cbli20210630

cbli20210630_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, 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

CYTOCOM, 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)

N/A

(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		CBLI		NASDAQ Capital Market

As of August 9, 2021, there were 15,478,945 shares outstanding of the registrant’s common stock, par value $0.005 per share.

		PAGE
PART I – FINANCIAL INFORMATION
ITEM 1.	Consolidated Condensed Financial Statements
	Consolidated Condensed Balance Sheets	3
	Consolidated Condensed Statements of Operations	4
	Consolidated Condensed Statements of Comprehensive Loss	4
	Consolidated Condensed Statement of Stockholders’ Equity	6
	Consolidated Condensed Statements of Cash Flows	7
	Notes to Consolidated Condensed Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	20
ITEM 4.	Controls and Procedures	20

PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	21
ITEM 1A.	Risk Factors	21
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
ITEM 3.	Defaults Upon Senior Securities	21
ITEM 4.	Mine Safety Disclosures	21
ITEM 5.	Other Information	21
ITEM 6.	Exhibits	22
Signatures		23

	*June 30, 2021*			*December 31, 2020*
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	13,776,955		$	1,946,418
Short-term investments		—			324,870
Accounts receivable		—			11,512
Other current assets		46,825			31,506
Total current assets		13,823,780			2,314,306
Equipment, net		4,954			3,715
Total assets	$	13,828,734		$	2,318,021
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	60,503		$	167,773
Accrued expenses		240,120			136,838
Total liabilities		300,623			304,611
Stockholders’ equity:
Preferred stock, $.005 par value; 1,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 0 shares issued and outstanding as of June 30, 2021 and December 31, 2020		—			—
Common stock, $.005 par value; 25,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 15,468,945 and 13,376,062 shares issued and outstanding as of June 30, 2021 and December 31, 2020		77,340			66,876
Additional paid-in capital		179,475,602			166,762,778
Accumulated other comprehensive loss		(681,820	)		(685,680	)
Accumulated deficit		(170,301,633	)		(169,104,029	)
Total Cytocom, Inc. stockholders’ equity (deficit)		8,569,489			(2,960,055	)
Noncontrolling interest in stockholders’ equity		4,958,622			4,973,465
Total stockholders’ equity		13,528,111			2,013,410
Total liabilities and stockholders’ equity	$	13,828,734		$	2,318,021

		*For the Three Months Ended*					*For the Six Months Ended*
		*June 30,*					*June 30,*
		*2021*		*2020*			*2021*			*2020*
Revenues:
Grants and contracts	$	-		$	63,255		$	-		$	219,297
Operating expenses:
Research and development		51,515			170,007			169,773			388,215
General and administrative		617,722			485,439			1,050,726			867,605
Total operating expenses		669,237			655,446			1,220,499			1,255,820
Loss from operations		(669,237	)		(592,191	)		(1,220,499	)		(1,036,523	)
Other income (expense):
Interest and other income (expense)		2,295			508,811			6,210			511,711
Foreign exchange gain (loss)		(152	)		(780	)		(10	)		(387	)
Change in value of warrant liability		-			(292,385	)		-			(453,074	)
Total other income (expense)		2,143			215,646			6,200			58,250
Net loss		(667,094	)		(376,545	)		(1,214,299	)		(978,273	)
Net loss attributable to noncontrolling interests		7,588			6,707			16,695			19,903
Net loss attributable to Cytocom, Inc.	$	(659,506	)	$	(369,838	)	$	(1,197,604	)	$	(958,370	)
Net loss attributable to common stockholders per share of common stock, basic and diluted	$	(0.04	)	$	(0.03	)	$	(0.08	)	$	(0.08	)
Weighted average number of shares used in calculating net loss per share, basic and diluted		15,468,945			11,947,364			14,847,980			11,651,761

									Additional
	Common Stock				Treasury Stock				Paid-In
	Shares		Amount		Shares		Amount		Capital
Balance at December 31, 2019		11,298,239	$	56,487		—	$	—	$	163,161,523
Exercise of warrants		105,000		53		—		—		504,853
Net loss		—		—		—		—		—
Foreign currency translation		—		—		—		—		—
Balance at March 31, 2020		11,403,239	$	56,540		—	$	-	$	163,666,376
Issuance of common stock, net of offering costs		1,515,878		7,579		—		—		2,775,846
Exercise of warrants		8,871		44		—		—		61,219
Net loss		—		—		—		—		—
Foreign currency translation		—		—		—		—		—
Balance at June 30, 2020		12,927,988	$	64,163		—	$	—	$	166,503,441

Balance at December 31, 2020		13,376,062	$	66,876		—	$	-	$	166,762,778
Exercise of warrants		92,883		464		—		—		(464	)
Net loss		—		—		—		—		—
Foreign currency translation		—		—		—		—		—
Issuance of common stock, net of offering costs		2,000,000		10,000		—		—		12,713,074
Balance at March 31, 2021		15,468,945	$	77,340		—	$	-	$	179,475,388
Issuance of common stock, net of offering costs		—		—		—		—		214
Net loss		—		—		—		—		—
Foreign currency translation		—		—		—		—		—
Balance at June 30, 2021		15,468,945	$	77,340		—	$	—	$	179,475,602

	*Accumulated Other Comprehensive Income (Loss)*			*Accumulated Deficit*			*Noncontrolling Interests*			*Total*
Balance at December 31, 2019	$	(568,030	)	$	(166,705,572	)	$	5,039,878		$	984,286
Exercise of warrants		—			—			—			504,906
Net loss		—			(588,532	)		(13,196	)		(601,728	)
Foreign currency translation		(74,477	)		—			(33,623	)		(108,100	)
Balance at March 31, 2020	$	(642,507	)	$	(167,294,104	)	$	4,993,059		$	779,364
Issuance of common stock, net of offering costs		—			—			—			2,783,425
Exercise of warrants		—			—			—			61,263
Net loss		—			(369,838	)		(6,707	)		(376,545	)
Foreign currency translation		30,383			—			14,012			44,395
Balance at June 30, 2020	$	(612,124	)	$	(167,663,942	)	$	5,000,364		$	3,291,902

Balance at December 31, 2020	$	(685,680	)	$	(169,104,029	)	$	4,973,465		$	2,013,410
Exercise of warrants		—			—			—			—
Net loss		—			(538,098	)		(9,107	)		(547,205	)
Foreign currency translation		(5,184	)		—			(2,488	)		(7,672	)
Issuance of common stock, net of offering costs		—			—			—			12,723,074
Balance at March 31, 2021	$	(690,864	)	$	(169,642,127	)	$	4,961,870		$	14,181,607
Issuance of common stock, net of offering costs		—			—			—			214
Net loss		—			(659,506	)		(7,588	)		(667,094	)
Foreign currency translation		9,044			—			4,340			13,384
Balance at June 30, 2021	$	(681,820	)	$	(170,301,633	)	$	4,958,622		$	13,528,111

	*For the Six Months Ended June 30,*
	*2021*			*2020*
Cash flows from operating activities:
Net loss	$	(1,214,299	)	$	(978,273	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,077			5,928
Accrued liability extinguishment		—			(501,892	)
Change in value of warrant liability		—			453,074
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(3,772	)		120,157
Other long-term assets		—			18,667
Accounts payable and accrued expenses		(8,553	)		(19,665	)
Net cash used in operating activities		(1,223,547	)		(902,004	)
Cash flows from investing activities:
Purchase of short-term investments		—			(360,379	)
Sale of short-term investments		323,111			403,624
Net cash provided by investing activities		323,111			43,245
Cash flows from financing activities:
Issuance of common stock, net of offering costs		12,723,288			2,783,425
Exercise of warrants		—			382,215
Net cash provided by financing activities		12,723,288			3,165,640
Effect of exchange rate change on cash and equivalents		7,685			(23,695	)
Increase in cash and cash equivalents		11,830,537			2,283,186
Cash and cash equivalents at beginning of period		1,946,418			1,126,124
Cash and cash equivalents at end of period	$	13,776,955		$	3,409,310

	*Three Months Ended*									*Six Months Ended*
	*June 30,*									*June 30,*
Customer	*2021*			*2020*			*Variance*			*2021*			*2020*			*Variance*
Department of Defense		0.0	%		86.8	%		(86.8	)%		0.0	%		77.5	%		(77.5	)%
Incuron		0.0	%		13.2	%		(13.2	)%		0.0	%		22.5	%		(22.5	)%
Total		0.0	%		100.0	%		(100.0	)%		0.0	%		100.0	%		(100.0	)%

	*Gains and losses on foreign exchange translations*
Beginning balance	$	(685,680	)
Other comprehensive income (loss) before reclassifications		3,860
Amounts reclassified from accumulated other comprehensive loss		—
Ending balance	$	(681,820	)

	*As of June 30,*
Common Equivalent Securities	*2021*		*2020*
Warrants		299,519		1,068,494
Options		64,897		89,913
Total		364,416		1,158,407

	*As of December 31, 2020*
	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets:
Short-term investments	$	—	$	324,870	$	—	$	324,870

	*Three Months Ended*
	*June 30, 2020*
	*Accrued Warrant Liability*
Beginning Balance	$	44,412
Total (gains) or losses, realized and unrealized, included in earnings (1)		292,385
Settlements		(61,303	)
Ending Balance	$	275,494

	*Total Stock Options Outstanding*			*Weighted Average Exercise Price per Share*
December 31, 2020		76,064		$	27.35
Forfeited, Canceled		(11,167	)		116.50
June 30, 2021		64,897		$	12.01

	*As of June 30, 2021*
	*Stock Options Outstanding*		*Vested Stock Options*
Quantity		64,897		64,897
Weighted Average Exercise Price	$	12.01	$	12.01
Weighted Average Remaining Contractual Term (in Years)		3.40		3.40
Intrinsic Value	$	93,481	$	93,481

	*Number of Warrants*			*Weighted Average Exercise Price*
December 31, 2020		371,340		$	7.28
Granted		150,000			8.75
Exercised		(92,883	)		2.03
Forfeited, Canceled		(128,938	)		16.63
June 30, 2021		299,519		$	5.62

		Three Months Ended June 30,
Funding Source	Program	2021		2020		Variance
DoD	JWMRP Contract (1)	$	-	$	44,544	$	(44,544	)
DoD	PRMRP Contract (2)		-		10,364		(10,364	)
Incuron	Service contract		-		8,347		(8,347	)
		$	-	$	63,255	$	(63,255	)

		Six Months Ended June 30,
Funding Source	Program	2021		2020		Variance
DoD	JWMRP Contract (1)	$	-	$	113,555	$	(113,555	)
DoD	PRMRP Contract (2)		-		56,385		(56,385	)
Incuron	Service contract		-		49,357		(49,357	)
		$	-	$	219,297	$	(219,297	)

	For the Six Months Ended June 30,
	2021			2020			Variance
Cash flows used in operating activities	$	(1,223,547	)	$	(902,004	)	$	(321,543	)
Cash flows provided by investing activities		323,111			43,245			279,866
Cash flows provided by financing activities		12,723,288			3,165,640			9,557,648
Effect of exchange rate change on cash and equivalents		7,685			(23,695	)		31,380
Increase in cash and cash equivalents		11,830,537			2,283,186			9,547,351
Cash and cash equivalents at beginning of period		1,946,418			1,126,124			820,294
Cash and cash equivalents at end of period	$	13,776,955		$	3,409,310		$	10,367,645

Exhibit Number		Description of Document

3.1*		Restated Certificate of Incorporation, as amended.

3.2		Second Amended and Restated By-Laws (Incorporated by reference to Exhibit 3.1 to Form 8-K filed on December 5, 2007).

3.3

SEC Form 10-Q filed by Cleveland BioLabs, Inc.