Lisata Therapeutics(US:LSTA)2022-05-05 20:09PART I - FINANCIAL INFORMATION Financial Statements Caladrius Biosciences reported a net loss of $4.2 million for Q1 2022, an improvement from $8.1 million in Q1 2021, with a definitive merger agreement with Cend Therapeutics announced Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $12,747 | $24,647 | | Marketable securities | $75,772 | $70,323 | | Total current assets | $90,700 | $96,182 | | Total assets | $91,463 | $97,008 | | Liabilities & Equity | | | | Total current liabilities | $2,801 | $4,523 | | Total liabilities | $3,222 | $5,008 | | Total stockholders' equity | $88,241 | $92,000 | Consolidated Statement of Operations Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $3,278 | $5,076 | | General and administrative | $3,342 | $3,010 | | Total operating expenses | $6,620 | $8,086 | | Operating loss | $(6,620) | $(8,086) | | Benefit from income taxes | $(2,479) | $— | | Net loss | $(4,226) | $(8,063) | | Basic and diluted loss per share | $(0.07) | $(0.19) | Consolidated Statement of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,642) | $(7,975) | | Net cash used in investing activities | $(6,090) | $(65,090) | | Net cash (used in) provided by financing activities | $(168) | $85,297 | | Net (decrease) increase in cash and cash equivalents | $(11,900) | $12,232 | - On April 26, 2022, the company entered into a merger agreement with Cend Therapeutics, Inc. Upon completion, former Cend stockholders and existing Caladrius stockholders are each expected to own approximately 50% of the combined company3282 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's clinical-stage biopharmaceutical operations, the proposed Cend Therapeutics merger, Q1 2022 financial performance, and liquidity, noting a Nasdaq listing deficiency Business Overview and Cend Merger Caladrius, a clinical-stage biopharmaceutical company, entered a merger agreement with Cend Therapeutics to diversify its pipeline, with Caladrius investing $10 million in Cend's Series D Preferred Stock - The company's current product candidates are XOWNA® (CLBS16) for coronary microvascular dysfunction (CMD), HONEDRA® (CLBS12) for critical limb ischemia (CLI), and CLBS201 for diabetic kidney disease (DKD)91 - A merger agreement was signed with Cend Therapeutics, where former Cend stockholders and current Caladrius stockholders will each own about 50% of the combined company, subject to adjustments based on Caladrius's net cash at closing9395 - Caladrius agreed to purchase approximately $10 million of Cend's Series D Preferred Stock to provide Cend with capital for its development programs before the merger closes101 Results of Operations Caladrius reported a net loss of $4.2 million for Q1 2022, a significant improvement from $8.1 million in Q1 2021, driven by reduced R&D expenses and a $2.5 million tax benefit Comparison of Operating Results (in thousands) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change | | :--- | :--- | :--- | :--- | | Research and development | $3,278 | $5,076 | $(1,798) | | General and administrative | $3,342 | $3,010 | $332 | | Total operating expenses | $6,620 | $8,086 | $(1,466) | | Net loss | $(4,226) | $(8,063) | $3,837 | - The 35% decrease in R&D expenses was primarily due to a reduction in manufacturing start-up and process development costs for the XOWNA® Phase 2b study115 - The company received a $2.5 million tax benefit from the sale of its New Jersey Net Operating Loss (NOL) tax benefits, which significantly reduced the net loss for the quarter119 Analysis of Liquidity and Capital Resources As of March 31, 2022, the company held $88.5 million in cash and equivalents, with sufficient liquidity for the next 12 months, despite a Nasdaq listing deficiency impacting ATM offering access - As of March 31, 2022, the company held cash, cash equivalents, and marketable securities of approximately $88.5 million121 - Management believes that the current cash on hand will be sufficient to fund operating expenses for at least the next 12 months128 - The company received a Nasdaq deficiency notice on February 18, 2022, for its stock trading below the $1.00 minimum bid price, which prevents it from selling shares under its ATM Agreement until compliance is regained130 Quantitative and Qualitative Disclosures About Market Risk This section is not applicable for the reporting period - The company states that this item is not applicable136 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2022138 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls139 PART II - OTHER INFORMATION Legal Proceedings There have been no material changes to the legal proceedings disclosures previously reported in the company's 2021 Form 10-K - No material changes to legal proceedings were reported since the 2021 Form 10-K142 Risk Factors The company faces significant risks including potential Nasdaq delisting due to minimum bid price non-compliance and various uncertainties related to the proposed merger with Cend Therapeutics - The company received a deficiency letter from Nasdaq on February 18, 2022, for failing to maintain a minimum closing bid price of $1.00 per share, giving it until August 17, 2022, to regain compliance143 - There is no assurance that the merger with Cend will be completed or that it will enhance stockholder value. The merger is subject to numerous closing conditions and termination rights144 - Failure to complete the merger could result in Caladrius paying Cend a termination fee of $1.0 million or, in other specified circumstances, Cend paying Caladrius a termination fee of $4.0 million99146150 - Following the merger, current Caladrius stockholders will have reduced ownership (approximately 50%) and voting interest, thereby exercising less influence over the combined organization's management153 Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the reporting period - None157 Defaults Upon Senior Securities There were no defaults upon senior securities during the reporting period - None158 Mine Safety Disclosures This section is not applicable to the company - Not applicable159 Other Information There is no other information to report for this period - None160 Exhibits This section lists key exhibits filed with the Form 10-Q, including the Merger Agreement with Cend Therapeutics and related financial agreements - Key exhibits filed include the Merger Agreement with Cend Therapeutics (2.1), the Series D Preferred Stock Purchase Agreement (10.1), and the Collaboration Agreement (10.2)168