What changed in this filing

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Item 1. Financial Statements

2021-08-12 compared with 2021-05-14 · 100 added, 70 removed, 332 unchanged (34% of the section changed)

18 unchanged sentences

Preferred stock, $ 0.001 par value;

5,000,000 shares authorized at December 31, 2020 and March 31, 2021;

5,000,000 shares authorized at December 31, 2020 and June 30, 2021;

6 % Convertible Exchangeable preferred stock;

335,273 shares issued and outstanding at December 31, 2020 and March 31, 2021.

Aggregate preference in liquidation of $4,006,512 as of December 31, 2020 and March 31, 2021.

335,273 shares issued and outstanding at December 31, 2020 and June 30, 2021.

Aggregate preference in liquidation of $ 4,006,512 as of December 31, 2020 and June 30, 2021.

Series A convertible preferred stock, $ 0.001 par value;

264 shares issued and outstanding at December 31, 2020 and March 31, 2021.

264 shares issued and outstanding at December 31, 2020 and June 30, 2021.

Series B convertible preferred stock, $ 0.001 par value;

237,745 shares issued and outstanding at December 31, 2020 and March 31, 2021.

237,745 shares issued and outstanding at December 31, 2020 and June 30, 2021.

Common stock, $ 0.001 par value;

100,000,000 shares authorized at December 31, 2020 and March 31, 2021;

6,246,896 and 9,234,110 shares issued and outstanding at December 31, 2020 and March 31, 2021.

100,000,000 shares authorized at December 31, 2020 and June 30, 2021;

6,246,896 and 9,234,110 shares issued and outstanding at December 31, 2020 and June 30, 2021.

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Operating expenses:

19 unchanged sentences

Three Months Ended

Six Months Ended

Translation adjustment

15 unchanged sentences

Balances at March 31, 2020

Issue of common stock, pre-funded warrants and warrants on equity financing, net of expenses

Stock-based compensation

Preferred stock dividends

Unrealized foreign exchange on intercompany loans

Translation adjustment

Loss for the period

Balances at June 30, 2020

Balances at December 31, 2020

7 unchanged sentences

Balances at March 31, 2021

The accompanying notes are an integral part of these consolidated financial statements.

Stock-based compensation

Preferred stock dividends

Unrealized foreign exchange on intercompany loans

Translation adjustment

Loss for the period

Balances at June 30, 2021

CYCLACEL PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

Operating activities:

27 unchanged sentences

Cyclacel Pharmaceuticals, Inc.

(“Cyclacel” or the “Company”) is a clinical-stage biopharmaceutical company developing innovative cancer medicines based on cell cycle, transcriptional regulation 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, help reduce tumors and ultimately increase overall survival of cancer patients.

Through March 31, 2021, 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.

(“Cyclacel” or the “Company”) is a clinical-stage biopharmaceutical company developing innovative cancer medicines based on cell cycle, transcriptional regulation and mitosis biology.

The Company uses insights in cancer biology to develop investigational medicines addressing the growing problem of resistance.

Cancer cells learn to evade anticancer therapeutics and become resistant to available therapies.

The Company aims to suppress mechanisms of resistance and reactivate the body’s own cell death mechanisms to destroy cancer cells.

Through June 30, 2021, 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.

Summary of Significant Accounting Policies

Basis of Presentation

The consolidated balance sheet as of March 31, 2021, the consolidated statements of operations, comprehensive loss, and stockholders’ equity for the three months ended March 31, 2021 and 2020 and the consolidated statements of cash flows for the three months ended March 31, 2021 and 2020, and all related disclosures contained in the accompanying notes, are unaudited.

The consolidated balance sheet as of June 30, 2021, the consolidated statements of operations, comprehensive loss, and stockholders’ equity for the three and six months ended June 30, 2021 and 2020 and the consolidated statements of cash flows for the six months ended June 30, 2021 and 2020, and all related disclosures contained in the accompanying notes, are unaudited.

The consolidated balance sheet as of December 31, 2020 is derived from the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2021.

1 unchanged sentence

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, 2021, and the results of operations and comprehensive loss for the three months ended March 31, 2021, and cash flows for the three months ended March 31, 2021, have been made.

The interim results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other reporting period.

In the opinion of management, all adjustments, which include only normal recurring adjustments necessary to present fairly the consolidated balance sheet as of June 30, 2021, and the results of operations and, comprehensive loss for the three and six months ended June 30, 2021, and cash flows for the six months ended June 30, 2021, have been made.

The interim results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 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, 2020 that are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2021.

Reverse Stock Split

On April 14, 2020 the Company completed a one-for-twenty reverse stock split, which reduced the number of shares of the Company’s common stock that were issued and outstanding at April 14, 2020, from 17,199,974 to 859,998 after the cancellation of 14 fractional shares, immediately prior to the effectiveness of the reverse stock split.

On April 14, 2020 the Company completed a one -for-twenty reverse stock split, which reduced the number of shares of the Company’s common stock that were issued and outstanding immediately prior to the effectiveness of the reverse stock split.

The number of shares of the Company’s authorized common stock was not affected by the reverse stock split and the par value of Cyclacel’s common stock remained unchanged at $ 0.001 per share.

The reverse stock split reduced the number of shares of the Company’s common stock that were outstanding at April 14, 2020 from 17,199,974 to 859,998 , after the cancellation of 14 fractional shares.

No fractional shares were issued in connection with the reverse stock split.

3 unchanged sentences

Management considers that there are no conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of at least one year from the date the financial statements are issued.

The Company expects that its cash of approximately $47.8 million as of March 31, 2021 will be sufficient to fund its operating expenses and capital expenditure requirements to early 2023.

The Company expects that its cash of approximately $ 43.6 million as of June 30, 2021 will be sufficient to fund its operating expenses and capital expenditure requirements to early 2023.

This evaluation is based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued, including:

42 unchanged sentences

No taxes were recorded on items of other comprehensive income (loss).

There were no reclassifications out of other comprehensive income (loss) during the three months ended March 31, 2020 and 2021.

There were no reclassifications out of other comprehensive income (loss) during the six months ended June 30, 2020 and 2021.

Revenue recognition

5 unchanged sentences

(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 transaction price could include both 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.

11 unchanged sentences

The Company accounts for lease contracts in accordance with ASC 842.

As of March 31, 2021, all of the Company’s leases are classified as operating leases.

As of June 30, 2021, the Company’s one outstanding lease is classified as an operating lease.

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.

14 unchanged sentences

The Company has elected an accounting policy to account for the lease and non-lease components as a single lease component.

Revenue recognized in the three months ended March 31, 2020 and 2021 was $0.

Revenue recognized in the three and six months ended June 30, 2020 and 2021 was $ 0 .

Net Loss per Common Share

1 unchanged sentence

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.

The following potentially dilutive securities have not been included in the computation of diluted net loss per share for the three months ended March 31, 2020 and 2021, as the result would be anti-dilutive:

The following potentially dilutive securities have not been included in the computation of diluted net loss per share for the three months ended June 30, 2020 and 2021, as the result would be anti-dilutive:

Stock options

9 unchanged sentences

Other current assets

Receivables of $126,000 are included in other current assets as at March 31, 2021.

This relates to royalty payments receivable under a December 2005 Asset Purchase Agreement, or APA, whereby Xcyte Therapies, Inc., or Xcyte (a business acquired by the Company 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 the Company’s product development plan following the transaction between Xcyte and Cyclacel in March 2006.

Accordingly, the company presented the $126,000 as other income during the three months ended March 31, 2021.

Accrued and Other Liabilities

3 unchanged sentences

Other current liabilities

The Company currently has two leases relating to its facilities in Dundee, Scotland and Berkeley Heights, New Jersey.

As of and for the three months ended March 31, 2021:

Other current liabilities as at 31 December 2020 include accrued compensation and the current portion of the lease liability for the Company’s facility in Dundee, Scotland.

The Company currently has one lease, relating to its facility in Berkeley Heights, New Jersey.

On May 4, 2021, the Company assigned the operating lease relating to its facility in Dundee, Scotland to the University of Dundee, Scotland for a reverse premium of approximately $ 400,000 , of which 50 % was payable on assignment.

The remaining 50 % is due on May 4, 2022 and is recorded as a payable for the period ended June 30, 2021.

The Company has no further obligations, liabilities or commitments in relation to this facility.

As of and for the six months ended June 30, 2021:

The Company recognized operating lease expenses of $ 144,463 .

Cash payments made during the three months ended March 31, 2021 totaled $102,348 and were presented within cash outflows from operating activities.

The remaining lease term as of March 31, 2021 is approximately 4.6 years for the Dundee facility (see Note 10 for a subsequent event related to this lease) and approximately 1.3 years for the Berkeley Heights facility.

The discount rate used by the Company in determining the lease liability was 12% for both leases.

Remaining payments for these two facilities are as follows:

Cash payments made during the six months ended June 30, 2021 totaled $ 150,941 and were presented as cash outflows from operating activities.

The remaining lease term as of June 30, 2021 is approximately 1.1 years for the Berkeley Heights facility.

The discount rate used by the Company in determining the lease liability was 12 %.

Remaining lease payments under the lease are (in $000’s):

Stock Based Compensation

Stock based compensation has been reported within expense line items on the consolidated statement of operations for the three months ended March 31, 2020 and 2021 as shown in the following table (in $000s):

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.

Most of the awards granted by the Company (and still outstanding) vest ratably over one to four years .

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.

Stock based compensation has been reported within expense line items on the consolidated statement of operations for the three and six months ended June 30, 2020 and 2021 as shown in the following table (in $000s):

Three Months Ended

Research and development

Six Months Ended

General and administrative

Research and development

Stock-based compensation costs before income taxes

3 unchanged sentences

In addition, the 2018 Plan allows up to 35,494 additional shares to be issued if awards outstanding under the 2018 Plan are cancelled or expire on or after the date of the Company’s 2018 annual meeting of stockholders.

As of March 31, 2021, the Company has reserved 254,366 shares of the Company’s common stock under the 2018 Plan, including shares that were available under the 2015 Plan and carried forward to the 2018 Plan.

As of June 30, 2021, the Company has reserved 179,964 shares of the Company’s common stock under the 2018 Plan for future issuances, including shares that were available under the 2015 Plan and carried forward to the 2018 Plan.

Stock option awards granted under the Company’s equity incentive plans have a maximum life of 10 years and generally vest over a one to four-year period from the date of grant.

3 unchanged sentences

The Inducement Plan allows for the issuance of up to 200,000 shares of the Company’s common stock (or the equivalent of such number).

As of March 31, 2021, 120,000 shares under the Inducement Plan have been issued, leaving a remaining reserve of 80,000 shares.

Option Grants

There were no options granted during the three months ended March 31, 2020.

There were 73,669 options granted during the three months ended March 31, 2021.

As of June 30, 2021, 120,000 shares under the Inducement Plan have been issued, leaving a remaining reserve of 80,000 shares.

Option Grants and Exercises

There were 129,153 options granted during the six months ended June 30, 2021.

These options had a grant date fair value ranging between $ 4.56 -$ 6.14 per option.

There were 36,400 options granted during the six months ended June 30, 2020.

These options had a grant date fair value of $ 3.95 .

The fair value of the stock options granted is calculated using the Black-Scholes option-pricing model as prescribed by ASC 718 using the following assumptions:

Three Months Ended

March 31, 2021

Six months ended

June 30, 2020

June 30, 2021

Expected term (years)

2 unchanged sentences

Expected dividend yield over expected term

Resulting weighted average grant date fair value

There were no stock options exercised during each of the three months ended March 31, 2020 and 2021, respectively.

There were no stock options exercised during each of the six months ended June 30, 2020 and 2021, 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.

4 unchanged sentences

Cancelled/forfeited

Options outstanding at March 31, 2021

Unvested at March 31, 2021

Vested and exercisable at March 31, 2021

Options outstanding at June 30, 2021

Unvested at June 30, 2021

Vested and exercisable at June 30, 2021

Restricted Stock Units

The Company issued 14,000 restricted stock units to employees during the year ended December 31, 2019.

The Company issued 3,938 additional restricted stock units to employees during the quarter ended March 31, 2020, of which 1,414 units have been forfeited.

The Company issued 3,938 additional restricted stock units to employees during the year ended December 31, 2020, of which 1,414 units have been forfeited.

The vesting of the remaining 16,524 outstanding restricted stock units is dependent upon the fulfillment of certain clinical conditions.

The Company determined that the satisfaction of the clinical conditions was not probable at March 31, 2021 and, as a result, recorded no compensation expense related to restricted stock units for the quarter ended March 31, 2021.

The restricted stock units were valued based on their fair value at the date of grant, which is equivalent to the market price of a share of the Company’s common stock.

Summarized information for restricted stock units’ activity for the quarter ended March 31, 2021 is as follows:

The Company recorded no compensation expense related to restricted stock units for the quarter ended June 30, 2021.

The Company issued an additional 18,992 restricted stock units to directors of the Company during the three months ended June 30, 2021.

These restricted stock units will vest over a period of one or three years .

Each restricted stock unit was valued at $ 6.69 based on their fair value at the date of grant, which is equivalent to the market price of a share of the Company’s common stock.

Summarized information for restricted stock units as of June 30, 2021 is as follows:

Value Per Share

Restricted Stock Units outstanding at March 31, 2021

Unvested at March 31, 2021

Vested and exercisable at March 31, 2021

Restricted Stock Units outstanding at June 30, 2021

Unvested at June 30, 2021

Vested and exercisable at June 30, 2021

Stockholders Equity

19 unchanged sentences

The closing of the offering occurred on December 22, 2020 and the net proceeds to the Company were approximately $ 6.9 million, after deducting offering expenses payable by the Company.

As of March 31, 2021, 237,745 shares of the Series B Preferred Stock remained issued and outstanding.

As of June 30, 2021, 237,745 shares of the Series B Preferred Stock remained issued and outstanding .

April 2020 equity financing

12 unchanged sentences

December 2020 Warrants

As of March 31, 2021, warrants to purchase 669,854 remained outstanding.

As of June 30, 2021, warrants to purchase 669,854 shares of common stock remained outstanding.

Each warrant shall be exercisable beginning on the 12-month anniversary of the date of issuance for a period of five years after the date of issuance, at an exercise price of $ 4.13 per Warrant Share.

1 unchanged sentence

The warrants may be exercised on a “cashless” basis.

There were no exercises of these warrants during the three months ended March 31, 2021.

There were no exercises of these warrants during the three and six months ended June 30, 2021.

April 2020 Warrants

As of March 31, 2021, 2,190,000 warrants issued in connection with the April 2020 equity financing remained outstanding, each with an exercise price of $5.00.

As of June 30, 2021, 2,190,000 warrants issued in connection with the April 2020 equity financing remained outstanding, each with an exercise price of $ 5.00 .

All such warrants were issued in connection with the April 2020 co-placement agency agreement.

7 unchanged sentences

In lieu of fractional shares, the Company will round down to the next whole share.

A total of 909,000 warrants were exercised during the three months ended March 31, 2021.

A total of 909,000 warrants were exercised during the six months ended June 30, 2021.

July 2017 Warrants

As of March 31, 2021, 374,525 warrants issued in connection with the July 2017 underwritten public offering remained outstanding, each with an exercise price of $40.00.

As of June 30, 2021, 374,525 warrants issued in connection with the July 2017 underwritten public offering remained outstanding, each with an exercise price of $ 40.00 .

All such warrants were issued in connection with the July 2017 underwritten public offering and are immediately exercisable.

5 unchanged sentences

Prior to the exercise of any warrants to purchase common stock, holders of the warrants will not have any of the rights of holders of the common stock purchasable upon exercise, including the right to vote, except as set forth therein.

There were no exercises of these warrants during the three months ended March 31, 2021 or March 31, 2020.

There were no exercises of these warrants during the three and six months ended June 30, 2021.

Series A Preferred Stock

1 unchanged sentence

During the year ended December 31, 2017, 8,608 shares of the Series A Preferred Stock were converted into 215,200 shares of common stock.

As of March 31, 2021, 264 shares of the Series A Preferred Stock remained issued and outstanding.

As of June 30, 2021, 264 shares of the Series A Preferred Stock remained issued and outstanding .

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 $ 1,000 by the initial conversion price of $ 40.00 per share, subject to a 4.99 % blocker provision, or, upon election by a holder prior to the issuance of shares of Series A Preferred Stock, 9.99 %, and is subject to adjustment for stock splits, stock dividends, distributions, subdivisions and combinations.

The 264 shares of Series A Preferred Stock issued and outstanding at March 31, 2021, are convertible into 6,600 shares of common stock.

The 264 shares of Series A Preferred Stock issued and outstanding at June 30, 2021, are convertible into 6,600 shares of common stock.

In the event of a liquidation, the holders of shares of the Series A Preferred Stock shall be permitted to participate on an as-converted-to-common-stock basis in any distribution of assets of the Company.

6 unchanged sentences

6 % Convertible Exchangeable Preferred Stock

As of March 31, 2021, there were 335,273 shares of the Company’s 6% Convertible Exchangeable Preferred Stock (the “6% Preferred Stock”) issued and outstanding at an issue price of $10.00 per share.

As of June 30, 2021, there were 335,273 shares of the Company’s 6 % Convertible Exchangeable Preferred Stock (the “ 6 % Preferred Stock”) issued and outstanding at an issue price of $ 10.00 per share.

Dividends on the 6 % Preferred Stock are cumulative from the date of original issuance at the annual rate of 6 % of the liquidation preference of the 6 % Preferred Stock, payable quarterly on the first day of February, May, August and November, commencing February 1, 2005.

1 unchanged sentence

The 6 % Preferred Stock has a liquidation preference of $ 10.00 per share, plus accrued and unpaid dividends.

As of March 31, 2021, accrued and unpaid dividends amounted to $50,291.

As of June 30, 2021, accrued and unpaid dividends amounted to $ 50,291 .

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 $59,220, which is 150% of the conversion price of the 6% Preferred Stock, for at least 20 trading days during any 30 day trading period, ending within five trading days prior to notice of automatic conversion.

6 unchanged sentences

Dividends on 6% Preferred Stock

On March 10, 2021, the board of directors declared a quarterly cash dividend in the amount of $0.15 per share on the Company’s 6% Preferred Stock.

The cash dividend was paid on May 1, 2021 to the holders of record of the 6% Preferred Stock as of the close of business on April 16, 2021.

Assignation of Lease relating to facility in Dundee, Scotland

On May 4, 2021, the Company assigned the operating lease relating to its facility in Dundee, Scotland to the University of Dundee.

As part of the assignation, a reverse premium of approximately $400,000 was payable by the Company to the University of Dundee.

Following assignation, the Company has no further obligations, liabilities or commitments in relation to this facility.

On June 15, 2021 , the board of directors declared a quarterly cash dividend in the amount of $ 0.15 per share on the Company’s Preferred Stock.

The cash dividend was paid on August 1, 2021 to the holders of record of the 6 % Preferred Stock as of the close of business on July 16, 2021 .

Controlled Equity Offering Sales Agreement

On August 12, 2021, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co.

("Cantor"), pursuant to which it may issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $ 50.0 million through Cantor as the sales agent.

Cantor may sell the Company’s common stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act.

Subject to the terms and conditions of the Sales Agreement, Cantor will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon the Company's instructions, including any price, time or size limits specified by the Company.

The Company has provided Cantor with customary indemnification rights, and Cantor will be entitled to a commission at a fixed commission rate equal to 3.0 % of the gross proceeds per share sold.

The Company has no obligation to sell any of the shares and may at any time suspend sales under the Sales Agreement or terminate the Sales Agreement.

The Sales Agreement will terminate upon the sale of all of the shares under the Sales Agreement unless terminated earlier by either party as permitted under the Sales Agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements