DELAWARE
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20-0077155
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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73 High Street, Buffalo, New York
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14203
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(Address of principal executive offices)
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(Zip Code)
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(Registrant’s telephone number, including area code)
(716) 849-6810
_______________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
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Large accelerated filer
¨
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Accelerated filer
x
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Non-accelerated filer
¨
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Smaller reporting company
¨
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TABLE OF CONTENTS
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PAGE
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PART I - FINANCIAL INFORMATION
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||
PART II - OTHER INFORMATION
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||
For the Three Months Ended June 30,
|
For the Six Months Ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Revenues:
|
||||||||||||||||
Grants and contracts
|
$ | 1,613,262 | $ | 258,237 | $ | 2,980,734 | $ | 1,189,634 | ||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
5,373,029 | 6,093,275 | 10,704,644 | 12,079,076 | ||||||||||||
General and administrative
|
3,016,851 | 3,326,686 | 6,500,223 | 5,754,157 | ||||||||||||
Total operating expenses
|
8,389,880 | 9,419,961 | 17,204,867 | 17,833,233 | ||||||||||||
Loss from operations
|
(6,776,618 | ) | (9,161,724 | ) | (14,224,133 | ) | (16,643,599 | ) | ||||||||
Other income (expense):
|
||||||||||||||||
Interest and other income
|
47,809 | 70,252 | 127,765 | 125,893 | ||||||||||||
Foreign exchange gain (loss)
|
46,776 | 641,332 | 74,910 | (51,084 | ) | |||||||||||
Change in value of warrant liability
|
2,795,612 | 2,543,270 | (652,111 | ) | 4,263,026 | |||||||||||
Total other income (expense)
|
2,890,197 | 3,254,854 | (449,436 | ) | 4,337,835 | |||||||||||
Net loss
|
(3,886,421 | ) | (5,906,870 | ) | (14,673,569 | ) | (12,305,764 | ) | ||||||||
Net loss attributable to noncontrolling interests
|
844,310 | 828,186 | 1,867,135 | 1,839,934 | ||||||||||||
Net loss attributable to Cleveland BioLabs, Inc.
|
$ | (3,042,111 | ) | $ | (5,078,684 | ) | $ | (12,806,434 | ) | $ | (10,465,830 | ) | ||||
Net loss available to common stockholders per share of common stock, basic and diluted
|
$ | (0.07 | ) | $ | (0.14 | ) | $ | (0.29 | ) | $ | (0.29 | ) | ||||
Weighted average number of shares used in calculating net loss per share, basic and diluted
|
44,948,591 | 35,745,675 | 44,887,920 | 35,701,619 |
For the Three Months Ended June 30,
|
For the Six Months Ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Net income/(loss) including noncontrolling interests
|
$ | (3,886,421 | ) | $ | (5,906,870 | ) | $ | (14,673,569 | ) | $ | (12,305,764 | ) | ||||
Other comprehensive income (loss)
|
||||||||||||||||
Foreign currency translation adjustment
|
(282,622 | ) | (668,874 | ) | (440,069 | ) | 65,764 | |||||||||
Comprehensive income/(loss) including noncontrolling interests
|
(4,169,043 | ) | (6,575,744 | ) | (15,113,638 | ) | (12,240,000 | ) | ||||||||
Comprehensive loss attributable to noncontrolling interests
|
961,118 | 1,122,633 | 2,049,198 | 1,815,293 | ||||||||||||
Comprehensive income/(loss) attributable to Cleveland BioLabs, Inc.
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$ | (3,207,925 | ) | $ | (5,453,111 | ) | $ | (13,064,440 | ) | $ | (10,424,707 | ) |
Additional
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Accumulated
Other
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|||||||||||||||||||||||||||
Common Stock
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Paid-in
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Comprehensive
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Accumulated
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Noncontrolling
|
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Income (Loss)
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Deficit
|
Interests
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Total
|
||||||||||||||||||||||
Balance at January 1, 2013
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44,730,445 | $ | 223,653 | $ | 123,864,830 | $ | 546,473 | $ | (118,301,789 | ) | $ | 14,152,541 | $ | 20,485,708 | ||||||||||||||
Stock based compensation
|
230,863 | 1,154 | 914,903 | 916,057 | ||||||||||||||||||||||||
Exercise of options
|
9,681 | 48 | 12,344 | 12,392 | ||||||||||||||||||||||||
Net loss
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(12,806,434 | ) | (1,867,135 | ) | (14,673,569 | ) | ||||||||||||||||||||||
Foreign currency translation
|
(258,006 | ) | (182,063 | ) | (440,069 | ) | ||||||||||||||||||||||
Balance at June 30, 2013
|
44,970,989 | $ | 224,855 | $ | 124,792,077 | $ | 288,467 | $ | (131,108,223 | ) | $ | 12,103,343 | $ | 6,300,519 |
For the Six Months Ended June 30,
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||||||||
2013
|
2012
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
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$ | (14,673,569 | ) | $ | (12,305,764 | ) | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
||||||||
Depreciation
|
189,840 | 257,641 | ||||||
Unrealized loss on short-term investments
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- | 12,801 | ||||||
Noncash compensation
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1,122,857 | 1,222,552 | ||||||
Change in value of warrant liability
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652,111 | (4,263,026 | ) | |||||
Changes in operating assets and liabilities:
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||||||||
Accounts receivable
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(1,155,910 | ) | 1,701,736 | |||||
Other current assets
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303,845 | (494,131 | ) | |||||
Other long-term assets
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(16,801 | ) | (2,592 | ) | ||||
Accounts payable
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(322,004 | ) | (234,314 | ) | ||||
Deferred revenue
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(661,811 | ) | - | |||||
Accrued expenses
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437,647 | 1,935,580 | ||||||
Net cash used in operating activities
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(14,123,795 | ) | (12,169,517 | ) | ||||
Cash flows from investing activities:
|
||||||||
Purchase of short-term investments
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- | (4,973,524 | ) | |||||
Sale of short-term investments
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2,256,834 | 1,347,181 | ||||||
Purchase of equipment
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(85,800 | ) | (116,355 | ) | ||||
Net cash provided by (used in) investing activities
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2,171,034 | (3,742,698 | ) | |||||
Cash flows from financing activities:
|
||||||||
Noncontrolling interest capital contribution to Incuron, LLC
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- | 5,893,557 | ||||||
Exercise of options
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12,392 | 1,425 | ||||||
Repayment of capital lease obligation
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(40,568 | ) | (20,221 | ) | ||||
Net cash provided by (used in) financing activities
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(28,176 | ) | 5,874,761 | |||||
Effect of exchange rate change on cash and equivalents
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(425,749 | ) | 394,545 | |||||
Decrease in cash and cash equivalents
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(12,406,686 | ) | (9,642,909 | ) | ||||
Cash and cash equivalents at beginning of period
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25,652,083 | 22,872,589 | ||||||
Cash and cash equivalents at end of period
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$ | 13,245,397 | $ | 13,229,680 | ||||
Supplemental disclosure of cash flow information:
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||||||||
Cash paid during the period for interest
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$ | 12,714 | $ | 10,226 | ||||
Supplemental schedule of noncash financing activities:
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||||||||
Equipment acquired through lease financing
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$ | - | $ | 221,690 |
For the six months ended June 30,
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||||||||
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2013
|
2012
|
||||||
Risk-free interest rate
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0.02 | - | 1.92% | 0.75 | - | 1.49% | ||
Expected dividend yield
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0% | 0 % | ||||||
Expected life (Years)
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5 |
-
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7.3 | 5 |
-
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6 | ||
Expected volatility
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80.71 | - | 89.66% | 86.58 | - | 92.24% |
As of June 30,
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||||||||
Common Equivalent Securities
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2013
|
2012
|
||||||
Warrants
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10,377,995 | 6,065,495 | ||||||
Options
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5,683,944 | 4,716,012 | ||||||
Total
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16,061,939 | 10,781,507 |
As of June 30, 2013
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||||||||||||||||
Level 1
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Level 2
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Level 3
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Total
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|||||||||||||
Liabilities:
|
||||||||||||||||
Compensatory stock options not yet issued (1)
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$ | - | $ | - | $ | 63,838 | $ | 63,838 | ||||||||
Accrued warrant liability
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- | - | 4,757,770 | 4,757,770 | ||||||||||||
Total liabilities
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$ | - | $ | - | $ | 4,821,608 | $ | 4,821,608 |
As of December 31, 2012
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||||||||||||||||
Level 1
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Level 2
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Level 3
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Total
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Accrued warrant liability
|
$ | - | $ | - | $ | 4,105,659 | $ | 4,105,659 | ||||||||
Total liabilities
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$ | - | $ | - | $ | 4,105,659 | $ | 4,105,659 |
June 30, 2013
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December 31, 2012
|
|||||||
Stock Price
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$ 1.58 | $ 1.33 | ||||||
Exercise Price
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$1.60 | - | 5.00 | $1.60 | - | 5.00 | ||
Term in years
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0.84 | - | 2.16 | 1.09 | - | 2.41 | ||
Volatility
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68.47 | - | 87.18% | 82.75 | - | 95.91% | ||
Annual rate of quarterly dividends
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0 % | 0 % | ||||||
Discount rate- bond equivalent yield
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.13 | - | .40% | .17 | - | .29% |
June 30, 2013
|
||||
Stock price
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$ | 1.58 | ||
Term in years
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5 | |||
Volatility
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80.80 | % | ||
Annual rate of quarterly dividends
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0 | % | ||
Discount rate - bond equivalent yield
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1.41 | % |
Three months ended June 30, 2013
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Six months ended June 30, 2013
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|||||||||||||||
Accrued Warrant
Liability
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Compensatory
Stock Options
Not Yet Issued
|
Accrued Warrant
Liability
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Compensatory
Stock Options
Not Yet Issued
|
|||||||||||||
Beginning balance
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$ | 7,553,382 | $ | 63,641 | $ | 4,105,659 | $ | - | ||||||||
Total (gains) or losses, realized and unrealized, included in earnings (1)
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(2,795,612 | ) | - | 652,111 | - | |||||||||||
Estimates and other changes in fair value (2)
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- | 197 | - | 63,838 | ||||||||||||
Settlements
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- | - | - | - | ||||||||||||
Balance, June 30, 2013
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$ | 4,757,770 | $ | 63,838 | $ | 4,757,770 | $ | 63,838 |
Three months ended June 30, 2012
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Six months ended June 30, 2012
|
|||||||||||||||
Accrued Warrant
Liability
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Compensatory
Stock Options
Not Yet Issued
|
Accrued Warrant
Liability
|
Compensatory
Stock Options
Not Yet Issued
|
|||||||||||||
Beginning balance
|
$ | 5,566,203 | $ | 85,000 | $ | 7,285,959 | $ | 378,750 | ||||||||
Total (gains) or losses, realized and unrealized, included in earnings (1)
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(2,543,270 | ) | - | (4,263,026 | ) | 51,823 | ||||||||||
Estimates and other changes in fair value (2)
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- | 29,617 | - | 114,617 | ||||||||||||
Settlements
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- | - | - | (430,573 | ) | |||||||||||
Balance, June 30, 2012
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$ | 3,022,933 | $ | 114,617 | $ | 3,022,933 | $ | 114,617 |
(1)
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Unrealized gains or losses related to the accrued warrant liability were included as change in value of accrued warrant liability. There were no realized gains or losses for the three and six month periods ended June 30, 2013 and 2012.
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(2)
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Expenses recorded for compensatory stock options not yet issued are included in research & development expense and general and administrative expense.
|
June 30, 2013
|
|||||||||||
Description
|
Fair Value
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Valuation Technique
|
Unobservable Input
|
Estimate/
Range
|
|||||||
Compensatory stock options not yet issued
|
$ | 63,838 |
Black-scholes pricing model
|
Expected term
|
5 | ||||||
Quantity of options
|
62,500 | ||||||||||
Accrued warrant liability
|
4,757,770 |
Black-scholes pricing model
|
Expected term
|
0.84 | - | 2.16 | |||||
$ | 4,821,608 |
Six months ended June 30, 2013
|
||||||||||||||||
Total Stock
Options
Outstanding
|
Weighted Average
Exercise Price
per Share
|
Nonvested
Stock Options
|
Weighted Average
Grant Date Fair
Value per Share
|
|||||||||||||
December 31, 2012
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5,016,916 | $ | 4.54 | 404,500 | $ | 2.30 | ||||||||||
Granted
|
863,604 | 1.68 | 863,604 | 1.22 | ||||||||||||
Vested
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- | - | (389,750 | ) | 1.75 | |||||||||||
Exercised
|
(9,681 | ) | 1.28 | - | - | |||||||||||
Forfeited, Canceled
|
(186,895 | ) | 2.63 | (121,250 | ) | 0.94 | ||||||||||
June 30, 2013
|
5,683,944 | $ | 4.18 | 757,104 | $ | 1.56 |
As of June 30, 2013
|
||||||||
Stock Options
Outstanding
|
Vested Stock
Options
|
|||||||
Quantity
|
5,683,944 | 4,926,840 | ||||||
Weighted-average exercise price
|
$ | 4.18 | $ | 4.49 | ||||
Weighted Average Remaining Contractual Term (in Years)
|
7.24 | 6.90 | ||||||
Intrinsic value
|
$ | 146,762 | $ | 129,358 |
Three Months Ended June 30,
|
||||||||||||||
Funding Source
|
Program
|
2013
|
2012
|
Variance
|
||||||||||
|
||||||||||||||
DoD
|
CBMS-MITS Contract
|
$ | 335,722 | $ | 183,111 | $ | 152,611 | |||||||
Russian Federation Ministry of Industry & Trade
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CBLB612 Pre-clinical (1)
|
404,626 | - | 404,626 | ||||||||||
DoD
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DTRA Contract
|
272,272 | 75,126 | 197,146 | ||||||||||
1,012,620 | 258,237 | 754,383 | ||||||||||||
Skolkovo Foundation
|
Curaxin research (1)
|
401,043 | - | 401,043 | ||||||||||
Russian Federation Ministry of Industry & Trade
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Xenomycins Pre-clinical (1)
|
199,599 | - | 199,599 | ||||||||||
|
$ | 1,613,262 | $ | 258,237 | $ | 1,355,025 |
(1)
|
The grants received from Russian government entities are denominated in Russian Rubles (RUB). The revenue above was calculated using average exchange rates for the periods presented.
|
As of June 30, 2013
|
||||||||||||||||||
Funding Source
|
Program
|
Total Award
Value
|
Funded Award
Value
|
Cumulative Revenue
Recognized
|
Funded
Backlog
|
|||||||||||||
|
||||||||||||||||||
DoD
|
CBMS-MITS Contract (1)
|
$ | 48,322,695 | $ | 6,933,761 | $ | 6,093,392 | $ | 840,369 | |||||||||
Russian Federation Ministry of Industry & Trade
|
CBLB612 Pre-clinical (2)
|
4,326,147 | 2,974,837 | 1,551,475 | 1,423,362 | |||||||||||||
DoD
|
DTRA Contract (3)
|
2,359,548 | 2,035,452 | 1,959,221 | 76,231 | |||||||||||||
55,008,390 | 11,944,050 | 9,604,088 | 2,339,962 | |||||||||||||||
Russian Federation Ministry of Industry & Trade
|
Xenomycins Pre-clinical (2)
|
4,560,523 | 3,383,477 | 1,323,996 | 2,059,481 | |||||||||||||
Skolkovo Foundation
|
Curaxin research (2)
|
4,704,411 | 4,704,411 | 2,482,578 | 2,221,833 | |||||||||||||
|
$ | 64,273,323 | $ | 20,031,937 | $ | 13,410,662 | $ | 6,621,275 |
(1)
|
Includes a $30 million conditional purchase option for 37,500 doses of Entolimod as a radiation countermeasure, exercisable upon approval.
|
(2)
|
The contracts received from Russian government entities are denominated in Russian Rubles (RUB). The contract value above is calculated based on the cumulative revenue recognized to date plus our backlog valued at the June 30, 2013 exchange rate.
|
(3)
|
On July 10, 2013, we received $324,096 of funding from DTRA, making the contract fully funded. This funding is not reflected in the funded award value as of June 30, 2013.
|
Three Months Ended June 30,
|
||||||||||||
2013
|
2012
|
Variance
|
||||||||||
Entolimod for Biodefense Applications
|
$ | 2,735,190 | $ | 3,610,619 | $ | (875,429 | ) | |||||
CBLB612
|
573,572 | 272,904 | 300,668 | |||||||||
Entolimod for Oncology Applications
|
40,144 | 200,781 | (160,637 | ) | ||||||||
3,348,906 | 4,084,304 | (735,398 | ) | |||||||||
Curaxins
|
1,231,592 | 408,996 | 822,596 | |||||||||
Panacela product candidates
|
792,532 | 1,599,975 | (807,443 | ) | ||||||||
Total R&D expenses
|
$ | 5,373,029 | $ | 6,093,275 | $ | (720,246 | ) |
Six Months Ended June 30,
|
||||||||||||||
Funding Source
|
Program
|
2013
|
2012
|
Variance
|
||||||||||
|
||||||||||||||
DoD
|
CBMS-MITS Contract
|
$ | 671,444 | $ | 1,062,945 | $ | (391,501 | ) | ||||||
Russian Federation Ministry of Industry & Trade
|
CBLB612 Pre-clinical (1)
|
662,789 | - | 662,789 | ||||||||||
DoD
|
DTRA Contract
|
366,656 | 126,689 | 239,967 | ||||||||||
1,700,889 | 1,189,634 | 511,255 | ||||||||||||
Skolkovo Foundation
|
Curaxin research (1)
|
905,113 | - | 905,113 | ||||||||||
Russian Federation Ministry of Industry & Trade
|
Xenomycins Pre-clinical (1)
|
374,732 | - | 374,732 | ||||||||||
|
$ | 2,980,734 | $ | 1,189,634 | $ | 1,791,100 |
(1)
|
The grants received from Russian government entities are denominated in Russian Rubles (RUB). The revenue above was calculated using average exchange rates for the periods presented.
|
Six Months Ended June 30,
|
||||||||||||
2013
|
2012
|
Variance
|
||||||||||
Entolimod for Biodefense Applications
|
$ | 5,050,319 | $ | 7,417,587 | $ | (2,367,268 | ) | |||||
CBLB612
|
788,013 | 559,653 | 228,360 | |||||||||
Entolimod for Oncology Applications
|
250,830 | 396,983 | (146,153 | ) | ||||||||
6,089,162 | 8,374,223 | (2,285,061 | ) | |||||||||
Curaxins
|
2,696,491 | 1,439,299 | 1,257,192 | |||||||||
Panacela product candidates
|
1,918,990 | 2,265,554 | (346,564 | ) | ||||||||
Total R&D expenses
|
$ | 10,704,644 | $ | 12,079,076 | $ | (1,374,432 | ) |
·
|
Since our inception in 2003, we have raised $107.7 million of net equity capital, including amounts received from the exercise of options and warrants.
|
·
|
The U.S. Department of Defense and Department of Health and Human Services awarded grants and contracts totaling $85.9 million for the development of Entolimod as a radiation countermeasure, including a $30 million purchase option for 37,500 doses, which is exercisable upon FDA approval. Of the total amount awarded, we earned $43.3 million through June 30, 2013 and expect to earn $1.2 million during the remainder of 2013. Additionally, we submitted a proposal to Biomedical Advanced Research and Development Agency (“BARDA”) for the continued development of Entolimod as a radiation countermeasure. If awarded in full, this contract could fund all remaining work necessary to complete development of Entolimod as a radiation countermeasure and allow us to file a Biologic License Application (“BLA”) with the FDA. There can be no assurance that the proposal for the BARDA funding will be granted, and if granted, when such award will be made.
|
·
|
Entities affiliated with the Russian Federation have awarded us contracts totaling $13.6 million, including awards for the development of Curaxins ($4.7 million), CBLB612 ($4.3 million) and Xenomycins ($4.6 million). All awards are valued based on revenue recognized to date, with the remaining backlog valued at the June 30, 2013 exchange rate. These contracts include a requirement for us to contribute matching funds, which are satisfied with both the value of developed intellectual property at the time of award and future expenses. At June 30, 2013, $11.1 million of the awards were funded; $7.3 million was received, of which $2.5 million remains as deferred revenue. We expect to recognize the remaining funding in 2013 and 2014.
|
·
|
We have been awarded $4.0 million in grant and contracts not described above, all of which has been recognized at June 30, 2013.
|
·
|
We actively pursue all reasonable domestic and international sources of grant and contract funding for our drug pipeline.
|
·
|
Incuron was formed to develop and commercialize our Curaxin product line, namely two compounds CBL0102 and CBL0137. BioProcess Capital Partners (“BCP”) committed to contribute up to $17.2 million (based on the current exchange rate) of funding as development milestones were accomplished. To date, Incuron has received $11.7 million of funding from BCP. BCP’s remaining capital contribution of $5.5 million is due upon completion of certain developmental milestones which the Company believes will occur in 2013.
|
·
|
Panacela was formed to develop and commercialize five preclinical compounds. Open Joint Stock Company “Rusnano” contributed $9.0 million at formation and has commitments to contribute up to $17 million of additional funding as development milestones are accomplished. CBLI contributed $3.0 million plus intellectual property at formation and has options to contribute additional capital based on agreed-upon terms.
|
●
|
our ability to obtain adequate sources of continued financing;
|
●
|
our ability to obtain approval for, and if approved, to successfully commercialize, Entolimod;
|
●
|
our ability to bring to market other proprietary drugs that are progressing through our development process;
|
●
|
our R&D efforts, including the timing and cost of clinical trials; and
|
●
|
our ability to enter into favorable alliances with third-parties who can provide substantial capabilities in clinical development, manufacturing, regulatory affairs, sales, marketing and distribution.
|
●
|
the number and outcome of pre-clinical studies and clinical trials we are planning to conduct; for example, our R&D expenses may increase based on the number of pivotal animal studies and clinical trials that we may be required to conduct;
|
●
|
the number of products entering into development from late-stage research; for example, there is no guarantee that internal research efforts will succeed in generating sufficient data for us to make a positive development decision or that an external drug candidate will be available on terms acceptable to us and some promising product candidates may not yield sufficiently positive pre-clinical results to meet our stringent development criteria;
|
●
|
in-licensing activities, including the timing and amount of related development funding or milestone payments; for example, we may enter into agreements requiring us to pay a significant up-front fee for the purchase of in-process R&D that we may record as R&D expense; or
|
●
|
future levels of revenue; R&D expenses as a percentage of future potential revenues can fluctuate with the changes in future levels of revenue and lower revenues can lead to less spending on R&D efforts.
|
●
|
pre-clinical study or clinical trial results may show the product to be less effective than desired (e.g., the study failed to meet its primary objectives) or to have harmful or problematic side effects;
|
●
|
we fail to receive the necessary regulatory approvals or there is a delay in receiving such approvals. Among other things, such delays may be caused by slow enrollment in clinical studies, length of time to achieve study endpoints, additional time requirements for data analysis or an NDA or BLA preparation, discussions with the FDA, an FDA request for additional pre-clinical or clinical data or unexpected safety or manufacturing issues;
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●
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they fail to conform to a changing standard of care for the diseases they seek to treat;
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they are less effective or more expensive than current or alternative treatment methods;
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●
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of manufacturing costs, pricing or reimbursement issues, or other factors that make the product not economically feasible; or
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●
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proprietary rights of others and their competing products and technologies may prevent our product from being commercialized.
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●
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regulators or institutional review boards (“IRB”) may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site or an institutional animal care and use committee may not authorize us to commence an animal study at a prospective study site;
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we may decide, or regulators may require us, to conduct additional pre-clinical testing or clinical trials, or we may abandon projects that we expect to be promising, if our pre-clinical tests, clinical trials or animal efficacy studies produce negative or inconclusive results;
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●
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we might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable safety risks;
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●
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regulators or IRBs may require that we hold, suspend or terminate clinical development for various reasons, including noncompliance with regulatory requirements or if it is believed that the clinical trials present an unacceptable safety risk to the patients enrolled in our clinical trials;
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●
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the cost of our clinical trials or animal studies could escalate and become cost prohibitive;
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any regulatory approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the product not commercially viable;
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we may not be successful in recruiting a sufficient number of qualifying subjects for our clinical trials or certain animals used in our animal studies or facilities conducting our studies may not be available at the time that we plan to initiate a study; and
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●
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the effects of our product candidates may not be the desired effects, may include undesirable side effects, or the product candidates may have other unexpected characteristics.
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●
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Contract manufacturers may encounter difficulties in achieving volume production, quality control and quality assurance and also may experience shortages in qualified personnel and obtaining active ingredients for our product candidates.
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If, for any circumstance, we are required change manufacturers, we could be faced with significant monetary and lost opportunity costs with switching manufacturers. Furthermore, such change may take a significant amount of time. The FDA and foreign regulatory agencies must approve these manufacturers in advance. This requires prior approval of regulatory submissions as well as successful completion of pre-approval inspections to ensure compliance with FDA and foreign regulations and standards.
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●
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Contract manufacturers are subject to ongoing periodic, unannounced inspection by the FDA and state and foreign agencies or their designees to ensure strict compliance with cGMP and other governmental regulations and corresponding foreign standards. We do not have control over compliance by our contract manufacturers with these regulations and standards. Our contract manufacturers may not be able to comply with cGMP and other FDA requirements or other regulatory requirements outside the U.S. Failure of contract manufacturers to comply with applicable regulations could result in delays, suspensions or withdrawal of approvals, seizures or recalls of product candidates and operating restrictions, any of which could significantly and adversely affect our business.
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●
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Contract manufacturers may breach the manufacturing agreements that we have with them because of factors beyond our control or may terminate or fail to renew a manufacturing agreement based on their own business priorities at a time that is costly or inconvenient to us.
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·
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perceptions by members of the healthcare community, including physicians, about the safety and effectiveness of our drugs;
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·
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published studies demonstrating the safety and effectiveness of our drugs;
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·
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adequate reimbursement for our products from payors; and
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·
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effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any.
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●
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the need to devote substantial time and attention of management and key employees to the preparation of bids and proposals for contracts that may not be awarded to us;
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●
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the need to accurately estimate the resources and cost structure that will be required to perform any contract that we might be awarded;
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●
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the risk that the government will issue a request for proposal to which we would not be eligible to respond;
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●
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the risk that third parties may submit protests to our responses to requests for proposal that could result in delays or withdrawals of those requests for proposal;
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●
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the expenses that we might incur and the delays that we might suffer if our competitors protest or challenge contract awards made to us pursuant to competitive bidding and the risk that any such protest or challenge could result in the resubmission of bids based on modified specifications, or in termination, reduction or modification of the awarded contract; and
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●
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the risk that review of our proposal or award of a contract or an option to an existing contract could be significantly delayed for reasons including, but not limited to, the need for us to resubmit our proposal or limitations on available funds due to government budget cuts.
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suspend or prevent us for a set period of time from receiving new contracts or extending existing contracts based on violations or suspected violations of laws or regulations;
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terminate our existing contracts;
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reduce the scope and value of our existing contracts;
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audit and object to our contract-related costs and fees, including allocated indirect costs;
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control and potentially prohibit the export of our products; and
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change certain terms and conditions in our contracts.
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decreased demand for our product candidates;
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injury to our reputation;
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withdrawal of clinical trial participants;
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costs of related litigation;
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diversion of our management’s time and attention;
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●
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substantial monetary awards to patients or other claimants;
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●
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loss of revenues;
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the inability to commercialize product candidates; and
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●
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increased difficulty in raising required additional funds in the private and public capital markets.
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·
|
our progress in developing and commercializing our products;
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·
|
price and volume fluctuations in the overall stock market from time to time;
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·
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fluctuations in stock market prices and trading volumes of similar companies;
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·
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actual or anticipated changes in our earnings or fluctuations in our operating results or in the expectations of securities analysts;
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·
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general economic conditions and trends;
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·
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major catastrophic events;
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·
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sales of large blocks of our stock;
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·
|
departures of key personnel;
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·
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changes in the regulatory status of our product candidates, including results of our pre-clinical studies and clinical trials;
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·
|
status of contract and funding negotiations relating to our product candidates;
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·
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events affecting CCF, RPCI or our other collaborators;
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·
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announcements of new products or technologies, commercial relationships or other events by us or our competitors;
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·
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regulatory developments in the U.S. and other countries;
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·
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failure of our common stock to be listed or quoted on the NASDAQ Capital Market, other national market system or any national stock exchange;
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·
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changes in accounting principles; and
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·
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discussion of us or our stock price by the financial and scientific press and in online investor communities.
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Exhibit Number
|
Description of Document
|
|
3.1
|
Certificate of Amendment to the Restated Certificate of Incorporation, filed with the Secretary of State of Delaware on June 20, 2013.
|
|
10.1
|
Employment Agreement made as of April 4, 2013 and effective as of April 1, 2013 by and between Cleveland BioLabs, Inc. and Jean Viallet (Incorporated by reference to Form 8-K filed on April 9, 2013).
|
|
10.2
|
Cleveland Biolabs, Inc. 2013 Employee Stock Purchase Plan (Incorporated by reference to Form 8-K filed on June 20, 2013).
|
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Yakov Kogan.
|
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of C. Neil Lyons.
|
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350.
|
|
101.1
|
The following information from CBLI’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012; (ii) Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2013 and 2012; (iii) Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2013 and 2012; (iv) Consolidated Statements of Cash Flows for the Six Months ended June 30, 2013 and 2012; (v) Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2013; and (vi) Notes to Consolidated Financial Statements.*
|
CLEVELAND BIOLABS, INC.
|
|||
Dated: August 9, 2013
|
By:
|
/s/ YAKOV KOGAN
|
|
Yakov Kogan
Chief Executive Officer
(Principal Executive Officer)
|
|||
Dated: August 9, 2013
|
By:
|
/s/ C. NEIL LYONS
|
|
C. Neil Lyons
Chief Financial Officer
(Principal Financial Officer)
|
1.
|
The first paragraph of Article FOURTH of the Restated Certificate of Incorporation of the Corporation (the “
Restated Certificate
”) is hereby amended and restated to read in its entirety as follows:
|
2.
|
The aforementioned amendment was duly adopted in accordance with the provisions of Section 242 of the Act and has been consented to by the stockholders, with proper notice given, in accordance with Section 228 of the Act.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cleveland BioLabs, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cleveland BioLabs, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
The Quarterly Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and
|
2.
|
The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by the Quarterly Report.
|
*
|
This certification accompanies the Quarterly Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Cleveland BioLabs, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Quarterly Report), irrespective of any general incorporation language contained in such filing.
|