cbli20210930

cbli20210930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 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 001-32954

STATERA BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-0077155
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2537 Research Boulevard, Suite 201, Fort Collins, Colorado	80526
(Address of principal executive offices)	(Zip Code)

(888) 613-8802

(Registrant’s telephone number, including area code)

Cytocom, Inc.

(Former name, former address and former fiscal year, if changed since last report)

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit 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 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	☐	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 ☒

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 $0.005		STAB		NASDAQ Capital Market

As of November 11, 2021, there were 32,095,520 shares outstanding of the registrant’s common stock, par value $0.005 per share.

Table of Contents

TABLE OF CONTENTS

		PAGE
PART I – FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Loss	5
	Condensed Consolidated Statement of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30
ITEM 4.	Controls and Procedures	30

PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	31
ITEM 1A.	Risk Factors	32
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
ITEM 3.	Defaults Upon Senior Securities	32
ITEM 4.	Mine Safety Disclosures	32
ITEM 5.	Other Information	32
ITEM 6.	Exhibits	33
Signatures		34

Table of Contents

STATERA BIOPHARMA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	*September 30, 2021*			*December 31, 2020*

ASSETS
Current assets:
Cash and cash equivalents	$	9,216,349		$	593,869
Short-term investments		233,642			—
Accounts receivable		144,244			—
Due from subsidiary		—			329,330
Prepaid expenses		2,688,472			—
Other current assets		1,045,332			2,547
Total current assets		13,328,039			925,746
Non-current assets:
Operating lease right-of-use assets		840,590			101,048
Restricted cash		5,000,000			—
Goodwill		76,972,668			—
Intangible assets, net		1,575,278			—
Property and equipment, net		119,133			8,690
Contract asset		192,222			—
Total non-current assets		84,699,891			109,738
Assets of discontinued operation		8,123
Total assets	$	98,036,053		$	1,035,484
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	5,928,805		$	2,687,847
Current portion of operating lease liabilities		198,302			30,758
Deferred revenue		506,032			—
Stock issuances due		470,828			—
Notes payable		2,883,333			1,902,237
Advances from related party		200,000			—
Total current liabilities		10,187,300			4,620,842
Operating lease liabilities, net of current portion		737,403			70,380
Long-term debt		12,916,667			—
Total long-term liabilities		13,654,070			70,380
Liabilities of discontinued operation		63			—
Total liabilities		23,841,433			4,691,222
Stockholders’ equity (deficit):
Preferred stock, $.005 par value; 1,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 0 shares issued and outstanding as of September 30, 2021 and December 31, 2020		—			—
Common stock, $.005 par value; 150,000,000 shares authorized as of September 30, 2021 and 25,000,000 shares authorized as of December 31, 2020; 32,095,520 shares issued and outstanding as of September 30, 2021 and 13,376,062 shares issued and outstanding as of December 31, 2020		160,478			160,478
Additional paid-in capital		126,220,319			23,946,747
Accumulated other comprehensive loss		(2,014	)		—
Accumulated deficit		(52,256,361	)		(27,762,963	)
Total Statera Biopharma, Inc. stockholders’ equity (deficit)		74,122,422			(3,655,738	)
Noncontrolling interest in stockholders’ equity		72,198			—
Total stockholders’ equity (deficit)		74,194,620			(3,655,738	)
Total liabilities and stockholders’ equity	$	98,036,053		$	1,035,484

See Notes to Condensed Consolidated Financial Statements

December 31, 2020 capital structure is not retroactively restated for the recapitalization as a result of the merger

Table of Contents

STATERA BIOPHARMA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

		*For the Three Months Ended*					*For the Nine Months Ended*
		*September 30,*					*September 30,*
		*2021*		*2020*			*2021*			*2020*
Revenues:
Grants and contracts	$	236,519		$	-		$	236,519		$	-
Cost of Revenue:
Cost of goods sold		115,927			-			115,927			-
Gross Profit		120,592			-			120,592			-
Operating expenses:
Research and development		3,434,977			4,383,325			6,274,936			4,509,890
Sales and marketing expense		23,242			-			26,037			-
General and administrative		6,306,323			1,787,333			14,981,086			2,284,577
Total operating expenses		9,764,542			6,170,658			21,282,059			6,794,467
Loss from operations		(9,643,950	)		(6,170,658	)		(21,161,467	)		(6,794,467	)
Other income (expense):
Interest and other income (expense)		(3,089,301	)		491,817			(3,463,572	)		(1,069,403	)
Total other income (expense)		(3,089,301	)		491,817			(3,463,572	)		(1,069,403	)
Income from discontinued operations, net of income taxes		(1	)		-			(1	)		-
Net loss		(12,733,250	)		(5,678,841	)		(24,625,038	)		(7,863,870	)
Net loss attributable to noncontrolling interests		13,419			-			13,419			-
Net loss attributable to Statera Biopharma, Inc.	$	(12,719,831	)	$	(5,678,841	)	$	(24,611,619	)	$	(7,863,870	)
Net loss attributable to common stockholders per share of common stock, basic and diluted	$	(0.47	)	$	(1.84	)	$	(0.86	)	$	(1.13	)
Weighted average number of shares used in calculating net loss per share, basic and diluted		27,036,583			3,081,294			28,671,422			6,957,095

See Notes to Condensed Consolidated Financial Statements

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STATERA BIOPHARMA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

		*For the Three Months Ended*					*For the Nine Months Ended*
		*September 30,*					*September 30,*
		*2021*		*2020*			*2021*			*2020*
Net loss including noncontrolling interests	$	(12,733,250	)	$	(5,678,841	)	$	(24,625,038	)	$	(7,863,870	)
Other comprehensive loss:
Foreign currency translation adjustment		(2,014	)		—			(2,014	)		—
Comprehensive loss including noncontrolling interests		(12,735,264	)		(5,678,841	)		(24,627,052	)		(7,863,870	)
Comprehensive loss attributable to noncontrolling interests		13,419			—			13,419			—
Comprehensive loss attributable to Statera Biopharma, Inc.	$	(12,721,845	)	$	(5,678,841	)	$	(24,613,633	)	$	(7,863,870	)

See Notes to Condensed Consolidated Financial Statements

Table of Contents

STATERA BIOPHARMA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

						Additional
	Common Stock					Paid-In
	Shares			Amount		Capital
Balance at December 31, 2019		20,346,999		$	20,347	$	11,307,253
Retroactive application of recapitalization		(9,048,760	)		36,144		151,854,270
Adjusted balance, beginning of period		11,298,239			56,491		163,161,523
Issuance of common stock		1,515,878			7,579		2,775,846
Issuance of common stock		6,000			30		13,470
Exercise of warrants		105,000			525		504,381
Exercise of warrants		8,871			44		61,219
Exercise of warrants		82,399			412		248,138
Foreign currency translation		—			—		—
Net loss		—			—		—
Balance at September 30, 2020		13,016,387		$	65,081	$	166,764,577

Balance at December 31, 2020		13,376,062		$	66,876	$	166,762,778
Exercise of warrants		92,883			464		(464	)
Issuance of common stock		2,000,000			10,000		12,713,074
Statera merger & recapitalization		16,626,575			83,138		(58,924,898	)
Shares to be issued for services		—			—		464,703
Shares to be issued for stock based compensation		—			—		234,000
Restricted stock		—			—		4,957,707
Panacela net loss		—			—		13,419
Net loss		—			—		-
Balance at September 30, 2021		32,095,520		$	160,478	$	126,220,319

	*Accumulated Other Comprehensive Income (Loss)*			*Accumulated Deficit*			*Noncontrolling Interests*			*Total*
Balance at December 31, 2019	$	—		$	(15,537,460	)	$	—		$	(4,209,860	)
Retroactive application of recapitalization		(568,030	)		—			5,039,878			156,362,262
Adjusted balance, beginning of period		(568,030	)		(15,537,460	)		5,039,878			152,152,402
Issuance of common stock		—			—			—			2,783,425
Issuance of common stock		—			—			—			13,500
Exercise of warrants		—			—			—			504,906
Exercise of warrants		—			—			—			61,263
Exercise of warrants		—			—			—			248,550
Foreign currency translation		(76,992	)		—			(69,565	)		(146,557	)
Net loss

SEC Form 10-Q filed by Statera Biopharma Inc.