What changed in this filing

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Item 1. Financial Statements

2022-05-12 compared with 2021-11-12 · 97 added, 143 removed, 316 unchanged (43% of the section changed)

3 unchanged sentences

(In $000s, except share, per share, and liquidation preference amounts)

September 30,

Current assets:

14 unchanged sentences

Preferred stock, $ 0.001 par value;

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

5,000,000 shares authorized at December 31, 2021 and March 31, 2022;

6 % Convertible Exchangeable preferred stock;

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

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

335,273 shares issued and outstanding at December 31, 2021 and March 31, 2022.

Aggregate preference in liquidation of $ 4,006,512 as of December 31, 2021 and March 31, 2022.

Series A convertible preferred stock, $ 0.001 par value;

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

264 shares issued and outstanding at December 31, 2021 and March 31, 2022.

Series B convertible preferred stock, $ 0.001 par value;

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

237,745 shares issued and outstanding at December 31, 2021 and March 31, 2022.

Common stock, $ 0.001 par value;

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

6,246,896 and 9,797,735 shares issued and outstanding at December 31, 2020 and September 30, 2021.

100,000,000 shares authorized at December 31, 2021 and March 31, 2022;

9,993,135 shares issued and outstanding at December 31, 2021 and March 31, 2022.

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Operating expenses:

19 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Translation adjustment

9 unchanged sentences

Balances at December 31, 2020

Issue of common stock and associated warrants on underwritten offering, net of expenses

Warrant Exercises

Stock-based compensation

4 unchanged sentences

Balances at March 31, 2021

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

Stock-based compensation

Preferred stock dividends

Unrealized foreign exchange on intercompany loans

Translation adjustment

Loss for the period

Balances at September 30, 2020

Balances at December 31, 2021

Issuance of common stock in underwritten offering, net of issuance costs

Warrant Exercises

Stock-based compensation

4 unchanged sentences

Balances at March 31, 2022

Stock-based compensation

Preferred stock dividends

Unrealized foreign exchange on intercompany loans

Translation adjustment

Loss for the period

Balances at June 30, 2021

Issue of common stock on At Market issuance sales agreement, net of expenses

Stock-based compensation

Preferred stock dividends

Unrealized foreign exchange on intercompany loans

Translation adjustment

Loss for the period

Balances at September 30, 2021

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

Operating activities:

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Prepaid expenses and other assets

Accounts payable and other current liabilities

Accounts payable, accrued and other current liabilities

Net cash used in operating activities

3 unchanged sentences

Financing activities:

Proceeds from issuing common stock and warrant exercises, net of issuance costs

Proceeds, net of issuance costs, from issuing common stock and warrants

Payment of preferred stock dividend

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

10 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 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 September 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.

(“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 and ultimately increase a patient’s overall survival.

Through March 31, 2022, 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 September 30, 2021, the consolidated statements of operations, comprehensive loss, and stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and the consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020, and all related disclosures contained in the accompanying notes, are unaudited.

The consolidated balance sheet as of March 31, 2022, the consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the three months ended March 31, 2022 and 2021, and all related disclosures contained in the accompanying notes, are unaudited.

The consolidated balance sheet as of December 31, 2021 is derived from the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2022.

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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 September 30, 2021, and the results of operations and, comprehensive loss for the three and nine months ended September 30, 2021, and cash flows for the nine months ended September 30, 2021, have been made.

The interim results for the three and nine months ended September 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.

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, 2022, and the results of operations, comprehensive loss, and cash flows for the three months ended March 31, 2022 and March 31, 2021, have been made.

The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 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, 2021 that are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2022.

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.

All amounts related to number of shares and per share amounts have been retroactively restated in these consolidated financial statements.

Going Concern

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 $ 40.2 million as of September 30, 2021 will be sufficient to fund its operating expenses and capital expenditure requirements to early 2023.

The Company expects that its cash of approximately $ 29.6 million as of March 31, 2022 will be sufficient to fund its operating expenses and capital expenditure requirements through June 30, 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:

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Other conditions and events, when considered in conjunction with the above, that may adversely affect the Company’s ability to meet its obligations.

The future viability of the Company beyond the beginning of 2023 is dependent on its ability to raise additional capital to finance its operations.

The future viability of the Company beyond the second quarter of 2023 is dependent on its ability to raise additional capital to finance its operations.

The Company does not currently have sufficient funds to complete development and commercialization of any of its drug candidates.

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The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies.

In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China.

It has now spread globally, including the United States and United Kingdom, where the Company has its operations.

The World Health Organization has declared the coronavirus outbreak a pandemic.

The extent to which the coronavirus impacts the Company’s financial condition and operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the ultimate duration of the pandemic, the emergence of new geographic hotspots, the emergence of subsequent outbreaks, travel restrictions, quarantines, social distancing and business closure requirements in the United States, the United Kingdom and other countries, and the effectiveness of actions taken globally to contain and treat the disease .

Management continues to evaluate the impact of the COVID-19 pandemic on its current operations and future plans and takes appropriate measures to address any such impact, but there can be no assurance that these efforts will be successful and that the pandemic will not have negative effect on the Company’s financial position and results of operations, but it could materially affect the ability of the Company to raise future capital or to conduct clinical studies on a timely basis.

Accounting standards adopted in the period

On January 1, 2020, the Company adopted the guidance issued in ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” As permitted by the ASU, the Company will apply the new guidance on a prospective basis to any new cloud computing arrangements.

ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements to be deferred over the non-cancellable term of the cloud computing arrangements plus any optional renewal periods (1) that are reasonably certain to be exercised by the customer or (2) for which exercise of the renewal option is controlled by the cloud service provider.

There has been no impact of this pronouncement on the Company’s consolidated financial statements and disclosures.

The FASB has issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”.

This standard simplifies the accounting for convertible instruments, such as convertible debt or convertible preferred stock, by eliminating two potential methods in accounting for the embedded conversion feature.

The standard also removes certain conditions previously used to evaluate whether a freestanding financial instrument, or certain types of embedded features, are considered to be settled in the issuer’s own equity.

Finally, ASU 2020-06 requires that an entity use the if-converted method in calculating the effects of convertible instruments on diluted earnings per share, with one limited exception.

As a smaller reporting company, the amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those years.

Early adoption is permitted, but no earlier than for fiscal years beginning after December 15, 2020.

The Company does not currently have any contracts affected by this guidance, but has nonetheless elected to adopt ASU 2020-06 as of January 1, 2021.

There was no impact of early adoption of this pronouncement on the Company’s consolidated financial statements and disclosures.

In November 2021 , the FASB issued ASU No.

2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance .

This ASU requires business entities to make annual disclosures about transactions with a government they account for by analogizing to a grant or contribution accounting model under ASC 958-605 or based on International Accounting Standard No.

ASU 2021-10 became effective for us on January 1, 2022.

We have evaluated the effect that this guidance has on our Consolidated Financial Statements and determined it does not have a material impact.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) .

The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options.

This amendment became effective for us on January 1, 2022.

This new guidance does not have a material impact on our financial statements for any past transactions, but it could change the way that we account for subsequent amendments to our outstanding warrants, if any.

Recently Issued Accounting Pronouncements

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

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

There were no reclassifications out of other comprehensive income (loss) during the three months ended March 31, 2022 and 2021.

Revenue recognition

The Company recognizes revenue using the five step-model provided in ASC 606, Revenue from Contracts with Customers (“ASC 606”):

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;

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(5) recognize revenue when, or as, the Company satisfies a performance obligation.

The transaction price could include both fixed payments and an estimate of variable consideration, including milestone payments.

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.

11 unchanged sentences

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

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

As of March 31, 2022, 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.

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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 and nine months ended September 30, 2020 and 2021 was $ 0 .

There was no revenue recognized in the three months ended March 31, 2022 and 2021.

The Company has no contract assets or liabilities in any period presented.

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 September 30, 2020 and 2021, as the result would be anti-dilutive:

September 30,

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, 2022 and 2021, as the result would be anti-dilutive:

Stock options

6 unchanged sentences

Prepaid expenses and other current assets consisted of the following (in $000s):

September 30,

Research and development tax credit receivable

1 unchanged sentence

Other current assets

Receivables of $ 1.3 million are included in other current assets as of March 31, 2022.

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 Thermo Fisher 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 recognized $ 1.3 million of other income related to this transaction during the three months ended March 31, 2022.

Non-Current Assets

As of March 31, 2022, the Company had non-current assets of $ 2.9 million, which comprised of clinical trial deposits held by a contract research organization in relation to the Company’s Phase 1/2 clinical trials.

Accrued and Other Liabilities

Accrued and other current liabilities consisted of the following (in $000s):

September 30,

Accrued research and development

1 unchanged sentence

Other current liabilities

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.

This lease was assigned on May 4, 2021 (see note 7).

Other current liabilities for the year ended December 31, 2021 was largely attributed to accrued payroll costs.

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 September 30, 2021.

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

The remaining 50 % was due on May 4, 2022 and is recorded as a payable for the period ended March 31, 2022.

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

As of and for the nine months ended September 30, 2021:

The Company recognized operating lease expenses of $ 159,898 .

Cash payments made during the nine months ended September 30, 2021 totaled $ 166,376 and were presented as cash outflows from operating activities.

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

For the three months ended March 31, 2022 and 2021, the Company recognized operating lease expenses of $ 14,686 and $ 97,660 respectively.

Cash payments made during the three months ended March 31, 2022 and 2021 totaled $ 15,435 and $ 102,348 respectively, and were presented within cash outflows from operating activities.

The remaining lease term as of March 31, 2022 is approximately 0.3 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):

Remaining payments for this facility are as follows (in $000s):

Stock Based Compensation

3 unchanged sentences

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 nine months ended September 30, 2020 and 2021 as shown in the following table (in $000s):

Stock based compensation has been reported within expense line items on the consolidated statement of operations for the three months ended March 31, 202 and 2021 as shown in the following table (in $000s):

Three Months Ended

Nine Months Ended

September 30,

General and administrative

1 unchanged sentence

Stock-based compensation costs before income taxes

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 Equity Incentive Plan (the “2018 Plan”) allows Cyclacel to make equity incentive grants to its officers, employees, directors and consultants.

The 2018 Plan replaces the 2015 Equity Incentive Plan (the “2015 Plan”).

The 2018 Plan allows for various types of award grants, including stock options and restricted stock units.

As of September 30, 2021, the Company has reserved 891,015 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.

On April 25, 2022, the Board of Directors adopted a resolution approving, subject to approval by the Company’s stockholders, an amendment of the 2018 Equity Incentive Plan to increase the number of shares of Common Stock available for grant under the 2018 Plan by adding an additional 500,000 shares.

As of March 31, 2022, the Company has reserved 260,794 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.

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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 September 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 154,653 options granted during the nine months ended September 30, 2021.

As of March 31, 2022, 120,000 shares under the Inducement Plan have been issued, leaving a remaining reserve of 80,000 shares.

Option Grants

There were 265,000 options granted during the three months ended March 31, 2022.

These options had a grant date fair value ranging between $ 2.62 -$ 2.90 per option.

There were 56,400 options granted during the nine months ended September 30, 2020.

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

These options had a grant date fair value ranging between $ 5.40 -$ 6.14 per option.

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:

Nine months ended

September 30, 2020

September 30, 2021

Three months ended

March 31, 2022

March 31, 2021

Expected term (years)

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0.420% – 0.585%

100 % – 114 %

Expected dividend yield over expected term

There were no stock options exercised during each of the nine months ended September 30, 2020 and 2021, respectively.

There were no stock options exercised during each of the three months ended March 31, 2021 and 2022, 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.

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Cancelled/forfeited

Options outstanding at September 30, 2021

Unvested at September 30, 2021

Vested and exercisable at September 30, 2021

Options outstanding at March 31, 2022

Unvested at March 31, 2022

Vested and exercisable at March 31, 2022

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 year ended December 31, 2020, of which 1,491 units have been forfeited.

The vesting of the remaining 16,447 outstanding restricted stock units is dependent upon certain clinical performance criteria being met.

The Company determined that the satisfaction of the clinical conditions was not probable at September 30, 2021 and, as a result, recorded no compensation expense related to restricted stock units for the quarter ended September 30, 2021.

The Company issued 18,992 restricted stock units to its directors during the nine months ended September 30, 2021.

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

The Company determined that the clinical conditions would not be satisfied as of December 31, 2021 and, as a result, these restricted stock units were cancelled as of December 31, 2021.

The Company issued an additional 18,992 restricted stock units to employees during the year ended December 31, 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 September 30, 2021 is as follows:

No restricted stock units were issued during the three months ended March 31, 2022.

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

Value Per Share

Restricted Stock Units outstanding at September 30, 2021

Unvested at September 30, 2021

Vested and exercisable at September 30, 2021

Restricted Stock Units outstanding at December 31, 2021

Restricted Stock Units outstanding at March 31, 2022

Unvested at March 31, 2022

Vested and exercisable at March 31, 2022

Stockholders Equity

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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.

During the three and nine months ended September 30, 2021, the Company sold 563,625 shares under the Sales Agreement for net proceeds of approximately $ 3.0 million.

An additional 170,800 shares have been sold subsequent to September 30, 2021 for net proceeds of approximately $ 0.9 million.

As of March 31, 2022, a total of 752,425 shares, for gross proceeds of approximately $ 4.0 million, have been sold pursuant to this agreement.

A further 1,854 shares, for gross proceeds of approximately $ 6,000 , were sold subsequent to March 31, 2022.

March 2021 Equity Financing

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A beneficial conversion feature is defined as a nondetachable conversion feature that is "in-the-money"

The Company calculated the value of the beneficial conversion feature based on its intrinsic value, which is the difference between the “effective conversion price” (after allocating the proceeds of the offering between the Series B Convertible Preferred Stock, the Warrants and Common Stock issued) and the market price of the Company's common shares, multiplied by the number of shares into which the Series B Convertible Preferred Stock is convertible.

shares, multiplied by the number of shares into which the Series B Convertible Preferred Stock is convertible.

The effective conversion price of $ 3.18 per share is different from the $ 4.18 per share contractual conversion price.

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

As of March 31, 2022, 237,745 shares of the Series B Preferred Stock remained issued and outstanding.

April 2020 Equity Financing

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December 2020 Warrants

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

As of March 31, 2022, warrants to purchase 669,854 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.

The exercise price of the Warrants will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the warrants.

The exercise price of the Warrants will be subject to adjustment in the event

of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the warrants.

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

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

There were no exercises of these warrants during the three months ended March 31, 2022 or March 31, 2021.

April 2020 Warrants

As of September 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 .

As of March 31, 2022, 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.

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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 nine months ended September 30, 2021.

There were no warrants exercised during the three months ended March 31, 2022, and a total of 909,000 warrants exercised during the three months ended March 31, 2021.

July 2017 Warrants

As of September 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 .

As of March 31, 2022, 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.

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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 and nine months ended September 30, 2021.

There were no exercises of these warrants during the three months ended March 31, 2022 or March 31, 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 September 30, 2021, 264 shares of the Series A Preferred Stock remained issued and outstanding which are convertible into 6,600 shares of common stock.

As of March 31, 2022, 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 September 30, 2021, are convertible into 6,600 shares of common stock.

The 264 shares of Series A Preferred Stock issued and outstanding at March 31, 2022 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 September 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.

As of March 31, 2022, 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 September 30, 2021, accrued and unpaid dividends amounted to $ 50,291 .

As of March 31, 2022, 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 September 8, 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 November 1, 2021 to the holders of record of the 6 % Preferred Stock as of the close of business on October 15, 2021 .

On March 9, 2022 , 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, 2022 to the holders of record of the 6 % Preferred Stock as of the close of business on April 14, 2022 .

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