Caladrius Biosciences Inc. filed SEC Form 8-K: Completion of Acquisition or Disposition of Assets, Material Modification to Rights of Security Holders, Leadership Update, Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year, Regulation FD Disclosure, Financial Statements and Exhibits

Under the terms of the Merger Agreement, the Company issued shares of its common stock to Cend’s stockholders, at an exchange ratio of 0.5338 shares of the Company’s common stock, after taking into account the Reverse Stock Split, for each share of Cend common stock and preferred stock outstanding immediately prior to the Merger. The exchange ratio was determined through arm’s length negotiations between the Company and Cend. The Company assumed all of the stock options outstanding under the Cend 2016 Equity Incentive Plan (the “Cend Plan”), with such stock options henceforth representing the right to purchase a number of shares of the Company’s common stock equal to 0.5338 multiplied by the number of shares of Cend common stock previously represented by such options.

 

Immediately after the Merger, there were 7,820,830 shares of the Company’s common stock outstanding. Immediately after the Merger, the former stockholders of Cend owned approximately 48% of the outstanding Company’s common stock, with the Company’s stockholders immediately prior to the Merger owning approximately 52% of the outstanding shares of the Company’s common stock.  In addition, the Company assumed stock options under the Cend Plan to purchase an aggregate of 1,227,776 shares of the Company’s common stock.  Approximately 38% of the Company’s common stock outstanding immediately after the Merger is held by stockholders party to lock-up agreements, pursuant to which such stockholders have agreed, except in limited circumstances, not to sell or transfer, or engage in swap or similar transactions with respect to, shares of the Company’s common stock, including, as applicable, shares received in the Merger and issuable upon exercise of certain warrants and options, for a period of 120 days following the completion of the Merger.

 

The Company entered into an employment agreement with Mr. Slack on September 15, 2022 (the “Slack Employment Agreement”) setting forth the terms of his employment. Pursuant to the Slack Employment Agreement, Mr. Slack is entitled to an annual base salary of $460,000 and is eligible to receive an annual performance bonus equivalent to 50% of his then-current base salary, although the amount of such bonus may be less than or greater than 50% in the sole discretion of the compensation committee of the Company. The initial term of the Slack Employment Agreement is three years, which automatically renews for subsequent one-year terms unless terminated by either party. If the Company determines not to renew the Slack Employment Agreement, it must give Mr. Slack 90 days’ notice before the expiration of the current term. In the event that Mr. Slack is terminated for Cause, resigns without Good Reason (each term as defined in the Slack Employment Agreement), or is terminated following death or disability, he shall receive regular wages through the termination date but shall receive no other severance compensation. In the event that Mr. Slack is terminated without Cause or resigns for Good reason, Mr. Slack shall, upon signing of a release of claims, be entitled to (i) a lump-sum payment comprised of any accrued but unpaid salary and bonus, any accrued and unused paid time off, any unreimbursed business expenses and any other accrued compensation, (ii) continued payment of his then-current base salary for 12 months following termination (the “Severance Period”), (iii) COBRA assistance for a portion of the monthly premium during the Severance Period, (iv) a prorated bonus payment based on the number of days employed within the calendar year during which termination occurs, and (v) an extension of the exercise period of any fully vested option awards to the shorter of one year post-termination and the remaining term of the respective option awards. In the event that Mr. Slack’s termination without Cause or resignation for Good Reason coincides with or occurs within one year following a Change of Control (as defined in the Slack Employment Agreement) and Mr. Slack signs a release of claims, (i) the Severance Period will be extended from 12 months to 15 months, (ii) the vesting of options granted to Mr. Slack will accelerate in full, (iii) the Company will pay Mr. Slack an amount equal to 125% of his target bonus, and (iv) the Company will increase the amount of COBRA assistance to cover the entire monthly premium.

The foregoing description of the Slack Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the Slack Employment Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

As stated above, on September 15, 2022, the Departing Directors resigned from the Company’s board of directors and any respective committees of the board of directors to which they belonged. Following such resignations, the Company’s board of directors was comprised of Gregory B. Brown, M.D. whose term expires at the Company’s 2024 annual meeting of stockholders, David J. Mazzo, Ph.D. whose term expires at the 2024 annual meeting of stockholders, Cynthia L. Flowers, whose term expires at the 2023 annual meeting of stockholders, and Steven M. Klosk, whose term expires at the 2025 annual meeting of stockholders (collectively, the “Remaining Directors”). The Remaining Directors then elected, effective as of the effective time of the Merger, four designees selected by Cend (the “Cend Designees”), each to serve as directors in staggered classes agreed upon by the Company and Cend prior to the completion of the Merger. The Cend Designees are David Slack, M.B.A., Dr. Erkki Ruoslahti, Ph.D., Heidi Henson, C.P.A. and Dr. Mohammad Azab, M.B.A. Following the Merger, the Company’s board of directors is divided into staggered three-year terms as set forth below:

 

On September 15, 2022, Ms. Henson, Ms. Flowers and Mr. Klosk were appointed to the audit committee of the Company’s board of directors, and Ms. Henson was appointed the chairperson of the audit committee. On September 15, 2022, Mr. Klosk, Dr. Brown and Ms. Henson were appointed to the compensation committee of the Company’s board of directors, and Mr. Klosk was appointed as the chairperson of the compensation committee. On September 15, 2022, Dr. Brown, Dr. Ruoslahti, Dr. Azab and Ms. Flowers were appointed to the nominating and governance committee of the Company’s board of directors, and Dr. Brown was appointed as the chairperson of the nominating and governance committee. On September 15, 2022, Dr. Ruoslahti, Dr. Mazzo, Mr. Slack, Dr. Brown and Dr. Azab were appointed to the science and technology committee of the Company’s board of directors, and Dr. Ruoslahti was appointed as the chairperson of the science and technology committee.

 

 

A copy of a slide presentation that the Company will use at investor and industry conferences and presentations is attached to this Current Report as Exhibit 99.2 and is incorporated herein solely for purposes of this Item 7.01 disclosure.

The information in this Item 7.01, including Exhibits 99.1 and 99.2 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Item 7.01, including Exhibits 99.1 and 99.2 attached hereto, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as otherwise expressly stated in such filing.

 

 (d) Exhibits

 

^	The schedules and exhibits to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

+	Management contract or compensatory plans or arrangements.