clbs-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2021


☐			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

Securities registered pursuant to Section 12(g) of the Act: None

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 ☒ No ☐

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 ☒ No ☐

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 definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

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 May 6, 2021
Common stock, $0.001 par value per share	59,498,958	shares

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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;

•the extent to which the COVID-19 coronavirus may impact our business, including our clinical trials and financial condition; 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 February 25, 2021 (our "2020 Form 10-K").

The factors discussed herein, including those risks described in "Item 1A. Risk Factors" and elsewhere in our 2020 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.

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TABLE OF CONTENTS


	PART I- FINANCIAL INFORMATION	Page No.
Item 1.	Financial Statements:	5
	Consolidated Balance Sheets at March 3 1 , 202 1 (unaudited) and December 31, 20 20	5
	Consolidated Statements of Operations for the three months ended March 3 1 , 2020 and 20 20 (unaudited)	6
	Consolidated Statements of Comprehensive Loss for the three months ended March 3 1 , 202 1 and 20 20 (unaudited)	7
	Consolidated Statements of Equity for the three months ended March 3 1 , 202 1 and 20 20 (unaudited)	8
	Consolidated Statements of Cash Flows for the three months ended March 3 1 , 202 1 and 20 20 (unaudited)	9
	Notes to Unaudited Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
	PART II- OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	26
	Signatures	27

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PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	March 31, 2021		December 31, 2020
ASSETS	(Unaudited)
Cash and cash equivalents	$	28,744	$	16,512
Marketable securities	82,767		18,061
Prepaid and other current assets	2,522		758
Total current assets	114,033		35,331
Property and equipment, net	41		57
Other assets	533		614
Total assets	$	114,607	$	36,002

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable	$	2,315	$	1,020
Accrued liabilities	2,123		2,486
Total current liabilities	4,438		3,506
Other long-term liabilities	155		254
Total liabilities	4,593		3,760
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 March 31, 2021 and December 31, 2020, respectively	—		—
Common stock, $0.001 par value, authorized 500,000,000 shares; issued 59,510,038 and 19,389,413 shares at March 31, 2021 and December 31, 2020, respectively; and outstanding, 59,498,958 and 19,378,333 shares at March 31, 2021 and December 31, 2020, respectively	60		19
Additional paid-in capital	544,601		458,748
Treasury stock, at cost; 11,080 shares at March 31, 2021 and December 31, 2020	(708)		(708)
Accumulated deficit	(433,613)		(425,550)
Accumulated other comprehensive loss	(72)		(13)
Total Caladrius Biosciences, Inc. stockholders' equity	110,268		32,496
Noncontrolling interests	(254)		(254)
Total stockholders' equity	110,014		32,242
Total liabilities and stockholders' equity	$	114,607	$	36,002

See accompanying notes to consolidated financial statements.

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CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)


	Three Months Ended March 31,
	2021		2020
Operating Expenses:
Research and development	$	5,076	$	1,499
General and administrative	3,010		2,558
Total operating expenses	8,086		4,057

Operating loss	(8,086)		(4,057)

Other income:
Investment income, net	23		71

Total other income	23		71



Net loss	$	(8,063)	$	(3,986)
Less - net income attributable to noncontrolling interests	—		4
Net loss attributable to Caladrius Biosciences, Inc. common stockholders	$	(8,063)	$	(3,990)


Basic and diluted loss per share
Caladrius Biosciences, Inc. common stockholders	$	(0.19)	$	(0.38)

Weighted average common shares outstanding
Basic and diluted shares	42,117		10,623

See accompanying notes to consolidated financial statements.

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CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)


	Three Months Ended March 31,
		2021		2020
Net loss		$	(8,063)	$	(3,986)

Other comprehensive loss:
Available for sale securities - net unrealized loss		(59)		(2)
Total other comprehensive loss		(59)		(2)

Comprehensive loss		(8,122)		(3,988)

Comprehensive income attributable to noncontrolling interests		—		4

Comprehensive loss attributable to Caladrius Biosciences, Inc. common stockholders		$	(8,122)	$	(3,992)

See accompanying notes to consolidated financial statements.

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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 Income (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, 2020	10	$	—	19,389	$	19	$	458,748	$	(13)	$	(425,550)	$	(708)	$	32,496	$	(254)	$	32,242

Net loss	—	—		—	—		—		—		(8,063)		—		(8,063)		—		(8,063)
Unrealized loss on marketable securities	—	—		—	—		—		(59)		—		—		(59)		—		(59)
Share-based compensation	—	—		273	—		413		—		—		—		413		—		413
Net proceeds from issuance of common stock and warrants	—	—		39,841	41		85,416		—		—		—		85,457		—		85,457
Proceeds from option exercises	—	—		7	—		24		—		—		—		24		—		24

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













	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, 2019	10	$	—	10,529	$	11	$	438,911	$	2	$	(417,400)	$	(708)	$	20,816	$	(263)	$	20,553

Net loss	—	—		—	—		—		—		(3,990)		—		(3,990)		4		(3,986)
Unrealized loss on marketable securities	—	—		—	—		—		(2)		—		—		(2)		—		(2)
Share-based compensation	—	—		110	—		419		—		—		—		419		—		419



Balance at March 31, 2020	10	$	—	10,639	$	11	$	439,330	$	—	$	(421,390)	$	(708)	$	17,243	$	(259)	$	16,984

See accompanying notes to consolidated financial statements.

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CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net loss	$	(8,063)	$	(3,986)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	597		567
Depreciation and amortization	16		15


Accretion on marketable securities	323		19
Changes in operating assets and liabilities:
Prepaid and other current assets	(1,763)		354
Other assets	81		233
Accounts payable, accrued liabilities and other liabilities	834		(1,443)
Net cash used in operating activities	(7,975)		(4,241)
Cash flows from investing activities:
Purchase of marketable securities	(75,911)		—
Sale of marketable securities	10,821		11,104
Purchases of property and equipment	—		(2)
Net cash (used in) provided by investing activities	(65,090)		11,102
Cash flows from financing activities:
Proceeds from exercise of options	24		—
Tax withholding payments on net share settlement equity awards	(184)		(148)
Net proceeds from issuance of common stock	85,457		—

Net cash provided by (used in) financing activities	85,297		(148)
Net increase in cash and cash equivalents	12,232		6,713
Cash and cash equivalents at beginning of period	16,512		14,032
Cash and cash equivalents at end of period	$	28,744	$	20,745

See accompanying notes to consolidated financial statements.

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CALADRIUS BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – The Business

Overview

Caladrius Biosciences, Inc. (“we,” “us,” "our," “Caladrius” or the “Company”) is a clinical-stage biopharmaceutical company dedicated to the development and commercialization of cellular therapies designed to reverse disease and/or promote the regeneration of damaged tissue. The Company is developing first-in-class therapeutics based on the characteristics of naturally occurring CD34+ cells and their ability to stimulate the growth of new microvasculature. Its technology leverages these cells to enable the body's natural repair mechanisms using formulations unique to each medical indication.

The Company's leadership team has decades of collective biopharmaceutical development experience. Its goal is to develop and commercialize products that address important unmet medical needs based on a broad and versatile portfolio of candidates. The Company’s current product candidates include: CLBS16, the subject of both a recently completed positive Phase 2a study and a newly initiated Phase 2b (FREEDOM) study in the U.S. for the treatment of coronary microvascular dysfunction (“CMD”); HONEDRA® (CLBS12), recipient of SAKIGAKE designation and eligible for early conditional approval in Japan for the treatment of critical limb ischemia (“CLI”) and Buerger’s disease based on the results of an ongoing clinical trial and recipient of orphan drug designation in March 2021 from the U.S. Food and Drug Administration ("FDA") for Buerger's disease; CLBS201, designed to assess the safety and efficacy of CD34+ cell therapy as a treatment for patients with pre-dialysis diabetic kidney disease (“DKD”) and OLOGO™ (CLBS14), a Regenerative Medicine Advanced Therapy (“RMAT”) designated Phase 3 ready therapy for treatment of no-option refractory disabling angina (“NORDA”).

Ischemic Repair (CD34 Cell Technology)

The CD34+ cell was discovered as a result of the deliberate search for a stem cell capable of stimulating the development and/or repair of blood vessels. All tissues in the body maintain their function by replacing cells over time. In addition to the maintenance function, the body must also be capable of building new blood vessels after injury. A CD34+ cell is a stem cell that has the ability to stimulate new blood vessel formation at the level of the microvasculature. No other native cell discovered to date has demonstrated this same capability.

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

HONEDRA® for Treatment of Critical Limb Ischemia

The Company's randomized and open-label, registration-eligible study of HONEDRA® in Japan for the treatment of CLI has shown strong results to date. 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. The study's enrollment continues to be slowed by the COVID-19 pandemic's impact in Japan, however, the Company is encouraged by the patient pre-screening pipeline and continues to make progress towards study completion, the exact date of which is impossible to predict given the continuing impact of COVID-19 on clinical trials like ours in Japan. While the final outcome of the trial will depend on all data from all subjects, data, to date, are very encouraging.

CLBS16 for Treatment of Coronary Microvascular Dysfunction

In 2017, with the assistance of a $1.9 million grant from the National Institutes of Health (Award Number R44HL135889), the Company initiated its program for CLBS16 for the treatment of CMD, a disease that afflicts millions of patients with no current targeted treatment options. That study, the ESCaPE-CMD trial, was a Phase 2a proof-of-concept study that enrolled patients at the Mayo Clinic in Rochester, MN and Cedars-Sinai Medical Center in Los Angeles, CA. That data set showed a positive therapeutic effect with a statistically significant improvement in angina frequency, coronary flow reserve, Canadian Cardiovascular Society Angina Class and Seattle Questionnaire score, as well as an acceptable safety profile. The full data set from that study was presented at the SCAI 2020 Scientific Sessions Virtual Conference on May 14, 2020 by Dr. Timothy Henry, FACC, of the Christ Hospital in Cincinnati, Ohio. In December 2020, the Company commenced enrollment in its Phase 2b FREEDOM trial of CLBS16 as a therapy for CMD. The first patient in the study was subsequently treated in January 2021 at The Christ Hospital Health Network in Cincinnati, Ohio. This 105-patient double-blind randomized and placebo-controlled

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clinical trial (FREEDOM Trial) is designed to further evaluate the efficacy and safety of intracoronary delivery of autologous CD34+ cells in subjects with CMD and without obstructive coronary artery disease. To the Company's knowledge, this is the first controlled regenerative medicine trial in CMD.

CLBS201 for Treatment of Diabetic Kidney Disease

The Company has prepared an initial development plan for the clinical study of CLBS201, a CD34+ investigational product for administration into the renal arteries to slow the deterioration or reverse the decline of renal function in patients with diabetic kidney disease ("DKD") who, although at a pre-dialysis stage, exhibit rapidly progressive disease. Progressive kidney failure is associated with attrition of the microcirculation of the kidney. Pre-clinical studies in kidney disease and injury models have demonstrated that protection or replenishment of the microcirculation results in improved kidney function. A Phase 2 proof of concept, randomized, placebo-controlled study is planned for initiation in the second half of 2021.

OLOGO™ for Treatment of No Option Refractory Disabling Angina

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 by a previous sponsor.

Based on the clinical evidence from the completed studies that a single administration of OLOGO™ reduces mortality, improves angina and increases exercise capacity in patients with otherwise untreatable angina, this product received Regenerative Medicine Advanced Therapy (“RMAT”) designation from the FDA. The Company continues to seek an agreement with the FDA on the design of a Phase 3 study of appropriate and practical size and scope which, in combination with previously filed Phase 1, 2 and 3 data, will be considered for the registration of OLOGO™. Notably, the RMAT designation affords the product a 6-month review time for a biologics license application ("BLA"), once submitted.

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.

Coronavirus Considerations

In December 2019, a novel strain of coronavirus (SARS-CoV-2), which causes COVID-19, was reported to have surfaced in China. In March 2020, the World Health Organization declared the outbreak of COVID-19 to be a pandemic, and the world's economies began to experience pronounced effects. Despite the FDA approval of multiple COVID-19 vaccines in late 2020, there remains uncertainty around the extent and duration of disruption and any future related financial impact cannot be reasonably estimated at this time. In response to the pandemic, the Company has implemented universal work from home as well as stringent social distancing and other hygiene policies for employees when they must be in the office. The Company's clinical study of HONEDRA® in Japan has experienced significant delays in enrollment due to the “State of Emergency” that was in effect for most of 2020 in response to COVID-19, and which was re-implemented on January 7, 2021 through March 21, 2021, and again on April 25, 2021 through May 11, 2021 covering Tokyo and other regions. This most recent reinstatement of the “State of Emergency” continues negatively to impact enrollment of the on-going clinical trial.

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 March 31, 2021, 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, 2020 and 2019 included in our 2020 Form 10-K. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

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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 making 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. Accordingly, actual results could differ from those estimates and assumptions.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Caladrius Biosciences, Inc. and its wholly owned and majority owned subsidiaries and affiliates. All intercompany activities have been eliminated in consolidation.

Note 2 – Summary of Significant Accounting Policies

In addition to the policies below, the Company's significant accounting policies are described in Note 2 of the Notes to Consolidated Financial Statements included in its 2020 Form 10-K. There were no changes to these policies during the three months ended March 31, 2021.

Concentration of Risks

The Company is subject to credit risk from its portfolio of cash, cash equivalents and marketable securities. Under its investment policy, the Company limits 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 the Company's 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.

New Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses, which will require companies to present assets held at amortized cost and available for sale debt securities net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. The guidance was effective for fiscal years and interim periods beginning after December 15, 2019 and adopted January 1, 2020. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

In October 2019, the FASB issued ASU 2019-12, which affects general principles within Topic 740, Income Taxes. The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company determined that the adoption of this new accounting guidance did not have a material impact on its consolidated financial statements and footnote disclosures.

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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):


	March 31, 2021								December 31, 2020
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

Corporate debt securities	$	59,937	$	—	$	(61)	$	59,876	$	8,406	$	—	$	(7)	$	8,399
Money market funds	18,044		—		—		18,044		7,591		—		—		7,591
Municipal debt securities	29,016		—		(12)		29,004		14,753		—		(6)		14,747

Total	$	106,997	$	—	$	(73)	$	106,924	$	30,750	$	—	$	(13)	$	30,737

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):


	March 31, 2021		December 31, 2020
Cash and cash equivalents	$	24,157	$	12,676
Marketable securities	82,767		18,061
Total	$	106,924	$	30,737

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


	March 31, 2021
	Amortized Cost		Estimated Fair Value
Less than one year	$	106,997	$	106,924
Greater than one year	—		—
Total	$	106,997	$	106,924

Note 4 – Income (Loss) Per Share

For the three months ended March 31, 2021 and 2020, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share as they are anti-dilutive. At March 31, 2021 and 2020, the Company excluded the following potentially dilutive securities (in thousands):


	March 31,
	2020	2020
Stock Options	1,022	1,280
Warrants	21,357	30

Restricted Stock Units	798	313

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 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.

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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 March 31, 2021, and December 31, 2020 (in thousands).


	March 31, 2021								December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Marketable securities - available for sale	$	—	$	82,767	$	—	$	82,767	$	—	$	18,061	$	—	$	18,061
	$	—	$	82,767	$	—	$	82,767	$	—	$	18,061	$	—	$	18,061

Note 6 – Accrued Liabilities

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


	March 31, 2021		December 31, 2020
Salaries, employee benefits and related taxes	$	1,119	$	1,716
Operating lease liabilities - current	381		370

Other	623		400
Total	$	2,123	$	2,486

Note 7 – Operating Leases

The Company has operating leases for two offices with terms that expire in 2022 and 2023. The Company estimates its incremental borrowing rate, at lease commencement, to determine the present value of lease payments, since most of the Company's leases do not provide an implicit rate of return. The Company recognizes lease expense on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company elected to account for non-lease components associated with its leases and lease components as a single lease component. Each of the Company's leases include options for the Company to extend the lease term and/or sub-lease space in whole or in part.

Operating lease liabilities and right-of-use assets were recorded in the following captions of our balance sheet were as follows (in thousands):


	March 31, 2021		December 31, 2020
Right-of Use Assets:
Other assets	$	492	$	574
Total Right-of-Use Asset	$	492	$	574

Operating Lease Liabilities:
Accrued liabilities	$	381	$	370
Other long-term liabilities	155		254
Total Operating Lease Liabilities	$	536	$	624

As of March 31, 2021, the weighted average remaining lease term for our operating leases was 1.6 years, and the weighted average discount rate for our operating leases was 9.625%. Future minimum lease payments under the lease agreements as of March 31, 2021 were as follows (in thousands):

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Years ended	Operating Leases


2021	312
2022	239
2023	27
Total lease payments	578
Less: Amounts representing interest	(42)
Present value of lease liabilities	$	536

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, 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 March 31, 2021, the Company had not made any sales of common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

Common Stock Sales Agreement

In February 2018, the Company entered into a common stock sales agreement with H.C. Wainwright & Co., LLC ("HCW") as sales agent, which was subsequently amended in August 2018 (the "Sales Agreement"), in connection with an “at the market offering” under which the Company from time to time 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 the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the "2018 Form 10-K"), the aggregate market value of its

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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 the Company's outstanding common stock held by non-affiliates was below $75.0 million at the time of its 2018 Form 10-K filing, the aggregate amount of securities that the Company was 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 its common stock held by non-affiliates at such time.

Subject to the terms and conditions of the Sales Agreement, HCW will use 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

SEC Form 10-Q filed by Caladrius Biosciences, Inc.