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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 10-Q
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2019
 
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Transition Period from __________________   to _________________________
 
Commission File Number 001-33650
 
CALADRIUS BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
22-2343568
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
 
110 Allen Road, 2nd Floor, Basking Ridge, New Jersey
07920
(Address of principal executive offices)
(zip code)
 
Registrant’s telephone number, including area code: 908-842-0100

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
CLBS
The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes     x         No     o
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes  x        No     o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer     o
Accelerated filer     o
Non-accelerated filer   x     
Smaller reporting company     x
 
Emerging growth company      o

If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  o     No  x


Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class
Outstanding as of November 5, 2019
Common stock, $0.001 par value per share
10,399,930

shares



Index

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report (this "Quarterly Report") contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as well as historical information. When used in this Quarterly Report, statements that are not statements of current or historical fact may be deemed to be forward-looking statements, including, without limitation, all statements  related to any expectations of revenues, expenses, cash flows, earnings or losses from operations, cash required to maintain current and planned operations, capital or other financial items; any statements of the plans, strategies and objectives of management for future operations; any plans or expectations with respect to product research, development and commercialization, including regulatory approvals; any other statements of expectations, plans, intentions or beliefs; and any statements of assumptions underlying any of the foregoing. Without limiting the foregoing, the words “plan,” “project,” “forecast,” “outlook,” “intend,” “may,” “will,” “expect,” “likely,” “believe,” “could,” “anticipate,” “estimate,” “continue” or similar expressions or other variations or comparable terminology are intended to identify such forward-looking statements, although some forward-looking statements are expressed differently. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity or our achievements or industry results, to be materially different from any future results, performance, levels of activity or our achievements or industry results expressed or implied by such forward-looking statements. Factors that could cause our actual results to differ materially from anticipated results expressed or implied by forward-looking statements include, among others:

•
our ability to obtain sufficient capital or strategic business arrangements to fund our operations and expansion plans, including meeting our financial obligations under various licensing and other strategic arrangements, the funding of our clinical trials for product candidates, and the commercialization of the relevant technology;
•
our ability to build and maintain the management and human resources infrastructure necessary to support the growth of our business;
•
whether a market is established for our cell-based products and services and our ability to capture a meaningful share of this market;
•
scientific, regulatory and medical developments beyond our control;
•
our ability to obtain and maintain, as applicable, appropriate governmental licenses, accreditations or certifications or to comply with healthcare laws and regulations or any other adverse effect or limitations caused by government regulation of our business;
•
whether any of our current or future patent applications result in issued patents, the scope of those patents and our ability to obtain and maintain other rights to technology required or desirable for the conduct of our business; and our ability to commercialize products without infringing upon the claims of third-party patents;
•
whether any potential strategic or financial benefits of various licensing agreements will be realized;
•
the results of our development activities;
•
our ability to complete our other planned clinical trials (or initiate other trials) in accordance with our estimated timelines due to delays associated with enrolling patients due to the novelty of the treatment, the size of the patient population and the need of patients to meet the inclusion criteria of the trial or otherwise; and
•
other factors discussed in "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 14, 2019, as subsequently amended on March 19, 2019 (our "2018 Form 10-K").

The factors discussed herein, including those risks described in "Item 1A. Risk Factors" and elsewhere in our 2018 Form 10-K and in our other periodic filings with the SEC, which are available for review at www.sec.gov, could cause actual results and developments to be materially different from those expressed or implied by such statements. All forward-looking statements attributable to us are expressly qualified in their entirety by these and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. Except as required by law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.




2
Index

TABLE OF CONTENTS
 
Page No.
Financial Statements:
 
Consolidated Balance Sheets at September 30, 2019 (unaudited) and December 31, 2018
 
Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018 (unaudited)
 
Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2019 and 2018 (unaudited)
 
Consolidated Statements of Equity for the three and nine months ended September 30, 2019 and 2018 (unaudited)
 
Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)
 
 
 
 

3
Index

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS
Item 1. CONSOLIDATED FINANCIAL STATEMENTS

CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 
September 30,
2019
 
December 31,
2018
ASSETS
(Unaudited)
 
 
Cash and cash equivalents
$
12,674

 
$
10,299

Marketable securities
16,487

 
32,754

Prepaid and other current assets
1,083

 
1,053

Total current assets
30,244

 
44,106

Property and equipment, net
115

 
165

Other assets
1,312

 
309

Total assets
$
31,671

 
$
44,580

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 

 
 

Liabilities
 

 
 

Accounts payable
$
844

 
$
762

Accrued liabilities
5,135

 
4,857

Total current liabilities
5,979

 
5,619

Other long-term liabilities
710

 
1,507

Total liabilities
$
6,689

 
$
7,126

Commitments and Contingencies


 


 
 
 
 
Stockholders' Equity
 
 
 

Preferred stock, authorized, 20,000,000 shares
Series B convertible redeemable preferred stock liquidation value, 0.001 share of common stock, $0.01 par value; 825,000 shares designated; issued and outstanding, 10,000 shares at September 30, 2019 and December 31, 2018, respectively
—

 
—

Common stock, $0.001 par value, authorized 500,000,000 shares; issued and outstanding, 10,411,010 and 9,865,735 shares at September 30, 2019 and December 31, 2018, respectively
10

 
10

Additional paid-in capital
438,388

 
436,433

Treasury stock, at cost; 11,080 shares at September 30, 2019 and December 31, 2018
(708
)
 
(708
)
Accumulated deficit
(412,444
)
 
(397,977
)
Accumulated other comprehensive loss
2

 
(32
)
Total Caladrius Biosciences, Inc. stockholders' equity
25,248

 
37,726

Noncontrolling interests
(266
)
 
(272
)
Total stockholders' equity
24,982

 
37,454

Total liabilities and stockholders' equity
$
31,671

 
$
44,580

See accompanying notes to consolidated financial statements.

4
Index

CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
(In thousands, except per share data)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Operating Expenses:
 
 
 
 
 
 
 
Research and development
$
3,004

 
$
1,701

 
$
8,030

 
$
6,086

General and administrative
2,068

 
2,062

 
6,980

 
7,105

Total operating expenses
5,072

 
3,763

 
15,010

 
13,191

 
 
 
 
 
 
 
 
Operating loss
(5,072
)
 
(3,763
)
 
(15,010
)
 
(13,191
)
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Investment income, net
175

 
214

 
611

 
585

Interest expense
—

 
—

 
—

 
(5
)
Total other income (expense), net
175

 
214

 
611

 
580

 
 
 
 
 
 
 
 
Net loss
$
(4,897
)
 
$
(3,549
)
 
$
(14,399
)
 
$
(12,611
)
Less - net income (loss) attributable to noncontrolling interests
1

 
1

 
6

 
(2
)
Net loss attributable to Caladrius Biosciences, Inc. common stockholders
$
(4,898
)
 
$
(3,550
)
 
$
(14,405
)
 
$
(12,609
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted loss per share
 
 
 
 
 
 
 
Caladrius Biosciences, Inc. common stockholders
$
(0.47
)
 
$
(0.36
)
 
$
(1.40
)
 
$
(1.31
)
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
 
 
 
 
 
 
Basic and diluted shares
10,411

 
9,745

 
10,279

 
9,634


See accompanying notes to consolidated financial statements.

5
Index

CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited) 
(In thousands)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Net loss
$
(4,897
)
 
$
(3,549
)
 
$
(14,399
)
 
$
(12,611
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
 
Available for sale securities - net unrealized income (loss)
2

 
30

 
34

 
(1
)
Total other comprehensive income (loss)
2

 
30

 
34

 
(1
)
 
 
 
 
 
 
 
 
Comprehensive loss
(4,895
)
 
(3,519
)
 
(14,365
)
 
(12,612
)
 
 
 
 
 
 
 
 
Comprehensive income (loss) attributable to noncontrolling interests
1

 
1

 
6

 
(2
)
 
 
 
 
 
 
 
 
Comprehensive loss attributable to Caladrius Biosciences, Inc. common stockholders
$
(4,896
)
 
$
(3,520
)
 
$
(14,371
)
 
$
(12,610
)
 
See accompanying notes to consolidated financial statements.

6
Index

CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited) 
(In thousands)
 
Series B Convertible
Preferred Stock
 
Common Stock
 
Additional
Paid in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Accumulated
Deficit
 
Treasury
Stock
 
Total
Caladrius Biosciences,
Inc.
Stockholders'
Equity
 
Non-
Controlling
Interest in
Subsidiary
 
Total
Equity
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
Balance at June 30, 2018
10

 
$
—

 
9,736

 
$
10

 
$
435,339

 
$
(31
)
 
$
(390,869
)
 
$
(708
)
 
$
43,741

 
$
(273
)
 
$
43,468

Net loss
—

 
—

 
—

 
—

 
—

 
—

 
(3,550
)
 
—

 
(3,550
)
 
1

 
(3,549
)
Unrealized gain on marketable securities
—

 
—

 
—

 
—

 
—

 
2

 
—

 
—

 
2

 
—

 
2

Share-based compensation
—

 
—

 
—

 
—

 
165

 
—

 
—

 
—

 
165

 
—

 
165

Net proceeds from issuance of common stock
—

 
—

 
115

 
—

 
710

 
—

 
—

 
—

 
710

 
—

 
710

Proceeds from option exercises
—

 
—

 
2

 
—

 
13

 
—

 
—

 
—

 
13

 
—

 
13

Balance at September 30, 2018
10

 
$
—

 
9,853

 
$
10

 
$
436,227

 
$
(29
)
 
$
(394,419
)
 
$
(708
)
 
$
41,081

 
$
(272
)
 
$
40,809

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series B Convertible
Preferred Stock
 
Common Stock
 
Additional
Paid in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Accumulated
Deficit
 
Treasury
Stock
 
Total
Caladrius Biosciences,
Inc.
Stockholders'
Equity
 
Non-
Controlling
Interest in
Subsidiary
 
Total
Equity
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
Balance at June 30, 2019
10

 
$
—

 
10,413

 
$
10

 
$
438,133

 
$
—

 
$
(407,546
)
 
$
(708
)
 
$
29,889

 
$
(267
)
 
$
29,622

Net loss
—

 
—

 
—

 
—

 
—

 
—

 
(4,898
)
 
—

 
(4,898
)
 
1

 
(4,897
)
Unrealized gain on marketable securities
—

 
—

 
—

 
—

 
—

 
2

 
—

 
—

 
2

 
—

 
2

Share-based compensation
—

 
—

 
(2
)
 
—

 
254

 
—

 
—

 
—

 
254

 
—

 
254

Net proceeds from issuance of common stock
—

 
—

 
—

 
—

 
1

 
—

 
—

 
—

 
1

 
—

 
1

Balance at September 30, 2019
10

 
$
—

 
10,411

 
$
10

 
$
438,388

 
$
2

 
$
(412,444
)
 
$
(708
)
 
$
25,248

 
$
(266
)
 
$
24,982

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


7
Index

 
Series B Convertible
Preferred Stock
 
Common Stock
 
Additional
Paid in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Accumulated
Deficit
 
Treasury
Stock
 
Total
Caladrius Biosciences,
Inc.
Stockholders'
Equity
 
Non-
Controlling
Interest in
Subsidiary
 
Total
Equity
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
Balance at December 31, 2017
10

 
$
—

 
9,484

 
$
9

 
$
433,044

 
$
(28
)
 
$
(381,810
)
 
$
(708
)
 
$
50,507

 
$
(318
)
 
$
50,189

Net loss
—

 
—

 
—

 
—

 
—

 
—

 
(12,609
)
 
—

 
(12,609
)
 
(2
)
 
(12,611
)
Unrealized loss on marketable securities
—

 
—

 
—

 
—

 
—

 
(1
)
 
—

 
—

 
(1
)
 
—

 
(1
)
Share-based compensation
—

 
—

 
127

 
1

 
1,878

 
—

 
—

 
—

 
1,879

 
—

 
1,879

Net proceeds from issuance of common stock
—

 
—

 
165

 
—

 
998

 
—

 
—

 
—

 
998

 
—

 
998

Proceeds from option exercises
—

 
—

 
77

 
—

 
355

 
—

 
—

 
—

 
355

 
—

 
355

Change in ownership in subsidiary
—

 
—

 
—

 
—

 
(48
)
 
—

 
—

 
—

 
(48
)
 
48

 
—

Balance at September 30, 2018
10

 
$
—

 
9,853

 
$
10

 
$
436,227

 
$
(29
)
 
$
(394,419
)
 
$
(708
)
 
$
41,081

 
$
(272
)
 
$
40,809

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series B Convertible
Preferred Stock
 
Common Stock
 
Additional
Paid in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Accumulated
Deficit
 
Treasury
Stock
 
Total
Caladrius Biosciences,
Inc.
Stockholders'
Equity
 
Non-
Controlling
Interest in
Subsidiary
 
Total
Equity
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
Balance at December 31, 2018
10

 
$
—

 
9,866

 
$
10

 
$
436,433

 
$
(32
)
 
$
(397,977
)
 
$
(708
)
 
$
37,726

 
$
(272
)
 
$
37,454

Adoption of accounting standard
—

 
—

 
—

 
—

 
—

 
—

 
(62
)
 
—

 
(62
)
 
—

 
(62
)
Net loss
—

 
—

 
—

 
—

 
—

 
—

 
(14,405
)
 
—

 
(14,405
)
 
6

 
(14,399
)
Unrealized gain on marketable securities
—

 
—

 
—

 
—

 
—

 
34

 
—

 
—

 
34

 
—

 
34

Share-based compensation
—

 
—

 
94

 
—

 
917

 
—

 
—

 
—

 
917

 
—

 
917

Net proceeds from issuance of common stock
—

 
—

 
451

 
—

 
1,038

 
—

 
—

 
—

 
1,038

 
—

 
1,038

Balance at September 30, 2019
10

 
$
—

 
10,411

 
$
10

 
$
438,388

 
$
2

 
$
(412,444
)
 
$
(708
)
 
$
25,248

 
$
(266
)
 
$
24,982

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes to consolidated financial statements.
 

8
Index

CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 
 
Nine Months Ended September 30,
 
2019
 
2018
Cash flows from operating activities:
 

 
 

Net loss
$
(14,399
)
 
$
(12,611
)
Adjustments to reconcile net loss to net cash used in operating activities:
 

 
 

Share-based compensation
1,047

 
2,281

Depreciation and amortization
50

 
208

Gain on disposal of assets
—

 
(1,429
)
Accretion on marketable securities
172

 
197

Changes in operating assets and liabilities:
 

 
 

Prepaid and other current assets
(30
)
 
210

Other assets
272

 
182

Accounts payable, accrued liabilities and other liabilities
(1,774
)
 
(5,982
)
Net cash used in operating activities
(14,662
)
 
(16,944
)
Cash flows from investing activities:
 

 
 

Purchase of marketable securities
(32,312
)
 
(60,191
)
Sale of marketable securities
48,441

 
54,134

Proceeds from CFC device sale
—

 
2,550

Acquisition of property and equipment
—

 
(134
)
Net cash provided by (used in) investing activities
16,129

 
(3,641
)
Cash flows from financing activities:
 

 
 

Proceeds from exercise of options
—

 
355

Tax withholding payments on net share settlement equity awards
(130
)
 
(403
)
Net proceeds from issuance of common stock
1,038

 
998

Repayment of notes payable
—

 
(159
)
Net cash provided by financing activities
908

 
791

Net increase (decrease) in cash, cash equivalents and restricted cash
2,375

 
(19,794
)
Cash, cash equivalents and restricted cash at beginning of period
10,299

 
34,168

Cash and cash equivalents at end of period
$
12,674

 
$
14,374

 
 
 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
Cash paid during the period for:
 
 
 
Interest
$
—

 
$
5

See accompanying notes to consolidated financial statements.

9
Index

CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES
 
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – The Business
Caladrius Biosciences, Inc. (“we,” “us,” "our," “Caladrius” or the “Company”) is a late-stage therapeutics development biopharmaceutical company committed to the development of innovative products that have the potential to restore the health of people with chronic illnesses. The Company's leadership team collectively has decades of biopharmaceutical development experience and world-recognized scientific achievement in the fields of cardiovascular and autoimmune disease, among other areas. The Company's goal is to build a broad portfolio of novel and versatile products that address important unmet medical needs. The Company's current product candidates include three developmental treatments for cardiovascular diseases based on its CD34+ cell therapy platform: CLBS12, recipient of SAKIGAKE designation and eligible for early conditional approval in Japan for the treatment of critical limb ischemia ("CLI") based on the results of an ongoing clinical trial; CLBS16, in Phase 2 in the U.S. for the treatment of coronary microvascular dysfunction ("CMD"); and CLBS14, recipient of an RMAT designation and for which the Company has finalized with the U.S. Food and Drug Administration ("the FDA") the protocol for a Phase 3 confirmatory trial in subjects with no-option refractory disabling angina ("NORDA").

Ischemic Repair (CD34 Cell Technology)

The Company's CD34+ cell technology has led to the development of therapeutic product candidates designed to address diseases and conditions caused by ischemia. Ischemia occurs when the supply of oxygenated blood to healthy tissue is restricted. Through the administration of CD34+ cells, the Company seeks to promote the development and formation of new microvasculature and thereby increase blood flow to the impacted area. The Company believes that a number of conditions caused by underlying ischemic injury can be improved through its CD34+ cell technology, including but not limited to CLI, CMD and NORDA.

Regarding CLBS12, the Company's product candidate for CLI, after detailed discussion and agreement with the Japanese Pharmaceutical and Medical Device Agency ("PMDA"), the Company opened a Phase 2 trial for enrollment in December 2017 and announced in March 2018 treatment of the first patient. Based on discussions with the PMDA, the Company expects that a successful outcome of this trial will make CLBS12 eligible for early conditional approval in Japan, thereby effectively making the ongoing trial a potential registration trial in that strategic market. The initial responses observed in the subjects who have reached an endpoint in this open label study are consistent with a positive therapeutic effect and safety profile as reported by previously published clinical trials in Japan and the U.S. Enrollment is ongoing and the Company anticipates completion in the first half of 2020 with top line data targeted for late 2020 or early 2021. We remain on track for an earliest possible approval in Japan during 2021 based on the accelerated review afforded by CLBS12's SAKIGAKE designation. While early signs are encouraging, the final outcome of the trial will be dependent on all data from all subjects.

In October 2017, the Company announced the award of a $1.9 million grant from the National Institutes of Health to support a clinical study of CD34+ cells in patients with CMD. This led to the initiation of development of CLBS16 and enrollment of patients in the Company's ESCaPE-CMD Phase 2 proof-of-concept study at the Mayo Clinic in Rochester, MN and Cedars-Sinai Medical Center in Los Angeles, CA. In June 2019, the Company announced the completion of enrollment in this study. The early results observed in the first six patients in this open label trial who reached the 6-month (primary endpoint) follow-up visit support the Company's expectations for CLBS16 and a positive therapeutic effect and acceptable safety profile in this indication. While the final outcome of the trial will be dependent on the 6-month data from all subjects, early observations of increased coronary flow reserve and decreased angina symptoms in treated patients are encouraging. Results of the first 17 of 20 patients enrolled in the trial who reached 6-month follow-up will be presented as a rapid fire oral presentation on November 16, 2019 at the annual meeting of the American Heart Association in Philadelphia, PA by one of the principal investigators, Dr. Noel Bairey Merz, FACC, FAHA, FESC, the director of the Barbra Streisand Women's Heart Center at Cedars-Sinai in Los Angeles, CA. Assuming that the full data set corroborates previously reported results, the Company plans to advance the program to its next clinical development step as expeditiously as possible.

To support a development program of CD34+ cells in the indication of NORDA, the Company acquired the rights to data and regulatory filings for a CD34+ cell therapy program for refractory angina that had been advanced to Phase 3 under the previous investigational new drug application (“IND”) holder. The Company has designated this program CLBS14 and reactivated the IND with the FDA with Caladrius as the sponsor. The Company, working closely with the FDA, has finalized the design of a confirmatory Phase 3 trial which, in combination with previously filed Phase 1, 2 and 3 data, will be considered for the registration of CLBS14. The Company has substantially completed the preparatory work for initiation of this trial; however, it will not commence enrollment of patients until sufficient capital is acquired, which will give it confidence that it can fund the trial through completion.


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Immunomodulation (Treg Technology)

For the last several years, the Company has been developing an innovative therapy for T1D (identified as CLBS03) that is based on a proprietary T-regulatory cell platform technology for immunomodulation. CLBS03 was granted Fast Track and Orphan drug designations from the FDA for this proposed indication and was granted Advanced Therapeutic Medicinal Product ("ATMP") classification from the European Medicines Agency ("EMA"). This program is based on the use of Tregs (T-regulatory cells) to treat diseases caused by imbalances in an individual's immune system.

In 2016, the Company commenced patient enrollment in the first of two cohorts in The Sanford Project: T-Rex Study, a Phase 2a prospective, randomized, placebo-controlled, double-blind clinical trial to evaluate the safety and efficacy of CLBS03 in adolescents with recent onset T1D (the "T-Rex Study"). On February 13, 2019, the Company announced top line results indicating that the therapy was well-tolerated but that the study's primary endpoint of preservation of C-peptide had not been achieved. The Company and its collaborators are conducting a comprehensive analysis of data from the trial (including the 2-year follow-up data to come in early 2020) and will make decisions regarding further development of CLBS03 based on the results of those analyses.

Additional Out-licensing Opportunities
The Company's broad intellectual property portfolio of cell therapy assets includes notable programs available for out-licensing in order to continue their clinical development. The Company's current long-term strategy focuses on advancing its therapies through development with the ultimate objective of obtaining market authorizations and entering commercialization, either alone or with partners, to provide treatment options to patients suffering from life-threatening medical conditions. The Company believes that it is well-positioned to realize potentially meaningful value increases within its own proprietary pipeline if it is successful in advancing its product candidates to their next significant development milestones.

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of September 30, 2019, and the results of its operations and its cash flows for the periods presented. The unaudited consolidated financial statements herein should be read together with the historical consolidated financial statements of the Company for the years ended December 31, 2018 and 2017 included in our 2018 Form 10-K. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.
    
Use of Estimates
 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amount of expenses during the reporting period. The Company bases its estimates on historical experience and other assumptions believed to be reasonable under the circumstances, the results of which form the basis for judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company makes critical estimates and assumptions in determining stock-based awards values and income taxes. Accordingly, actual results could differ from those estimates and assumptions.

An accounting policy is considered to be critical if it is important to the Company’s financial condition and results of operations and if it requires management’s most difficult, subjective and complex judgments in its application.
 
Principles of Consolidation
 
The Consolidated Financial Statements include the accounts of Caladrius Biosciences, Inc. and its wholly owned and partially owned subsidiaries and affiliates. All intercompany activities have been eliminated in consolidation.


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Note 2 – Summary of Significant Accounting Policies
 
In addition to the policies below, our significant accounting policies are described in Note 2 of the Notes to Consolidated Financial Statements included in our 2018 Form 10-K. There were no changes to these policies during the three and nine months ended September 30, 2019.

Concentration of Risks
We are subject to credit risk from our portfolio of cash, cash equivalents and marketable securities. Under our investment policy, we limit amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. Cash is held at major banks in the United States. Therefore, the Company is not exposed to any significant concentrations of credit risk from these financial instruments. The goals of our investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements, and a competitive after-tax rate of return.

Share-Based Compensation  

The Company expenses all share-based payment awards to employees, directors, and consultants, including grants of stock options, warrants, and restricted stock, over the requisite service period based on the grant date fair value of the awards. Consultant awards are remeasured each reporting period through vesting. For awards with performance-based vesting criteria, the Company estimates the probability of achievement of the performance criteria and recognizes compensation expense related to those awards expected to vest. The Company determines the fair value of option awards using the Black-Scholes option-pricing model, which uses both historical and current market data to estimate the fair value. This method incorporates various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield and expected life of the options or warrants. The fair value of the Company’s restricted stock and restricted stock units is based on the closing market price of the Company’s common stock on the date of grant.

Income Taxes  
The Company recognizes (a) the amount of taxes payable or refundable for the current year and (b) deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.
The Company evaluates the accounting for uncertainty in tax positions at the end of each reporting period. The accounting guidance requires companies to recognize in their financial statements the impact of a tax position if the position is more likely than not to be sustained if the position were to be challenged by a taxing authority. The position ascertained inherently requires judgment and estimates by management. The Company recognizes interest and penalties as a component of income tax expense.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize lease assets and lease liabilities for those leases classified as operating leases. The guidance was effective for interim and annual periods beginning after December 15, 2018 and was adopted as of January 1, 2019. The Company adopted the standard using the optional transition method, with an immaterial adjustment to accumulated deficit upon adoption. The comparative information has not been restated and continues to be reported under the accounting standards that were in effect for those periods. The Company concluded that the adoption of ASU 2016-02 was non-cash in nature, did not affect the Company's cash position, and did not have a material impact on the Company's financial statements.

In June 2018, the FASB issued ASU 2018-07, "Improvements to Nonemployee Share-Based Payment Accounting," which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company's adoption date of ASC 606. The Company determined that the adoption of this new accounting guidance did not have a material impact on its financial statements and footnote disclosures.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments". ASU 2016-13 requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The new standard will be effective for

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us on January 1, 2020. The Company is currently evaluating the effect that the updated standard will have on our consolidated financial statements and footnote disclosures.


Note 3 – Available-for-Sale-Securities
 
The following table is a summary of available-for-sale securities recorded in cash and cash equivalents or marketable securities in our Consolidated Balance Sheets (in thousands):

 
September 30, 2019
 
December 31, 2018
 
Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
 
Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
Corporate debt securities
$
17,489

 
$
5

 
$
(3
)
 
$
17,491

 
$
33,536

 
$
—

 
$
(32
)
 
$
33,504

Money market funds
9,198

 
—

 
—

 
9,198

 
4,314

 
—

 
—

 
4,314

Total
$
26,687

 
$
5

 
$
(3
)
 
$
26,689

 
$
37,850

 
$
—

 
$
(32
)
 
$
37,818


Estimated fair values of available-for-sale securities are generally based on prices obtained from commercial pricing services. The following table summarizes the classification of the available-for-sale securities in our Consolidated Balance Sheets (in thousands):

 
September 30, 2019
 
December 31, 2018
Cash and cash equivalents
$
10,202

 
$
5,064

Marketable securities
16,487

 
32,754

Total
$
26,689

 
$
37,818


The following table summarizes our portfolio of available-for-sale securities by contractual maturity (in thousands):
 
 
September 30, 2019
 
Amortized Cost
 
Estimated Fair Value
Less than one year
$
26,687

 
$
26,689

Greater than one year
—

 
—

Total
$
26,687

 
$
26,689



Note 4 – Loss Per Share
 
For the three and nine months ended September 30, 2019 and 2018, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share as they are anti-dilutive. At September 30, 2019 and 2018, the Company excluded the following potentially dilutive securities (in thousands):
 
September 30,
 
2019
 
2018
Stock Options
1,095

 
1,036

Warrants
30

 
49

Restricted Stock Units
118

 
45

 
Note 5 – Fair Value Measurements
 
The fair value of financial assets and liabilities that are being measured and reported are defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal

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market at the measurement date (exit price). The Company is required to classify fair value measurements in one of the following categories:
 
Level 1 inputs are defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
 
Level 2 inputs are defined as inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly.
 
Level 3 inputs are defined as unobservable inputs for the assets or liabilities. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.
 
The following table sets forth by level within the fair value hierarchy the Company's financial assets that were accounted for at fair value on a recurring basis as of September 30, 2019, and December 31, 2018 (in thousands).

 
 
September 30, 2019
 
December 31, 2018
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marketable securities - available for sale
 
$
—

 
$
16,487

 
$
—

 
$
16,487

 
$
—

 
$
32,754

 
$
—

 
$
32,754

 
 
$
—

 
$
16,487

 
$
—

 
$
16,487

 
$
—

 
$
32,754

 
$
—

 
$
32,754


Note 6 – Accrued Liabilities

Accrued liabilities as of September 30, 2019 and December 31, 2018 were as follows (in thousands):
 
September 30, 2019
 
December 31, 2018
Salaries, employee benefits and related taxes
$
1,676

 
$
1,758

Operating lease liabilities - current
368

 
—

CIRM upfront funding - current
2,286

 
2,583

Other
805

 
516

Total
$
5,135

 
$
4,857


Note 7 – Operating Leases

The Company has operating leases for two offices with terms that expire in 2022 and 2023. In addition, the Company pays for facility space through a third-party manufacturing contract that contains an embedded operating lease, with an estimated expiration in 2020. The Company estimates its incremental borrowing rate, at lease commencement, to determine the present value of lease payments, since most of the Company's leases do not provide an implicit rate of return. The Company recognizes lease expense on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company elected to account for non-lease components associated with its leases and lease components as a single lease component. Upon adoption of Topic 842 on January 1, 2019, we recognized $1.4 million of operating lease liabilities and $1.3 million of operating lease right-of-use assets for our existing operating leases in our balance sheet. As of September 30, 2019, the Company's operating lease liabilities and right-of-use assets were $1.1 million and $1.0 million, respectively. Each of the Company's leases include options for us to extend the lease term and/or sub-lease space in whole or in part.
    
Operating lease liabilities and right-of-use assets were recorded in the following captions of our balance sheet were as follows (in thousands):

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September 30, 2019
Right-of Use Assets:
 
Other assets
$
1,003

Total Right-of-Use Asset
$
1,003

 
 
Operating Lease Liabilities:
 
Accrued liabilities
$
368

Other long-term liabilities
710

Total Operating Lease Liabilities
$
1,078

    
As of September 30, 2019, the weighted average remaining lease term for our operating leases was 2.2 years, and the weighted average discount rate for our operating leases was 9.625%. Future minimum lease payments under the lease agreements as of September 30, 2019 were as follows (in thousands):

Years ended
Operating Leases
2019
$
151

2020
431

2021
414

2022
239

2023
27

Total lease payments
1,262

Less: Amounts representing interest
(184
)
Present value of lease liabilities
$
1,078


Note 8 – Stockholders' Equity

Equity Issuances

Purchase Agreement
In March 2019, the Company and Lincoln Park Capital Fund, LLC (“Lincoln Park”) entered into a purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company has the right to sell to Lincoln Park shares of the Company’s common stock having an aggregate value of up to $26.0 million, subject to certain limitations and conditions set forth in the Purchase Agreement (the “Offering”). As consideration for entering into the Purchase Agreement, the Company issued to Lincoln Park an additional 181,510 shares of common stock as commitment shares.
Pursuant to the Purchase Agreement, Lincoln Park purchased 250,000 shares of common stock, at a price of $4.00 per share, for a total gross purchase price of $1.0 million (the “Initial Purchase”) upon commencement. Thereafter, as often as every business day from and after one business day following the date of the Initial Purchase and over the 36-month term of the Purchase Agreement the Company has the right, from time to time, at its sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 100,000 shares of common stock, with such amount increasing as the closing sale price of the common stock increases; provided Lincoln Park’s obligation under any single such purchase will not exceed $2.5 million, unless the Company and Lincoln Park mutually agree to increase the maximum amount of such single purchase (each, a “Regular Purchase”). If the Company directs Lincoln Park to purchase the maximum number of shares of common stock it then may sell in a Regular Purchase, then in addition to such Regular Purchase, and subject to certain conditions and limitations in the Purchase Agreement, the Company may direct Lincoln Park in an “accelerated purchase” to purchase an additional amount of common stock that may not exceed the lesser of (i) 300%  the number of shares purchased pursuant to the corresponding Regular Purchase or (ii) 30% of the total number of shares of the Company’s common stock traded during a specified period on the applicable purchase date as set forth in the Purchase Agreement. Under certain circumstances and in accordance with the Purchase Agreement, the Company may direct Lincoln Park to purchase shares in multiple accelerated purchases on the same trading day.
The Company controls the timing and amount of any sales of its common stock to Lincoln Park. There is no upper limit on the price per share that Lincoln Park must pay for its common stock under the Purchase Agreement, but in no event will shares be sold to Lincoln Park on a day the closing price is less than the floor price specified in the Purchase Agreement. In all instances,

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the Company may not sell shares of its common stock to Lincoln Park under the purchase agreement if it would result in Lincoln Park beneficially owning more than 9.99% of its common stock.
The Purchase Agreement does not limit the Company’s ability to raise capital from other sources at the Company’s sole discretion, except that (subject to certain exceptions) the Company may not enter into any Variable Rate Transaction (as defined in the Purchase Agreement, including the issuance of any floating conversion rate or variable priced equity-like securities) during the 36 months after the date of the Purchase Agreement. The Company has the right to terminate the Purchase Agreement at any time, at no cost to the Company.
As of September 30, 2019, the Company had not made any sales of common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

Common Stock Sales Agreement
In February 2018, the Company entered into a common stock sales agreement with H.C. Wainwright & Co., LLC ("HCW") as sales agent, which was subsequently amended in August 2018 (the "Sales Agreement"), in connection with an “at the market offering” under which the Company from time to time may offer and sell shares of its common stock having an aggregate offering price of not more than $25.0 million. In March 2019, subsequent to the filing of our 2018 Form 10-K, the aggregate market value of our outstanding common stock held by non-affiliates was approximately $52.8 million. Pursuant to General Instruction I.B.6 of Form S-3, since the aggregate market value of our outstanding common stock held by non-affiliates was below $75.0 million at the time of our 2018 Form 10-K filing, the aggregate amount of securities that we were permitted to offer and sell at such time was reduced to $17.6 million (or a maximum of 4.8 million shares), which was equal to one-third of the aggregate market value of our common stock held by non-affiliates at such time.
Subject to the terms and conditions of the Sales Agreement, HCW will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon the Company's instructions, including any price, time or size limits specified by the Company. The Company has provided HCW with customary indemnification rights, and HCW will be entitled to a commission at a fixed commission rate equal to 3.0% of the gross proceeds per share sold. The Company has no obligation to sell any of the shares and may at any time suspend sales under the Sales Agreement or terminate the Sales Agreement. The Sales Agreement will terminate upon the sale of all of the shares under the Sales Agreement unless terminated earlier by either party as permitted under the Sales Agreement.
During the nine months ended September 30, 2019, the Company did not issue shares of common stock under the Sales Agreement. As of September 30, 2019, the Company has issued 149,041 shares of common stock under the Sales Agreement for net proceeds of $1.0 million since inception.

Stock Options and Warrants

The following table summarizes the activity for stock options and warrants for the nine months ended September 30, 2019:

 
 
Stock Options
 
Warrants
 
 
Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term (Years)
 
Aggregate Intrinsic Value (In Thousands)
 
Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term (Years)
 
Aggregate Intrinsic Value (In Thousands)
Outstanding at December 31, 2018
 
1,018,530

 
$
30.54

 
5.30
 
$
3.3

 
30,000

 
$
5.89

 
4.19
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes during the period:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted
 
209,346

 
4.86

 
 
 
 
 
—

 
—

 
 
 
 
Exercised
 
(240
)
 
3.54

 
 
 
 
 
—

 
—

 
 
 
 
Forfeited
 
(2,610
)
 
4.63

 
 
 
 
 
—

 
—

 
 
 
 
Expired
 
(130,354
)
 
57.67

 
 
 
 
 
—

 
—

 
 
 
 
Outstanding at September 30, 2019
 
1,094,672

 
$
22.47

 
6.03
 
$
—

 
30,000

 
$
5.89

 
3.45
 
$
—

Vested at September 30, 2019
or expected to vest in the future
 
1,074,281

 
$
22.81

 
5.97
 
$
—

 
30,000

 
$
5.89

 
3.45
 
$
—

Vested at September 30, 2019
 
854,347

 
$
27.50

 
5.20
 
$
—

 
30,000

 
$
5.89

 
3.45
 
$
—




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Restricted Stock

During the nine months ended September 30, 2019 and 2018, the Company issued restricted stock for services as follows ($ in thousands):
 
 
Nine Months Ended September 30,
  
 
2019
 
2018
Number of restricted stock issued
 
123,564

 
91,740

Value of restricted stock issued
 
$
612

 
$
348


Restricted Stock Units
During the nine months ended September 30, 2019 and 2018, the Company issued restricted stock units for services as follows ($ in thousands, except share data):
 
Nine Months Ended September 30,
 
2019
 
2018
Number of restricted stock units issued
184,454

 
127,228

Value of restricted stock units issued
$
909

 
$
652

The weighted average estimated fair value of restricted stock issued for services in the nine months ended September 30, 2019 and 2018 was $4.93 and $5.12 per share, respectively. The fair value of the restricted stock units was determined using the Company’s closing stock price on the date of issuance. The vesting terms of restricted stock unit issuances are generally one year, or upon the achievement of performance-based milestones.

Note 9 – Share-Based Compensation

Share-Based Compensation

We utilize share-based compensation in the form of stock options, restricted stock, and restricted stock units.  The following table summarizes the components of share-based compensation expense for the three and nine months ended September 30, 2019 and 2018 (in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Research and development
$
54

 
$
32

 
$
229

 
$
413

General and administrative
200

 
135

 
818

 
1,869

Total share-based compensation expense
$
254

 
$
167

 
$
1,047

 
$
2,282

 
 
 
 
 
 
 
 

Total compensation cost related to non-vested awards not yet recognized and the weighted-average periods over which the awards were expected to be recognized at September 30, 2019 were as follows (in thousands):
 
Stock Options
 
Restricted Stock
Unrecognized compensation cost
$
749

 
$
—

Expected weighted-average period in years of compensation cost to be recognized
1.80

 
0


Total fair value of shares vested and the weighted average estimated fair values of shares granted for the nine months ended September 30, 2019 and 2018 were as follows (in thousands):
 
Stock Options
 
Nine Months Ended September 30,
 
2019
 
2018
Total fair value of shares vested
$
398

 
$
218

Weighted average estimated fair value of shares granted
$
3.18

 
$
2.61



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Valuation Assumptions

The fair value of stock options and warrants at the date of grant was estimated using the Black-Scholes option pricing model. The expected volatility is based upon historical volatility of the Company’s stock. The expected term for the options is based upon observation of actual time elapsed between date of grant and exercise of options for all employees. The expected term for the warrants is based upon the contractual term of the warrants.

Note 10 – Research Funding

California Institute of Regenerative Medicine Grant Award
In February 2017, CIRM awarded us funds of up to $12.2 million to support the T-Rex Study. The funding is based upon the achievement of certain milestones related to the proportion of subjects enrolled in California, as well as manufacturing and development costs incurred in California. In March 2018, CIRM calculated the precise amount of the funding award as $8.6 million, based on the actual number of subjects enrolled in California.
The Company received $5.7 million in initial funding in May 2017, a $1.9 million milestone payment in December 2017, a $0.3 million progress payment in March 2018, and a $0.2 million progress payment in May 2019, of which the total will be amortized over the estimated award period through July 2020 as a reduction to the related research and development expenses. As of September 30, 2019, $2.3 million of the funding received was recorded in accrued liabilities. During the three and nine months ended September 30, 2019, the Company amortized and recognized $0.7 million and $2.0 million in credits, respectively, to research and development related to CIRM funds received. During the three and nine months ended September 30, 2018, the Company amortized and recognized $0.6 million and $1.9 million in credits, respectively, to research and development related to CIRM funds received.

Note 11 – Income Taxes
 
In assessing the realizability of deferred tax assets, including the net operating loss carryforwards ("NOLs"), the Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize its existing deferred tax assets.  Based on its assessment, the Company has provided a full valuation allowance against its net deferred tax assets as their future utilization remains uncertain at this time.
As of December 31, 2018, the Company had approximately $225 million of federal NOLs available to offset future taxable income expiring from 2030 through 2036. In accordance with Section 382 of the Internal Revenue code, the usage of the Company’s NOLs could be limited in the event of a change in ownership. The Company performed an analysis and determined that it has had ownership changes of greater than 50% over a 3-year testing period. The last ownership change was determined to be in 2015. Based on a market capitalization of $124.5 million and using an applicable federal rate of 2.5%, the annual limitation would be approximately $3.0 million. Post change losses generated after June 2, 2015 would not be subject to 382 limitations. Additionally, the Company would be able to increase NOL limitations by the realized built in gain on the sale of PCT in May of 2017.

The Company applies the FASB’s provisions for uncertain tax positions. The Company recognizes interest and penalties associated with certain tax positions as a component of income tax expense. As of September 30, 2019, management does not believe the Company has any material uncertain tax positions. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year. For years prior to 2015, the federal statute of limitations is closed for assessing tax. The Company’s state tax returns remain open to examination for a period of three to four years from date of filing.

Note 12 – Contingencies
 
Contingencies
 
From time to time, the Company is subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. While the outcome of pending claims cannot be predicted with certainty, the Company does not believe that the outcome of any pending claims will have a material adverse effect on the Company's financial condition or operating results.


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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements” herein and under “Risk Factors” in our 2018 Form 10-K. The following discussion should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report and in our 2018 Form 10-K.
 
Overview
 
Caladrius Biosciences, Inc. (“we,” “us,” "our," “Caladrius” or the “Company”) is a late-stage therapeutics development biopharmaceutical company committed to the development of innovative products that have the potential to restore the health of people with chronic illnesses. Our leadership team collectively has decades of biopharmaceutical development experience and world-recognized scientific achievement in the fields of cardiovascular and autoimmune disease, among other areas. Our goal is to build a broad portfolio of novel and versatile products that address important unmet medical needs. Our current product candidates include three developmental treatments for cardiovascular diseases based on its CD34+ cell therapy platform: CLBS12, recipient of SAKIGAKE designation and eligible for early conditional approval in Japan for the treatment of critical limb ischemia ("CLI") based on the results of an ongoing clinical trial; CLBS16, in Phase 2 in the U.S. for the treatment of coronary microvascular dysfunction ("CMD"); and CLBS14, recipient of an RMAT designation and for which we have finalized with the U.S. Food and Drug Administration (the "FDA") the protocol for a Phase 3 confirmatory trial in subjects with no-option refractory disabling angina ("NORDA").

Ischemic Repair (CD34 Cell Technology)

Our CD34+ cell technology has led to the development of therapeutic product candidates designed to address diseases and conditions caused by ischemia. Ischemia occurs when the supply of oxygenated blood to healthy tissue is restricted. Through the administration of CD34+ cells, we seek to promote the development and formation of new microvasculature and thereby increase blood flow to the impacted area. We believe that a number of conditions caused by underlying ischemic injury can be improved through its CD34+ cell technology, including but not limited to CLI, CMD and NORDA.

Regarding CLBS12, our product candidate for CLI, after detailed discussion and agreement with the Japanese Pharmaceutical and Medical Device Agency ("PMDA"), we opened a Phase 2 trial for enrollment in December 2017 and announced in March 2018 treatment of the first patient. Based on discussions with the PMDA, we expect that a successful outcome of this trial will make CLBS12 eligible for early conditional approval in Japan, thereby effectively making the ongoing trial a potential registration trial in that strategic market. The initial responses observed in the subjects who have reached an endpoint in this open label study are consistent with a positive therapeutic effect and safety profile as reported by previously published clinical trials in Japan and the U.S. Enrollment is ongoing and we anticipate completion in the first half of 2020 with top line data targeted for late 2020 or early 2021. We remain on track for an earliest possible approval in Japan during 2021 based on the accelerated review afforded by CLBS12's SAKIGAKE designation. While early signs are encouraging, the final outcome of the trial will be dependent on all data from all subjects.

In October 2017, we announced the award of a $1.9 million grant from the National Institutes of Health to support a clinical study of CD34+ cells in patients with CMD. This led to the initiation of development of CLBS16 and enrollment of patients in the Company's ESCaPE-CMD Phase 2 proof-of-concept study at the Mayo Clinic in Rochester, MN and Cedars-Sinai Medical Center in Los Angeles, CA. In June 2019, we announced the completion of enrollment in this study. The early results observed in the first six patients in this open label trial who reached the 6-month (primary endpoint) follow-up visit support our expectations for CLBS16 and a positive therapeutic effect and acceptable safety profile in this indication. While the final outcome of the trial will be dependent on the 6-month data from all subjects, early observations of increased coronary flow reserve and decreased angina symptoms in treated patients are encouraging. Results of the first 17 of 20 patients enrolled in the trial who reached 6-month follow-up will be presented as a rapid fire oral presentation on November 16, 2019 at the annual meeting of the American Heart Association in Philadelphia, PA by one of the principal investigators, Dr. Noel Bairey Merz, FACC, FAHA, FESC, the director of the Barbra Streisand Women's Heart Center at Cedars-Sinai in Los Angeles, CA. Assuming that the full data set corroborates previously reported results, the Company plans to advance the program to its next clinical development step as expeditiously as possible.


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Index

To support a development program of CD34+ cells in the indication of NORDA, we acquired the rights to data and regulatory filings for a CD34+ cell therapy program for refractory angina that had been advanced to Phase 3 under the previous investigational new drug application (“IND”) holder. We have designated this program CLBS14 and reactivated the IND with the FDA with Caladrius as the sponsor. We, working closely with the FDA, have finalized the design of a confirmatory Phase 3 trial which, in combination with previously filed Phase 1, 2 and 3 data, will be considered for the registration of CLBS14. We have substantially completed the preparatory work for initiation of this trial; however, we will not commence enrollment of patients until sufficient capital is acquired, which will give us confidence that we can fund the trial through completion.

Immunomodulation (Treg Technology)

For the last several years, we have been developing an innovative therapy for T1D (identified as CLBS03) that is based on a proprietary T-regulatory cell platform technology for immunomodulation. CLBS03 was granted Fast Track and Orphan drug designations from the FDA for this proposed indication and was granted Advanced Therapeutic Medicinal Product ("ATMP") classification from the European Medicines Agency ("EMA"). This program is based on the use of Tregs (T-regulatory cells) to treat diseases caused by imbalances in an individual's immune system.

In 2016, we commenced patient enrollment in the first of two cohorts in The Sanford Project: T-Rex Study, a Phase 2a prospective, randomized, placebo-controlled, double-blind clinical trial to evaluate the safety and efficacy of CLBS03 in adolescents with recent onset T1D (the "T-Rex Study"). On February 13, 2019, we announced top line results indicating that the therapy was well-tolerated but that the study's primary endpoint of preservation of C-peptide had not been achieved. We and our collaborators are conducting a comprehensive analysis of data from the trial (including the 2-year follow-up data to come in early 2020) and will make decisions regarding further development of CLBS03 based on the results of those analyses.

Additional Out-licensing Opportunities
Our broad intellectual property portfolio of cell therapy assets includes notable programs available for out-licensing in order to continue their clinical development. Our current long-term strategy focuses on advancing our therapies through development with the ultimate objective of obtaining market authorizations and entering commercialization, either alone or with partners, to provide treatment options to patients suffering from life-threatening medical conditions. We believe that we are well-positioned to realize potentially meaningful value increases within our own proprietary pipeline if we are successful in advancing our product candidates to their next significant development milestones.

Results of Operations
 
Three and Nine Months Ended September 30, 2019 Compared to Three and Nine Months Ended September 30, 2018
 
Overall, net losses were $4.9 million and $14.4 million for the three and nine months ended September 30, 2019, compared to $3.5 million and $12.6 million for the three and nine months ended September 30, 2018.

    
Operating Expenses

For the three months ended September 30, 2019, operating expenses totaled $5.1 million compared to $3.8 million for the three months ended September 30, 2018, representing an increase of $1.3 million, or 35%. Operating expenses were comprised of the following:
 
•
Research and development expenses were approximately $3.0 million for the three months ended September 30, 2019, compared to $1.7 million for the three months ended September 30, 2018, representing an increase of approximately $1.3 million, or 77%. Research and development in both periods focused on the advancement of our ischemic repair platform and related to (i) expenses associated with our ongoing Phase 2 study of CLBS12 in critical limb ischemia development program in Japan, (ii) expense associated with our ongoing Phase 1b/2a study for CLBS16 in coronary microvascular dysfunction, and (iii) expenses associated with planning our CLBS14 program in NORDA.

•
General and administrative expenses were approximately $2.1 million for both the three months ended September 30, 2019 and the three months ended September 30, 2018. Our general and administrative expenses focus on general corporate-related activities.


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Index

For the nine months ended September 30, 2019, operating expenses totaled $15.0 million compared to $13.2 million for the nine months ended September 30, 2018, representing an increase of $1.8 million, or 14%. Operating expenses were comprised of the following:
 
•
Research and development expenses were approximately $8.0 million for the nine months ended September 30, 2019, compared to $6.1 million for the nine months ended September 30, 2018, representing an increase of approximately $1.9 million, or 32%. Research and development in both periods focused on the advancement of our ischemic repair platform, and related to (i) expenses associated with our ongoing Phase 2 study of CLBS12 in critical limb ischemia development program in Japan, (ii) expense associated with our ongoing study for CLBS16 in coronary microvascular dysfunction, and (iii) expenses associated with planning our CLBS14 program in NORDA.

•
General and administrative expenses were approximately $7.0 million for the nine months ended September 30, 2019, compared to $7.1 million for the nine months ended September 30, 2018, representing a decrease of approximately $0.1 million, or 2%. Our general and administrative expenses focus on general corporate-related activities.

Historically, to minimize our use of cash, we have used a variety of equity and equity-linked instruments to compensate employees, consultants and other service providers. The use of these instruments has resulted in charges to the results of operations, which have been significant in the past.

Other Income (Expense)

Total other income (expense) is primarily comprised of investment income on cash, cash equivalents and marketable securities.





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Index

Analysis of Liquidity and Capital Resources
 
At September 30, 2019, we had cash, cash equivalents, and marketable securities of approximately $29.2 million, working capital of approximately $24.3 million, and stockholders’ equity of approximately $25.2 million.
 
During the nine months ended September 30, 2019, we met our immediate cash requirements through existing cash balances. Additionally, we used equity and equity-linked instruments to pay for services and compensation.

Net cash provided by or used in operating, investing and financing activities were as follows (in thousands): 
 
Nine Months Ended September 30,
 
2019
 
2018
Net cash used in operating activities
$
(14,662
)
 
$
(16,944
)
Net cash provided by (used in) investing activities
16,129

 
(3,641
)
Net cash provided by financing activities
908

 
791

 
Operating Activities
 
Our cash used in operating activities during the nine months ended September 30, 2019 was $14.7 million, which is comprised of (i) our net loss of $14.4 million, adjusted for non-cash expenses totaling $1.3 million (which includes adjustments for equity-based compensation, depreciation and amortization, and amortization/accretion of marketable securities), and (ii) changes in operating assets and liabilities using approximately $1.5 million.

Our cash used in operating activities during the nine months ended September 30, 2018 was $16.9 million, which is comprised of (i) our net loss of $12.6 million, adjusted for non-cash expenses totaling $1.3 million (which includes adjustments for equity-based compensation, depreciation and amortization, gains on disposals of assets, and amortization/accretion of marketable securities), and (ii) changes in operating assets and liabilities providing approximately $5.6 million.

 Investing Activities
 
Our cash provided by investing activities during the nine months ended September 30, 2019 totaled $16.1 million and was entirely due to net proceeds from the sale of marketable securities (net of purchases of marketable securities).

Our cash used in investing activities during the nine months ended September 30, 2018 totaled approximately $3.6 million, and was primarily due to net purchases of marketable securities (net of sales of marketable securities), and partially offset by $2.5 million in proceeds from the sale of our CFC device.
 
Financing Activities

Our cash provided by financing activities during the nine months ended September 30, 2019 consisted of proceeds of $1.0 million through the issuance of 250,000 shares of our common stock under the provisions of our common stock purchase agreement with Lincoln Park Capital, which was partially offset by tax withholding-related payments on net share settlement equity awards to employees.
Our cash provided by financing activities during the nine months ended September 30, 2018 consisted of proceeds of approximately $1.0 million through the issuance of shares of our common stock under the provisions of our Common Stock Sales Agreement with H.C. Wainwright and $0.3 million of option exercise proceeds, which was partially offset by payment obligations under equipment finance leases and tax withholding-related payments on net share settlement equity awards to employees.

Liquidity and Capital Requirements Outlook

To meet our short and long-term liquidity needs, we expect to use existing cash balances and a variety of other means. Other sources of liquidity could include additional potential issuances of debt or equity securities in public or private financings, partnerships and/or collaborations and/or sale of assets. Our history of operating losses and liquidity challenges may make it difficult for us to raise capital on acceptable terms or at all. The demand for the equity and debt of biopharmaceutical companies like ours is dependent upon many factors, including the general state of the financial markets. During times of extreme market

22
Index

volatility, capital may not be available on favorable terms, if at all. Our inability to obtain such additional capital could materially and adversely affect our business operations. We will also continue to seek, as appropriate, grants for scientific and clinical studies from various governmental agencies and foundations. We believe that our cash on hand will enable us to fund operating expenses for at least the next 12 months following the issuance of our financial statements considering the assumption that any initiation of a CLBS14 Phase 3 study is contingent on the successful acquisition of additional capital to fund such a study.
In March 2019, we and Lincoln Park Capital Fund, LLC (“Lincoln Park”) entered into a purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”), pursuant to which we have the right to sell to Lincoln Park shares of our common stock having an aggregate value of up to $26 million, subject to certain limitations and conditions set forth in the Purchase Agreement (the “Offering”). As consideration for entering into the Purchase Agreement, we issued to Lincoln Park an additional 181,510 shares of common stock as commitment shares. Pursuant to the Purchase Agreement, Lincoln Park purchased 250,000 shares of common stock, at a price of $4.00 per share, for a total gross purchase price of $1.0 million (the “Initial Purchase”) upon commencement. Thereafter, as often as every business day from and after one business day following the date of the Initial Purchase and over the 36-month term of the Purchase Agreement, we have the right, from time to time, at our sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 100,000 shares of common stock, with such amount increasing as the closing sale price of the common stock increases; provided Lincoln Park’s obligation under any single such purchase will not exceed $2,500,000, unless we and Lincoln Park mutually agree to increase the maximum amount of such single purchase (each, a “Regular Purchase”). If we direct Lincoln Park to purchase the maximum number of shares of common stock it then may sell in a Regular Purchase, then in addition to such Regular Purchase, and subject to certain conditions and limitations in the Purchase Agreement, we may direct Lincoln Park in an “accelerated purchase” to purchase an additional amount of common stock that may not exceed the lesser of (i) 300%  the number of shares purchased pursuant to the corresponding Regular Purchase or (ii) 30% of the total number of shares of our common stock traded during a specified period on the applicable purchase date as set forth in the Purchase Agreement. Under certain circumstances and in accordance with the Purchase Agreement, we may direct Lincoln Park to purchase shares in multiple accelerated purchases on the same trading day. As of September 30, 2019, the Company had not made any sales of common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.
In February 2018, we entered into a common stock sales agreement (the "Sales Agreement") with H.C. Wainwright & Co., LLC ("HCW"), as sales agent, in connection with an “at the market offering” under which we from time to time may offer and sell shares of our common stock, which was further amended in August 2018, having an aggregate offering price of up to $25 million. In March 2019, subsequent to the filing of our 2018 Form 10-K, the aggregate market value of our outstanding common stock held by non-affiliates was approximately $52.8 million. Pursuant to General Instruction I.B.6 of Form S-3, since the aggregate market value of our outstanding common stock held by non-affiliates was below $75.0 million at the time of our 2018 Form 10-K filing, the aggregate amount of securities that we were permitted to offer and sell at such time was reduced to $17.6 million (or a maximum of 4.8 million shares), which was equal to one-third of the aggregate market value of our common stock held by non-affiliates at such time. Subject to the terms and conditions of the Sales Agreement, HCW will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon our instructions, including any price, time or size limits specified by us. We have provided HCW with customary indemnification rights, and HCW will be entitled to a commission at a fixed commission rate equal to 3.0% of the gross proceeds per share sold. We have no obligation to sell any of the shares and may at any time suspend sales under the Sales Agreement or terminate the Sales Agreement. The Sales Agreement will terminate upon the sale of all of the shares under the Sales Agreement unless terminated earlier by either party as permitted under the Sales Agreement. As of September 30, 2019, we issued 149,041 shares of common stock under the Sales Agreement for net proceeds of $1.0 million.
While we continue to seek capital through a number of means, there can be no assurance that additional financing will be available on acceptable terms, if at all, and our negotiating position in capital generating efforts may worsen as existing resources are used. Additional equity financing may be dilutive to our stockholders; debt financing, if available, may involve significant cash payment obligations and covenants that restrict our ability to operate as a business; our stock price may not reach levels necessary to induce option or warrant exercises; and asset sales may not be possible on terms we consider acceptable. If we are unable to access capital necessary to meet our long-term liquidity needs, we may have to delay the expansion of our business or raise funds on terms that we currently consider unfavorable.

Seasonality
 
We do not believe that our operations are seasonal in nature.
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements.

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Index

 
Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies and estimates during the three and nine months ended September 30, 2019, compared to those reported in our 2018 Form 10-K.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.  CONTROLS AND PROCEDURES

(a)  Disclosure Controls and Procedures

Disclosure controls and procedures are the controls and other procedures we have designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Due to the inherent limitations of control systems, not all misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.

As of September 30, 2019, we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b)  Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15, that occurred during our last quarter to which this Quarterly Report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Index

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
There are no material changes to the disclosures previously reported in our 2018 Form 10-K.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously reported in our 2018 Form 10-K. See the risk factors set forth in our 2018 Annual Report on Form 10-K under the caption "Item 1 A - Risk Factors."


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS
The Exhibit Index appearing immediately after the signature page to this Form 10-Q is incorporated herein by reference.



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Index

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
CALADRIUS BIOSCIENCES, INC.
November 6, 2019
 
By:  /s/ David J. Mazzo, PhD      
Name: David J. Mazzo, PhD
Title: President and Chief Executive Officer
(Principal Executive Officer)
November 6, 2019
 
By: /s/ Joseph Talamo                    
Name: Joseph Talamo
Title: Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)






26
Index

CALADRIUS BIOSCIENCES, INC.
FORM 10-Q

Exhibit Index

*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
**
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
 
XBRL Instance Document
101.SCH
 
XBRL Taxonomy Extension Schema
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase
101.LAB
 
XBRL Taxonomy Extension Label Linkbase
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase
_______________

*
Filed herewith.
**
Furnished herewith.
             

27
Exhibit
Exhibit 31.1
 
CERTIFICATIONS UNDER SECTION 302
 
I, David J. Mazzo, PhD, certify that:
 
1.  I have reviewed this Quarterly Report on Form 10-Q of Caladrius Biosciences, Inc.;
 
2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
 
a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
 
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: November 6, 2019

/s/ David J. Mazzo, PhD    
Name: David J. Mazzo, PhD
Title: President and Chief Executive Officer (Principal Executive Officer)

Exhibit
Exhibit 31.2
 
CERTIFICATIONS UNDER SECTION 302
 
I, Joseph Talamo, certify that:
 
1.  I have reviewed this Quarterly Report on Form 10-Q of Caladrius Biosciences, Inc.;
 
2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
 
a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
 
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 

Date: November 6, 2019

 /s/ Joseph Talamo
Name: Joseph Talamo
Title: Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)


Exhibit
Exhibit 32.1
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report on Form 10-Q of Caladrius Biosciences, Inc. (the “Company”) for the quarter ended September 30, 2019 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David J. Mazzo, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:
 

1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and

2.
The information contained in the Report fairly presents, in all material respects, the financial condition of the Company as of the dates presented and the results of operations of the Company for the periods presented.
 
Dated:  November 6, 2019
 

 
/s/ David J. Mazzo, PhD
 
David J. Mazzo, PhD
 
President and Chief Executive Officer (Principal Executive Officer)
 
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.
 



Exhibit
Exhibit 32.2
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report on Form 10-Q of Caladrius Biosciences, Inc. (the “Company”) for the quarter ended September 30, 2019 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph Talamo, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:
 

1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and

2.
The information contained in the Report fairly presents, in all material respects, the financial condition of the Company as of the dates presented and the results of operations of the Company for the periods presented.
 
Dated:  November 6, 2019

 
 
/s/ Joseph Talamo
 
Joseph Talamo
 
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
 
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.