Item 1.01 Entry into a Material Definitive Agreement
On April 18, 2022, Statera Biopharma, Inc. (the "Company") entered a
"Forbearance and Second Amendment to Loan Documents," ("Forbearance Agreement")
regarding the Loan Agreement between Avenue Venture Opportunities Fund, L.P.
("Avenue") and the Company, with respect to the Loan and Security Agreement,
dated as of April 26, 2021, between Avenue and the Company.
The description and terms of the Forbearance Agreement are stated in Item 2.04
and are hereby incorporated by reference.
Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
As previously reported in its Current Report on Form 8-K filed with the SEC on
March 31, 2022, Statera Biopharma, Inc. (the "Company") received a letter (the
"Letter") from Avenue Venture Opportunities Fund, L.P. ("Avenue") regarding
alleged events of default with respect to the Loan and Security Agreement, dated
as of April 26, 2021, between the Company and Avenue (the "Loan Agreement"). In
the Letter, Avenue alleges that certain events of default under the Loan
Agreement have occurred and continue to exist. Specifically, Avenue alleged that
the Company was in violation of certain provisions of the Loan Agreement as a
result of which, Avenue purported to exercise its rights to suspend further
loans or advances to the Company under the Loan Agreement and to accelerate the
amount due under the Loan Agreement, which it asserts to be approximately $11.2
million, inclusive of fees of penalties. Avenue further states in the letter
that interest will continue to accrue on the outstanding amounts at the default
rate of 5.0%. In furtherance of the allegations set forth in the Letter, Avenue
foreclosed on approximately $4.8 million of the Company's cash.
In response to the Letter, on April 18, 2022, Avenue and the Company entered
into a "Forbearance and Second Amendment to Loan Documents," ("Forbearance
Agreement") regarding the Loan Agreement, whereby the parties agreed to the
following terms:
On March 25, 2022, Avenue exercised certain of its remedies under the Loan
Agreement with respect to the Existing Defaults (as defined below), by sweeping
cash from Company's accounts, totaling Four Million Eight Hundred Twenty-Seven
Thousand Two Hundred Ninety and 22/110 Dollars ($4,827,290.22), which Avenue
applied to the then-outstanding Obligations under the Loan Agreement. The
principal balance outstanding under the Loan Agreement, before giving effect to
the Forbearance Agreement, is Five Million Seven Hundred Eleven Thousand
Forty-Nine and 14/100 Dollars ($5,711,049.14), plus accrued and unpaid interest,
fees (including the Prepayment Fee) and expenses (including but not limited to
legal fees and costs).
Subject to the terms of the Forbearance Agreement, Avenue agrees that, from the
effective date of the Agreement until May 31, 2022 (the "Forbearance Period"),
it will refrain and forbear from exercising certain remedies arising out of the
Existing Defaults or any other present or future Event of Default under the Loan
Agreement or Supplement. Under the Forbearance Agreement, Avenue shall not
seize, sweep, or by any means take control of, directly or indirectly, any funds
from any of the Company's bank accounts; and (ii) during the Forbearance Period,
the Loans may be prepaid in whole or in part at any time, subject to the
repayment and prepayment terms of the Loan Documents.
In addition to the terms of the Forbearance Agreement, certain terms of the Loan
Agreement were amended, including changing the Agreement Effective Date to April
18, 2022, and revisions to certain definitions of Agreement terminology.
A copy of the Forbearance Agreement is attached as Exhibit 1.1 and is
incorporated herein.
Item 3.01.
Notice of
Delisting
or Failure
to Satisfy
a
Continued
Listing
Rule or
Standard;
Transfer
of
Listing.
On April 19, 2022, Statera Biopharma, Inc. (the "Company") received a letter
from the Listing Qualifications Department of The Nasdaq Stock Market ("NASDAQ")
stating that, because the Company has not yet filed its Annual Report on Form
10-K for the fiscal year ended December 31, 2021 (the "Form 10-K") with the
Securities and Exchange Commission (the "SEC"), the Company is not in compliance
with NASDAQ Listing Rule 5250(c)(1) for continued listing. Pursuant to the
NASDAQ letter, the Company is required to submit a plan to regain compliance by
June 20, 2022. If the plan is accepted by NASDAQ, the Company must implement the
plan to regain compliance by the date that is 180 days after the due date of the
Form 10-K, or October 17, 2022. The Company submitted the plan to NASDAQ to
regain compliance on May 27, 2022 and is currently awaiting NASDAQ acceptance.
--------------------------------------------------------------------------------
Subsequently, on May 18, 2022, the Company received an additional letter from
NASDAQ stating that because the Company remains delinquent in filing its Form
10-K, and subsequently has failed to timely file its Quarterly Report on Form
10-Q for the period ended March 31, 2022 (the "Form 10-Q"), the Company does not
comply with NASDAQ Listing Rules for continued listing. NASDAQ reiterated that
the Company had until June 20, 2022 to submit a plan to regain compliance with
respect to the delinquent Form 10-K and Form 10-Q. Please note that any Staff
exception to allow the Company to regain compliance, if granted, will be limited
to a maximum of 180 calendar days from the due date of the Form 10-K, or October
17, 2022. As noted above, the Company submitted the plan to NASDAQ to regain
compliance on May 27, 2022 and is currently awaiting NASDAQ acceptance.
As previously reported by the Company in its Current Report on Form 8-K filed
with the SEC on March 25, 2022, on March 23, 2022, the Company received written
notice from NASDAQ indicating that because the minimum bid price of the
Company's common stock has closed below $1.00 per share for the last 30
consecutive business days, the Company no longer meets the requirements of
Listing Rule 5550(a)(2), which requires the Company to maintain a minimum bid
price of $1.00 per share (the "Bid Price Rule"). The NASDAQ Listing Rules
provide the Company with a compliance period of 180 calendar days in which to
regain compliance with the Bid Price Rule. Accordingly, the Company will regain
compliance if at any time during this 180-day period the closing bid price of
the Company's common stock is at least $1.00 for a minimum of 10 consecutive
business days.
In the event the Company does not regain compliance by the end of the 180-day
compliance period on September 19, 2022, but meets certain other applicable
standards, the Company may be eligible for additional time. To qualify, the
Company will be required to meet the continued listing requirement for market
value of publicly held shares and all other initial listing standards for
NASDAQ, with the exception of the Bid Price Rule, and will need to provide
written notice of the Company's intention to cure the deficiency during the
second compliance period, by effecting a reverse stock split, if necessary. If
the Company meets these requirements, NASDAQ will inform the Company that it has
been granted an additional 180 calendar days to regain compliance with the Bid
Price Rule. However, if it appears to NASDAQ that the Company will not be able
to cure the deficiency, or if it is otherwise not eligible, NASDAQ will provide
notice that the Company's common stock will be subject to delisting. At that
time, the Company may appeal the delisting determination to a hearings panel.
The Company intends to monitor the bid price of its common stock and consider
available options if its common stock does not trade at a level likely to result
in the Company regaining compliance with the Bid Price Rule by September 19,
2022. There can be no assurance that the Company will be able to regain
compliance with the Bid Price Rule or that the Company will otherwise be
compliant with the other NASDAQ listing standards.
Also as previously reported by the Company in its Current Report on Form 8-K
filed with the SEC on March 31, 2022, as amended by the Current Report on Form
8-K/A filed with the SEC on April 13, 2022, on March 25, 2022, Randy Saluck and
Lea Verny, each a member of the board of directors (the "Board") of the Company,
resigned from their positions as members of Board, effective immediately. At the
time of their resignations, Mr. Saluck and Ms. Verny each served on the audit,
nominating and corporate governance and compensation committees of the Board. As
a result of these resignations, the Company is no longer in compliance with
several of NASDAQ governance rules.
First, under NASDAQ Listing Rule 5605(b)(1), a majority of the directors on the
Board must be independent directors, as defined under the NASDAQ rules. As of
the effective time of the resignations of Mr. Saluck and Ms. Verny, the Board is
comprised of one director who is independent under the NASDAQ Listing Rules and
two directors who are not independent.
Second, under NASDAQ Listing Rule 5605(c)(2)(A), the audit committee of the
Board must be comprised of at least three independent directors, as defined
under the NASDAQ rules. As of the effective time of the resignations of Mr.
Saluck and Ms. Verny, the audit committee of the Board is comprised of one
director who is independent under the NASDAQ Listing Rules.
Third, under NASDAQ Listing Rule 5605(d)(2)(A), the compensation committee of
the Board must be comprised of at least three independent directors, as defined
under the NASDAQ Rules. As of the effective time of the resignations of Mr.
Saluck and Ms. Verny, the compensation committee of the Board is comprised of
only one director who is independent under the NASDAQ Listing Rules.
Item 7.01 Regulation FD Disclosure.
On April 22, 2022, the Company issued a press release announcing that on April
19, 2022, NASDAQ sent a letter to the Company indicating that, because the
Company had not yet filed the Form 10-K, the Company is not in compliance with
NASDAQ Listing Rule 5250(c)(1) for continued listing. A copy of the April 22,
2022 press release is attached as Exhibit 99.1 to this Current Report on Form
8-K.
On May 23, 2022, the Company issued a press release announcing that the Company
received a letter from the Listing Qualifications Department of NASDAQ on May
18, 2022 indicating that, because the Company was delinquent in filing the Form
10-Q, the Company had not complied with Nasdaq Listing Rule 5250(c)(1) for
continued listing. A copy of the May 23, 2022 press release is attached as
Exhibit 99.2 to this Current Report on Form 8-K.
The information in this Item 7.01 of Form 8-K, including Exhibits 99.1 and 99.2,
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities under that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended (the
"Securities Act"), except as shall be expressly set forth by specific reference.
The press releases attached as Exhibit 99.1 and Exhibit 99.2 shall not be
incorporated by reference into any filing or other document pursuant to the
Securities Act, except as shall be expressly set forth by specific reference in
such filing or document.
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Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements.
Forward-looking statements are based on management's current expectations and
are subject to risks and uncertainties, many of which are beyond the Company's
control, that may cause actual results or events to differ materially from those
projected. These risks and uncertainties include risks described in the section
entitled "Risk Factors" and elsewhere in the Company's Annual Report on Form
10-K filed with the SEC on March 22, 2021 and in its other filings with the SEC,
including, without limitation, its reports on Forms 8-K and 10-Q, and the
prospectus supplement filed with the SEC on March 23, 2022, all of which can be
obtained on the SEC website at www.sec.gov. Readers are cautioned not to place
undue reliance on the forward-looking statements, which speak only as of the
date on which they are made and reflect management's current estimates,
projections, expectations and beliefs. The Company expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in its
expectations or any changes in events, conditions or circumstances on which any
such statement is based, except as required by law.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed or furnished with this Current Report on Form
8-K:
Exhibit
Number Description
1.1 Forbearance and Second Amendment to Loan Documents, dated April 18,
99.1 2022.
99.2 Press Release of Statera Biopharma, Inc., dated April 22, 2022.
Press Release of Statera Biopharma, Inc., dated May 23, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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STATERA BIOPHARMA, INC. 