Bio Green Med Solution, Inc. 10-Q

Item 1. Financial Statements CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED BALANCE SHEETS (In $000s, except share, per share, and liquidation preference amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2022 2021 ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 29,077 ​ $ 36,559 Prepaid expenses and other current assets ​ 3,000 ​ 4,383 Total current assets ​ 32,077 ​ 40,942 Property and equipment, net ​ 48 ​ 64 Right-of-use lease asset ​ ​ 161 ​ ​ 30 Non-current deposits ​ ​ 3,060 ​ ​ 1,551 Total assets ​ $ 35,346 ​ $ 42,587 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 2,205 ​ $ 2,117 Accrued and other current liabilities ​ 2,821 ​ 3,177 Total current liabilities ​ 5,026 ​ 5,294 Lease liability ​ ​ 113 ​ ​ 30 Total liabilities ​ 5,139 ​ 5,324 Stockholders’ equity: ​ ​ Preferred stock, $ 0.001 par value; 5,000,000 shares authorized at December 31, 2021 and June 30, 2022; ​ ​ 6 % Convertible Exchangeable preferred stock; 335,273 shares issued and outstanding at December 31, 2021 and June 30, 2022. Aggregate preference in liquidation of  $ 4,006,512 as of December 31, 2021 and June 30, 2022. ​ — ​ — Series A convertible preferred stock, $ 0.001 par value; 264 shares issued and outstanding at December 31, 2021 and June 30, 2022. ​ — ​ — Series B convertible preferred stock, $ 0.001 par value; 237,745 shares issued and outstanding at December 31, 2021 and June 30, 2022. ​ — ​ — Common stock, $ 0.001 par value; 100,000,000 shares authorized at December 31, 2021 and June 30, 2022; 11,350,289 and 9,993,135 shares issued and outstanding at June 30, 2022 and December 31, 2021 respectively. ​ 11 ​ 10 Additional paid-in capital ​ 425,114 ​ 422,960 Accumulated other comprehensive loss ​ ( 1,276 ) ​ ( 748 ) Accumulated deficit ​ ( 393,642 ) ​ ( 384,959 ) Total stockholders’ equity ​ 30,207 ​ 37,263 Total liabilities and stockholders’ equity ​ $ 35,346 ​ $ 42,587 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 3 Table of Contents CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In $000s, except share and per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Six Months Ended ​ June 30, ​ June 30, ​ 2022 2021 ​ 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues $ — ​ $ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ Research and development 4,205 ​ 4,101 ​ 9,159 ​ 6,667 General and administrative 1,580 ​ 1,999 ​ 3,185 ​ 3,738 Total operating expenses 5,785 ​ 6,100 ​ 12,344 ​ 10,405 Operating loss ( 5,785 ) ​ ( 6,100 ) ​ ( 12,344 ) ​ ( 10,405 ) Other income (expense): ​ ​ ​ Foreign exchange gains (losses) 209 ​ ( 13 ) ​ 238 ​ ( 3 ) Interest income 17 ​ 4 ​ 21 ​ 8 Other income, net — ​ 18 ​ 1,280 ​ 144 Total other income, net 226 ​ 9 ​ 1,539 ​ 149 Loss before taxes ( 5,559 ) ​ ( 6,091 ) ​ ( 10,805 ) ​ ( 10,256 ) Income tax benefit 984 ​ 964 ​ 2,122 ​ 1,651 Net loss ( 4,575 ) ​ ( 5,127 ) ​ ( 8,683 ) ​ ( 8,605 ) Dividend on convertible exchangeable preferred shares ( 50 ) ​ ( 50 ) ​ ( 101 ) ​ ( 101 ) Net loss applicable to common shareholders $ ( 4,625 ) ​ $ ( 5,177 ) ​ $ ( 8,784 ) ​ $ ( 8,706 ) Basic and diluted earnings per common share: ​ ​ ​ Net loss per share – basic and diluted $ ( 0.46 ) ​ $ ( 0.56 ) ​ $ ( 0.87 ) ​ $ ( 1.07 ) Weighted average common shares outstanding 10,136,089 ​ 9,234,110 ​ 10,065,007 ​ 8,172,472 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 4 Table of Contents CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In $000s) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Six Months Ended ​ June 30, ​ June 30, ​ 2022 2021 ​ 2022 2021 Net loss $ ( 4,575 ) ​ $ ( 5,127 ) ​ $ ( 8,683 ) ​ $ ( 8,605 ) Translation adjustment 15,715 ​ ( 869 ) ​ 21,518 ​ ( 2,452 ) Unrealized foreign exchange gain (loss) on intercompany loans ( 16,168 ) ​ 941 ​ ( 22,046 ) ​ 2,540 Comprehensive loss $ ( 5,028 ) ​ $ ( 5,055 ) ​ $ ( 9,211 ) ​ $ ( 8,517 ) ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 5 Table of Contents ​ CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In $000s, except share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional Other ​ ​ ​ Total ​ Preferred Stock Common Stock Paid-in Comprehensive Accumulated Stockholders’ ​ Shares Amount Shares Amount Capital Loss Deficit Equity Balances at December 31, 2020 ​ 573,282 ​ $ — 6,246,896 ​ $ 6 ​ $ 400,071 ​ $ ( 746 ) ​ $ ( 366,072 ) ​ $ 33,259 Issue of common stock and associated warrants on underwritten offering, net of expenses — ​ — 2,078,214 ​ 2 ​ 13,500 ​ — ​ — ​ 13,502 Warrant Exercises ​ — ​ — 909,000 ​ 1 ​ 4,544 ​ — ​ — ​ 4,545 Stock-based compensation — ​ — — ​ — ​ 255 ​ — ​ — ​ 255 Preferred stock dividends — ​ — — ​ — ​ ( 50 ) ​ — ​ — ​ ( 50 ) Unrealized foreign exchange on intercompany loans — ​ — — ​ — ​ — ​ 1,599 ​ — ​ 1,599 Translation adjustment — ​ — — ​ — ​ — ​ ( 1,583 ) ​ — ​ ( 1,583 ) Loss for the period — ​ — — ​ — ​ — ​ — ​ ( 3,478 ) ​ ( 3,478 ) Balances at March 31, 2021 573,282 ​ $ — 9,234,110 ​ $ 9 ​ $ 418,320 ​ $ ( 730 ) ​ $ ( 369,550 ) ​ $ 48,049 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — — ​ — ​ 272 ​ — ​ — ​ 272 Preferred stock dividends — ​ — — ​ — ​ ( 50 ) ​ — ​ — ​ ( 50 ) Unrealized foreign exchange on intercompany loans — ​ — — ​ — ​ — ​ 941 ​ — ​ 941 Translation adjustment — ​ — — ​ — ​ — ​ ( 869 ) ​ — ​ ( 869 ) Loss for the period — ​ — — ​ — ​ — ​ — ​ ( 5,127 ) ​ ( 5,127 ) Balances at June 30, 2021 573,282 ​ $ — 9,234,110 ​ $ 9 ​ $ 418,542 ​ $ ( 658 ) ​ $ ( 374,677 ) ​ $ 43,216 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at December 31, 2021 573,282 ​ $ — 9,993,135 ​ $ 10 ​ $ 422,960 ​ $ ( 748 ) ​ $ ( 384,959 ) ​ $ 37,263 Stock-based compensation — ​ — — ​ — ​ 380 ​ — ​ — ​ 380 Preferred stock dividends — ​ — — ​ — ​ ( 50 ) ​ — ​ — ​ ( 50 ) Unrealized foreign exchange on intercompany loans — ​ — — ​ — ​ — ​ ( 5,878 ) ​ — ​ ( 5,878 ) Translation adjustment — ​ — — ​ — ​ — ​ 5,803 ​ — ​ 5,803 Loss for the period — ​ — — ​ — ​ — ​ — ​ ( 4,108 ) ​ ( 4,108 ) Balances at March 31, 2022 573,282 ​ $ — 9,993,135 ​ $ 10 ​ $ 423,290 ​ $ ( 823 ) ​ $ ( 389,067 ) ​ $ 33,410 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issue of common stock on At Market issuance sales agreement, net of expenses ​ — ​ — 1,339,742 ​ 1 ​ 1,524 ​ — ​ — ​ 1,525 Stock-based compensation — ​ — — ​ — ​ 350 ​ — ​ — ​ 350 Stock-based awards — ​ — 17,412 ​ — ​ — ​ — ​ — ​ — Preferred stock dividends — ​ — — ​ — ​ ( 50 ) ​ — ​ — ​ ( 50 ) Unrealized foreign exchange on intercompany loans — ​ — — ​ — ​ — ​ ( 16,168 ) ​ — ​ ( 16,168 ) Translation adjustment — ​ — — ​ — ​ — ​ 15,715 ​ — ​ 15,715 Loss for the period — ​ — — ​ — ​ — ​ — ​ ( 4,575 ) ​ ( 4,575 ) Balances at June 30, 2022 573,282 ​ $ — 11,350,289 ​ $ 11 ​ $ 425,114 ​ $ ( 1,276 ) ​ $ ( 393,642 ) ​ $ 30,207 ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 6 Table of Contents CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In $000s) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, ​ 2022 2021 Operating activities: ​ ​ ​ ​ Net loss ​ $ ( 8,683 ) ​ $ ( 8,605 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Depreciation ​ ​ 17 ​ ​ 26 Stock-based compensation ​ ​ 730 ​ ​ 533 Changes in lease liability ​ ​ — ​ ​ 115 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Prepaid expenses and other assets ​ ​ ( 926 ) ​ ​ ( 476 ) Accounts payable, accrued and other current liabilities ​ ​ 172 ​ ​ 626 Net cash used in operating activities ​ ​ ( 8,690 ) ​ ​ ( 7,781 ) Investing activities: ​ ​ ​ ​ Purchase of property, plant and equipment ​ ​ ( 7 ) ​ ​ ( 16 ) Net cash used in investing activities ​ ​ ( 7 ) ​ ​ ( 16 ) Financing activities: ​ ​ ​ ​ Proceeds, net of issuance costs, from issuing common stock and warrants ​ ​ 1,525 ​ ​ 18,047 Payment of preferred stock dividend ​ ​ ( 101 ) ​ ​ ( 101 ) Net cash provided by financing activities ​ ​ 1,424 ​ ​ 17,946 ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash and cash equivalents ​ ​ ( 209 ) ​ ​ 84 Net (decrease) increase in cash and cash equivalents ​ ​ ( 7,482 ) ​ ​ 10,233 Cash and cash equivalents, beginning of period ​ ​ 36,559 ​ ​ 33,406 Cash and cash equivalents, end of period ​ $ 29,077 ​ $ 43,639 Supplemental cash flow information: ​ ​ ​ ​ Cash received during the period for: ​ ​ ​ ​ Interest ​ ​ 21 ​ ​ 9 Research & Development Tax Credits ​ ​ 3,328 ​ ​ 1,390 ​ ​ ​ ​ ​ ​ ​ Non cash financing activities: ​ ​ ​ ​ Accrual of preferred stock dividends ​ ​ 50 ​ ​ 50 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 7 Table of Contents 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 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 June 30, 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. ​ 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated balance sheet as of June 30, 2022, the consolidated statements of operations, comprehensive loss, and stockholders’ equity for the three and six months ended June 30, 2022 and 2021 and the consolidated statements of cash flows for the six months ended June 30, 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. 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 June 30, 2022, and the results of operations and, comprehensive loss for the three and six months ended June 30, 2022, and cash flows for the six months ended June 30, 2022, have been made. The interim results for the three and six months ended June 30, 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. 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 $ 29.1 million as of June 30, 2022 will be sufficient to fund its operating expenses and capital expenditure requirements into the second half of 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: a. The Company’s current financial condition, including its sources of liquidity; b. The Company’s conditional and unconditional obligations due or anticipated within one year; c. The funds necessary to maintain the Company’s operations considering its current financial condition, obligations, and other expected cash flows; and 8 Table of Contents d. 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 second half 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. Additional funding may not be available to the Company on favorable terms, or at all. If the Company is not able to secure additional funding when needed, it may have to delay, reduce the scope of or eliminate one or more of its clinical trials or research and development programs or make changes to its operating plan. In addition, it may have to partner one or more of its product candidate programs at an earlier stage of development, which would lower the economic value of those programs to the Company. 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. Accounting standards adopted in the period 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. 20 . ASU 2021-10 became effective for us on January 1, 2022. The Company has evaluated the effect that this guidance has on its 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 the Company accounts for subsequent amendments to its outstanding warrants, if any. Recently Issued Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) has issued ASU 2020-04, “Reference Rate Reform (Topic 848)”. This standard provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform initiatives that would replace interbank offered rates, including the London Interbank Offered Rate (LIBOR). For example, modifications of lease contracts within the scope of ASC 842 solely for changes in reference rates would be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not currently have any contracts affected by this guidance. 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, notably their short maturities. 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). No taxes were recorded on items of other comprehensive income 9 Table of Contents (loss). There were no reclassifications out of other comprehensive income (loss) during the six months ended June 30, 2021 and 2022. 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 a 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. Leases The Company accounts for lease contracts in accordance with ASC 842. As of June 30, 2022, the Company’s only outstanding facilities 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. As the Company’s lease does not specify 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 10 Table of Contents 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 options included in its lease agreement 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. 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. 3. Revenue Revenue recognized in the three and six months ended June 30, 2021 and 2022 was $ 0 . 4. Net Loss per Common Share 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. 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, 2021 and 2022, as the result would be anti-dilutive: ​ ​ ​ ​ ​ ​ June 30, ​ June 30, ​ 2022 2021 Stock options 1,613,089 731,761 Restricted Stock Units 118,665 — 6 % convertible exchangeable preferred stock 85 85 Series A preferred stock 6,600 6,600 Series B preferred stock 1,188,725 1,188,725 Common stock warrants 3,234,379 3,234,379 Total shares excluded from calculation 6,161,543 5,161,550 ​ ​ ​ ​ 11 Table of Contents 5. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in $000s): ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2022 2021 Research and development tax credit receivable ​ $ 2,000 ​ $ 3,727 Prepayments and VAT receivable ​ ​ 921 ​ 577 Other current assets ​ 79 ​ ​ 79 ​ ​ $ 3,000 ​ $ 4,383 ​ ​ 6. Non-Current Assets As of June 30, 2022, the Company had non-current assets of $ 3.1 million, which is mostly comprised of clinical trial deposits held by a contract research organization in relation to the Company’s Phase 1/2 clinical trials. ​ 7. Accrued and Other Liabilities Accrued and other current liabilities consisted of the following (in $000s): ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2022 2021 Accrued research and development ​ $ 1,896 ​ $ 2,310 Accrued legal and professional fees ​ 367 ​ 233 Other current liabilities ​ 558 ​ 634 ​ ​ $ 2,821 ​ $ 3,177 ​ ​ Other current liabilities for the year ended December 31, 2021 was largely attributed to accrued payroll costs. ​ 8. Leases The Company currently has one lease, relating to its facility in Berkeley Heights, New Jersey. On April 4, 2022 the Company extended this lease by three years , expiring July 31, 2025. On May 4, 2021, the Company assigned an 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 paid on assignment and the remaining 50 % was paid on May 4, 2022. The Company has no further obligations, liabilities or commitments in relation to this facility. As of and for the six months ended June 30, 2022 and 2021: The Company recognized operating lease expenses of $ 30,470 and $ 144,463 in the six month periods ending June 30, 2022 and 2021 respectively. Cash payments made during the six months ended June 30, 2022 and 2021 totaled $ 30,870 and $ 150,941 respectively and were presented within cash outflows from operating activities. The remaining lease term as of June 30, 2022 is approximately 3.1 years for the Berkeley Heights facility. The discount rate used by the Company in determining the lease liability was 12 %. 12 Table of Contents Remaining lease payments under the lease are (in $000’s): ​ ​ ​ ​ 2022 $ 31 2023 ​ ​ 63 2024 ​ ​ 65 2025 ​ ​ 38 2026 ​ ​ — Thereafter ​ ​ — ​ $ 197 ​ ​ ​ 9. Stock Based Compensation 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, 2021 and 2022 as shown in the following table (in $000s): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Six Months Ended ​ June 30, June 30, ​ 2022 2021 2022 2021 ​ General and administrative ​ $ 216 ​ $ 190 ​ $ 469 ​ $ 364 ​ Research and development ​ ​ 134 ​ $ 88 ​ $ 262 ​ $ 169 ​ Stock-based compensation costs before income taxes ​ $ 350 ​ $ 278 ​ $ 730 ​ $ 533 ​ ​ 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 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. ​ On June 14, 2022, the Company’s stockholders approved an amendment of the 2018 Plan to increase the number of shares of Common Stock available for grant under the Plan by adding an additional 500,000 shares. As of June 30, 2022, the Company has reserved 389,896 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. ​ 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 200,000 shares of the Company’s common stock (or the equivalent of such number). As of June 30, 2022, 120,000 shares under the Inducement Plan have been issued, leaving a remaining reserve of 80,000 shares. ​ ​ 13 Table of Contents Option Grants and Exercises ​ There were 517,337 options granted during the six months ended June 30, 2022. These options had a grant date fair value ranging between $ 0.86 -$ 2.90 per option. 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. 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended ​ Six months ended ​ June 30, 2022 June 30, 2021 Expected term (years) 5 – 6 5 – 6 Risk free interest rate 1.370% – 3.605% ​ 0.420% – 1.00% Volatility 87 – 93% ​ 98 – 102% Expected dividend yield over expected term 0.00 % ​ 0.00 % ​ ​ ​ ​ ​ ​ ​ There were no stock options exercised during each of the six months ended June 30, 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. ​ In the second quarter of 2022, the Company amended the terms of 11,952 options and 2,374 restricted stock units issued to a former director. Specifically, the Company accelerated the vesting of 4,748 options and 2,374 restricted stock units that otherwise would have been forfeited upon the director’s retirement of service. In addition, the Company extended the time by which the director could exercise all vested awards from 90 days to two years. The Company recorded an additional $3,500 of compensation cost in the second quarter of 2022 as a result of these modifications. ​ Outstanding Options A summary of the share option activity and related information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2021 1,099,357 ​ $ 7.53 8.99 ​ $ 189 Granted 517,337 ​ $ 2.42 — ​ — Cancelled/forfeited ( 3,604 ) ​ $ 28.15 ​ ​ ​ Options outstanding at June 30, 2022 1,613,090 ​ $ 5.84 8.85 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested at June 30, 2022 1,090,833 ​ $ 3.25 9.35 ​ $ — Vested and exercisable at June 30, 2022 522,257 ​ $ 11.25 7.79 ​ $ — ​ Restricted Stock Units The Company issued 118,665 restricted stock units during the six months ended June 30, 2022. These restricted stock units will vest over a period of one year for grants to directors and three years for grants to employees. Each restricted stock unit was valued at $ 1.11 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. 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. 14 Table of Contents Summarized information for restricted stock units as of June 30, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Average ​ ​ Restricted Grant Date ​ ​ Stock Units ​ Value Per Share Restricted Stock Units outstanding at December 31, 2021 18,992 ​ $ 6.69 Granted ​ 118,665 ​ ​ 1.11 Restricted Stock Units outstanding at June 30, 2022 ​ 137,657 ​ $ — ​ ​ ​ ​ ​ ​ Unvested at June 30, 2022 120,248 ​ $ 1.18 Vested and exercisable at June 30, 2022 17,409 ​ $ 6.69 ​ ​ ​ ​ ​ 10 . Stockholders Equity August 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 $ 10.0 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 shares of the Company’s common stock 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 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. As of June 30, 2022, a total of 2,092,167 shares, for gross proceeds of approximately $ 5.9 million, have been sold pursuant to this agreement. ​ March 2021 Equity Financing On March 12, 2021, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Oppenheimer & Co. Inc., as representative of the underwriters identified therein (collectively, the “Underwriters”), pursuant to which the Company agreed to issue and sell 1,807,143 shares of common stock, $ 0.001 par value per share, at a public offering price of $ 7.00 per share (the “Offering”) along with a 30-day overallotment option to purchase up to an additional 271,071 shares of common stock at the public offering price, less underwriting discounts and commissions. ​ The closing of the offering occurred on March 16, 2021, and the net proceeds to the Company (including exercise of the over-allotment option) were approximately $ 13.5 million, after deducting placement agent fees and other offering expenses payable by the Company. December 2020 Equity Financing On December 18, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Acorn Bioventures, LP (the “Purchaser”), pursuant to which the Company agreed to offer, issue and sell to the Purchaser, (i) in a registered direct offering, (a) an aggregate of 485,912 shares (the “Common Shares”) of common stock, par value $ 0.001 per share (“Common Stock”), and (b) an aggregate of 237,745 shares of Series B Convertible Preferred Stock (the “Preferred Shares,” and collectively with the Common Shares, the “Shares”), par value $ 0.001 per share (“Series B Preferred Stock”), and (ii) in a concurrent private placement, warrants (the “Warrants”) to purchase up to an aggregate of 669,854 shares (the “Warrant Shares”) of Common Stock. 15 Table of Contents The combined purchase price for each Share, together with one Warrant to purchase 0.4 shares of Common Stock, is $ 4.18 . 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 Warrants may be exercised on a “cashless” basis. Each share of Series B Convertible Preferred Stock will convert into five shares of Common Stock. The conversion feature within the Series B Convertible Preferred Stock was determined to be beneficial as of the offering date. A beneficial conversion feature is defined as a nondetachable conversion feature that is "in-the-money" at issuance. 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. The effective conversion price of $ 3.18 per share is different from the $ 4.18 per share contractual conversion price. As the series B Preferred Stock contained no stated redemption date and the conversion feature could be exercised at any time, the discount associated with the beneficial conversion feature was immediately charged against additional paid-in-capital and treated as a deemed dividend for both financial reporting and earnings per share purposes. The common stock, Warrants and Series B Preferred Stock are freestanding financial instruments. The Warrants are classified within equity (as a component of additional paid-in capital) in the consolidated balance sheet and are not remeasured on a recurring basis. The Series B Preferred Stock is classified within permanent equity in the consolidated balance sheet. 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 June 30, 2022, 237,745 shares of the Series B Preferred Stock remained issued and outstanding. April 2020 Equity Financing On April 21, 2020, the Company entered into a co-placement agency agreement with Roth Capital Partners, LLC, Ladenburg Thalmann & Co. Inc., and Brookline Capital Markets, a division of Arcadia Securities, LLC (the “Co-Placement Agents”) and a securities purchase agreement with certain purchasers for the purchase and sale of (i) 1,910,000 shares of common stock, (ii) pre-funded warrants to purchase up to 2,090,000 shares of common stock at an exercise price of $ 0.001 per share, and (iii) accompanying common stock warrants to purchase up to 4,000,000 shares of common stock at an exercise price of $ 5.00 per share. The shares of common stock and accompanying common stock warrants were sold at a combined public offering price of $ 5.00 per share and common stock warrant. Each common stock warrant sold with the shares of common stock represents the right to purchase one share of common stock at an exercise price of $ 5.00 per share. The common stock warrants are exercisable immediately and expire five years from the date of issuance. The pre-funded warrants and accompanying common stock warrants were sold at a combined public offering price of $ 4.999 per pre-funded warrant and common stock warrant. The pre-funded warrants were sold to purchasers whose purchase of shares of common stock in the public offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99 % (or, at the election of the purchaser, 9.99 %) of the Company’s outstanding common stock immediately following the consummation of the public offering, in lieu of shares of common stock. Each pre-funded warrant represents the right to purchase one share of the Company’s common stock at an exercise price of $ 0.001 per share. The pre-funded warrants are exercisable immediately and may be exercised at any time until the pre-funded warrants are exercised in full. The shares of common stock and pre-funded warrants, and accompanying common stock warrants, were issued separately and are immediately separable upon issuance. ​ 16 Table of Contents The closing of the offering occurred on April 24, 2020, and the net proceeds to the Company were approximately $ 18.3 million, after deducting placement agent fees and other offering expenses payable by the Company. ​ Subsequent to the closing of the offering, all of the pre-funded warrants issued in connection therewith were converted into 2,090,000 shares of common stock. ​ Warrants December 2020 Warrants 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. 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 six months ended June 30, 2022 or June 30, 2021. April 2020 Warrants As of June 30, 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. The common warrants are immediately exercisable and will expire on the fifth anniversary of the original issuance date. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Company’s common stock. The common warrants were issued separately from the common stock and were eligible for transfer immediately after issuance. A common warrant to purchase one share of common stock was issued for every share of common stock purchased in this offering. 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). A holder (together with its affiliates) may not exercise any portion of the common warrant to the extent that the holder would own more than 4.99 % of the outstanding common stock immediately after exercise, except that upon at least 61 days prior notice from the holder to the Company, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s common warrants up to 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the common warrants. No fractional shares of common stock will be issued in connection with the exercise of a common warrant. In lieu of fractional shares, the Company will round down to the next whole share. There were no warrants exercised during the three or six months ended June 30, 2022, and a total of 909,000 warrants exercised during the three and six months ended June 30, 2021. July 2017 Warrants 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. The warrants expire in 2024. Subject to limited exceptions, a holder of warrants will not have the right to exercise any portion of its warrants if the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99 % (or, at the election of the purchaser, 9.99 %) of the shares of our Common Stock then outstanding after giving effect to such exercise. 17 Table of Contents The exercise price and the number of shares issuable upon exercise of the warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s common stock. The warrant holders must pay the exercise price in cash upon exercise of the warrants unless such warrant holders are utilizing the cashless exercise provision of the warrants. On the expiration date, unexercised warrants will automatically be exercised via the “cashless” exercise provision. 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 six months ended June 30, 2022 or June 30, 2021. Series A Preferred Stock 8,872 shares of the Company’s Series A Preferred Stock were issued in the July 2017 underwritten public offering. 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 June 30, 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 June 30, 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. 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 any arrearage in the payment of dividends on such shares, and there are no sinking fund provisions applicable to the Series A Preferred Stock. 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 (the “Measurement Period”) exceeds 300 % of the initial conversion price of the Series A Preferred Stock (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and similar transactions), (ii) the daily trading volume on each Trading Day during such Measurement Period exceeds $ 500,000 per trading day and (iii) the holder is not in possession of any information that constitutes or might constitute, material non-public information which was provided by the Company. 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 shall be exercised ratably among the holders of the then outstanding preferred stock. 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. 18 Table of Contents 6 % Convertible Exchangeable Preferred Stock As of June 30, 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. Any dividends must be declared by the Company’s board of directors and must come from funds that are legally available for dividend payments. The 6 % Preferred Stock has a liquidation preference of $ 10.00 per share, plus accrued and unpaid dividends. As of June 30, 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. The 6 % Preferred Stock has no maturity date and no voting rights prior to conversion into common stock, except under limited circumstances. The Company may, at its option, redeem the 6 % Preferred Stock in whole or in part, out of funds legally available at the redemption price of $ 10.00 per share. 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 6 % Convertible Subordinated Debentures (the “Debentures”) at the rate of $ 10.00 principal amount of Debentures for each share of 6 % Preferred Stock. The Debentures, if issued, will mature 25 years after the Exchange Date and have substantially similar terms to those of the 6 % Preferred Stock. No such exchanges have taken place to date. 11. Subsequent Events Dividends on 6% Preferred Stock ​ On June 14, 2022 , 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, 2022 to the holders of record of the 6 % Preferred Stock as of the close of business on July 15, 2022 . ​ August 2021 Controlled Equity Offering Sales Agreement Subsequent to the quarter ended June 30, 2022, under the Sales Agreement, the Company sold a further 1,188,900 shares, for net proceeds of approximately $1.6 million. ​ ​ ​ 19 Table of Contents