cbli20220630

cbli20220630_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 June 30, 2022

☐	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.)

4333 Corbett Drive, Suite 1082, Fort Collins, Colorado	80525
(Address of principal executive offices)	(Zip Code)

(888) 613-8802

(Registrant’s telephone number, including area code)

(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 October 24, 2022, there were 53,295,653 shares outstanding of the registrant’s common stock, par value $0.005 per share.

		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’ Deficit	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	19
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	28
ITEM 4.	Controls and Procedures	28

PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	29
ITEM 1A.	Risk Factors	30
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
ITEM 3.	Defaults Upon Senior Securities	30
ITEM 4.	Mine Safety Disclosures	30
ITEM 5.	Other Information	30
ITEM 6.	Exhibits	31
Signatures		32

	*June 30, 2022*			*December 31, 2021*
		UNAUDITED
ASSETS
Current assets:
Cash and cash equivalents	$	553,754		$	1,844,732
Short-term investments		163,105			134,603
Accounts receivable		218,334			216,183
Prepaid expenses		247,003			981,895
Contract asset		196,422			132,572
Other current assets		289,991			837,358
Total current assets		1,668,609			4,147,343
Non-current assets:
Operating lease right-of-use assets		1,060,579			964,331
Restricted cash		—			5,000,000
Goodwill		9,267,007			9,267,007
Intangible assets, net		1,353,562			1,580,980
Property and equipment, net		184,456			201,901
Total non-current assets		11,865,604			17,014,219
Assets of discontinued operation		8,123			8,123
Total assets	$	13,542,336		$	21,169,685
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	11,677,761		$	5,715,956
Current portion of operating lease liabilities		364,830			254,998
Deferred revenue		550,215			373,468
Stock issuances due		681,028			325,828
Notes payable		6,396,486			4,575,000
Total current liabilities		19,670,320			11,245,250
Operating lease liabilities, net of current portion		793,289			806,140
Long-term debt		-			10,625,000
Total long-term liabilities		793,289			11,431,140
Liabilities of discontinued operation		63			63
Total liabilities		20,463,672			22,676,453
Stockholders’ equity (deficit):
Preferred stock, $.005 par value; 1,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021		—			—
Common stock, $.005 par value; 150,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 49,641,362 shares issued and outstanding as of June 30, 2022 and 35,484,106 shares issued and outstanding as of December 31, 2021		248,208			177,421
Additional paid-in capital		133,464,596			127,743,333
Accumulated other comprehensive income (loss)		25,169			(6,651	)
Accumulated deficit		(140,726,745	)		(129,482,141	)
Total Statera Biopharma, Inc. stockholders’ deficit		(6,988,772	)		(1,568,038	)
Noncontrolling interest in stockholders’ equity		67,436			61,270
Total stockholders’ deficit		(6,921,336	)		(1,506,768	)
Total liabilities and stockholders’ deficit	$	13,542,336		$	21,169,685

	*For the Three Months Ended*						*For the Six Months Ended*
	*June 30,*						*June 30,*
	*2022*			*2021*			*2022*			*2021*
Revenues:
Grants and contracts	$	768,827		$	-		$	1,766,666		$	-
Cost of goods sold		200,936			-			554,607			-
Gross profit		567,891			-			1,212,059			-
Operating expenses:
Research and development		973,604			1,815,616			4,215,932			2,839,960
Sales and marketing expense		19,364			-			56,400			2,795
General and administrative		2,428,434			4,507,874			6,406,783			8,674,763
Total operating expenses		3,421,402			6,323,490			10,679,115			11,517,518
Loss from operations		(2,853,511	)		(6,323,490	)		(9,467,056	)		(11,517,518	)
Other expense:
Interest and other expense		(637,036	)		(281,655	)		(1,783,424	)		(374,273	)
Total other expense		(637,036	)		(281,655	)		(1,783,424	)		(374,273	)
Income from discontinued operations, net of income taxes		-			-			-			-
Net loss		(3,490,547	)		(6,605,145	)		(11,250,480	)		(11,891,791	)
Net loss attributable to noncontrolling interests		3,153			-			5,876			-
Net loss attributable to Statera Biopharma, Inc.	$	(3,487,394	)	$	(6,605,145	)	$	(11,244,604	)	$	(11,891,791	)
Net loss attributable to common stockholders per share of common stock, basic and diluted	$	(0.07	)	$	(0.27	)	$	(0.26	)	$	(0.48	)
Weighted average number of shares used in calculating net loss per share, basic and diluted		49,671,113			24,723,308			43,694,850			24,527,333

							*Additional*
	*Common Stock*						*Paid-In*
	*Shares*			*Amount*			*Capital*
Balance at December 31, 2020		13,376,062		$	66,880		$	166,762,778
Exercise of warrants		92,883			466			(466	)
Issuance of common stock, net of offering costs		2,000,000			10,000			12,713,074
Net loss		—			—			—
Balance at March 31, 2021		15,468,945		$	77,346		$	179,475,386
Issuance of common stock, net of offering costs		—			—			214
Net loss		—			—			—
Balance at June 30, 2021		15,468,945		$	77,346		$	179,475,600

Balance at December 31, 2021		35,484,106		$	177,421		$	127,743,333
Issuance of common stock, net of offering costs		14,555,555			72,778			6,383,727
Common stock repurchase		(160,130	)		(801	)		(50,507	)
Shares issued for stock based compensation		100,000			500			(500	)
Stock based compensation		—			—			452,537
Foreign currency translation		—			—			—
Net loss		—			—			—
Balance at March 31, 2022		49,979,531		$	249,898		$	134,528,590
Common stock repurchase		(338,169	)	$	(1,690	)	$	1,690
Stock based compensation		—			—			(1,065,684	)
Foreign currency translation		—			—			—
Net loss		—			—			—
Balance at June 30, 2022		49,641,362		$	248,208		$	133,464,596

	*Accumulated Other Comprehensive Income (Loss)*			*Accumulated Deficit*			*Noncontrolling Interests*			*Total*
Balance at December 31, 2020	$	(685,680	)	$	(27,631,321	)	$	4,973,465		$	143,486,118
Exercise of warrants		—			—			—			—
Issuance of common stock, net of offering costs		—			—			—			12,723,074
Net loss		—			(5,286,646	)		—			(5,286,646	)
Balance at March 31, 2021	$	(685,680	)	$	(32,917,967	)	$	4,973,465		$	150,922,546
Issuance of common stock, net of offering costs		—						—			214
Net loss		—			(6,605,145	)		—			(6,605,145	)
Balance at June 30, 2021	$	(685,680	)	$	(39,523,112	)	$	4,973,465		$	144,317,615

Balance at December 31, 2021	$	(6,651	)	$	(129,482,141	)	$	61,270		$	(1,506,768	)
Issuance of common stock, net of offering costs		—			—			—			6,456,505
Common stock repurchase		—			—			—			(51,308	)
Shares issued for stock based compensation		—			—			—			—
Stock based compensation		—			—			—			452,537
Foreign currency translation		(17,601	)		—			(8,486	)		(26,087	)
Net loss		—			(7,757,210	)		(2,723	)		(7,759,933	)
Balance at March 31, 2022	$	(24,252	)	$	(137,239,351	)	$	50,061		$	(2,435,054	)
Common stock repurchase		—			—			—			—
Stock based compensation		—			—			—			(1,065,684	)
Foreign currency translation		49,421			—			20,528			69,949
Net loss		—			(3,487,394	)		(3,153	)		(3,490,547	)
Balance at June 30, 2022	$	25,169		$	(140,726,745	)	$	67,436		$	(6,921,336	)

	*For the Six Months Ended June 30,*
	*2022*			*2021*
Cash flows from operating activities:
Net loss	$	(11,250,480	)	$	(11,891,791	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		23,899			2,791
Amortization expense		227,418			—
Noncash equity expense		—			235,538
Stock based compensation		(613,147	)		3,779,199
Noncash lease expense		733			711
Services obtained for common shares		355,200			299,000
Changes in operating assets and liabilities:
Other current assets		547,369			(196,542	)
Accounts receivable		(2,151	)		—
Short term investments		(28,502	)		—
Prepaid expenses		734,892			—
Contract asset		(63,850	)		—
Accounts payable and accrued expenses		5,961,805			2,157,297
Deferred revenue		176,747			—
Net cash used in operating activities		(3,930,067	)		(5,613,797	)
Cash flows from investing activities:
Purchase of property and equipment		(6,454	)		(22,790	)
Acquired net assets		—			537,751
Net cash provided by (used in) investing activities		(6,454	)		514,961
Cash flows from financing activities:
Proceeds from issuance of common		6,405,195			—
Proceeds from issuance of preferred shares		—			5,685,113
Proceeds from issuance of long-term debt		500,000			14,870,740
Payment of debt issuance costs		—			(329,260	)
Repayments on notes payable		(9,303,514	)		—
Net cash provided by (used in) financing activities		(2,398,319	)		20,226,593
Effect of exchange rate change on cash and equivalents		43,862			—
Increase (decrease) in cash and cash equivalents		(6,290,978	)		15,127,757
Cash, cash equivalents, and restricted cash, beginning of year		6,844,732			593,869
Cash, cash equivalents, and restricted cash end of year	$	553,754		$	15,721,626

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	539,842		$	279,329

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Right of use asset exchanged for lease liability	$	1,099		$	229,868
Debt principal converted to equity		—			1,804,500
Debt interest converted to equity		—			490,470
Non-cash consideration of acquisition of ImQuest through the issuance of preferred stock		—			15,332,495
Non-cash equity fees		—			365,408

	*Gains and losses on foreign exchange translations*
Beginning balance	$	(6,651	)
Other comprehensive income (loss) before reclassifications		31,820
Amounts reclassified from accumulated other comprehensive loss		—
Ending balance	$	25,169

	*As of*
Common Equivalent Securities	*June 30, 2022*		*December 31, 2021*
Warrants		33,208,944		2,431,168
Restricted Stock Units		621,668		1,567,368
Options		1,234,527		45,468
Total		35,065,139		4,044,004

	July 27, 2021
Number of shares of the combined company owned by Cleveland BioLabs, Inc. stockholders		15,478,945	(1)
Multiplied by the price per share of Cleveland BioLabs, Inc. common stock	$	4.99	(2)
Total purchase price	$	77,239,936

	July 27, 2021
Tangible Assets Acquired
Cash and cash equivalents	$	13,116,460
Other receivables		25,142
Other current assets		44,507
Fixed assets - net		4,954
Panacela (67.57% ownership)		178,388
Total Tangible Assets		13,369,451

Assumed Liabilities
Accounts payable		(426,570	)
Accrued expenses		(41,755	)
Total Liabilities		(468,325	)
Net Tangible Assets/Liabilities		12,901,126
Intangible Assets Acquired
Goodwill		64,338,810
Total Net Assets Acquired	$	77,239,936

	Six Months Ended June 30,
	2021			2022
Revenue	$	1,429,473		$	1,766,666
Net loss	$	(13,653,502	)	$	(11,250,480	)

	June 30, 2022		December 31, 2021
Accounts payable	$	8,071,281	$	3,964,962
Accrued payroll		2,192,486		195,470
Accrued interest and fees		72,741		51,195
Other accrued expenses		1,341,253		1,504,329
	$	11,677,761	$	5,715,956

	June 30, 2022		December 31, 2021
Short-term portion of Avenue Ventures note payable	$	6,196,486	$	4,375,000
Short-term notes payable		200,000		200,000
	$	6,396,486	$	4,575,000

Maturity of Lease Liability	Total
2022	$	258,740
2023		475,556
2024		264,955
2025		173,644
2026		182,326
Thereafter		223,605
Total undiscounted lease payments		1,578,826
Less: Imputed interest		437,811
Present value of lease liabilities	$	1,141,015

	June 30, 2022			December 31, 2021
Customer base	$	1,312,000		$	1,312,000
Trade-names/marks		502,100			502,100
Accumulated amortization		(460,538	)		(233,120	)
Net carrying value	$	1,353,562		$	1,580,980

	*Total Stock Options Outstanding*			*Weighted Average Exercise Price per Share*
December 31, 2021		45,468		$	14.28
Granted		1,216,149			0.24
Vested		—			—
Forfeited, Canceled		(26,730	)		14.89
June 30, 2022		1,234,887		$	0.44

	*As of June 30, 2022*
	*Stock Options Outstanding*		*Vested Stock Options*
Quantity		1,234,887

SEC Form 10-Q filed by Statera Biopharma Inc.