdaq Capital Market** if continued listing requirements are not met, and significant dilution from future fundraising or the exercise of outstanding securities[341](index=341&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=63&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) There are no unresolved staff comments - There are no unresolved staff comments[348](index=348&type=chunk) [ITEM 1C. CYBERSECURITY](index=63&type=section&id=ITEM%201C.%20CYBERSECURITY) The company maintains a comprehensive cybersecurity program based on **NIST frameworks**, overseen by its board and audit committee, including security monitoring, vulnerability assessments, employee training, and incident response planning, with third-party diligence - The company maintains a comprehensive cybersecurity program based on **NIST frameworks** to identify, prevent, and mitigate cybersecurity threats[349](index=349&type=chunk)[351](index=351&type=chunk) - The board of directors, through its audit committee, actively oversees cybersecurity risk management and strategy, receiving quarterly updates from the Chief Information Officer[356](index=356&type=chunk)[357](index=357&type=chunk)[359](index=359&type=chunk) - Cybersecurity activities include network monitoring, vulnerability assessments, penetration testing, mandatory employee training, phishing simulations, and incident response planning[352](index=352&type=chunk) - Diligence is performed on third-party service providers with access to systems or data, requiring contractual agreements for cybersecurity risk management[354](index=354&type=chunk) [ITEM 2. PROPERTIES](index=65&type=section&id=ITEM%202.%20PROPERTIES) The company's corporate headquarters in Basking Ridge, NJ, occupy **8,100 rentable square feet** under a lease extending through September **30**, **2025**, with two **five-year** renewal options - Corporate headquarters are in Basking Ridge, New Jersey, with approximately **8,100 rentable square feet**[360](index=360&type=chunk) - The base monthly rent is approximately **$15,900** through September **30**, **2025**, with two **five-year** renewal options[360](index=360&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=65&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company faces ordinary course legal proceedings, none believed to materially affect its financial condition, including ongoing litigation with Lingmed Limited over a success fee from Cend's Qilu Pharmaceuticals agreement, with a trial set for August **2**, **2024** - The company is subject to legal proceedings and claims in the ordinary course of business, with no current belief of a material adverse effect on financial condition[361](index=361&type=chunk) - An ongoing litigation involves Lingmed Limited alleging breach of contract and fraud against Cend (now Lisata) for a success fee related to a **Qilu Pharmaceuticals** agreement[362](index=362&type=chunk) - The trial date for the Lingmed lawsuit is set for August **2**, **2024**, and the company intends to vigorously defend itself[363](index=363&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=66&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable - This item is not applicable[364](index=364&type=chunk) [PART II](index=67&type=section&id=PART%20II) [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=67&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on **Nasdaq** under '**LSTA**,' with **292 record holders** as of February **29**, **2024**, no cash dividends paid or anticipated, and details on equity compensation plans are provided - Common stock trades on The **Nasdaq Capital Market** under the symbol '**LSTA**'[367](index=367&type=chunk) - As of February **29**, **2024**, there were approximately **292 holders** of record of common stock[367](index=367&type=chunk) - The company has not paid cash dividends and does not anticipate doing so in the foreseeable future, intending to retain earnings for business development[368](index=368&type=chunk) Equity Compensation Plan Information (as of December 31, 2023) | Metric | Number of Securities to be Issued Upon Exercise of Outstanding Options (1) | Weighted Average Exercise Price of Outstanding Options and Rights | Number of Securities Remaining Available for Future Issuance (excluding col (a)) (3) | | :------------------------------------------------ | :--------------------------------------------------------- | :---------------------------------------------------------- | :----------------------------------------------------------------------- | | Equity compensation plans approved by security holders (2) | 1,322,501 | $10.81 | 615,052 | | Equity compensation plans not approved by security holders | 0 | — | 0 | | Total | 1,322,501 | $10.81 | 615,052 | [ITEM 6. [RESERVED]](index=67&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved - This item is reserved[372](index=372&type=chunk) [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=68&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial performance and condition for **2023** and **2022**, covering business overview, results of operations, liquidity, capital resources, off-balance sheet arrangements, and critical accounting policies [Overview](index=68&type=section&id=Overview_MD%26A) **Lisata Therapeutics** is a clinical-stage pharmaceutical company focused on developing and commercializing innovative therapies for solid tumors, with its lead candidate **LSTA1** in **Phase 2a** and **Phase 2b** clinical studies - **Lisata Therapeutics** is a clinical-stage pharmaceutical company dedicated to discovering, developing, and commercializing innovative therapies for solid tumors and other major diseases[374](index=374&type=chunk) - **LSTA1**, the lead investigational product, is designed to activate a novel uptake pathway for enhanced anti-cancer drug penetration into solid tumors and is currently in **Phase 2a** and **Phase 2b** clinical studies globally[374](index=374&type=chunk) [Results of Operations](index=68&type=section&id=Results%20of%20Operations) The company reported a **$20.8 million** net loss in **2023**, a significant improvement from **$54.2 million** in **2022**, primarily due to a **$31.9 million** decrease in operating expenses from the absence of **2022 IPR&D**, alongside increased other income Consolidated Results of Operations (in thousands) | Metric | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | Change (2023 vs 2022) | | :-------------------------- | :---------------------- | :---------------------- | :-------------------- | | Research and development | $12,734 | $13,067 | $(333) | | In-process R&D | $0 | $30,393 | $(30,393) | | General and administrative | $12,974 | $14,141 | $(1,167) | | Total operating expenses | $25,708 | $57,601 | $(31,893) | | Loss from operations | $(25,708) | $(57,601) | $31,893 | | Total other income | $2,538 | $897 | $1,641 | | Benefit from income taxes | $(2,330) | $(2,479) | $(149) | | Net loss | $(20,840) | $(54,225) | $33,385 | - Total operating expenses decreased by **$31.9 million (55.4%)** primarily due to the absence of a **$30.4 million IPR&D** expense in **2023** related to the Cend merger[378](index=378&type=chunk) - Research and development expenses decreased by **$0.3 million (2.5%)** due to lower costs associated with **LSTA1** programs compared to legacy **CD34+** cell therapy programs in the prior year[384](index=384&type=chunk) - General and administrative expenses decreased by **$1.2 million (8.3%)** due to non-recurring merger-related costs and lower equity expense in the prior year, partially offset by severance costs in **2023**[384](index=384&type=chunk) - Total other income increased by **$1.6 million**, primarily from investment income and the sale of **NJ NOLs**[380](index=380&type=chunk) - The company received a **$2.3 million** income tax benefit in **2023** from the sale of **NJ NOLs**, compared to **$2.5 million** in **2022**[381](index=381&type=chunk)[382](index=382&type=chunk) [Analysis of Liquidity and Capital Resources](index=69&type=section&id=Analysis%20of%20Liquidity%20and%20Capital%20Resources) As of December **31**, **2023**, the company held **$50.5 million** in cash and marketable securities, with **$20.0 million** net cash used in operations, **$10.1 million** provided by investing, and **$0.4 million** by financing, expecting existing funds to cover **12 months** but anticipating future capital needs Key Financial Position Metrics (as of December 31, 2023, in millions) | Metric | Amount | | :------------------------------------ | :----- | | Cash, cash equivalents, and marketable securities | $50.5 | | Working capital | $47.3 | | Stockholders' equity | $48.1 | Net Cash Flows (in thousands) | Activity | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :-------------------------------- | :---------------------- | :---------------------- | | Net cash used in operating activities | $(20,032) | $(21,170) | | Net cash provided by investing activities | $10,102 | $28,911 | | Net cash provided by (used in) financing activities | $385 | $(224) | - Net cash provided by investing activities in **2023** was primarily due to net sales of marketable securities[388](index=388&type=chunk) - Net cash provided by financing activities in **2023** included proceeds from **ATM Agreement** (**$0.3 million**) and option exercises (**$0.2 million**)[390](index=390&type=chunk) - The company believes its cash on hand and marketable securities will fund operating expenses for at least the next **12 months**[392](index=392&type=chunk) - Future capital requirements are difficult to forecast, and the company may seek additional financing through debt, equity, partnerships, or asset sales, with no assurance of acceptable terms[392](index=392&type=chunk)[395](index=395&type=chunk) [Off-Balance Sheet Arrangements](index=71&type=section&id=Off-Balance%20Sheet%20Arrangements) The company does not have any off-balance sheet arrangements - The company does not have any off-balance sheet arrangements[396](index=396&type=chunk) [Critical Accounting Policies and Estimates](index=71&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statement preparation requires significant estimates and judgments, with critical accounting policies including share-based compensation valuation and the Cend merger's asset acquisition accounting, where **IPR&D** was expensed - Critical accounting policies involve significant management estimates and judgments, particularly for share-based compensation and the valuation of the Cend merger[397](index=397&type=chunk)[398](index=398&type=chunk) - The Cend merger was accounted for as an asset acquisition, with substantially all fair value concentrated in in-process research and development (**IPR&D**), which was expensed[399](index=399&type=chunk) - Share-based compensation expense is recognized over the service period based on grant date fair value, using the **Black-Scholes option-pricing model** for options[400](index=400&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=71&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This item is not applicable - This item is not applicable[401](index=401&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=71&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the company's audited consolidated financial statements for **2023** and **2022**, including the Independent Auditor's Report, Balance Sheets, Statements of Operations, Comprehensive Loss, Equity, Cash Flows, and accompanying Notes [Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248)](index=74&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20(PCAOB%20ID%20Number%20248)) Grant Thornton LLP issued an unqualified opinion on **Lisata Therapeutics'** consolidated financial statements for **2023** and **2022**, confirming fair presentation in conformity with U.S. **GAAP**, without auditing internal control effectiveness or identifying critical audit matters - Grant Thornton LLP issued an unqualified opinion on the consolidated financial statements for **2023** and **2022**, confirming fair presentation in accordance with U.S. **GAAP**[409](index=409&type=chunk) - The audit did not include an opinion on the effectiveness of internal control over financial reporting[411](index=411&type=chunk) - No critical audit matters were identified for the current period audit[413](index=413&type=chunk) [Consolidated Balance Sheets at December 31, 2023 and 2022](index=75&type=section&id=Consolidated%20Balance%20Sheets%20at%20December%2031%2C%202023%20and%202022) Consolidated balance sheets show total assets decreased from **$73.0 million** in **2022** to **$54.7 million** in **2023**, driven by reduced cash and marketable securities, with total equity decreasing from **$66.3 million** to **$47.9 million** Consolidated Balance Sheet Highlights (in thousands) | Metric | December 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------------ | :------------------ | | Cash and cash equivalents | $22,593 | $32,154 | | Marketable securities | $27,942 | $37,072 | | Total current assets | $53,924 | $71,876 | | Total assets | $54,694 | $73,034 | | Total current liabilities | $6,590 | $6,383 | | Total liabilities | $6,800 | $6,710 | | Total Lisata Therapeutics, Inc. stockholders' equity | $48,148 | $66,578 | | Total equity | $47,894 | $66,324 | - Total assets decreased by **$18.3 million (25.1%)** from **$73.0 million** in **2022** to **$54.7 million** in **2023**[416](index=416&type=chunk) - Total equity decreased by **$18.4 million (27.8%)** from **$66.3 million** in **2022** to **$47.9 million** in **2023**[416](index=416&type=chunk) [Consolidated Statements of Operations - Years Ended December 31, 2023 and 2022](index=76&type=section&id=Consolidated%20Statements%20of%20Operations%20-%20Years%20Ended%20December%2031%2C%202023%20and%202022) Consolidated statements of operations show a net loss of **$20.8 million** for **2023**, a significant reduction from **$54.2 million** in **2022**, primarily due to decreased operating expenses from the absence of **2022 IPR&D**, and increased investment income Consolidated Statements of Operations (in thousands, except per share data) | Metric | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :------------------------------------------------ | :---------------------- | :---------------------- | | Research and development | $12,734 | $13,067 | | In-process research and development | $0 | $30,393 | | General and administrative | $12,974 | $14,141 | | Operating expenses | $25,708 | $57,601 | | Operating loss | $(25,708) | $(57,601) | | Investment income, net | $2,724 | $1,052 | | Total other income | $2,538 | $897 | | Net loss before benefit from income taxes and noncontrolling interests | $(23,170) | $(56,704) | | Benefit from income taxes | $(2,330) | $(2,479) | | Net loss | $(20,840) | $(54,225) | | Net loss attributable to Lisata Therapeutics, Inc. common stockholders | $(20,840) | $(54,225) | | Basic and diluted loss per share | $(2.58) | $(10.47) | | Weighted average common shares outstanding | 8,073 | 5,180 | - Net loss decreased by **$33.4 million (61.6%)** from **$54.2 million** in **2022** to **$20.8 million** in **2023**[419](index=419&type=chunk) - Operating expenses decreased by **$31.9 million (55.4%)** in **2023**, primarily due to the absence of in-process research and development expenses[419](index=419&type=chunk) - Basic and diluted loss per share improved from **$(10.47)** in **2022** to **$(2.58)** in **2023**[419](index=419&type=chunk) [Consolidated Statements of Comprehensive Loss - Years Ended December 31, 2023 and 2022](index=77&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss%20-%20Years%20Ended%20December%2031%2C%202023%20and%202022) Consolidated statements of comprehensive loss show a **$20.9 million** comprehensive loss for **2023**, a significant improvement from **$54.2 million** in **2022**, including net loss adjusted for unrealized gains on available-for-sale securities and foreign currency translation Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :------------------------------------------------ | :---------------------- | :---------------------- | | Net loss | $(20,840) | $(54,225) | | Available for sale securities - net unrealized gain | $12 | $52 | | Cumulative translation adjustment arising during the period | $(25) | $(11) | | Total other comprehensive income (loss) | $(13) | $41 | | Comprehensive loss | $(20,853) | $(54,184) | | Comprehensive loss attributable to Lisata Therapeutics, Inc. common stockholders | $(20,853) | $(54,184) | - Comprehensive loss decreased by **$33.3 million (61.5%)** from **$54.2 million** in **2022** to **$20.9 million** in **2023**[422](index=422&type=chunk) [Consolidated Statements of Equity - Years Ended December 31, 2023 and 2022](index=78&type=section&id=Consolidated%20Statements%20of%20Equity%20-%20Years%20Ended%20December%2031%2C%202023%20and%202022) Consolidated statements of equity reflect a decrease in total equity from **$66.3 million** in **2022** to **$47.9 million** in **2023**, primarily due to net loss, partially offset by share-based compensation and proceeds from common stock issuance and option exercises Consolidated Statements of Equity Highlights (in thousands) | Metric | Balance at Dec 31, 2022 | Net Loss (2023) | Share-based Compensation (2023) | Net Proceeds from Issuance of Common Stock (2023) | Proceeds from Option Exercises (2023) | Unrealized Gain on Marketable Securities (2023) | Foreign Currency Translation Adjustment (2023) | Balance at Dec 31, 2023 | | :-------------------------------- | :---------------------- | :-------------- | :------------------------------ | :------------------------------------------------ | :------------------------------------ | :---------------------------------------------- | :--------------------------------------------- | :---------------------- | | Common Stock | $8 | — | — | — | — | — | — | $8 | | Additional Paid-in Capital | $574,548 | — | $1,947 | $321 | $155 | — | — | $576,971 | | Accumulated Other Comprehensive Loss | $(29) | — | — | — | — | $12 | $(25) | $(42) | | Accumulated Deficit | $(507,241) | $(20,840) | — | — | — | — | — | $(528,081) | | Treasury Stock | $(708) | — | — | — | — | — | — | $(708) | | Total Lisata Therapeutics, Inc. Stockholders' Equity | $66,578 | $(20,840) | $1,947 | $321 | $155 | $12 | $(25) | $48,148 | - Total **Lisata Therapeutics**, Inc. stockholders' equity decreased by **$18.4 million** from **$66.6 million** in **2022** to **$48.1 million** in **2023**[425](index=425&type=chunk) - The accumulated deficit increased by **$20.8 million** in **2023** due to the net loss[425](index=425&type=chunk) [Consolidated Statements of Cash Flows - Years Ended December 31, 2023 and 2022](index=79&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20-%20Years%20Ended%20December%2031%2C%202023%20and%202022) In **2023**, net cash used in operating activities was **$20.0 million**, investing activities provided **$10.1 million**, and financing activities provided **$0.4 million**, reflecting shifts from **2022** primarily due to marketable securities sales and common stock issuance Consolidated Statements of Cash Flows (in thousands) | Activity | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :-------------------------------- | :---------------------- | :---------------------- | | Net cash used in operating activities | $(20,032) | $(21,170) | | Net cash provided by investing activities | $10,102 | $28,911 | | Net cash provided by (used in) financing activities | $385 | $(224) | | Net (decrease) increase in cash and cash equivalents | $(9,561) | $7,507 | | Cash and cash equivalents at end of year | $22,593 | $32,154 | - Net cash used in operating activities decreased by **$1.1 million (5.4%)** in **2023** compared to **2022**[428](index=428&type=chunk) - Net cash provided by investing activities decreased by **$18.8 million (65.1%)** in **2023**, primarily due to lower net sales of marketable securities[428](index=428&type=chunk) - Net cash provided by financing activities in **2023** was **$0.4 million**, a positive shift from **$0.2 million** used in **2022**, driven by proceeds from common stock issuance and option exercises[428](index=428&type=chunk) [Notes to Consolidated Financial Statements](index=80&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed information supporting the consolidated financial statements, covering business overview, significant accounting policies, the Cend merger, available-for-sale securities, property and equipment, loss per share, fair value measurements, accrued liabilities, operating leases, stockholders' equity, share-based compensation, income taxes, and license agreements [Note 1 – The Business](index=80&type=section&id=Note%201%20%E2%80%93%20The%20Business) This note overviews **Lisata Therapeutics**, a clinical-stage pharmaceutical company focused on solid tumors with **LSTA1**, detailing the September **2022** Cend merger, name change, **1:15 reverse stock split**, and asset acquisition accounting where **IPR&D** was expensed - **Lisata Therapeutics** is a clinical-stage pharmaceutical company focused on discovering, developing, and commercializing innovative therapies for solid tumors, with **LSTA1** as its lead candidate[430](index=430&type=chunk) - The company completed a merger with **Cend Therapeutics**, Inc. on September **15**, **2022**, changed its name from Caladrius Biosciences, Inc. to **Lisata Therapeutics**, Inc., and effected a **1:15 reverse stock split**[433](index=433&type=chunk)[434](index=434&type=chunk)[438](index=438&type=chunk) - The merger was accounted for as an asset acquisition, with in-process research and development (**IPR&D**) expensed, as Caladrius was considered the accounting acquirer[436](index=436&type=chunk)[437](index=437&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=82&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines significant accounting policies, including classification and valuation of marketable securities, depreciation, impairment review, share-based compensation expensing using **Black-Scholes**, and the **five-step** revenue recognition process for license and collaboration arrangements, including **IPR&D** and milestones - All marketable securities are classified as available-for-sale, carried at estimated fair values, with unrealized gains/losses excluded from net income and reported in accumulated other comprehensive income (loss)[446](index=446&type=chunk) - Property and equipment are depreciated using the straight-line method over estimated useful lives (e.g., **10 years** for furniture, **3 years** for computer equipment)[447](index=447&type=chunk) - Share-based compensation for employees, directors, and consultants is expensed over the requisite service period based on grant date fair value, using the **Black-Scholes option-pricing model** for options[449](index=449&type=chunk) - Research and development (**R&D**) expenses are recognized when incurred, and upfront payments for new drug compounds are immediately expensed as in-process **R&D (IPR&D)** if they have no alternative future use[453](index=453&type=chunk)[455](index=455&type=chunk) - Revenue from license and collaboration arrangements is recognized using a **five-step** process, allocating transaction price to performance obligations and recognizing revenue as obligations are satisfied[457](index=457&type=chunk) [Note 3 – Merger](index=84&type=section&id=Note%203%20%E2%80%93%20Merger) The Cend Therapeutics merger was accounted for as an asset acquisition with a total purchase price of **$36.1 million**, allocating fair value primarily to in-process research and development (**IPR&D**) and a license, with **IPR&D** expensed - The merger with **Cend Therapeutics** was accounted for as an asset acquisition, with a total purchase price of **$36.1 million**[462](index=462&type=chunk)[463](index=463&type=chunk) - The purchase price was allocated to net assets acquired, including **$30.4 million** for acquired in-process research and development (**IPR&D**) and **$0.4 million** for a license, with **IPR&D** being expensed[462](index=462&type=chunk)[464](index=464&type=chunk) [Note 4 – Available-for-Sale-Securities](index=85&type=section&id=Note%204%20%E2%80%93%20Available-for-Sale-Securities) The company's available-for-sale securities portfolio totaled **$44.7 million** at December **31**, **2023**, primarily corporate debt, commercial paper, money market, and municipal debt, carried at fair value with a small net unrealized loss of **$5 thousand**, and most maturities under one year Available-for-Sale Securities (in thousands) | Type | Cost (2023) | Fair Value (2023) | Cost (2022) | Fair Value (2022) | | :-------------------- | :---------- | :---------------- | :---------- | :---------------- | | Corporate debt securities | $37,791 | $37,786 | $44,308 | $44,291 | | Commercial Paper | $1,981 | $1,981 | $7,953 | $7,953 | | Money market funds | $4,268 | $4,268 | $4,871 | $4,871 | | Municipal debt securities | $622 | $622 | $7,626 | $7,625 | | Total | $44,662 | $44,657 | $64,758 | $64,740 | - As of December **31**, **2023**, the total estimated fair value of available-for-sale securities was **$44.7 million**, with a gross unrealized gain of **$3 thousand** and gross unrealized losses of **$8 thousand**[465](index=465&type=chunk) - All available-for-sale securities had contractual maturities of less than **one year** as of December **31**, **2023** and **2022**[465](index=465&type=chunk) [Note 5 – Property and Equipment](index=86&type=section&id=Note%205%20%E2%80%93%20Property%20and%20Equip

Exhibit 99.1 Lisata Therapeutics Reports Full Year 2023 Financial Results and Provides Business Update "2023 was a testament to our unwavering commitment to operational excellence and focused, efficient development. Our entire organization worked seamlessly to achieve significant milestones in the advancement of our lead investigational product, LSTA1," stated David J. Mazzo, Ph.D., President and Chief Executive Officer of Lisata. "Throughout 2024, we look to maintain and even build on this momentum as we p ...

Financial Data and Key Metrics Changes - For Q3 2023, operating expenses totaled $6 million, a decrease of 84.2% compared to $37.7 million in Q3 2022. Excluding a $30.4 million in-process research and development expense from a merger, operating expenses decreased by $1.4 million or 18.6% year-over-year [5][82]. - General and administrative expenses were approximately $2.6 million for Q3 2023, down 35.3% from $4.0 million in Q3 2022, primarily due to nonrecurring merger-related costs in the prior year [81]. - Net losses were $5.3 million for Q3 2023, compared to $37.4 million in Q3 2022. Excluding the merger-related expense, net losses decreased by $1.7 million or 24.7% year-over-year [82]. Business Line Data and Key Metrics Changes - Research and development expenses were approximately $3.4 million for Q3 2023, slightly up from $3.3 million in Q3 2022, primarily due to study activities associated with ongoing clinical trials [71]. - The ASCEND trial has achieved full enrollment in Cohort A and is approximately 95% complete overall, with top-line data expected in late 2024, a year earlier than initially anticipated [85][61]. Market Data and Key Metrics Changes - The company had cash, cash equivalents, and marketable securities of approximately $54.4 million as of September 30, 2023, which is projected to fund operations into early 2026 [6]. - The company is experiencing a low trading volume, averaging 20,000 to 25,000 shares per day out of over 8 million outstanding, which contributes to stock price volatility [60]. Company Strategy and Development Direction - The company aims to enhance the efficacy of various anticancer therapies through its lead product candidate, LSTA1, which targets advanced solid tumors [70][84]. - The strategy includes conducting multiple clinical trials globally, focusing on the combination of LSTA1 with standard therapies for various solid tumors, including pancreatic and glioblastoma cancers [21][54]. Management's Comments on Operating Environment and Future Outlook - Management noted that the biotech market has faced challenges due to high interest rates, impacting stock prices across the sector, despite the company's strong fundamentals and execution [46]. - The company believes that the current market cap is irrational, trading at approximately 35% to 40% of its cash on hand, and expects this to change as pivotal data from trials is released [46][48]. Other Important Information - LSTA1 has received multiple orphan drug designations, including for pancreatic cancer and malignant glioma, which may facilitate faster market access [54][64]. - The company is eligible for a refundable tax incentive in Australia for qualifying R&D activities, which significantly offsets trial expenses [92]. Q&A Session Summary Question: What are the implications of the orphan drug and fast-track designations? - These designations allow for accelerated approval consideration and more rapid review cycles with the FDA, which are beneficial for getting products to market faster [42][64]. Question: How does the company view its market cap and stock price? - Management expressed concern over the inconsistency between the company's advanced clinical programs and its low market cap, attributing it to broader market conditions and shareholder behavior [46][48]. Question: What factors are contributing to rapid trial enrollment? - The trial's design allows control arm participants to receive standard care, making participation more appealing, alongside the treatment-naive population in Australia [15][90].

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Lisata Therapeutics, Inc. and its subsidiaries for the periods ended September 30, 2023, and December 31, 2022, including balance sheets, statements of operations, comprehensive loss, equity, and cash flows, along with detailed notes explaining the company's business, accounting policies, merger impact, and other financial details [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :-------------------------------- | :----------------------- | :----------- | | Cash and cash equivalents | $32,428 | $32,154 | | Marketable securities | $21,966 | $37,072 | | Total current assets | $57,233 | $71,876 | | Total assets | $58,089 | $73,034 | | Total current liabilities | $5,132 | $6,383 | | Total liabilities | $5,385 | $6,710 | | Total stockholders' equity | $52,704 | $66,324 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and development | $3,380 | $3,335 | $9,721 | $9,853 | | In-process research and development | $— | $30,393 | $— | $30,393 | | General and administrative | $2,584 | $3,992 | $9,962 | $10,815 | | Total operating expenses | $5,964 | $37,720 | $19,683 | $51,061 | | Operating loss | $(5,964) | $(37,720) | $(19,683) | $(51,061) | | Net loss attributable to Lisata Therapeutics, Inc. | $(5,261) | $(37,383) | $(15,475) | $(48,235) | | Basic and diluted loss per share | $(0.65) | $(7.88) | $(1.92) | $(11.28) | [Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Consolidated Statements of Comprehensive Loss Highlights (in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss | $(5,261) | $(37,383) | $(15,475) | $(48,235) | | Total other comprehensive loss | $(50) | $(20) | $(71) | $(20) | | Comprehensive loss attributable to common stockholders | $(5,311) | $(37,403) | $(15,546) | $(48,255) | [Consolidated Statements of Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Equity) - Total stockholders' equity decreased from **$66,324 thousand** at December 31, 2022, to **$52,704 thousand** at September 30, 2023, primarily due to the net loss incurred during the period[15](index=15&type=chunk)[26](index=26&type=chunk) - The company issued **3,773 thousand shares** of common stock in connection with the Merger in September 2022, increasing additional paid-in capital by **$26,094 thousand**[24](index=24&type=chunk) - Accumulated deficit increased from **$(507,241) thousand** at December 31, 2022, to **$(522,716) thousand** at September 30, 2023, reflecting the net loss[15](index=15&type=chunk)[26](index=26&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(15,963) | $(14,702) | | Net cash provided by investing activities | $15,816 | $21,805 | | Net cash provided by (used in) financing activities | $361 | $(238) | | Net increase in cash and cash equivalents | $274 | $6,831 | | Cash and cash equivalents at end of period | $32,428 | $31,478 | [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) [Note 1 – The Business](index=12&type=section&id=Note%201%20%E2%80%93%20The%20Business) Lisata Therapeutics, Inc. is a clinical-stage pharmaceutical company focused on innovative therapies for solid tumors, with its lead product candidate LSTA1 designed to enhance drug penetration. The company completed a merger with Cend Therapeutics, Inc. in September 2022, which included a name change and a 1:15 reverse stock split, and was accounted for as an asset acquisition - Lisata Therapeutics, Inc. is a clinical-stage pharmaceutical company focused on discovering, developing, and commercializing innovative therapies for solid tumors and other major diseases[32](index=32&type=chunk) - The lead investigational product candidate, LSTA1, is designed to activate a novel uptake pathway for co-administered anti-cancer drugs to penetrate solid tumors more effectively and potentially modify the tumor microenvironment[32](index=32&type=chunk) - On September 15, 2022, the company (then Caladrius Biosciences, Inc.) completed the acquisition of Cend Therapeutics, Inc., changed its name to Lisata Therapeutics, Inc., and effected a **1:15 reverse stock split**[34](index=34&type=chunk)[35](index=35&type=chunk) - The merger was accounted for as an asset acquisition, with substantially all fair value concentrated in in-process research and development (IPR&D), which was expensed[38](index=38&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=14&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's key accounting policies, including the classification and valuation of cash, marketable securities, property and equipment, and the expensing of research and development costs, including in-process R&D. It also details the revenue recognition policy, noting no revenue was recognized from license or collaboration arrangements in the reported periods - All marketable securities are classified as available-for-sale, carried at estimated fair values, with unrealized gains and losses reported in accumulated other comprehensive income (loss)[47](index=47&type=chunk) - Research and development (R&D) expenses, including salaries, clinical trial costs, and contract fees, are expensed as incurred[53](index=53&type=chunk) - Upfront payments for new drug compounds and pre-commercial milestone payments are immediately expensed as in-process research and development (IPR&D) if the drug has no alternative future use without regulatory approval[55](index=55&type=chunk) - No revenue was recognized from license and collaboration arrangements for the three and nine months ended September 30, 2023 and 2022[58](index=58&type=chunk) [Note 3 – Merger](index=17&type=section&id=Note%203%20%E2%80%93%20Merger) The merger with Cend Therapeutics was accounted for as an asset acquisition with a total purchase price of $36.1 million, primarily allocated to in-process research and development (IPR&D) which was expensed - The Merger was accounted for as an asset acquisition, with substantially all of the fair value concentrated in IPR&D[62](index=62&type=chunk) Merger Purchase Price Calculation and Allocation (in thousands) | Item | Amount | | :---------------------------------------------------- | :------- | | Total purchase price | $36,098 | | Acquired in-process research and development | $30,393 | | License | $355 | | Cash and cash equivalents | $7,062 | | Net working capital (excluding cash) | $(1,690) | | Other liabilities | $(22) | | Net assets acquired | $36,098 | [Note 4 – Available-for-Sale-Securities](index=17&type=section&id=Note%204%20%E2%80%93%20Available-for-Sale-Securities) The company's available-for-sale securities portfolio, totaling $51.1 million at September 30, 2023, primarily consists of corporate debt, commercial paper, money market funds, agency bonds, treasury bills, and municipal debt securities, all with maturities less than one year Available-for-Sale Securities (in thousands) | Security Type | Sep 30, 2023 Estimated Fair Value | Dec 31, 2022 Estimated Fair Value | | :-------------------- | :-------------------------------- | :-------------------------------- | | Corporate debt securities | $28,812 | $44,291 | | Commercial paper | $1,978 | $7,953 | | Money market funds | $13,572 | $4,871 | | Agency bonds | $1,986 | $— | | Treasury bills | $3,996 | $— | | Municipal debt securities | $725 | $7,625 | | **Total** | **$51,069** | **$64,740** | - All available-for-sale securities at September 30, 2023, have contractual maturities of less than one year[65](index=65&type=chunk) [Note 5 – Property and Equipment](index=19&type=section&id=Note%205%20%E2%80%93%20Property%20and%20Equipment) Net property and equipment decreased to $204 thousand at September 30, 2023, from $296 thousand at December 31, 2022, with depreciation expense of $89 thousand for the nine months ended September 30, 2023 Property and Equipment, Net (in thousands) | Item | Sep 30, 2023 | Dec 31, 2022 | | :---------------------- | :----------- | :----------- | | Property and equipment, gross | $661 | $713 | | Accumulated depreciation | $(457) | $(417) | | **Property and equipment, net** | **$204** | **$296** | - Depreciation expense for the nine months ended September 30, 2023, was approximately **$89 thousand**, compared to **$22 thousand** for the same period in 2022[66](index=66&type=chunk) [Note 6 – Income (Loss) Per Share](index=19&type=section&id=Note%206%20%E2%80%93%20Income%20%28Loss%29%20Per%20Share) Due to net losses incurred, potentially dilutive securities such as stock options, warrants, and restricted stock units were excluded from the diluted loss per share calculation as they were anti-dilutive - Basic and diluted loss per share for Lisata Therapeutics, Inc. common stockholders was **$(1.92)** for the nine months ended September 30, 2023, and **$(11.28)** for the nine months ended September 30, 2022[18](index=18&type=chunk) Potentially Dilutive Securities Excluded from Diluted Loss Per Share (in thousands) | Security Type | Sep 30, 2023 | Sep 30, 2022 | | :-------------------- | :----------- | :----------- | | Stock options | 1,321 | 1,399 | | Warrants | 1,422 | 1,424 | | Restricted stock units | 202 | 48 | [Note 7 – Fair Value Measurements](index=19&type=section&id=Note%207%20%E2%80%93%20Fair%20Value%20Measurements) The company classifies its financial assets and liabilities based on a fair value hierarchy, with cash equivalents primarily in Level 1 and marketable securities in Level 2, reflecting observable inputs Fair Value Measurements (in thousands) as of September 30, 2023 | Asset Type | Level 1 | Level 2 | Level 3 | Total | | :------------------------------------ | :------ | :------ | :------ | :------ | | Cash equivalents | $29,103 | $— | $— | $29,103 | | Marketable securities - available for sale | $— | $21,966 | $— | $21,966 | | **Total Assets** | **$29,103** | **$21,966** | **$—** | **$51,069** | - The carrying values of accounts payable and accrued expenses approximate fair value due to their short maturity[70](index=70&type=chunk) [Note 8 – Accrued Liabilities](index=20&type=section&id=Note%208%20%E2%80%93%20Accrued%20Liabilities) Accrued liabilities totaled $3,820 thousand at September 30, 2023, with salaries, employee benefits, and clinical/R&D related liabilities being the largest components Accrued Liabilities (in thousands) | Item | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------------ | :----------- | :----------- | | Salaries, employee benefits and related taxes | $2,366 | $2,586 | | Clinical and R&D related liabilities | $915 | $785 | | Accounting & tax consulting liabilities | $230 | $— | | Operating lease liabilities — current | $164 | $180 | | Other | $145 | $177 | | **Total** | **$3,820** | **$3,728** | [Note 9 – Operating Leases](index=20&type=section&id=Note%209%20%E2%80%93%20Operating%20Leases) The company has an operating lease for office space expiring in 2025, with a right-of-use asset of $348 thousand and total operating lease liabilities of $345 thousand as of September 30, 2023 Operating Lease Balances (in thousands) | Item | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Right-of-Use Assets (Other assets) | $348 | $487 | | Operating Lease Liabilities (Current) | $164 | $180 | | Operating Lease Liabilities (Long-term) | $181 | $305 | | **Total Operating Lease Liabilities** | **$345** | **$485** | - As of September 30, 2023, the weighted average remaining lease term was **2.0 years**, and the weighted average discount rate was **9.625%**[73](index=73&type=chunk) Future Minimum Lease Payments (in thousands) | Year | Operating Leases | | :--- | :--------------- | | 2023 | $48 | | 2024 | $190 | | 2025 | $143 | | **Total lease payments** | **$381** | | Less: Amounts representing interest | $(36) | | **Present value of lease liabilities** | **$345** | [Note 10 – Stockholders' Equity](index=21&type=section&id=Note%2010%20%E2%80%93%20Stockholders%27%20Equity) This note details changes in stockholders' equity, including the 1:15 reverse stock split in September 2022, the issuance of common stock through an At The Market (ATM) offering, and activity related to stock options, warrants, and restricted stock/units - The company implemented a **1:15 reverse stock split** on September 14, 2022, to increase its common stock's per share trading price for Nasdaq listing compliance[39](index=39&type=chunk)[75](index=75&type=chunk) - During the nine months ended September 30, 2023, the company issued **64,394 shares** of common stock under its ATM Agreement for net proceeds of **$270,774 thousand**[76](index=76&type=chunk) Stock Options and Warrants Activity (Nine Months Ended Sep 30, 2023) | Item | Stock Options (Shares) | Warrants (Shares) | | :------------------------------------ | :--------------------- | :---------------- | | Outstanding at December 31, 2022 | 1,391,352 | 1,423,774 | | Granted | 180,896 | — | | Exercised | (82,500) | — | | Forfeited | (144,594) | — | | Expired | (24,603) | (2,000) | | Outstanding at September 30, 2023 | 1,320,551 | 1,421,744 | | Weighted Average Exercise Price (Stock Options) | $10.82 | N/A | | Weighted Average Exercise Price (Warrants) | N/A | $42.51 | - The company issued **159,950 restricted stock** and **188,850 restricted stock units** for services during the nine months ended September 30, 2023[80](index=80&type=chunk)[81](index=81&type=chunk) [Note 11 – Share-Based Compensation](index=23&type=section&id=Note%2011%20%E2%80%93%20Share-Based%20Compensation) Total share-based compensation expense for the nine months ended September 30, 2023, was $1,565 thousand, with $221 thousand in unrecognized compensation cost for stock options, $161 thousand for restricted stock units, and $483 thousand for restricted stock Share-Based Compensation Expense (in thousands) | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and development | $103 | $271 | $517 | $63 | | General and administrative | $203 | $769 | $1,048 | $1,53 | | **Total share-based compensation expense** | **$306** | **$1,040** | **$1,565** | **$2,16** | Unrecognized Compensation Cost (in thousands) as of September 30, 2023 | Award Type | Unrecognized Compensation Cost | | :-------------------- | :----------------------------- | | Stock Options | $221 | | Restricted Stock Units | $161 | | Restricted Stock | $483 | [Note 12 – Income Taxes](index=23&type=section&id=Note%2012%20%E2%80%93%20Income%20Taxes) The company maintains a full valuation allowance against its net deferred tax assets due to uncertainty regarding future utilization of net operating losses (NOLs). Ownership changes in 2021 and 2022 significantly limited the usability of Federal NOLs, and the company received $2.2 million from the sale of New Jersey NOLs in April 2023 - A full valuation allowance is provided against net deferred tax assets due to uncertainty of future utilization of existing deferred tax assets, including NOLs[84](index=84&type=chunk) - Ownership changes on January 25, 2021, and September 15, 2022, resulted in **$168.8 million** and **$88.2 million**, respectively, of Federal NOLs expiring unutilized[85](index=85&type=chunk)[87](index=87&type=chunk) - In April 2023, the company received final approval to sell a percentage of its New Jersey NOLs for net proceeds of **$2.2 million**, recorded as a benefit from income taxes[93](index=93&type=chunk) [Note 13 – Australia Research and Development Tax Incentive](index=24&type=section&id=Note%2013%20%E2%80%93%20Australia%20Research%20and%20Development%20Tax%20Incentive) The company's Australian subsidiary is eligible for a refundable R&D tax incentive, with $0.5 million recorded as a receivable for the nine months ended September 30, 2023, and a $0.6 million refund received for the 2022 tax year - The Australian subsidiary is eligible for a refundable tax incentive of **43.5% to 48.5%** for qualified research and development activities[95](index=95&type=chunk) - As of September 30, 2023, **$0.5 million** was recorded as an income tax incentive receivable[95](index=95&type=chunk) - A **$0.6 million** tax refund related to the 2022 tax year was received from the Australian Taxation Office on September 4, 2023[96](index=96&type=chunk) [Note 14 – Contingencies](index=25&type=section&id=Note%2014%20%E2%80%93%20Contingencies) The company is involved in a legal proceeding with Lingmed Limited, which filed a complaint in May 2022 claiming entitlement to a success fee related to Cend's collaboration with Qilu Pharmaceuticals. The trial date is set for August 2, 2024, and the company intends to vigorously defend itself - Lingmed Limited filed a complaint in May 2022, alleging breach of contract, fraud, and declaratory relief, claiming a success fee based on Cend's agreement with Qilu Pharmaceuticals[98](index=98&type=chunk) - A trial date for the Lingmed litigation has been set for **August 2, 2024**[98](index=98&type=chunk) - The company denies Lingmed's allegations and intends to vigorously defend itself[98](index=98&type=chunk) [Note 15 – Technology Transfer Agreement](index=25&type=section&id=Note%2015%20%E2%80%93%20Technology%20Transfer%20Agreement) In July 2023, the company transferred its rights to the tumor penetrating nanocomplex (TPN) platform to Impilo Therapeutics, receiving 574,500 shares of Impilo's pre-seed preferred stock as consideration - In July 2023, the company entered into a technology transfer agreement with Impilo Therapeutics, transferring its rights to the tumor penetrating nanocomplex (TPN) platform[99](index=99&type=chunk) - As consideration, Impilo issued **574,500 shares** of its pre-seed preferred stock to the company[99](index=99&type=chunk) [Note 16 – License Agreements](index=25&type=section&id=Note%2016%20%E2%80%93%20License%20Agreements) The company holds license agreements with Sanford Burnham Prebys (SBP) for LSTA1, with potential milestone payments up to $10.6 million and 4% royalties. Licenses with the University of California at San Diego (UCSD) and a second SBP agreement were assigned to Impilo, and a license with MIT was terminated effective December 30, 2023 - The company has an exclusive, worldwide, royalty-bearing license with Sanford Burnham Prebys (SBP) for LSTA1, with potential aggregate milestone payments of approximately **$10.6 million** and **4% royalties** on net sales[100](index=100&type=chunk) - A license agreement with UCSD for nano-particles to modulate immune response was assigned in full to Impilo on **August 2, 2023**[104](index=104&type=chunk)[106](index=106&type=chunk) - A second license agreement with SBP was assigned in full to Impilo on **September 14, 2023**[102](index=102&type=chunk) - The license agreement with MIT for tissue-specific delivery of interfering RNA was terminated, effective **December 30, 2023**[107](index=107&type=chunk)[109](index=109&type=chunk) [Note 17 – Research Collaboration and License Agreement](index=27&type=section&id=Note%2017%20%E2%80%93%20Research%20Collaboration%20and%20License%20Agreement) Cend (now Lisata) granted an exclusive license to Qilu Pharmaceutical for the development and commercialization of LSTA1 in Greater China, receiving an upfront payment of $10 million and a $5 million development milestone prior to the merger. The company is eligible for additional milestone payments up to $220 million and tiered royalties - Cend granted an exclusive license to Qilu Pharmaceutical for the development and commercialization of LSTA1 in the Greater Area of China[110](index=110&type=chunk) - Prior to the Merger, Cend received and recognized an upfront payment of **$10 million** and a **$5 million** development milestone from Qilu[110](index=110&type=chunk) - The company is eligible to receive additional developmental and commercial milestone payments up to **$95 million** and **$125 million**, respectively, and tiered royalties on net sales ranging from **10% to 15%**[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting its focus on LSTA1 for solid tumors, the impact of the Cend merger, and a detailed comparison of financial performance for the three and nine months ended September 30, 2023, versus 2022, along with an outlook on liquidity and capital resources [Overview](index=28&type=section&id=Overview) Lisata Therapeutics is a clinical-stage pharmaceutical company developing LSTA1 to enhance anti-cancer drug penetration in solid tumors by activating the CendR active transport system. LSTA1 has shown favorable safety and activity in clinical trials for pancreatic cancer. The company also has CD34+ cell therapy programs for ischemic repair, which it is seeking to partner, and completed a merger with Cend Therapeutics in September 2022 - Lisata Therapeutics is a clinical-stage pharmaceutical company focused on developing innovative therapies for solid tumors, with LSTA1 as its lead investigational product candidate[114](index=114&type=chunk) - LSTA1 is designed to activate the C-end rule (CendR) active transport system, enabling more selective and efficient uptake of co-administered anti-cancer drugs into solid tumors and potentially modifying the tumor microenvironment[117](index=117&type=chunk)[119](index=119&type=chunk) - LSTA1 has demonstrated favorable safety, tolerability, and activity in clinical trials for metastatic pancreatic ductal adenocarcinoma (mPDAC), with an Objective Response Rate (ORR) of **59%** and median overall survival of over **13 months**[120](index=120&type=chunk) - The company also has development programs based on its autologous CD34+ cell therapy technology platform for ischemic repair, which it is seeking to partner[124](index=124&type=chunk)[125](index=125&type=chunk) - The merger with Cend Therapeutics, Inc. was completed on **September 15, 2022**, leading to a name change and a **1:15 reverse stock split**, and was accounted for as an asset acquisition[127](index=127&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) The company reported a significant reduction in net loss for both the three and nine months ended September 30, 2023, compared to the prior year, primarily driven by the absence of a large in-process research and development expense related to the Cend merger in 2022 - Net loss decreased significantly to **$5.3 million** for the three months ended September 30, 2023, from **$37.4 million** in the prior year[133](index=133&type=chunk) - Net loss decreased to **$15.5 million** for the nine months ended September 30, 2023, from **$48.2 million** in the prior year[138](index=138&type=chunk) - The primary driver for the decrease in net loss and operating expenses was the absence of the **$30.4 million** in-process research and development expense related to the Cend merger, which was recognized in the prior year[134](index=134&type=chunk)[139](index=139&type=chunk) [Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022](index=32&type=section&id=Three%20Months%20Ended%20September%2030%2C%202023%20Compared%20to%20Three%20Months%20Ended%20September%2030%2C%202022) For the three months ended September 30, 2023, net loss decreased by $32.1 million to $5.3 million, primarily due to the $30.4 million in-process R&D expense in the prior year. Operating expenses decreased by 84.2%, or 18.6% excluding the IPR&D expense, driven by lower general and administrative costs Operating Expenses (in thousands) - Three Months Ended September 30 | Expense Category | 2023 | 2022 | Change | | :-------------------------- | :----- | :----- | :------- | | Research and development | $3,380 | $3,335 | $45 | | In-process research and development | $— | $30,393 | $(30,393) | | General and administrative | $2,584 | $3,992 | $(1,408) | | **Total operating expenses** | **$5,964** | **$37,720** | **$(31,756)** | | **Net loss** | **$(5,261)** | **$(37,383)** | **$32,122** | - General and administrative expenses decreased by **$1.4 million** (**35.3%**) due to non-recurring merger-related costs, lower equity expense, and timing of the annual stockholder meeting in the prior year[136](index=136&type=chunk) - Research and development expenses slightly increased by **$45 thousand** (**1.3%**) due to LSTA1 clinical trial activities, offset by reduced expenses for Ischemic Repair programs[136](index=136&type=chunk) [Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022](index=33&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202023%20Compared%20to%20Nine%20Months%20Ended%20September%2030%2C%202022) For the nine months ended September 30, 2023, net loss decreased by $32.8 million to $15.5 million. Total operating expenses decreased by 61.5%, or 4.8% excluding the IPR&D expense, driven by lower general and administrative costs and a slight decrease in R&D expenses Operating Expenses (in thousands) - Nine Months Ended September 30 | Expense Category | 2023 | 2022 | Change | | :-------------------------- | :----- | :----- | :------- | | Research and development | $9,721 | $9,853 | $(132) | | In-process research and development | $— | $30,393 | $(30,393) | | General and administrative | $9,962 | $10,815 | $(853) | | **Total operating expenses** | **$19,683** | **$51,061** | **$(31,378)** | | **Net loss** | **$(15,475)** | **$(48,235)** | **$32,760** | - General and administrative expenses decreased by **$0.9 million** (**7.9%**) due to non-recurring merger-related costs, lower equity expense, reduced annual stockholder meeting expenses, and decreased D&O insurance premiums, partially offset by severance costs[140](index=140&type=chunk) - Research and development expenses slightly decreased by **$0.1 million** (**1.3%**) due to LSTA1 clinical trial activities being offset by reduced expenses for Ischemic Repair programs[140](index=140&type=chunk) - The company recognized a **$2.3 million** benefit from income taxes in 2023 from the sale of New Jersey NOLs, compared to **$2.5 million** in 2022[142](index=142&type=chunk)[143](index=143&type=chunk) [Analysis of Liquidity and Capital Resources](index=35&type=section&id=Analysis%20of%20Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company had $54.4 million in cash, cash equivalents, and marketable securities, and $52.1 million in working capital. Net cash used in operating activities was $16.0 million, while investing activities provided $15.8 million, and financing activities provided $0.4 million. The company believes existing cash and marketable securities will fund operations for at least the next 12 months but acknowledges the need for additional capital for long-term needs Liquidity and Capital Resources (in thousands) | Metric | Sep 30, 2023 | | :------------------------------------ | :----------- | | Cash, cash equivalents and marketable securities | $54,400 | | Working capital | $52,100 | | Stockholders' equity | $53,000 | Net Cash Flows (in thousands) - Nine Months Ended September 30 | Activity | 2023 | 2022 | | :------------------------------------ | :--------- | :--------- | | Net cash used in operating activities | $(15,963) | $(14,702) | | Net cash provided by investing activities | $15,816 | $21,805 | | Net cash provided by (used in) financing activities | $361 | $(238) | - Cash provided by financing activities in 2023 included **$0.3 million** from the ATM Agreement and **$0.2 million** from option exercises, partially offset by tax withholding payments[151](index=151&type=chunk) - The company believes its cash on hand and marketable securities will fund operating expenses for at least the next **12 months**[153](index=153&type=chunk) - Future capital requirements are difficult to forecast and may necessitate additional debt or equity financings, partnerships, or asset sales, with no assurance of availability on acceptable terms[153](index=153&type=chunk)[156](index=156&type=chunk) [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) The company does not have any off-balance sheet arrangements - The company does not have any off-balance sheet arrangements[157](index=157&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There have been no material changes in the company's critical accounting policies and estimates during the three and nine months ended September 30, 2023, compared to those reported in its 2022 Form 10-K - No material changes occurred in critical accounting policies and estimates during the three and nine months ended September 30, 2023, compared to the 2022 Form 10-K[158](index=158&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there are no quantitative and qualitative disclosures about market risk applicable to the company for the reported period - The company states that this item is not applicable[159](index=159&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Chief Executive Officer, evaluated the effectiveness of the company's disclosure controls and procedures as of September 30, 2023, concluding they were effective at a reasonable assurance level. There were no material changes in internal control over financial reporting during the quarter - As of September 30, 2023, the Chief Executive Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[161](index=161&type=chunk) - There were no changes in internal control over financial reporting during the last quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[162](index=162&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) There are no material changes to the legal proceedings disclosures previously reported in the company's 2022 Form 10-K, other than those detailed in Note 14 – Contingencies - No material changes to legal proceedings disclosures from the 2022 Form 10-K, except as disclosed in Note 14 – Contingencies[164](index=164&type=chunk) [Item 1A. Risk Factors](index=38&type=page&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously reported in the company's 2022 Form 10-K - No material changes to the risk factors previously reported in the 2022 Form 10-K[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None to report for this item[165](index=165&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - None to report for this item[166](index=166&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - The company states that this item is not applicable[167](index=167&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) There is no other information to report for the period - None to report for this item[168](index=168&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section incorporates the Exhibit Index by reference, listing certifications and Inline XBRL documents - The Exhibit Index, appearing immediately after the signature page, is incorporated by reference[169](index=169&type=chunk) - Exhibits include certifications of principal executive and financial officers (31.1, 32) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[175](index=175&type=chunk)

Lisata Therapeutics, Inc. (NASDAQ:LSTA) Q2 2023 Results Conference Call August 15, 2023 8:30 AM ET Company Participants John Menditto - VP, IR and Corporate Communications Dr. David Mazzo - President and Chief Executive Officer Dr. Kristen Buck - EVP, Research and Development and Chief Medical Officer James Nisco - VP, Finance and Treasury Conference Call Participants Steve Brozak - WBB Securities Pete Enderlin - MAZ Partners Kemp Dolliver - Brookline Capital Markets Operator Welcome to the Lisata Therapeut ...