Cleveland BioLabs, Inc. (NASDAQ:CBLI) Files An 8-K Completion of Acquisition or Disposition of Assets
Item 2.01 of a Current Report on Form 8-K. This report is being filed to provide certain financial statements of Cytocom and to provide unaudited pro forma financial information of the combined company in connection with this Merger.
Item 2.02 Results of Operations and Financial Condition.
The Company’s preliminary estimated unaudited revenues, research and development (“R&D”) costs and net loss for the year ended December 31, 2020 are set forth below. The Company has provided a range for these preliminary financial results because its closing procedures for its fiscal year ended December 31, 2020 are not yet complete. The Company’s preliminary estimates of the financial results set forth below are based solely on information available to it as of the date of this Current Report on Form 8-K and are inherently uncertain and subject to change. The Company’s preliminary estimates contained in this Current Report on Form 8-K are forward-looking statements. The Company’s actual results remain subject to the completion of management’s final review and its other closing procedures, as well as the completion of the audit of the Company’s annual financial statements. These preliminary estimates are not a comprehensive statement of the Company’s financial results for the year ended December 31, 2020, and should not be viewed as a substitute for full financial statements prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). In addition, these preliminary estimates for the year ended December 31, 2020 are not necessarily indicative of the results to be achieved in any future period. Accordingly, you should not place undue reliance on these preliminary financial results.
The preliminary estimated unaudited financial results included in this Current Report on Form 8-K have been prepared by, and are the responsibility of, the Company’s management. The Company’s independent registered public accounting firm, Meaden & Moore, Ltd., has not audited, reviewed, compiled or performed any procedures with respect to the preliminary financial results. Accordingly, Meaden & Moore, Ltd. does not express an opinion or any other form of assurance with respect thereto.
For the year ended December 31, 2020, the Company estimates that its revenues will range from $250,000 to $280,000, representing a decrease of approximately 76% compared to the year ended December 31, 2019, primarily due to a decrease in revenue from the Company’s contracts with the U.S Department of Defense that provided grants for preclinical studies and a decrease in revenue from the Incuron LLC service contract for continued preclinical development. The Company does not anticipate any revenues from its contracts with the U.S. Department of Defense in 2021 due to the completion of the contracts and grants in 2020. Service revenue from Incuron LLC is also expected to cease as the Company’s service contract with this company was not extended.
For the year ended December 31, 2020, the Company estimates that its R&D expenses decreased from $1.7 million for the year ended December 31, 2019 to between $0.6 million and $0.8 million for the year ended December 31, 2020, representing a decrease of approximately 58%. Significant reductions include an estimated $0.6 million reduction of funds spent on entolimod for biodefense indication due to reduced preclinical development activity resulting from the Company’s previously disclosed vendor delays in the analytical analyses required to complete the biocomparability study and the U.S. Food and Drug Administration (the “FDA”) having not agreed with the Company’s conclusions regarding the biocomparability study until the first quarter of 2020, which prevented further development progress from occurring, and a decrease of an estimated $0.3 million related to Curaxins. The Company anticipates that R&D expenses associated with the development of its drug candidates will decrease in 2021. However, should the FDA have questions regarding the pre-EUA submission, the Company could conduct unplanned studies as necessary to respond to the FDA questions, within the confines of current funding limitations.
For the year ended December 31, 2020, the Company estimates that its net loss will range from $2.3 million to $2.5 million, a decrease in loss of approximately 10% when compared to a reported net loss of $2.7 million for the year ended December 31, 2019. The decrease in net loss was primarily due to decreased R&D expenses, offset in part by an increase in general and administrative expense primarily related to the Company’s sale of securities in June of 2020 and the negotiation of the Merger.
As of December 31, 2020, the Company estimates that it has approximately $2.3 million in cash, cash equivalents and short-term investments, which are expected to fund the Company’s projected operating requirements and allow it to fund its operating plan, in each case, into April 2022. However, until the Company is able to commercialize its product candidates at a level that covers its cash expenses, the Company will need to raise substantial additional capital, which it may be unable to raise in sufficient amounts, when needed and at acceptable terms.
Cytocom’s closing procedures for its fiscal year ended December 31, 2020 are not yet complete and its actual results remain subject to the completion of its management’s final review and its other closing procedures, as well as the completion of the audit of its annual financial statements. The following preliminary estimates are not a comprehensive statement of Cytocom’s financial results for the year ended December 31, 2020, and should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. However, it expects to report that it generated no revenues, incurred approximately $5.2 million in research and development expenses and incurred approximately $5.8 million in general and administrative expenses. Cytocom also expects to report that as of December 31, 2020, it has approximately $0.6 million in cash, cash equivalents and short-term investments, which together with cash raised in the first two months of 2021 are expected to fund its projected operating requirements and allow it to fund its operating plan, in each case, into May, 2021. Cytocom also expects that its audit report for the year ended December 31, 2020 will contain a paragraph expressing doubt about its ability continue as a going concern.
The information disclosed in this Item 2.02 shall be deemed “filed” under the Securities Exchange Act of 1934, as amended, and shall be incorporated by reference into the Company’s registration statements on Form S-3 (File Nos. 333-238578, 333-209232, 333-202387, and 333-192755).
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.*
* — Note: Business has not yet been acquired. Financial statements are provided to Rule 3-05 of Regulation S-X in connection with a probable business combination.
Audited Financial Statements of Cytocom Inc. as of December 31, 2019 and 2018 and the related statements of operations, stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2019, and the related notes, listed as Exhibit 99.1 and incorporated herein by reference.
Unaudited Financial Statements of Cytocom Inc. as of September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019, together with the related notes to the financial statements, listed as Exhibit 99.2 and incorporated herein by reference.
(b) Pro Forma Financial Information.
Unaudited Pro Forma Condensed Combined Financial Statements of the Company, Cytocom and ImQuest Life Sciences, Inc. and affiliates as of September 30, 2020, for the nine months ended September 30, 2020 and for the year ended December 31, 2019, a copy of which is filed as Exhibit 99.3 hereto and incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements that involve risks and uncertainties. Forward-looking statements give our current expectations of forecasts of future events. All statements other than statements of current or historical fact contained in this current report, including statements regarding our future financial position, business strategy, new products, budgets, liquidity, cash flows, projected costs, regulatory approvals or the impact of any laws or regulations applicable to us, and plans and objectives of management for future operations, are forward-looking statements. The words \”anticipate,\” \”believe,\” \”continue,\” \”should,\” \”estimate,\” \”expect,\” \”intend,\” \”may,\” \”plan,\” \”project,\” \”will,\” and similar expressions, as they relate to us, are intended to identify forward-looking statements.
We have based these forward-looking statements on our current expectations about future events. While we believe these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. Our actual future results may differ materially from those discussed here for various reasons. Factors that could contribute to such differences include, but are not limited to:
Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this report are made only as of the date hereof. We do not undertake any obligation to update any such statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments.
CLEVELAND BIOLABS INC Exhibit
EX-23.1 2 ex_227758.htm EXHIBIT 23.1 ex_227758.htm Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statement Nos. 333-238578,…
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About Cleveland BioLabs, Inc. (NASDAQ:CBLI)
Cleveland BioLabs, Inc. (CBLI) is a biopharmaceutical company. The Company’s programs are focused developing approaches to activate the immune system and address serious medical needs. Its platform of Toll-like immune receptor activators has applications in mitigation of radiation injury and immuno-oncology. Its advanced product candidate is entolimod, an immuno-stimulatory agent, which the Company is developing as a radiation countermeasure and an immunotherapy for oncology and other indications. It also has an additional clinical-stage program and multiple projects in different stages of preclinical drug development. Its products include Entolimod, CBLB612, CBL0137 and Mobilan. Entolimod is a toll-like receptor 5 (TLR5). CBLB612 is a compound-based upon a natural activator of another tissue-specific component of the immune system. Mobilan is a recombinant non-replicating adenovirus that directs expression of TLR5.