Bio Green Med Solution, Inc 10-Q for FY2025 Q1
Bio Green Med Solution, Inc. (BGMS)
About this 10-Q
Bio Green Med Solution, Inc filed this 10-Q on May 14, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $81K
- compared with a net loss of $2.95M a year earlier
- Diluted EPS
- $0.00
- compared with -$2.27 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| 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
(Exact name of registrant as specified in its charter)
| (State
or Other Jurisdiction of Incorporation or Organization) |
(I.R.S.
Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The Stock Market LLC | ||||
| The
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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.
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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
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 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 ☐ | |
| Smaller
reporting filer | ||
| 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
As of May 11, 2025 there were shares of the registrant’s common stock outstanding.
CYCLACEL PHARMACEUTICALS, INC.
TABLE OF CONTENTS
| 2 |
Recent Developments
In December 2024, Cyclacel Pharmaceuticals, Inc., a Delaware corporation (the “Company”) announced that it was in the process of exploring and reviewing strategic alternatives on an expedited basis in order to preserve the Company’s cash, including a potential transaction with investor, David E. Lazar of Activist Investing, LLC (“Lazar”). The Company’s Board of Directors (the “Board”) reviewed a range of appropriate strategies to realize value from its assets. The Board directed management to reduce operating costs, which included the liquidation of the Company’s wholly-owned United Kingdom subsidiary, Cyclacel Limited (“Subsidiary”), while such alternatives were being explored. On January 2, 2025, the Company entered into a securities purchase agreement with Lazar, pursuant to which he agreed to purchase from the Company 1,000,000 shares of Series C Convertible Preferred Stock and 2,100,000 shares of Series D Convertible Preferred Stock of Cyclacel at a purchase price of $1.00 per share for aggregate gross proceeds of $3.1 million, subject to the terms and conditions of the securities purchase agreement (together, the Series C Convertible Preferred Stock and Series D Convertible Preferred Stock are the “Securities”). The proceeds of the transaction were used to settle outstanding liabilities of the Company and other general corporate and operating purposes.
On February 11, 2025, investor Lazar, who was serving as the Company’s interim Chief Executive Officer and Secretary, entered into a securities purchase agreement (the “Purchase Agreement”) with an investor, Datuk Dr. Doris Wong Sing Ee (the “Investor”) pursuant to which the Investor agreed to purchase 1,000,000 shares of Series C Convertible Preferred Stock of the Company, and 1,745,262 of the 2,100,000 shares of Series D Convertible Preferred Stock of the Company, currently held by Lazar so that Purchaser would hold seventy percent (70%) of the fully diluted issued and outstanding shares of the Company. The Purchase Agreement closed on February 26, 2025 (the “Closing Date”). Additionally, the Investor succeeded to all of Lazar’s rights and interests under that certain securities purchase agreement between the Lazar and the Company dated January 2, 2025.
The Securities were convertible into shares of the common stock, par value $0.001 per share (the “Common Stock”) of the Company at the election of the Investor as follows: (i) the 1,000,000 shares of the Series C wee convertible into 2,650,000 shares of Common Stock, and (ii) 1,745,262 of the Series D were convertible into 191,978,820 shares of Common Stock. On the Closing Date, the Investor exercised the conversion rights related to the Series C and Series D shares into Common Stock in full resulting in the Investor owning 194,628,820 shares of Common Stock.
Historically, Cyclacel Limited has been a wholly owned subsidiary of the Company. The Company’s two ongoing clinical research programs were conducted through Cyclacel Limited and all intellectual property and rights to those programs were owned by that entity. On January 31, 2025, the creditors voluntary liquidation of Cyclacel Limited was announced in the London Gazette, one of the official public records of the government of the United Kingdom. Upon the commencement of the liquidation of the Cyclacel Limited, the Company lost operational and strategic control over the Cyclacel Limited and the financial results of Cyclacel Limited have been deconsolidated from Company as of January 31, 2025. On the date of deconsolidation, stockholders’ equity increased by approximately $5.0 million.
As part of the Company’s efforts to reduce operating costs it has determined to focus on the development of the plogosertib (“Plogo”) clinical program only. Accordingly, on March 10, 2025, the Company repurchased certain assets related to Plogo from Cyclacel Limited with the approval of the joint liquidator in exchange for approximately $0.3 million in cash. Fadraciclib, Cyclacel Limited’s other drug development program, is being marketed for sale by the joint liquidator . The Company has no plans at this time to repurchase any rights to or assets of the fadraciclib program.
| 3 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CYCLACEL PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
(In $000s, except share, per share, and liquidation preference amounts)
(Unaudited)
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use lease asset | ||||||||
| Non-current deposits | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued and other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Lease liability | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, $ par value;
shares authorized at March 31, 2025 and December 31, 2024; | ||||||||
| Series A convertible preferred stock, $ par value; shares issued and outstanding at March 31, 2025 and December 31, 2024 | ||||||||
| Series B convertible preferred stock, $ par value; shares issued and outstanding at March 31, 2025 and December 31, 2024 | ||||||||
| Series C convertible preferred stock, $ par value; shares issued and outstanding at March 31, 2025 and December 31, 2024 | ||||||||
| Series D convertible preferred stock, $ par value; shares issued and outstanding at March 31, 2025 and shares issued and outstanding at December 31, 2024 | ||||||||
| Series E convertible preferred stock, $ par value; shares issued and outstanding at March 31, 2025 and shares issued and outstanding at December 31, 2024 | ||||||||
| Preferred stock, value | ||||||||
| Common stock, $ par value; shares authorized at March 31, 2025 and shares authorized at December 31, 2024; shares issued and outstanding at March 31, 2025 and shares issued and outstanding at December 31, 2024 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-1 |
CYCLACEL PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In $000s, except share and per share amounts)
(Unaudited)
| 2025 | 2024 | |||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues: | ||||||||
| Clinical trial supply | $ | $ | ||||||
| Revenues | $ | $ | ||||||
| Operating expenses: | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Foreign exchange gains (losses) | ( | ) | ||||||
| Interest income | ||||||||
| Gain on deconsolidation of subsidiary | ||||||||
| Other income, net | ||||||||
| Total other income (expense), net | ||||||||
| Loss before taxes | ( | ) | ( | ) | ||||
| Income tax benefit | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Dividend on convertible exchangeable preferred shares | ||||||||
| Net loss applicable to common shareholders | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted earnings per common share: | ||||||||
| Net loss per share – basic and diluted (common shareholders) | $ | ) | $ | ) | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-2 |
CYCLACEL PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In $000s)
(Unaudited)
| 2025 | 2024 | |||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Translation adjustment | ||||||||
| Translation adjustment on deconsolidation of subsidiary | ||||||||
| Unrealized foreign exchange loss on intercompany loans | ( | ) | ( | ) | ||||
| Comprehensive loss | $ | $ | ( | ) | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
CYCLACEL PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(In $000s, except share amounts)
(Unaudited)
| Shares | Amount | Shares | Amount | Capital | Loss | Deficit | (Deficit) | |||||||||||||||||||||||||
| Additional | Other | Total Stockholders’ | ||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Comprehensive | Accumulated | Equity | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Loss | Deficit | (Deficit) | |||||||||||||||||||||||||
| Balances at December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | | |||||||||||||||||||||
| Issue costs on issuance of common stock upon conversion of pre-funded warrants in underwritten offering | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Series B Preferred stock conversions | ( | ) | ||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||
| Unrealized foreign exchange on intercompany loans | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Translation adjustment | — | — | ||||||||||||||||||||||||||||||
| Loss for the period | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balances at March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Balances at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Balances | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Issue costs on issuance of common stock, preferred stock and associated warrants on underwritten offering, net of expenses | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Issue of Series C preferred stock in Securities Purchase Agreement | — | |||||||||||||||||||||||||||||||
| Series C Preferred stock conversions | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Issue of Series D preferred stock in Securities Purchase Agreement | — | |||||||||||||||||||||||||||||||
| Series D Preferred stock conversions | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Issue of Series D preferred stock in Securities Purchase Agreement | — | |||||||||||||||||||||||||||||||
| Warrant Exercise | — | |||||||||||||||||||||||||||||||
| Issue of common stock on Securities Purchase Agreement | — | |||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||
| Deconsolidation of Subsidiary | — | — | ( | ) | ||||||||||||||||||||||||||||
| Unrealized foreign exchange on intercompany loans | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Translation adjustment | — | — | ||||||||||||||||||||||||||||||
| Loss for the period | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balances at March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Balances | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
CYCLACEL PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In $000s)
(Unaudited)
| 2025 | 2024 | |||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Stock-based compensation | ||||||||
| Changes in lease liability | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | ||||||||
| Accounts payable, accrued and other current liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing activities: | ||||||||
| Purchase of property, plant and equipment | ||||||||
| Net cash used in investing activities | ||||||||
| Financing activities: | ||||||||
| Costs from issuing common stock and pre-funded warrants | ( | ) | ( | ) | ||||
| Proceeds, net of issuance costs, from issuing common stock and pre-funded warrants, net | ||||||||
| Net cash provided by (used) in financing activities | ( | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Cash received during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Research & development tax credits | $ | $ | ||||||
| Cash paid during the period for: | ||||||||
| Interest | ||||||||
| Taxes | $ | $ | ||||||
| Noncash financing activities: | ||||||||
| Accrual of preferred stock dividends | — | — | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
CYCLACEL PHARMACEUTICALS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Company Overview
Nature of Operations
Cyclacel Pharmaceuticals, Inc. (“Cyclacel” or the “Company”) is a clinical-stage biopharmaceutical company developing innovative cancer medicines based on cell cycle, transcriptional regulation, epigenetics and mitosis control biology. Cyclacel is a pioneer company in the field of cancer cell cycle biology with a vision to improve patient healthcare by translating insights in cancer biology into medicines that can overcome resistance and ultimately increase a patient’s overall survival.
On
January 24, 2025, the Company’s wholly owned United Kingdom subsidiary Cyclacel Limited entered into a creditors voluntary liquidation.
Upon the commencement of the liquidation of the Cyclacel Limited, the Company lost operational and strategic control over the Cyclacel
Limited and the financial results of Cyclacel Limited have been deconsolidated from Company as of January 24, 2025. The deconsolidation
of the subsidiary resulted in a gain on deconsolidation of approximately $
Through March 31, 2025, substantially all efforts of the Company to date have been devoted to performing research and development, conducting clinical trials, developing and acquiring intellectual property, raising capital and recruiting and training personnel.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated balance sheet as of March 31, 2025, the consolidated statements of operations, comprehensive loss, and stockholders’ equity (deficit) for the three months ended March 31, 2025 and 2024 and the consolidated statements of cash flows for the three months ended March 31, 2025 and 2024, and all related disclosures contained in the accompanying notes, are unaudited. The consolidated balance sheet as of December 31, 2024 is derived from the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on April 2, 2025. The consolidated financial statements are presented on the basis of accounting principles that are generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for a complete set of financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments necessary to present fairly the consolidated balance sheet as of March 31, 2025, and the results of operations, comprehensive loss, and changes in stockholders’ equity (deficit) for the three months ended March 31, 2025, and cash flows for the three months ended March 31, 2025, have been made. The interim results for three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other reporting period. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the year ended December 31, 2024 that are included in the Company’s Annual Report on Form 10-K filed with the SEC on April 2, 2025.
Going Concern
Pursuant to the requirements of Accounting Standard Codification (ASC) 205-40, Presentation of Financial Statements-Going Concern, management is required at each reporting period to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effects of its plans sufficiently alleviate the substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern for one year after the date that these financial statements are issued. In performing its analysis, management excluded certain elements of its operating plan that cannot be considered probable. Under ASC 205-40, the future receipts of potential funding from future equity or debt issuances or by entering into partnership agreements cannot be considered probable at this time because these plans are not entirely within the Company’s control nor have they been approved by the Board of Directors as of the date of these consolidated financial statements.
| F-6 |
Based
on the Company’s current operating plan, it is anticipated that cash and cash equivalents of $
On February 25, 2025, Nasdaq notified the Company that it has regained compliance with the equity requirement in Listing Rule 5550(b)(1) (the “Equity Rule”), as required by the Nasdaq Hearing Panel’s decision dated October 22, 2024. Following the Company’s regaining compliance with the Equity Rule, the Company will be subject to a Mandatory Panel Monitor for a period of one year from February 25, 2025 pursuant to Listing Rule 5815(d)(4)(B).
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business.
Newly Adopted Accounting Pronouncements
On January 1, 2025, the Company adopted Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This standard requires all entities to include specified captions when reconciling the statutory income tax rate to the effective tax rate, on both a percentage and absolute dollar basis, in the annual financial statements. ASU 2023-09 also requires entities to disclose the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign for each annual reporting period, with separate disclosure of individual jurisdictions for which tax payments to, or receipts from, exceed a defined threshold. The company does not anticipate the adoption of ASU 2023-09 will require significant adjustments to the presentation of that information in the Company’s annual financial statements.
Recently Issued Accounting Pronouncements
The FASB has issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. This standard will require all public entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. ASU 2024-03 will not change the way in which expenses are recognized or measured. However, the Company is currently evaluating the effects of ASU 2023-07 on its financial statement presentation and disclosures.
Fair Value of Financial Instruments
Financial instruments consist of cash equivalents, accounts payable and accrued liabilities. The carrying amounts of cash equivalents, accounts payable and accrued liabilities approximate their respective fair values due to the nature of the accounts and their short maturities.
| F-7 |
Comprehensive Income (Loss)
All
components of comprehensive income (loss), including net income (loss), are reported in the financial statements in the period in which
they are recognized. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events
and circumstances from non-owner sources. Net income (loss) and other comprehensive income (loss), including foreign currency translation
adjustments, are reported, net of any related tax effect, to arrive at comprehensive income (loss).
Foreign Currency and Currency Translation
Transactions that are denominated in a foreign currency are remeasured into the functional currency at the current exchange rate on the date of the transaction. Any foreign currency-denominated monetary assets and liabilities are subsequently remeasured at current exchange rates, with gains or losses recognized as foreign exchange (losses) gains in the statement of operations. This accounting policy is also applied to foreign currency denominated intercompany payables or receivables for which settlement is planned or anticipated in the foreseeable future.
Through January 24, 2025, the assets and liabilities of the Company’s international subsidiary were translated from its functional currency into United States dollars at exchange rates prevailing at the balance sheet date. Average rates of exchange during the period are used to translate the statement of operations, while historical rates of exchange are used to translate any equity transactions. Translation adjustments arising on consolidation due to differences between average rates and balance sheet rates, as well as unrealized foreign exchange gains or losses arising from translation of intercompany loans for which settlement is not planned or anticipated in the foreseeable future and that are of a long-term-investment nature, were recorded in other comprehensive loss.
Leases
The Company accounts for lease contracts in accordance with ASC 842. As of March 31, 2025, the Company’s outstanding leases are classified as operating leases.
The Company recognizes an asset for the right to use an underlying leased asset for the lease term and records lease liabilities based on the present value of the Company’s obligation to make lease payments under the lease. As the Company’s leases do not indicate an implicit rate, the Company uses a best estimate of its incremental borrowing rate to discount the future lease payments. The Company estimates its incremental borrowing rate based on observable information about risk-free interest rates that are the same tenure as the lease term, adjusted for various factors, including the effects of assumed collateral, the nature of how the loan is repaid (e.g., amortizing versus bullet), and the Company’s credit risk.
The Company evaluates lessee-controlled options included in its lease agreements to extend or terminate the lease. The Company will reflect the effects of exercising those options in the lease term when it is reasonably certain that the Company will exercise that option. In assessing whether it is reasonably certain that the Company will exercise an option, the Company considers factors such as:
| ● | The lease payments due in any optional period; | |
| ● | Penalties for failure to exercise (or not exercise) the option; | |
| ● | Market factors, such as the availability of similar assets and current rental rates for such assets; | |
| ● | The nature of the underlying leased asset and its importance to the Company’s operations; and | |
| ● | The remaining useful lives of any related leasehold improvements. |
| F-8 |
Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease payments, if any, are recognized in the period when the obligation to make those payments is incurred. Lease incentives received prior to lease commencement are recorded as a reduction in the right-of-use asset. Fixed lease incentives received after lease commencement reduce both the lease liability and the right-of-use asset.
The Company has elected an accounting policy to account for the lease and non-lease components as a single lease component.
Revenue Recognition
When the Company enters into contracts with customers, the Company recognizes revenue using the five step-model provided in ASC 606, Revenue from Contracts with Customers (“ASC 606”):
| (1) | identify the contract with a customer; |
| (2) | identify the performance obligations in the contract; |
| (3) | determine the transaction price; |
| (4) | allocate the transaction price to the performance obligations in the contract; and |
| (5) | recognize revenue when, or as, the Company satisfies a performance obligation. |
The transaction price includes fixed payments and an estimate of variable consideration, including milestone payments. The Company determines the variable consideration to be included in the transaction price by estimating the most likely amount that will be received and then applies a constraint to reduce the consideration to the amount which is probable of being received. When applying the constraint, the Company considers:
| ● | Whether achievement of a development milestone is highly susceptible to factors outside the entity’s influence, such as milestones involving the judgment or actions of third parties, including regulatory bodies; |
| ● | Whether the uncertainty about the achievement of the milestone is not expected to be resolved for a long period of time; |
| ● | Whether the Company can reasonably predict that a milestone will be achieved based on previous experience; and |
| ● | The complexity and inherent uncertainty underlying the achievement of the milestone. |
The transaction price is allocated to each performance obligation based on the relative selling price of each performance obligation. The best estimate of the selling price is determined after considering all reasonably available information, including market data and conditions, entity-specific factors such as the cost structure of the deliverable and internal profit and pricing objectives.
The revenue allocated to each performance obligation is recognized as or when the Company satisfies the performance obligation.
The Company recognizes a contract asset, when the value of satisfied (or part satisfied) performance obligations is in excess of the payment due to the Company, and deferred revenue when the amount of unconditional consideration is in excess of the value of satisfied (or part satisfied) performance obligations. Once the right to receive consideration is unconditional, that amount is presented as a receivable.
Grant revenue received from organizations that are not the Company’s customers, such as charitable foundations or government agencies, is presented as a reduction against the related research and development expenses.
| F-9 |
3. Revenue
The
Company recognized $ revenue for the three months ended March 31, 2025 and $
The Company calculates net loss per common share in accordance with ASC 260 “Earnings Per Share” (“ASC 260”). Basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period.
Schedule of Earnings Per Share, Basic and Diluted
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| Stock options | ||||||||
| Restricted Stock Units | ||||||||
| 6% convertible exchangeable preferred stock | ||||||||
| Series A preferred stock | ||||||||
| Series D preferred stock | ||||||||
| Series E preferred stock | ||||||||
| Common stock warrants | ||||||||
| Total shares excluded from calculation | ||||||||
5. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in $000s):
Schedule of Prepaid Expenses and Other Current Assets
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Prepayments | ||||||||
| Other current assets | ||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||
6. Non-Current Assets
The
Company had $ non-current assets as of March 31, 2025 and $
7. Accrued and Other Liabilities
Accrued and other current liabilities consisted of the following (in $000s):
Schedule of Accrued and Other Current Liabilities
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued research and development | $ | $ | ||||||
| Accrued legal and professional fees | ||||||||
| Other current liabilities | ||||||||
| Accrued and other current liabilities | $ | $ | ||||||
8. Leases
The Company currently has an operating lease liability relating to its facilities in Kuala Lumpur, Malaysia. The Company terminated its lease agreement for its previous headquarters in Berkely Heights, New Jersey, effective January 31, 2025.
| F-10 |
For
the three months ended March 31, 2025 and 2024, the Company recognized operating lease expenses of $
Remaining lease payments for both facilities are as follows (in $000s):
Schedule of Remaining Lease Payments
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| Thereafter | ||||
| Total future minimum lease obligation | $ |
ASC 718 requires compensation expense associated with share-based awards to be recognized over the requisite service period which, for the Company, is the period between the grant date and the date the award vests or becomes exercisable. The Company recognizes all share-based awards under the straight-line attribution method, assuming that all granted awards will vest. Forfeitures are recognized in the periods when they occur.
Schedule of Stock Based Compensation Expense
| 2025 | 2024 | |||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| General and administrative | $ | $ | ||||||
| Research and development | ||||||||
| Stock-based compensation costs | $ | $ | ||||||
2018 Plan
In May 2018, the Company’s stockholders approved the 2018 Equity Incentive Plan (the “2018 Plan”), under which Cyclacel may make equity incentive grants to its officers, employees, directors and consultants. The 2018 Plan allows for various types of award grants, including stock options and restricted stock units.
On February 6, 2025, the Company’s stockholders approved an amendment to the 2018 Plan to reserve an additional shares of Common Stock for issuance thereunder, which number would not be adjusted as a result of the Reverse Stock Split. As of March 31, 2025, the Company has reserved approximately shares of the Company’s common stock under the 2018 Plan for future issuances.
Stock option awards granted under the Company’s equity incentive plans have a maximum life of years and generally
2020 Inducement Equity Incentive Plan
In October 2020, the Inducement Equity Incentive Plan (the “Inducement Plan”), became effective. Under the Inducement Plan, Cyclacel may make equity incentive grants to new senior level Employees (persons to whom the Company may issue securities without stockholder approval). The Inducement Plan allows for the issuance of up to shares of the Company’s common stock (or the equivalent of such number). As of March 31, 2025, there were no shares issued under the Inducement Plan, leaving a remaining reserve of shares.
| F-11 |
Option Awards Granted Outside of the 2018 Plan and Inducement Plan
During February 2025, the Company issued stock option awards to employees and consultants outside of the 2018 Plan and the Inducement Plan. The shares underlying these options are not registered for resale. All of the options granted outside of the 2018 Plan and Inducement Plan vest immediately upon grant and can be exercised beginning three months from the recipient’s Termination Date through the expiry of the option awards, which is ten years from the grant date. The Termination Date is defined as the date on which an award recipient ceases to be an employee, director or consultant of the Company or of an Affiliate for any reason other than the death or disability, or termination of the recipient for cause.
Option Grants and Exercises
There were options granted during the three months ended March 31, 2025. Of these awards, were issued under the 2018 Plan and the rest were issued outside of the 2018 Plan and the Inducement Plan. Options granted during the three months ended March 31, 2025 had a grant date fair value ranging between $ and $ per option.
There were options granted under the 2018 Plan during the three months ended March 31, 2024. These options had a grant date fair value of $ per option.
Schedule of Assumptions Used for Fair Value of the Stock Options Granted Using Black-Scholes Option-Pricing Model
| Three months ended | Three months ended | |||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Expected term (years) | - | |||||||
| Risk free interest rate | % – | % | % | |||||
| Volatility | % – | % | % | |||||
| Expected dividend yield over expected term | % | % | ||||||
| Resulting weighted average grant date fair value | $ | $ | ||||||
There were stock options exercised during each of the three months ended March 31, 2025 and 2024, respectively. The Company does not expect to be able to benefit from the deduction for stock option exercises that may occur because the company has tax loss carryforwards from prior periods that would be expected to offset any potential taxable income.
Outstanding Options
Schedule of Share Option Activity
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Number of | Average | Remaining | Aggregate | |||||||||||||
| Options | Exercise | Contractual | Intrinsic | |||||||||||||
| Outstanding | Price Per Share | Term (Years) | Value ($000) | |||||||||||||
| Options outstanding at December 31, 2024 | $ | $ | ||||||||||||||
| Granted | $ | — | $ | — | ||||||||||||
| Exercised | $ | — | $ | — | ||||||||||||
| Cancelled/forfeited | ( | ) | $ | — | $ | — | ||||||||||
| Options outstanding at March 31, 2025 | $ | $ | ||||||||||||||
| Unvested at March 31, 2025 | $ | — | $ | — | ||||||||||||
| Vested and exercisable at March 31, 2025 | $ | $ | ||||||||||||||
| F-12 |
Restricted Stock Units
restricted stock units were issued during the three months ended March 31, 2025. The Company issued restricted stock units during the three months ended March 31, 2024. These restricted stock units vested monthly over a six-month service period. These restricted stock units were valued at $ at the date of grant, which was equivalent to the market price of a share of the Company’s common stock on that date.
A total of restricted stock units were issued in January 2023. These units vest on the third anniversary of their date of grant, or earlier if certain defined clinical trial related performance targets are met. A three-year vesting assumption was applied to these restricted stock units as satisfaction of the performance conditions is not probable at this time. Each restricted stock unit was valued at $ at the date of grant, which was equivalent to the market price of a share of the Company’s common stock on that date. As of March 31, 2025, all but of the original awards granted have been forfeited due to the recipient’s termination of service with the Company. In the three months ended March 31, 2025, the Company reduced stock compensation cost, a component of selling general, and administrative expense, by approximately $ as a result of forfeitures of these awards during that period.
Schedule of Restricted Stock Units Activity
| Weighted | Weighted | |||||||||||
| Average | Average | |||||||||||
| Restricted | Grant Date | Remaining | ||||||||||
| Stock Units | Value per share | Term | ||||||||||
| Restricted Stock Units outstanding at December 31, 2024 | $ | years | ||||||||||
| Granted | $ | |||||||||||
| Cancelled/forfeited | ( | ) | $ | |||||||||
| Restricted Stock Units outstanding at March 31, 2025 | $ | years | ||||||||||
| Unvested at March 31, 2025 | $ | years | ||||||||||
| Vested at March 31, 2025 | $ | years | ||||||||||
10. Stockholders Equity
Common Stock Equity Offerings
April 2024 Securities Purchase Agreement
On
April 30, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional
investor (the “Purchaser”) for the issuance and sale in a private placement (the “Private Placement”) of (i)
shares of the Company’s common stock, (ii) pre-funded warrants to purchase up to
The
Common Warrants are exercisable immediately upon issuance at an exercise price of $
| F-13 |
In connection with the Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”), dated as of April 30, 2024, with the Purchaser, pursuant to which the Company agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) registering the resale of the securities issued in the Private Placement.
The
Private Placement closed on May 2, 2024. The gross proceeds to the Company from the Private Placement were approximately $
H.C.
Wainwright & Co., LLC (“Wainwright”) acted as the Company’s exclusive placement agent in connection with the Private
Placement, pursuant to that certain engagement letter, dated as of April 29, 2024, between the Company and Wainwright (as amended, the
“Engagement Letter”). Pursuant to the Engagement Letter, the Company paid Wainwright (i) a cash fee equal to
In
connection with this transaction, the Company was required to compensate Roth Capital Partners, LLC, pursuant to a tail provision contained
in an engagement letter entered into on March 14, 2024, in an amount equal to
Each of the instruments issued in the Private Placement have been classified and recorded as part of shareholders’ equity (deficit). The amounts allocated to each issued security were based on their relative fair values, resulting in initial carrying values of the respective instruments as follows:
| Allocated Amount | ||||
| Common shares | $ | |||
| Prefunded warrants | ||||
| Common warrants | ||||
| Net proceeds | $ | |||
The
aggregate fair value of the Placement Agent Warrants was $
In determining the fair values of the Pre-Funded Warrants, Common Warrants, and Placement Agent Warrants, the Company used a Black-Scholes Option Pricing model with the following assumptions:
Schedule of Fair value of Warrants Valuation Assumption
| Pre-Funded Warrants | Common Warrants | Placement Agent Warrants | ||||
| Expected volatility | ||||||
| Contractual term | 1½
- 5½
years | 5½
years | ||||
| Risk-free interest rate | ||||||
| Expected dividend yield |
The fair value of the common shares was determined using the closing price of the Company’s common stock as of May 2, 2024, which is the date that the Private Placement closed.
| F-14 |
December 2023 Registered Direct Offering Securities Purchase Agreement
On
December 21, 2023, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain
institutional investors (“Purchasers”). Pursuant to the Securities Purchase Agreement, the Company agreed to sell in a registered
direct offering (“Registered Direct Offering”) shares (“Shares”) of the Company’s common stock,
$ par value per share (“Common Stock”), and pre-funded warrants (“Pre-Funded Warrants”) to purchase up to
Pursuant
to the Securities Purchase Agreement, in a concurrent private placement (together with the Registered Direct Offering, the “Offerings”),
the Company also agreed to issue to the Purchasers unregistered warrants (“Common Warrants”) to purchase up to
On
December 21, 2023, in a separate concurrent insider private placement (the “Insider Private Placement”), the Company also
entered into a Securities Purchase Agreement with certain of its executive officers (the “Insider Securities Purchase Agreement”)
pursuant to which the Company agreed to sell in a private placement (i) shares of Common Stock and warrants to purchase
Ladenburg Thalmann & Co. Inc. (the “Placement Agent”) acted as the exclusive placement agent for the Offerings, pursuant to a placement agency agreement (the “Placement Agency Agreement”), dated December 21, 2023, by and between the Company and the Placement Agent.
Pursuant
to the Placement Agency Agreement, the Company paid the Placement Agent a cash placement fee equal to
Each of the instruments issued in the Offerings and the Insider Private Placement have been classified and recorded as part of shareholders’ equity (deficit). The amounts allocated to each issued security were based on their relative fair values, resulting in initial carrying values of the respective instruments as follows:
| Allocated Amount | ||||
| Common Shares | $ | |||
| Pre-Funded Warrants | $ | |||
| Regular Warrants | $ | |||
| Net Proceeds | $ | |||
| F-15 |
The
aggregate fair value of the Placement Agent Warrants was $
In determining the fair values of the Pre-Funded Warrants, Regular Warrants, and Placement Agent Warrants, the Company used a Black-Scholes Option Pricing model with the following assumptions:
Schedule of Fair value of Warrants Valuation Assumption
| Pre-Funded Warrants | Regular Warrants | Placement Agent Warrants | ||||
| Expected volatility | ||||||
| Contractual/ expected term | ||||||
| Risk-free interest rate | ||||||
| Expected dividend yield |
The fair value of the common shares was determined using the closing price of the Company’s common stock as of December 26, 2023, which is the date that the Offerings and the Insider Private Placement closed.
Warrants
November 2024 Warrants (As Amended)
As
of March 31, 2025, warrants to purchase a total of
A
total of
April 2024 Warrants
As
of March 31, 2025, warrants to purchase a total of
A
total of
| F-16 |
December 2023 Warrants
As
of March 31, 2025, warrants to purchase a total of
There
were
December 2020 Warrants
As
of March 31, 2025, warrants to purchase
There
were
April 2020 Warrants
As
of March 31, 2025,
The
common warrants are exercisable, at the option of each holder, in whole or in part, by delivering to the Company a duly executed exercise
notice accompanied by payment in full for the number of shares of the Company’s common stock purchased upon such exercise (except
in the case of a cashless exercise).
There
were
Preferred Stock
Series E Preferred Stock
A
total of shares of the Company’s Series E Preferred Stock were issued pursuant to a March 2025 Securities Purchase Agreement
with certain accredited investors. The Company received proceeds of $
| F-17 |
Each
share of Series E Preferred Stock is convertible into shares of the Company’s common stock, par value $ per share (“Common
Stock”). In no event will the Series E Preferred Stock be convertible into Common Stock in a manner that would result in each Investor
or their transferees or their affiliates holding more than the lower of (i) the maximum percentage of the number of shares of Common
Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Series E
Preferred Stock that can be issued to the holder without requiring a vote of the stockholders of the Company under the rules and regulations
of The Nasdaq Capital Market (“Nasdaq”); and (ii)
Pursuant to the Purchase Agreement, the Company filed a certificate of designations (the “Series E Certificate of Designations”) with the Secretary of State of Delaware designating the rights, preferences and limitations of the shares of the Series E Preferred Stock on March 21, 2025. The Series E Certificate of Designations provides, in particular, that the Series E Preferred Stock will vote together with the Common Stock on an as-converted basis, subject to the Series E Ownership Limitation, subject further to adjustments for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions.
The holders of Series E Preferred Stock will be entitled to participate in any dividends made on shares of Common Stock (on an as-converted basis) if and when such dividends are declared. Upon any liquidation or sale of the Company or all or substantially all of its assets, the holders of the Series E Preferred Stock will be entitled to receive pari passu with the other holders of preferred stock, prior to and in preference to any distribution to holders of Common Stock, an amount equal to $ per share, the stated value of the Series E Preferred Stock, then held by them plus any accrued but unpaid dividends. Thereafter, the remaining assets of the Company will be distributed to the holders of Common Stock until such holders receive a return of their capital originally contributed, and thereafter, any remaining assets will be distributed to all holders of Common Stock and preferred stock pro rata based on the number of shares held on an as-converted basis.
As of March 31, 2025, shares of the Series E Preferred Stock remain issued and outstanding. The shares of Series E Preferred Stock issued and outstanding at March 31, 2025, are convertible into shares of common stock.
Series C and Series D Preferred Stock
A
total of shares of the Company’s Series C Preferred Stock and shares of the Company’s Series D Preferred
Stock were issued pursuant to a January 2025 Securities Purchase Agreement with David E. Lazar, pursuant to which he agreed to purchase
from the Company shares of Series C Convertible Preferred Stock (the “Series C Preferred Stock”) and
shares of Series D Convertible Preferred Stock (the “Series D Preferred Stock” and, together with the Series C Preferred
Stock, the “Preferred Stock”) of the Company at a purchase price of $ per share for aggregate gross proceeds of $
Each
share of Series C Preferred Stock is convertible into shares of the Company’s common stock, par value $ per share (“Common
Stock”), and each share of Series D Preferred Stock is convertible into shares of Common Stock. In no event will the Series
C Preferred Stock be convertible into Common Stock in a manner that would result in Mr. Lazar or his transferees or their affiliates
holding more than the lower of (i) the maximum percentage of the number of shares of Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon conversion of the Preferred Stock that can be issued to the holder without
requiring a vote of the stockholders of the Company under the rules and regulations of The Nasdaq Stock Market (“Nasdaq”);
and (ii)
| F-18 |
In
addition, prior to a Fundamental Transaction (as defined below), in no event will the Series D Preferred Stock be convertible into Common
Stock in a manner that would result in Mr. Lazar or his transferees or their affiliates holding more than the lower of (i) the maximum
percentage of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon conversion of the Preferred Stock that can be issued to the Holder without requiring a vote of the stockholders of
the Company under the rules and regulations of Nasdaq; and, (ii)
On February 24, 2025, all of the Series C preferred shares were converted in conjunction with the Purchase Agreement. As of March 31, 2025 there were no remaining shares of the Series C Preferred Stock.
On February 24, 2025, of the Series D preferred shares were converted in conjunction with the Purchase Agreement. As of March 31, 2025, shares of the Series D Preferred Stock remain issued and outstanding. The shares of Series D Preferred Stock issued and outstanding at March 31, 2025, are convertible into shares of common stock.
Series B Preferred Stock
A total of shares of the Company’s Series B Preferred Stock were issued pursuant to a December 2020 Securities Purchase Agreement. Each share of Series B Preferred Stock was initially convertible into one third (1/3) share of common stock (the “Conversion Shares”), subject to adjustment in accordance with the Certificate of Designation.
During the year ended December 31, 2024, shares of Series B Preferred Stock were converted, at the option of the holder, into shares of common stock. As of March 31, 2025, there were remaining shares of the Series B Preferred Stock.
Series A Preferred Stock
A
total of shares of the Company’s Series A Preferred Stock were issued in a July 2017 Underwritten Public Offering. Each share
of Series A Preferred Stock is convertible at any time at the option of the holder thereof, into a number of shares of common stock determined
by dividing $
As of March 31, 2025 and December 31, 2024, shares of the Series A Preferred Stock remain issued and outstanding. The shares of Series A Preferred Stock issued and outstanding at March 31, 2025, are convertible into shares of common stock.
In the event of a liquidation, the holders of shares of the Series A Preferred Stock may participate on an as-converted-to-common-stock basis in any distribution of assets of the Company. The Company shall not pay any dividends on shares of common stock (other than dividends in the form of common stock) unless and until such time as dividends on each share of Series A Preferred Stock are paid on an as-converted basis. There is no restriction on the Company’s ability to repurchase shares of Series A Preferred Stock while there is an arrearage in the payment of dividends on such shares, and there are no sinking fund provisions applicable to Series A Preferred Stock.
| F-19 |
Subject
to certain conditions, at any time following the issuance of the Series A Preferred Stock, the Company has the right to cause each holder
of the Series A Preferred Stock to convert all or part of such holder’s Series A Preferred Stock in the event that (i) the volume
weighted average price of our common stock for 30 consecutive trading days, or Measurement Period exceeds
The Series A Preferred Stock has no maturity date, will carry the same dividend rights as the common stock, and with certain exceptions contains no voting rights. In the event of any liquidation or dissolution of the Company, the Series A Preferred Stock ranks senior to the common stock in the distribution of assets, to the extent legally available for distribution.
6% Convertible Exchangeable Preferred Stock
As
of March 31, 2025, there were shares of the Company’s
The
Company may automatically convert the 6% Preferred Stock into common stock if the per share closing price of the Company’s common
stock has exceeded $
The
The
Company may, at its option, redeem the
The
6% Preferred Stock is exchangeable, in whole but not in part, at the option of the Company on any dividend payment date beginning on
November 1, 2005 (the “Exchange Date”) for the Company’s
11. Subsequent Events
Dividends on 6% Preferred Stock
On
April 19, 2025, the board of directors of the Company declared a quarterly cash dividend on the Company’s
| F-20 |
Preferred Stock Conversions
On April 2, 2025, all of the remaining shares of the Company’s Series D Preferred Stock was converted into shares of common stock.
On April 29, 2025, all of the shares of the Company’s Series E Preferred Stock was converted into shares of common stock.
Amendment to Amended and Restated Certificate of Incorporation
On April 25, 2025, after obtaining the approval of the Board of Directors and the Company’s majority stockholder, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock from two hundred fifty million () to six hundred million (). The amendment did not result in any changes to the issued and outstanding shares of the Company’s common stock, and only affects the number of shares that may be issued by the Company in the future.
Proposed Business Combination of FITTERS Diversified Berhad
On
May 6, 2025, the Company entered into an Exchange Agreement with FITTERS Diversified Berhad (9318.KL; “FITTERS”), an investment
holding company engaged, through its subsidiaries, in the business of the sale of fire safety materials, equipment and fire prevention
systems, “Waste-To-Resource” services and real estate development and construction. Pursuant to the Exchange Agreement, all
of the ordinary shares owned by FITTERS of FITTERS’ subsidiary, Fitters Sdn. Bhd., a Malaysia-based private limited company (“Fitters
Sub”) shall be exchanged for common stock, par value $, of the Company (the “Purchaser Stock”), and Fitters Sub
shall be continuing as a wholly-owned subsidiary of the Company (the “Transaction”). As part of the Transaction, Cyclacel
shall issue an amount of Purchaser Stock equal to 19.99% percent, which percentage may be subject to adjustment, of the issued and outstanding
shares of Purchaser Stock as of the closing date to FITTERS. At the closing, it is expected that Cyclacel stockholders will own approximately
The Transaction is subject to approval from Cyclacel stockholders and FITTERS shareholders. The Exchange Agreement has been unanimously approved by the Boards of Directors of each of Cyclacel, FITTERS and Fitters Sub.
Reverse Stock Split
On May 7, 2025, the Company filed an amendment to its Certificate of Incorporation (“Certificate of Amendment”)
to implement a
As a result of the reverse stock split, on the Effective Date, every sixteen shares of common stock then issued and outstanding automatically was combined into one share of common stock, with no change in par value per share. No fractional shares were outstanding following the reverse stock split, and any fractional shares that would have resulted from the reverse stock split have been (a) rounded up to the nearest whole number for any shareholder who would otherwise be entitled to receive one-half or more of a fractional split-adjusted share, and (b) rounded down to the nearest whole number for any shareholder who would otherwise be entitled to receive less than one-half of a fractional split-adjusted share.
| F-21 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, including, without limitation, Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking statements” within the meaning of Section 27A of the Securities Exchange Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend that the forward-looking statements be covered by the safe harbor for forward-looking statements in the Exchange Act. The forward-looking information is based on various factors and was derived using numerous assumptions. All statements, other than statements of historical fact, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. These forward-looking statements are usually accompanied by words such as “believe,” “anticipate,” “plan,” “seek,” “expect,” “intend” and similar expressions.
Forward-looking statements necessarily involve risks and uncertainties, and our actual results could differ materially from those anticipated in the forward looking statements due to a number of factors, including those set forth in Part I, Item 1A, entitled “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2024, as updated and supplemented by Part II, Item 1A, entitled “Risk Factors,” of our Quarterly Reports on Form 10-Q, and elsewhere in this report. These factors as well as other cautionary statements made in this Quarterly Report on Form 10-Q, should be read and understood as being applicable to all related forward-looking statements wherever they appear herein. The forward-looking statements contained in this Quarterly Report on Form 10-Q represent our judgment as of the date hereof. We encourage you to read those descriptions carefully. We caution you not to place undue reliance on the forward-looking statements contained in this report. These statements, like all statements in this report, speak only as of the date of this report (unless an earlier date is indicated) and we undertake no obligation to update or revise the statements except as required by law. Such forward-looking statements are not guarantees of future performance and actual results will likely differ, perhaps materially, from those suggested by such forward-looking statements. In this report, “Cyclacel,” the “Company,” “we,” “us,” and “our” refer to Cyclacel Pharmaceuticals, Inc.
Overview
On January 24, 2025, the Company’s wholly owned United Kingdom subsidiary Cyclacel Limited entered into a creditors voluntary liquidation. Upon the commencement of the liquidation of the Cyclacel Limited, the Company lost operational and strategic control over the Cyclacel Limited and the financial results of Cyclacel Limited have been deconsolidated from Company as of January 24, 2025. The deconsolidation of the subsidiary resulted in a gain on deconsolidation of approximately $5.0 million shown as other income within the income statement for the period.
We are a clinical-stage biopharmaceutical company developing innovative cancer medicines based on cell cycle, transcriptional regulation, epigenetics and mitosis control biology. We reported revenue of $0 for the three months ended March 31, 2025, and revenues of $29,000 for the three months ended March 31, 2024. We do not expect to report a significant amount of revenue for the foreseeable future.
As part of the Company’s efforts to reduce operating costs it has determined to focus on the development of the plogosertib (“Plogo”) clinical program only. Accordingly, on March 10, 2025, the Company repurchased certain assets related to Plogo from Cyclacel Limited with the approval of the joint liquidator in exchange for approximately $0.3 million in cash. Fadraciclib, Cyclacel Limited’s other drug development program, is being marketed for sale by the joint liquidator . The Company has no plans at this time to repurchase any rights to or assets of the fadraciclib program.
We currently retain all marketing rights worldwide to the compounds associated with our drug programs.
| 4 |
Plogosertib Phase 1/2 Study in Advanced Solid Tumors and Lymphoma (140-101; NCT#05358379)
This open-label Phase 1/2 registration-directed study uses a streamlined design and initially seeks to determine the RP2D for single-agent oral plogosertib in a dose escalation stage. Once RP2D has been established, the study will enter into proof-of-concept, cohort stage, using a Simon 2-stage design. In this stage plogosertib will be administered to patients in up to seven mechanistically relevant cohorts including patients with bladder, breast, colorectal (including KRAS mutant), hepatocellular and biliary tract, and lung cancers (both small cell and non-small cell), as well as lymphomas. An additional basket cohort will enroll patients with biomarkers relevant to the drug’s mechanism, including MYC amplified tumors. The protocol allows for expansion of individual cohorts based on response which may allow acceleration of the clinical development and registration plan for plogosertib.
Fifteen patients have been treated at the first five dose escalation levels with no dose limiting toxicities observed. Stable disease has been observed in pretreated patients with gastrointestinal, lung, and ovarian cancers. A new, alternative salt, oral formulation of plogosertib with improved bioavailability is under development.
Going Concern
For the three months ended March 31, 2025, we used net cash of $8.2 million to fund our operating activities. We have cash and cash equivalents of $3.5 million as of March 31, 2025, which will allow it to meet its liquidity requirements into the second quarter of 2025. However, there remains substantial doubt about our ability to continue as a going concern. We are currently investigating ways to raise additional capital through private equity financing or by entering into a strategic transaction. In the event that we are not able to secure funding, we may be forced to curtail operations, delay or stop ongoing development activities, cease operations altogether, and/or file for bankruptcy.
On February 25, 2025, Nasdaq notified the Company that it has regained compliance with the equity requirement in Listing Rule 5550(b)(1) (the “Equity Rule”), as required by the Nasdaq Hearing Panel’s decision dated October 22, 2024. As previously reported by the Company on Form 8-K, filed with the SEC on October 24, 2024, on October 15, 2024, the Company met with the Nasdaq Hearings Panel regarding its potential delisting from Nasdaq as a result of its non-compliance with the Equity Rule. On October 22, 2024, the Company received the Nasdaq Hearings Panel decision which granted the Company until December 24, 2024 to regain compliance with the Equity Rule. This date was subsequently extended to February 25, 2025. Following the Company’s regaining compliance with the Equity Rule, pursuant to the Nasdaq notice on February 25, 2025, the Company will be subject to a Mandatory Panel Monitor for a period of one year from February 25, 2025 pursuant to Listing Rule 5815(d)(4)(B).
Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months. This is because we have not generated any revenues and no revenues are anticipated for the foreseeable future. We cannot complete the development of plogo without obtaining additional financing. Accordingly, we must raise cash from sources other than operations. Our only other source for cash at this time is investments by others in our company. We must raise cash to implement our business plan.
As a result of the current difficult economic environment and our lack of funding to implement our business plan, our Board of Directors has begun to analyze strategic alternatives available to the Company to continue as a going concern. Such alternatives include raising additional debt or equity financing or consummating a merger or acquisition with a partner that may involve a change in our business plan.
Although our Board of Directors’ preference would be to obtain additional funding to implement our business plan, the Board believes that it must consider all viable strategic alternatives that are in the best interests of our shareholders. Such strategic alternatives include a merger, acquisition, share exchange, asset purchase, or similar transaction. We believe we would be an attractive candidate for such a business combination due to the perceived benefits of being a publicly listed company, thereby providing a transaction partner access to the public marketplace to raise capital, such as:
1. We plan to acquire and consolidate complimentary industrial assets. Typically, these assets are the core manufacturer and supplier of specific bulk commodity minerals and chemicals distributed to the global manufacturer industry. Our consolidation strategy is to assemble a portfolio of mature and value-add industrial commodities businesses to generate scalable enterprises with a large portfolio of products and services addressing a common and stable customer base. We believe that smaller, legacy-owned industrial companies will benefit from economies of scale and professional asset allocation. Our acquisition strategy seeks to capitalize on the price differential between public company and private company valuations, while also providing the platform to access capital markets and professional management oversight.
| 5 |
2. Our present intent is to identify and evaluate business opportunities that might prove to be a good match for the Company. We will not be able to develop any identified business opportunities without additional financing. Our board of directors and management are actively pursuing financing to maintain operations while we evaluate potential businesses. We will not restrict our consideration to any particular business or industry segment, and might consider, among others, finance, brokerage, insurance, transportation, communications, research and development, biotechnology, service, natural resources, manufacturing, or technology. Management recognizes that the Company’s inadequate financial resources limit the scope and number of suitable business venture candidates that might otherwise be available. The decision to participate in a specific business opportunity will be made upon management’s analysis of the quality of the other firm’s management and personnel, the anticipated acceptability of new products or marketing concepts, the merit of technological changes and numerous other factors which are difficult, if not impossible, to analyze through the application of any objective criteria.
3. In many instances, it is anticipated that the historical operations of a specific venture may not necessarily be indicative of the potential for the future because of the necessity to substantially shift a marketing approach, expand operations, change product emphasis, change or substantially augment management, or make other changes. We will to some extent be dependent upon the management of a business opportunity to identify such problems and to implement or be primarily responsible for the implementation of, required changes. We will not acquire or merge with any company for which audited financial statements could not be obtained. Nonetheless, it may be anticipated that any opportunity in which we determine to participate would present certain risks to our shareholders. Risks might include the track record of management’s effectiveness, failures to establish a consistent market for products or services, development stage, or to realize profits. Many more of these risks may not be adequately identified prior to the selection of a specific opportunity, and our shareholders must, therefore, depend on the ability of management to identify and evaluate such risks as such become evident.
We may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another entity or may purchase the stock or assets of an existing business. In the event a merger or acquisition were to occur, our shareholders would in all likelihood hold a lesser percentage ownership interest in the Company following such merger or acquisition. The percentage ownership of existing shareholders may be subject to a significant reduction in the event we acquire a target company with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant substantial dilutive effect on the percentage of shares held by the Company’s present shareholders.
Liquidity and Capital Resources
The following is a summary of our key liquidity measures as of March 31, 2025 and 2024 (in $000s):
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash and cash equivalents | $ | 3,450 | $ | 2,798 | ||||
| Working capital: | ||||||||
| Current assets | $ | 3,714 | $ | 4,835 | ||||
| Current liabilities | (663 | ) | (8,350 | ) | ||||
| Total working capital deficit | $ | 3,051 | $ | (3,515 | ) | |||
Since our inception, we have relied primarily on the proceeds from sales of common and preferred equity securities to finance our operations and internal growth. Additional funding has come through research and development tax credits, government grants, the sale of product rights, interest on investments and licensing revenue. We have incurred significant losses since our inception. As of March 31, 2025, we had an accumulated deficit of $440.5 million.
| 6 |
Cash Flows
Cash from operating, investing and financing activities for the three months ended March 31, 2025 and 2024 is summarized as follows (in $000s):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (3,247 | ) | $ | (483 | ) | ||
| Net cash used in investing activities | — | — | ||||||
| Net cash provided by financing activities | 3,646 | (79 | ) | |||||
Operating activities
Net cash used in operating activities increased by $2.8 million, from $0.5 million for the three months ended March 31, 2024 to $3.2 million for the three months ended March 31, 2025. The increase in cash used by operating activities was primarily due toa change in working capital of $7.1 million as result of the change of control of the Company, and offset by decrease in net loss of $2.8 million and increase of $1.5 million of stock compensation expense.
Investing activities
Net cash used by investing activities was $0 for each of the three months ended March 31, 2025 and 2024.
Financing activities
Net cash provided by financing activities was $3.6 million for the three months ended March 31, 2025 as a direct result of receiving approximately $3.6 million, net of expenses, from the issuance of preferred stock under a Securities Purchase Agreement following a change of control of the Company.
Net cash used in financing activities was $79,000 for the three months ended March 31, 2024 primarily due to dividend payment of approximately $50,000 to the holders of our 6% Preferred Stock.
Funding Requirements and Going Concern
We do not currently have sufficient funds to complete development and commercialization of any of our drug candidates. Current business and capital market risks could have a detrimental effect on the availability of sources of funding and our ability to access them in the future, which may delay or impede our progress of advancing our drugs currently in the clinical pipeline to approval by the Food and Drug Administration (“FDA”) or European Medicines Agency (“EMA”) for commercialization. Additionally, we plan to continue to evaluate in-licensing and acquisition opportunities to gain access to new drugs or drug targets that would fit with our strategy. Any such transaction would likely increase our funding needs in the future.
Our future funding requirements will depend on many factors, including but not limited to:
| ● | the rate of progress and cost of our clinical trials, preclinical studies and other discovery and research and development activities; | |
| ● | the costs associated with establishing manufacturing and commercialization capabilities; | |
| ● | the costs of acquiring or investing in businesses, product candidates and technologies; | |
| ● | the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; | |
| ● | the costs and timing of seeking and obtaining FDA and EMA approvals; | |
| ● | the effect of competing technological and market developments; and | |
| ● | the economic and other terms and timing of any collaboration, licensing or other arrangements into which we may enter. |
| 7 |
Until we can generate a sufficient amount of product revenue to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through public or private equity offerings, debt financings or strategic collaborations. Although we are not reliant on institutional credit finance and therefore not subject to debt covenant compliance requirements or potential withdrawal of credit by banks, we are reliant on the availability of funds and activity in equity markets. We do not know whether additional funding will be available on acceptable terms, or at all. If we are not able to secure additional funding when needed, we may have to delay, reduce the scope of or eliminate one or more of our clinical trials or research and development programs or make changes to our operating plan, which may include ceasing operations altogether and/or filing for bankruptcy. In addition, we may have to partner one or more of our product candidate programs at an earlier stage of development, which would lower the economic value of those programs to us.
Since our inception, we have relied primarily on the proceeds from sales of common and preferred equity securities to finance our operations and internal growth. Additional funding has come through research and development tax credits, government grants, the sale of product rights, interest on investments, licensing revenue, royalty income, and a limited amount of product revenue from operations discontinued in September 2012.
As discussed in Note 2 of the Notes to the Consolidated Financial Statements accompanying this Quarterly Report on Form 10-Q, under ASC Topic 205-40, Presentation of Financial Statements - Going Concern, management is required at each reporting period to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued.
Our history of losses, our negative cash flows from operations, our liquidity resources currently on hand, and our dependence on the ability to obtain additional financing to fund our operations after the current resources are exhausted, about which there can be no certainty, have resulted in our assessment that there is substantial doubt about our ability to continue as a going concern for a period of at least twelve months from the issuance date of this Quarterly Report on Form 10-Q. We are currently investigating ways to raise additional capital through private equity financing or by entering into a strategic transaction. In the event that we are not able to secure funding, we may be forced to curtail operations, delay or stop ongoing development activities, cease operations altogether, and/or file for bankruptcy. In such event, our stockholders may lose their entire investment in our company.
Results of Operations
Three Months Ended March 31, 2025 and 2024
Revenues
We recognized $0 revenue for the three months ended March 31, 2025 and $29,000 for the three months ended March 31, 2024. This revenue is related to recovery of clinical manufacturing costs associated with an investigator sponsored study managed by Cedars-Sinai Medical Center.
We do not expect to report revenue for the foreseeable future.
Research and Development Expenses
From our inception, we have focused on drug discovery and development programs, with a particular emphasis on orally available anticancer agents, and our research and development expenses have represented costs incurred to discover and develop novel small molecule therapeutics, including clinical trial costs for fadraciclib and plogosertib. We have also incurred costs in the advancement of product candidates toward clinical and preclinical trials and the development of in-house research to advance our biomarker program and technology platforms. We expense all research and development costs as they are incurred. Research and development expenses primarily include:
| ● | Clinical trial and regulatory-related costs; |
| 8 |
| ● | Payroll and personnel-related expenses, including consultants and contract research organizations; | |
| ● | Preclinical studies, supplies and materials; | |
| ● | Technology license costs; | |
| ● | Stock-based compensation; and | |
| ● | Rent and facility expenses for our offices. |
The following table provides information with respect to our research and development expenditures for the three months ended March 31, 2025 and 2024 (in $000s except percentages):
| Three Months Ended | ||||||||||||||||
| March 31, | Difference | |||||||||||||||
| 2025 | 2024 | $ | % | |||||||||||||
| Transcriptional Regulation (fadraciclib) | $ | 389 | $ | 1,752 | $ | (1,363 | ) | (78 | ) | |||||||
| Anti-mitotic (plogosertib) | 360 | 963 | (603 | ) | (63 | ) | ||||||||||
| Other research and development expenses | 73 | 87 | (14 | ) | (16 | ) | ||||||||||
| Total research and development expenses | $ | 822 | $ | 2,802 | $ | (1,980 | ) | (71 | ) | |||||||
Total research and development expenses represented 16% and 64% of our operating expenses for the three months ended March 31, 2025 and 2024 respectively.
Research and development expenses decreased by $2.0 million from $2.8 million for the three months ended March 31, 2024 to $0.8 million for the three months ended March 31, 2025. Expenditure for the transcriptional regulation program ceased as a result of the Company’s UK subsidiary, Cyclacel Limited, being liquidated on January 24, 2025. Research and development expenses relating to plogosertib decreased by $0.6 million relative to the respective comparative period whilst we continue to explore and develop an alternative salt, oral formulation with improved bioavailability.
The future
Following the liquidation of the UK Subsidiary, and therefore the loss of ownership of our transcriptional regulation program, we anticipate that overall research and development expenses for the year ended December 31, 2025 will decrease significantly compared to the year ended December 31, 2024 as we focus only on the development of anti-mitotic program.
General and Administrative Expenses
General and administrative expenses include costs for administrative personnel, legal and other professional expenses and general corporate expenses. The following table summarizes the general and administrative expenses for the three months ended March 31, 2025 and 2024 (in $000s except percentages):
| Three Months Ended | ||||||||||||||||
| March 31, | Difference | |||||||||||||||
| 2025 | 2024 | $ | % | |||||||||||||
| Total general and administrative expenses | $ | 4,214 | $ | 1,582 | $ | 2,632 | 166 | |||||||||
| 9 |
Total general and administrative expenses represented 84% and 36% of our operating expenses for the three months ended March 31, 2025 and 2024 respectively.
General and administrative expenses increased by approximately $2.6 million from $1.6 million for the three months ended March 31, 2024 to $4.2 million for the three months ended March 31, 2025, due to several one-time costs associated with the change of control of the Company; primarily stock compensation expense of $1.4 million, D&O insurance costs of $0.7 million, compensation expense of $0.3 million and legal costs of $0.1 million.
The future
We expect general and administrative expenditures for the year ended December 31, 2025 to be broadly in line with our expenditures for the year ended December 31, 2024, as the Company begins to stabilize following a change of control.
Other (expense) income, net
The following table summarizes other (expense) income, net for the three months ended March 31, 2025 and 2024 (in $000 except percentages):
| Three Months Ended | ||||||||||||||||
| March 31, | Difference | |||||||||||||||
| 2025 | 2024 | $ | % | |||||||||||||
| Foreign exchange losses | $ | (8 | ) | $ | 1 | $ | (9 | ) | (900 | ) | ||||||
| Interest income | 6 | 2 | 4 | 200 | ||||||||||||
| Gain on deconsolidation of subsidiary | 4,947 | - | 4,947 | - | ||||||||||||
| Other income, net | 10 | 52 | (42 | ) | (81 | ) | ||||||||||
| Total other income (expense), net | $ | 4,955 | 55 | $ | 4,900 | 8,909 | ||||||||||
Total other income increased by $4.9 million from $55,000 for the three months ended March 31, 2024 to $5.0 million for the three months ended March 31, 2025. The liquidation of our formerly wholly owned subsidiary and the subsequent deconsolidation thereof in January 2025 resulted in a $5.0 million gain on deconsolidation. Other income for the three months ended March 31, 2025 relates to royalties receivable under a December 2005 Asset Purchase Agreement, or APA, whereby Xcyte Therapies, Inc., or Xcyte (a business acquired by us in March 2006) sold certain assets and intellectual property to ThermoFisher Scientific Company, or TSC (formerly Invitrogen Corporation) through the APA and other related agreements. The assets and technology were not part of our product development plan following the transaction between Xcyte and Cyclacel in March 2006. Accordingly, we presented $0 and $52,000 as other income arising from royalties from the APA during each of the three months ended March 31, 2025 and 2024 respectively.
Foreign exchange gains (losses)
Foreign exchange losses increased by $9,000, from a gain of $1,000 for the three months ended March 31, 2024, to a loss of $8,000 for the three months ended March 31, 2025.
The future
Other income (expense), net for the year ended December 31, 2025, will continue to be impacted by changes in the receipt of income under the APA. As we are not in control of sales made by TSC, we are unable to estimate the level and timing of income under the APA, if any.
As a result of the liquidation of the UK subsidiary in January 2025, the intercompany loans have been forgiven. The accumulated translation adjustments previously recorded in other comprehensive income within equity have been reclassified from accumulated other comprehensive income and recorded as part of the gain/loss from deconsolidation of the subsidiary. Foreign exchange gains and losses relating to ordinary operating expenditure, which is expected to be settled in the foreseeable future, will be recognized within the statement of operations.
| 10 |
Income Tax Benefit
Credit is taken for research and development tax credits, which are claimed from the United Kingdom’s revenue and customs authority, or HMRC, in respect of qualifying research and development costs incurred.
The following table summarizes total income tax benefit for the three months ended March 31, 2025 and 2024 (in $000s except percentages):
| Three Months Ended | ||||||||||||||||
| March 31, | Difference | |||||||||||||||
| 2025 | 2024 | $ | % | |||||||||||||
| Total income tax benefit | $ | — | $ | 1,354 | $ | (1,354 | ) | (100 | ) | |||||||
The total income tax benefit, which comprised of research and development tax credits recoverable was $1.4 million, during the three months ended March 31, 2024 to $0 for the three months ended March 31, 2025, following the liquidation of the UK Subsidiary and the subsequent loss of eligibility for recoverable tax credits as a result thereof. The level of tax credits recoverable is linked directly to qualifying research and development expenditure incurred in any one year and the availability of trading losses.
The future
Following the liquidation of the UK Subsidiary, we are no longer eligible to receive United Kingdom research and development tax credits for the year ending December 31, 2025
Critical Accounting Policies and Estimates
Our critical accounting policies are those policies which require the most significant judgments and estimates in the preparation of our consolidated financial statements. We evaluate our estimates, judgments, and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. A summary of our critical accounting policies is presented in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2024 and Note 2 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. There have been no material changes to our critical accounting policies during the three months ended March 31, 2025.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, we are not required to provide information in response to this item.
Item 4. Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness, as of March 31, 2025, of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based upon such evaluation, our chief executive officer and principal financial and accounting officer have concluded that, as of March 31, 2025, our disclosure controls and procedures were effective to provide reasonable assurance that the information we are required to disclose in our filings with the Securities and Exchange Commission, or SEC, under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our chief executive officer and principal financial and accounting officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
Other than the hiring of a new chief financial officer, there were no changes in internal control over financial reporting during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
| 11 |
Inherent Limitation on the Effectiveness of Internal Controls
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute, assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot ensure that such improvements will be sufficient to provide us with effective internal control over financial reporting.
PART II. Other Information
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
There have been no material changes to our risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2022. For a further discussion of our Risk Factors, refer to Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Item 6. Exhibits
| Exhibit Number | Description | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a) As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a) As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1* | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2* | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101 | The following materials from Cyclacel Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements. | |
| 104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline eXtensible Business Reporting Language (included with Exhibit 101). | |
* |
Filed herewith. | |
| # | Management contract or compensatory plans or agreements. |
| 12 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned.
| CYCLACEL PHARMACEUTICALS, INC. | ||
| Date: May 14, 2025 | By: | /s/ Datuk Dr. Doris Wong |
| Datuk Dr. Doris Wong | ||
| Chief Executive Officer and Executive Director | ||
| 13 |
Exhibit 31.1
CERTIFICATIONS
I, Datuk Dr. Doris Wong, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2025 of Cyclacel Pharmaceuticals, 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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); | |
| 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 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. |
| Date: May 14, 2025 | By: | /s/ Datuk Dr. Doris Wong |
| Datuk Dr. Doris Wong | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATIONS
I, Kiu Cu Seng, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2025 of Cyclacel Pharmaceuticals, 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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); | |
| 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 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. |
| Date: May 14, 2025 | By: | /s/ Kiu Cu Seng |
| Kiu Cu Seng | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Cyclacel Pharmaceuticals, Inc. (the “Company”) for the quarter ended March 31, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Datuk Dr. Doris Wong, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
| 2. | To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the report. |
| Date: May 14, 2025 | By: | /s/ Datuk Dr. Doris Wong |
| Datuk Dr. Doris Wong | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Cyclacel Pharmaceuticals, Inc. (the “Company”) for the quarter ended March 31, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Kiu Cu Seng, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
| 2. | To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the report. |
| Date: May 14, 2025 | By: | /s/ Kiu Cu Seng |
| Kiu Cu Seng | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) |