Lisata Therapeutics(LSTA) - 2021 Q2 - Quarterly Report

Cover Page Filing Information This report is CALADRIUS BIOSCIENCES, INC.'s 10-Q quarterly report for the period ended June 30, 2021, identifying the company as a non-accelerated filer and smaller reporting company listed on The Nasdaq Capital Market - The company filed its 10-Q quarterly report for the period ended June 30, 2021[2] Company Basic Information | Metric | Information | | :--- | :--- | | Company Name | CALADRIUS BIOSCIENCES, INC. | | Jurisdiction of Incorporation | Delaware | | IRS Employer Identification No. | 22-2343568 | | Principal Executive Offices | 110 Allen Road, 2nd Floor, Basking Ridge, New Jersey 07920 | | Telephone | 908-842-0100 | | Stock Symbol | CLBS | | Exchange | The Nasdaq Capital Market | | Filing Status | Non-accelerated filer, Smaller reporting company | | Shell Company | No | CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Forward-Looking Statements This quarterly report contains forward-looking statements concerning future expectations for revenue, expenses, cash flows, operating profit/loss, capital needs, management plans, and product development and commercialization, which inherently involve uncertainties and risks that could cause actual results to differ materially from expectations - Forward-looking statements in the report cover expectations for future revenue, expenses, cash flows, operating profit or loss, capital requirements, management plans, and product development and commercialization, including regulatory approvals[6] - Forward-looking statements are subject to uncertainties and known and unknown risks that could cause actual results to differ materially from expectations[6] - Factors that could cause actual results to differ include: obtaining sufficient capital, establishing management and human resource infrastructure, market establishment, scientific/regulatory/medical developments, government permits and regulatory compliance, patent acquisition and commercialization, potential benefits of licensing agreements, development activity results, clinical trial progress (affected by patient recruitment and COVID-19), and other risk factors discussed in the 2020 10-K report[9] TABLE OF CONTENTS Report Structure This quarterly report is divided into two parts: Part I covers financial information, and Part II covers other information, including legal proceedings and risk factors - The report is divided into two parts: Part I, Financial Information, and Part II, Other Information[11] - Part I includes financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures[11] - Part II includes legal proceedings, risk factors, sales of equity securities, defaults upon senior securities, mine safety disclosures, other information, and exhibits[11] PART I- FINANCIAL INFORMATION Item 1. Financial Statements This section presents the company's consolidated balance sheets as of June 30, 2021, and December 31, 2020, along with consolidated statements of operations, comprehensive loss, equity, and cash flows for the three and six months ended June 30, 2021 and 2020, accompanied by notes to unaudited consolidated financial statements Consolidated Balance Sheets As of June 30, 2021, total assets significantly increased to $108,614 thousand, primarily due to a substantial rise in marketable securities, while total liabilities slightly increased and stockholders' equity grew significantly, reflecting enhanced capital structure through equity financing Consolidated Balance Sheet Key Data (Thousands of USD) | Metric | June 30, 2021 (Unaudited) | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 12,935 | 16,512 | | Marketable securities | 93,155 | 18,061 | | Prepaid and other current assets | 1,990 | 758 | | Total current assets | 108,080 | 35,331 | | Property and equipment, net | 84 | 57 | | Other assets | 450 | 614 | | Total assets | 108,614 | 36,002 | | Liabilities | | | | Accounts payable | 1,242 | 1,020 | | Accrued liabilities | 2,614 | 2,486 | | Total current liabilities | 3,856 | 3,506 | | Other long-term liabilities | 79 | 254 | | Total liabilities | 3,935 | 3,760 | | Stockholders' Equity | | | | Common stock | 60 | 19 | | Additional paid-in capital | 544,893 | 458,748 | | Accumulated deficit | (439,295) | (425,550) | | Total stockholders' equity | 104,679 | 32,242 | | Total liabilities and stockholders' equity | 108,614 | 36,002 | - As of June 30, 2021, total assets were $108,614 thousand, a significant increase from $36,002 thousand as of December 31, 2020[15] - Marketable securities increased from $18,061 thousand as of December 31, 2020, to $93,155 thousand as of June 30, 2021[15] - Total stockholders' equity increased from $32,242 thousand as of December 31, 2020, to $104,679 thousand as of June 30, 2021[15] Consolidated Statements of Operations The company reported net losses for both the second quarter and first half of 2021, with operating losses and R&D expenses significantly increasing compared to 2020, primarily driven by the CLBS16 Phase 2b study, while income tax benefits substantially decreased Consolidated Statements of Operations Key Data (Thousands of USD, except per share data) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Operating Expenses | | | | | | Research and development | 4,329 | 1,818 | 9,405 | 3,317 | | General and administrative | 2,818 | 2,474 | 5,828 | 5,032 | | Total operating expenses | 7,147 | 4,292 | 15,233 | 8,349 | | Operating loss | (7,147) | (4,292) | (15,233) | (8,349) | | Other Income (Expense) | | | | | | Investment income, net | 47 | 22 | 70 | 93 | | Other expense, net | (90) | — | (90) | — | | Total other (expense) income | (43) | 22 | (20) | 93 | | Net loss before income tax benefit and noncontrolling interest | (7,190) | (4,270) | (15,253) | (8,256) | | Income tax benefit | (1,508) | (10,872) | (1,508) | (10,872) | | Net (loss) income | (5,682) | 6,602 | (13,745) | 2,616 | | Net (loss) income attributable to Caladrius Biosciences, Inc. common stockholders | (5,682) | 6,598 | (13,745) | 2,608 | | Basic and diluted (loss) earnings per share | (0.10) | 0.50 | (0.27) | 0.22 | | Weighted average common shares outstanding | 59,510 | 13,151 | 50,862 | 11,880 | - Net loss for the second quarter of 2021 was $5,682 thousand, compared to net income of $6,602 thousand for the same period in 2020[18] - Net loss for the first half of 2021 was $13,745 thousand, compared to net income of $2,616 thousand for the same period in 2020[18] - Research and development expenses increased by 138% and 184% year-over-year for the second quarter and first half of 2021, respectively, primarily due to increased costs for the CLBS16 Phase 2b study[18] Consolidated Statements of Comprehensive Loss The company reported comprehensive losses for both the second quarter and first half of 2021, primarily reflecting net losses and unrealized losses on marketable securities Consolidated Statements of Comprehensive Loss Key Data (Thousands of USD) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net (loss) income | (5,682) | 6,602 | (13,745) | 2,616 | | Other comprehensive loss | | | | | | Available-for-sale securities - net unrealized loss | (4) | (9) | (4) | (9) | | Total other comprehensive loss | (4) | (9) | (4) | (9) | | Comprehensive (loss) income | (5,686) | 6,593 | (13,749) | 2,607 | | Comprehensive (loss) income attributable to Caladrius Biosciences, Inc. common stockholders | (5,686) | 6,589 | (13,749) | 2,599 | - Comprehensive loss for the second quarter of 2021 was $5,686 thousand, compared to comprehensive income of $6,593 thousand for the same period in 2020[21] - Comprehensive loss for the first half of 2021 was $13,749 thousand, compared to comprehensive income of $2,607 thousand for the same period in 2020[21] Consolidated Statements of Equity As of June 30, 2021, the company's stockholders' equity significantly increased to $104,679 thousand, primarily due to net proceeds from common stock and warrant issuances, despite recording a net loss during the period Consolidated Statements of Equity Key Changes (Thousands of USD) | Change Item | March 31 to June 30, 2021 | December 31, 2020 to June 30, 2021 | March 31 to June 30, 2020 | December 31, 2019 to June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Beginning balance | 110,014 | 32,242 | 16,984 | 20,553 | | Net (loss) income | (5,682) | (13,745) | 6,602 | 2,616 | | Unrealized (loss) gain on marketable securities | 55 | (4) | (7) | (9) | | Share-based compensation | 270 | 683 | 294 | 713 | | Net proceeds from common stock issuance | 22 | 85,479 | 9,683 | 9,683 | | Proceeds from option exercise | — | 24 | — | — | | Ending balance | 104,679 | 104,679 | 33,556 | 33,556 | - As of June 30, 2021, total stockholders' equity was $104,679 thousand, a significant increase from $32,242 thousand as of December 31, 2020[23] - In the first half of 2021, the company received $85,479 thousand in net proceeds from the issuance of common stock and warrants[23] - During the same period, the company recorded a net loss of $13,745 thousand, but this was offset by share-based compensation and new stock issuance activities[23] Consolidated Statements of Cash Flows In the first half of 2021, the company experienced a significant increase in cash outflow from operating activities and a substantial increase in cash outflow from investing activities, primarily for marketable securities purchases, while cash inflow from financing activities significantly rose due to common stock and warrant issuances Consolidated Statements of Cash Flows Key Data (Thousands of USD) | Cash Flow Type | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | (12,602) | 262 | | Net cash (used in) provided by investing activities | (76,294) | 2,855 | | Net cash provided by financing activities | 85,319 | 9,535 | | Net (decrease) increase in cash and cash equivalents | (3,577) | 12,652 | | Cash and cash equivalents at end of period | 12,935 | 26,684 | - Net cash outflow from operating activities was $12,602 thousand in the first half of 2021, compared to a net inflow of $262 thousand in the same period of 2020[27] - Net cash outflow from investing activities was $76,294 thousand in the first half of 2021, primarily due to purchases of marketable securities[27] - Net cash inflow from financing activities was $85,319 thousand in the first half of 2021, mainly from the issuance of common stock and warrants[27] Notes to Unaudited Consolidated Financial Statements This section provides detailed explanations of the company's business, accounting policies, financial instruments, equity transactions, R&D funding, income taxes, and contingencies, offering essential context for understanding the consolidated financial statements Note 1 – The Business Caladrius Biosciences is a clinical-stage biopharmaceutical company focused on developing and commercializing CD34+ cell-based therapies to reverse disease and promote regeneration of damaged tissues, with multiple product candidates in various development stages and active pursuit of out-licensing opportunities, while the COVID-19 pandemic continues to negatively impact patient enrollment in clinical trials - The company focuses on developing and commercializing CD34+ cell-based therapies to stimulate new microvascular formation for ischemic diseases[30][32][33] - Key product candidates include: CLBS16 (coronary microvascular dysfunction, completed Phase 2a, initiated Phase 2b FREEDOM trial), HONEDRA (CLBS12) (critical limb ischemia and Buerger's disease, in registration study in Japan, received FDA orphan drug designation), CLBS201 (diabetic kidney disease, Phase 2 study planned for H2 2021), and OLOGO (CLBS14) (no-option refractory angina, received RMAT designation but seeking partnership due to high FDA requirements)[31][34][35][36][37][38][39][40] - The COVID-19 pandemic continues to cause significant delays in patient enrollment for HONEDRA's clinical trial in Japan and CLBS16's FREEDOM trial in the US[34][37][43] Note 2 – Summary of Significant Accounting Policies This section outlines the basis of financial statement preparation, use of accounting estimates, consolidation principles, and significant accounting policies, including concentration of risk, share-based compensation, and adoption of new accounting standards, with no material changes to significant accounting policies in the first half of 2021 - Financial statements are prepared in accordance with US GAAP and SEC Form 10-Q instructions, including all normal and recurring adjustments deemed necessary by management[44] - The company faces credit risk from its cash, cash equivalents, and marketable securities portfolio, mitigated by investment policies[48] - Share-based compensation (including stock options, warrants, and restricted stock) for employees, directors, and consultants is expensed over the service period based on fair value at the grant date[49] - Adoption of Accounting Standards Update (ASU) 2019-12 had no material impact on the company's consolidated financial statements and disclosures[51] Note 3 – Available-for-Sale-Securities As of June 30, 2021, the fair value of the company's available-for-sale securities significantly increased to $102,208 thousand, primarily comprising corporate bonds, money market funds, and municipal bonds, with most maturing within one year Available-for-Sale Securities Summary (Thousands of USD) | Security Type | Fair Value June 30, 2021 | Fair Value December 31, 2020 | | :--- | :--- | :--- | | Corporate bonds | 53,274 | 8,399 | | Money market funds | 7,922 | 7,591 | | Municipal bonds | 41,012 | 14,747 | | Total | 102,208 | 30,737 | - As of June 30, 2021, total available-for-sale securities were $102,208 thousand, with $93,155 thousand classified as marketable securities and $9,053 thousand as cash equivalents[52] - As of June 30, 2021, the vast majority of available-for-sale securities ($102,144 thousand) had contractual maturities of less than one year[52] Note 4 – Income (Loss) Per Share Due to the company recording a net loss in the first half of 2021, common stock equivalents were excluded from diluted loss per share calculations as they were anti-dilutive; as of June 30, 2021, the company had a significant number of potentially dilutive securities, including stock options, warrants, and restricted stock units - In the first half of 2021, the company excluded common stock equivalents from diluted loss per share calculations due to a net loss[53] Potentially Dilutive Securities (Thousands of Shares) | Security Type | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Stock options | 1,005 | 1,161 | | Warrants | 21,357 | 2,154 | | Restricted stock units | 798 | 313 | Note 5 – Fair Value Measurements The company classifies and measures financial assets according to a fair value hierarchy (Level 1, Level 2, Level 3); as of June 30, 2021, and December 31, 2020, all of its available-for-sale marketable securities were categorized as Level 2, indicating their fair value is primarily based on observable indirect inputs - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable indirect inputs), and Level 3 (unobservable inputs)[56][57][58] Financial Assets Classified by Fair Value Hierarchy (Thousands of USD) | Asset Type | June 30, 2021 Level 2 | December 31, 2020 Level 2 | | :--- | :--- | :--- | | Available-for-sale marketable securities | 93,155 | 18,061 | | Total | 93,155 | 18,061 | Note 6 – Accrued Liabilities As of June 30, 2021, total accrued liabilities were $2,614 thousand, a slight increase from December 31, 2020, primarily composed of salaries, employee benefits and related taxes, operating lease liabilities, and other accrued items Accrued Liabilities Composition (Thousands of USD) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Salaries, employee benefits and related taxes | 1,389 | 1,716 | | Operating lease liabilities — current | 366 | 370 | | Other | 859 | 400 | | Total | 2,614 | 2,486 | Note 7 – Operating Leases The company holds two office operating leases expiring in 2022 and 2023, with total operating lease liabilities of $445 thousand as of June 30, 2021, a weighted-average remaining lease term of 1.3 years, and a weighted-average discount rate of 9.625% Operating Lease Liabilities and Right-of-Use Assets (Thousands of USD) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Right-of-use assets (other assets) | 408 | 574 | | Operating lease liabilities (accrued liabilities) | 366 | 370 | | Operating lease liabilities (other long-term liabilities) | 79 | 254 | | Total operating lease liabilities | 445 | 624 | - As of June 30, 2021, the weighted-average remaining lease term was 1.3 years, and the weighted-average discount rate was 9.625%[64] Future Minimum Lease Payments (Thousands of USD) | Year | Operating Leases | | :--- | :--- | | 2021 | 208 | | 2022 | 239 | | 2023 | 27 | | Total lease payments | 474 | | Less: interest portion | (29) | | Present value of lease liabilities | 445 | Note 8 – Stockholders' Equity The company significantly increased stockholders' equity in the first half of 2021 through a series of equity issuance activities, including registered direct offerings and private placements, raising substantial capital, while also managing equity incentive plans such as stock options, warrants, and restricted stock units - In February 2021, the company sold 24,906,134 shares of common stock and 12,453,067 warrants to institutional investors, and 1,632,652 shares of common stock and 816,326 warrants to qualified investors through a registered direct offering, raising approximately $65.0 million in gross proceeds[75] - In January 2021, the company sold 12,500,000 shares of common stock and 6,250,000 warrants through a private placement, raising $25.0 million in gross proceeds[76] - As of June 30, 2021, the company had 1,005,209 stock options and 21,356,600 warrants outstanding[78] - In the first half of 2021, the company issued 300,450 shares of restricted stock and 458,245 restricted stock units for service compensation[79][80] Note 9 – Share-Based Compensation The company recognized $867 thousand in share-based compensation expense in the first half of 2021, primarily within general and administrative expenses; as of June 30, 2021, total unrecognized share-based compensation costs were $1,238 thousand, expected to be recognized over the next 1 to 2 years Share-Based Compensation Expense (Thousands of USD) | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Research and development | 24 | 56 | 120 | 18 | | General and administrative | 246 | 239 | 747 | 68 | | Total share-based compensation expense | 270 | 295 | 867 | 86 | Unrecognized Compensation Cost and Weighted-Average Recognition Period (Thousands of USD) | Incentive Type | Unrecognized Compensation Cost | Expected Weighted-Average Recognition Period (Years) | | :--- | :--- | :--- | | Stock options | 338 | 1.73 | | Restricted stock units | 407 | 1.26 | | Restricted stock | 493 | 2.01 | | Total | 1,238 | | - The fair value of stock options and warrants is estimated using the Black-Scholes option pricing model, considering historical volatility, risk-free interest rates, expected dividend yield, and expected term[83] Note 10 – Research Funding The company previously received up to $12.2 million in funding from the California Institute for Regenerative Medicine (CIRM) for CLBS03's Phase 2 clinical trial for new-onset Type 1 diabetes; as of September 2020, $8.2 million had been received, and $0.7 million in R&D expense offset was recognized in the first half of 2020 - The company previously received up to $12.2 million in funding from CIRM for the Phase 2 clinical trial of CLBS03 for new-onset Type 1 diabetes[84] - As of September 2020, $8.2 million in funding had been received, and $0.7 million in R&D expense offset was recognized in the first half of 2020[84] Note 11 – Income Taxes The company has a full valuation allowance against its deferred tax assets, including net operating losses (NOLs), due to uncertainty regarding their future utilization; in April 2021, the company sold a portion of its New Jersey NOLs through an NJEDA program, generating $1.4 million in net proceeds and recognizing $1.5 million in income tax benefit - The company has a full valuation allowance against its deferred tax assets, including NOLs, due to uncertainty regarding their future utilization[85] - As of December 31, 2020, the company had approximately $264 million in federal NOLs and a total of $182 million in state NOLs[86][87] - In April 2021, the company sold a portion of its New Jersey NOLs through the NJEDA program, generating $1.4 million in net proceeds and recognizing $1.5 million in income tax benefit[92] Note 12 – Contingencies The company periodically faces legal proceedings and claims, but management believes the outcome of any pending claims will not have a material adverse effect on its financial condition or results of operations - The company periodically faces legal proceedings and claims, but management believes their outcome will not have a material adverse effect on financial condition or results of operations[93] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's detailed analysis of the company's financial condition and results of operations for the three and six months ended June 30, 2021, focusing on operating expenses, net loss, liquidity sources, and capital requirements, and discussing the ongoing impact of the COVID-19 pandemic Overview Caladrius Biosciences is a clinical-stage biopharmaceutical company focused on developing CD34+ cell-based therapies to reverse disease and promote regeneration of damaged tissues, with multiple product candidates aimed at addressing diseases caused by ischemic injury - The company is a clinical-stage biopharmaceutical company dedicated to developing and commercializing CD34+ cell-based therapies[95] - Key product candidates include CLBS16 (coronary microvascular dysfunction), HONEDRA (CLBS12) (critical limb ischemia and Buerger's disease), CLBS201 (diabetic kidney disease), and OLOGO (CLBS14) (no-option refractory angina)[96] - The company's proprietary CD34+ cell technology aims to increase blood flow to affected areas by promoting new microvascular formation, thereby improving diseases caused by ischemic injury[98] HONEDRA for Treatment of Critical Limb Ischemia HONEDRA's registration study in Japan for critical limb ischemia has shown positive results to date, but the COVID-19 pandemic continues to cause significant delays in patient enrollment, making the study completion date unpredictable - HONEDRA's registration study in Japan for CLI has shown positive results to date, demonstrating positive therapeutic effects and safety characteristics[99] - The COVID-19 pandemic, including ongoing states of emergency in Japan, continues to severely impact patient enrollment for this study, leading to slow progress and an unpredictable completion date[99] CLBS16 for Treatment of Coronary Microvascular Dysfunction CLBS16's Phase 2a study for coronary microvascular dysfunction showed positive efficacy, and the Phase 2b FREEDOM trial was initiated in December 2020; however, the COVID-19 pandemic has slowed patient enrollment, with enrollment for the FREEDOM trial now expected to complete in Q3 2022 and final data in Q2 2023 - CLBS16's Phase 2a ESCaPE-CMD trial showed positive efficacy, significantly improving angina frequency, coronary flow reserve, and other metrics[100] - The Phase 2b FREEDOM trial was initiated in December 2020, aiming to further evaluate the efficacy and safety of autologous CD34+ cells in CMD patients[100] - The COVID-19 pandemic has slowed patient enrollment for the FREEDOM trial, with enrollment now expected to complete in Q3 2022 and final data in Q2 2023[101] CLBS201 for Treatment of Diabetic Kidney Disease The company has developed an initial development plan for CLBS201 to treat diabetic kidney disease, aiming to slow or reverse renal function decline through CD34+ cell therapy; a Phase 2 proof-of-concept study is planned for initiation in the second half of 2021, with safety data from a six-subject run-in period expected in Q2 2022 - CLBS201 aims to slow or reverse the decline in renal function in patients with diabetic kidney disease through CD34+ cell therapy[102] - A Phase 2 proof-of-concept study is planned for initiation in the second half of 2021, including an open-label run-in period for six subjects[102] - Safety data from the six-subject run-in period is expected to be completed in Q2 2022[102] OLOGO for Treatment of No Option Refractory Disabling Angina OLOGO™ received FDA Regenerative Medicine Advanced Therapy (RMAT) designation, but due to FDA requirements for a large 400-patient Phase 3 study, the company decided not to independently advance the project and is seeking partners - OLOGO™ received FDA RMAT designation, with clinical evidence showing reduced mortality, improved angina, and increased exercise capacity[104] - Due to FDA requirements for a large 400-patient Phase 3 study, the company decided not to independently advance the project and is seeking partners[104] Additional Out-licensing Opportunities The company possesses a broad intellectual property portfolio in cell therapy and actively seeks out-licensing opportunities to advance clinical development, with a long-term strategy to commercialize products independently or with partners to provide therapeutic options for patients - The company possesses a broad intellectual property portfolio in cell therapy and actively seeks out-licensing opportunities to advance clinical development[105] - The long-term strategy is to commercialize products independently or with partners, ultimately providing therapeutic options for patients[105] Coronavirus Considerations The COVID-19 pandemic continues to impact the company's business, particularly causing significant patient enrollment delays for HONEDRA's clinical trial in Japan due to multiple states of emergency - The COVID-19 pandemic continues to impact the company's business, including clinical trials and financial condition[106] - HONEDRA's clinical trial in Japan faces significant patient enrollment delays due to multiple states of emergency and hospital bed shortages in Japan[106] Results of Operations The company reported net losses for both the second quarter and first half of 2021, primarily due to significant increases in research and development and general and administrative expenses, coupled with a reduction in income tax benefits Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020 In Q2 2021, the company reported a net loss of $5.7 million, compared to net income of $6.6 million in Q2 2020; operating expenses grew 67%, driven by a 138% increase in R&D expenses due to the CLBS16 Phase 2b study and a 14% increase in general and administrative expenses, while income tax benefits significantly decreased - Net loss for the second quarter of 2021 was $5.7 million, compared to net income of $6.6 million for the same period in 2020[107] - Total operating expenses increased by 67% year-over-year, from $4.3 million in 2020 to $7.1 million in 2021[108] - Research and development expenses increased by 138% to $4.3 million, primarily due to increased costs for the CLBS16 Phase 2b study[108] - General and administrative expenses increased by 14% to $2.8 million, mainly due to higher director and officer insurance premiums and strategic consulting fees[110] - Income tax benefit decreased from $10.9 million in 2020 to $1.5 million in 2021, primarily due to reduced gains from the sale of New Jersey NOLs[112][113] Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020 In the first half of 2021, the company reported a net loss of $13.7 million, compared to net income of $2.6 million in the first half of 2020; operating expenses grew 82%, driven by a 184% increase in R&D expenses due to the CLBS16 Phase 2b study and a 16% increase in general and administrative expenses, while income tax benefits significantly decreased - Net loss for the first half of 2021 was $13.7 million, compared to net income of $2.6 million for the same period in 2020[114] - Total operating expenses increased by 82% year-over-year, from $8.3 million in 2020 to $15.2 million in 2021[115] - Research and development expenses increased by 184% to $9.4 million, primarily due to increased costs for the CLBS16 Phase 2b study[115] - General and administrative expenses increased by 16% to $5.8 million, mainly due to higher director and officer insurance premiums and strategic consulting fees[117] - Income tax benefit decreased from $10.9 million in 2020 to $1.5 million in 2021, primarily due to reduced gains from the sale of New Jersey NOLs[119][120] Analysis of Liquidity and Capital Resources As of June 30, 2021, the company had ample cash, cash equivalents, and marketable securities totaling approximately $106.1 million, and $104.2 million in working capital; in the first half of 2021, the company secured substantial cash through equity financing activities to support operations and investments Operating Activities In the first half of 2021, cash outflow from operating activities was $12.6 million, primarily driven by net loss and changes in working capital; in contrast, the same period in 2020 saw a net inflow of $0.3 million - Net cash outflow from operating activities was $12.6 million in the first half of 2021, primarily due to a $13.7 million net loss and $0.9 million in working capital changes[123] - Net cash inflow from operating activities was $0.3 million in the first half of 2020, primarily due to $2.6 million net income and $3.3 million in working capital changes[124] Investing Activities In the first half of 2021, cash outflow from investing activities was $76.3 million, mainly for marketable securities purchases, whereas the same period in 2020 saw a net inflow of $2.9 million from net sales of marketable securities - Net cash outflow from investing activities was $76.3 million in the first half of 2021, primarily due to purchases of marketable securities[125] - Net cash inflow from investing activities was $2.9 million in the first half of 2020, primarily due to net sales of marketable securities[125] Financing Activities In the first half of 2021, cash inflow from financing activities was $85.3 million, primarily from the January 2021 private placement and February 2021 registered direct offering, which raised significant capital through common stock and warrant issuances - Net cash inflow from financing activities was $85.3 million in the first half of 2021[126] - This primarily included $23.1 million in net proceeds from the January 2021 private placement and $60.6 million in net proceeds from the February 2021 registered direct offering[126] - Net cash inflow from financing activities was $9.5 million in the first half of 2020, primarily from registered direct offerings in April and May 2020 and the common stock sales agreement with H.C. Wainwright[127] Liquidity and Capital Requirements Outlook The company expects existing cash to support operations for at least the next 12 months; to meet long-term liquidity needs, it plans to utilize current cash balances and may raise additional funds through debt or equity securities, partnerships, or asset sales, having entered into an ATM agreement with HCW in June 2021 to issue up to $50.0 million in common stock - As of June 30, 2021, the company had approximately $106.1 million in cash, cash equivalents, and marketable securities, and approximately $104.2 million in working capital[121] - The company expects existing cash to support operating expenses for at least the next 12 months[129] - The company entered into an ATM agreement with H.C. Wainwright & Co., LLC on June 4, 2021, to issue up to $50.0 million of common stock, none of which had been issued as of June 30, 2021[130] - The company raised approximately $90.0 million in gross proceeds in February 2021 through a registered direct offering and in January 2021 through a private placement[132][134] Seasonality The company believes its operations are not seasonal - The company believes its operations are not seasonal[137] Off-Balance Sheet Arrangements The company has no off-balance sheet arrangements - The company has no off-balance sheet arrangements[138] Critical Accounting Policies and Estimates There were no material changes to the company's critical accounting policies and estimates for the three and six months ended June 30, 2021, compared to those disclosed in the 2020 10-K report - There were no material changes to the company's critical accounting policies and estimates for the three and six months ended June 30, 2021[139] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable - This section is not applicable[140] Item 4. Controls and Procedures As of June 30, 2021, the company's management assessed and determined its disclosure controls and procedures to be effective, with no material changes in internal control over financial reporting during the quarter - As of June 30, 2021, the company's management, including the Chief Executive Officer and Chief Financial Officer, assessed and determined its disclosure controls and procedures to be effective[142] - There were no material changes in internal control over financial reporting during the quarter[143] PART II- OTHER INFORMATION Item 1. Legal Proceedings Legal proceedings disclosures in this quarterly report show no material changes from those reported in the company's 2020 10-K report - Legal proceedings disclosures show no material changes from those reported in the company's 2020 10-K report[145] Item 1A. Risk Factors Risk factor disclosures in this quarterly report show no material changes from those reported in the company's 2020 10-K report - Risk factor disclosures show no material changes from those reported in the company's 2020 10-K report[146] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds during this quarter - There were no unregistered sales of equity securities or use of proceeds during this quarter[146] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during this quarter - There were no defaults upon senior securities during this quarter[147] Item 4. Mine Safety Disclosures This section is not applicable - This section is not applicable[148] Item 5. Other Information There were no other information disclosures during this quarter - There were no other information disclosures during this quarter[149] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q report, including certifications from the CEO, CFO, and Chief Accounting Officer, as well as XBRL files - Exhibits include certifications from the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer under Sections 302 and 906 of the Sarbanes-Oxley Act[157] - Exhibits also include XBRL instance documents and taxonomy extension files (Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase)[157] Signatures This report was formally signed by Caladrius Biosciences, Inc. on August 5, 2021, by Dr. David J. Mazzo, President and Chief Executive Officer (also Chief Financial Officer and Chief Accounting Officer) - This report was signed by Caladrius Biosciences, Inc. on August 5, 2021[155] - The signatory is Dr. David J. Mazzo, serving as President and Chief Executive Officer (also Chief Financial Officer and Chief Accounting Officer)[155]