What changed in this filing

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Item 1. Financial Statements

2023-08-10 compared with 2023-05-11 · 101 added, 79 removed, 305 unchanged (37% of the section changed)

16 unchanged sentences

Lease liability

Total liabilities

Redeemable common stock, $ 0.001 par value;

3,117,100 shares issued and outstanding at March 31, 2023 and December 31, 2022 (Note 10)

3,117,100 shares issued and outstanding at June 30, 2023 and December 31, 2022 (Note 10)

Stockholders’ equity:

Preferred stock, $ 0.001 par value;

5,000,000 shares authorized at March 31, 2023 and December 31, 2022;

5,000,000 shares authorized at June 30, 2023 and December 31, 2022;

6 % Convertible Exchangeable preferred stock;

335,273 shares issued and outstanding at March 31, 2023 and December 31, 2022.

Aggregate preference in liquidation of $ 4,006,512 as of March 31, 2023 and December 31, 2022.

335,273 shares issued and outstanding at June 30, 2023 and December 31, 2022.

Aggregate preference in liquidation of $ 4,006,512 as of June 30, 2023 and December 31, 2022.

Series A convertible preferred stock, $ 0.001 par value;

264 shares issued and outstanding at March 31, 2023 and December 31, 2022.

264 shares issued and outstanding at June 30, 2023 and December 31, 2022.

Series B convertible preferred stock, $ 0.001 par value;

237,745 shares issued and outstanding at March 31, 2023 and December 31, 2022.

237,745 shares issued and outstanding at June 30, 2023 and December 31, 2022.

Common stock, $ 0.001 par value;

100,000,000 shares authorized at March 31, 2023 and December 31, 2022;

12,539,189 shares issued and outstanding at March 31, 2023 and December 31, 2022

100,000,000 shares authorized at June 30, 2023 and December 31, 2022;

12,642,822 shares issued and outstanding at June 30, 2023 and 12,539,189 shares issued and outstanding at December 31, 2022

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Clinical trial supply

Operating expenses:

6 unchanged sentences

Interest income

Other income, net

Total other income, net

Other income (expense), net

Total other income (expense), net

Loss before taxes

9 unchanged sentences

Three Months Ended

Six Months Ended

Translation adjustment

15 unchanged sentences

Balances at March 31, 2022

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 June 30, 2022

Balances at December 31, 2022

5 unchanged sentences

Balances at March 31, 2023

Stock-based compensation

Preferred stock dividends

Unrealized foreign exchange on intercompany loans

Translation adjustment

Loss for the period

Balances at June 30, 2023

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

Operating activities:

10 unchanged sentences

Financing activities:

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

4 unchanged sentences

Cash received during the period for:

Research & Development Tax Credits

Cash paid during the period for:

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

Cyclacel is a pioneer company in the field of cancer cell cycle biology with a vision to improve patient healthcare by translating insights in cancer biology into medicines that can overcome resistance and ultimately increase a patient’s overall survival.

Through March 31, 2023, 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.

Through June 30, 2023, 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, 2023, the consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the three months ended March 31, 2023 and 2022, and all related disclosures contained in the accompanying notes, are unaudited.

The consolidated balance sheet as of June 30, 2023, the consolidated statements of operations, comprehensive loss, and stockholders’ equity for the three and six months ended June 30, 2023 and 2022 and the consolidated statements of cash flows for the six months ended June 30, 2023 and 2022, and all related disclosures contained in the accompanying notes, are unaudited.

The consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2023.

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, 2023, and the results of operations, comprehensive loss, and cash flows for the three months ended March 31, 2023 and 2022, have been made.

The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 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, 2023, and the results of operations and, comprehensive loss for the three and six months ended June 30, 2023, and cash flows for the six months ended June 30, 2023, have been made.

The interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 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, 2022 that are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 8, 2023.

4 unchanged sentences

The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern for one year after the date that these financial statements are issued.

In performing its analysis, management excluded certain elements of its operating plan that cannot be considered probable.

within the Company’s control nor have they been approved by the Board of Directors as of the date of these consolidated financial statements.

Based on the Company’s current operating plan, it is anticipated that cash and cash equivalents of $ 11.4 million as of March 31, 2023, together with the $4.7 million research and development tax credits received in April 2023 will allow it to meet liquidity requirements through the end of 2023.

In performing its analysis, management excluded certain elements of its operating plan that cannot

be considered probable.

Under ASC 205-40, the future receipts of potential funding from future equity or debt issuances or by entering into partnership agreements cannot be considered probable at this time because these plans are not entirely within the Company’s control nor have they been approved by the Board of Directors as of the date of these consolidated financial statements.

Based on the Company’s current operating plan, it is anticipated that cash and cash equivalents of $ 10.2 million as of June 30, 2023, will allow it to meet liquidity requirements through the end of 2023.

However, the current operating plan includes discretionary expenditures, which if not incurred could extend liquidity requirements into the second quarter of 2024.

The Company’s history of losses, negative cash flows from operations, potential rescission rights, liquidity resources currently on hand, and its dependence on the ability to obtain additional financing to fund its operations after the current resources are exhausted, about which there can be no certainty, have resulted in the assessment that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the issuance date of these financial statements.

6 unchanged sentences

This Accounting Standards Update (“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.

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

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

The adoption of this guidance had no material effect on the Company’s Consolidated Financial Statements.

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.

This amendment became effective on January 1, 2022.

The adoption of this new guidance did 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

13 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, 2023 and 2022.

There were no reclassifications out of other comprehensive income (loss) during the six months ended June 30, 2022 and 2023.

Revenue Recognition

19 unchanged sentences

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

As of March 31, 2023, the Company’s outstanding leases are classified as operating leases.

As of June 30, 2023, the Company’s outstanding leases are classified as operating leases.

The Company recognizes an asset for the right to use an underlying leased asset for the lease term and records lease liabilities based on the present value of the Company’s obligation to make lease payments under the lease.

14 unchanged sentences

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

There was no revenue recognized in the three months ended March 31, 2023 and 2022.

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

The Company recognized $ 373,000 of revenue for the three and six months ended June 30, 2023.

This related to recovery of clinical manufacturing costs associated with an investigator sponsored study managed by Cedar-Sinai Medical Center.

There were no revenues recognized for the comparative periods in 2022.

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, 2023 and 2022, 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, 2023 and 2022, as the result would be anti-dilutive:

Stock options

10 unchanged sentences

Other current assets

Other current assets as of June 30, 2023 include reclassification of approximately $ 1.5 million of clinical trial deposits previously recognized as long term but now expected to be consumed within one year as of June 30, 2023.

Non-Current Assets

As of March 31, 2023, 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.

As of June 30, 2023, the Company had non-current assets of $ 1.0 million, which is primarily 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

4 unchanged sentences

Other current liabilities for the year ended December 31, 2022 were largely attributed to accrued payroll costs.

The Company currently has an operating lease relating to its facilities in Berkeley Heights, New Jersey.

For the three months ended March 31, 2023 and 2022, the Company recognized operating lease expenses of $ 17,949 and $ 14,686 , respectively, including $1,945 in 2023 relating to a short term lease for offices in Dundee, Scotland.

Cash payments made during the three months ended March 31, 2023 and 2022 totaled $ 17,634 and $ 15,435 , respectively, and were presented within cash outflows from operating activities.

The remaining lease term as of March 31, 2023 is approximately 2.3 years for the Berkeley Heights facility.

The Company currently has an operating lease liability relating to its facilities in Berkeley Heights, New Jersey.

For the six months ended June 30, 2023 and 2022, the Company recognized operating lease expenses of $ 36,949 and $ 30,470 respectively, including $ 4,896 in 2023 relating to a short term lease for offices in Dundee, Scotland.

Cash payments made during the six months ended June 30, 2023 and 2022 totaled $ 36,318 and $ 30,870 , respectively, and were presented within cash outflows from operating activities.

The remaining lease term as of June 30,

2023 is approximately 2.1 years for the Berkeley Heights facility.

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

2 unchanged sentences

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 months ended March 31, 2023 and 2022 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 and six months ended June 30, 2023 and 2022 as shown in the following table (in $000s):

Three Months Ended

Six Months Ended

General and administrative

3 unchanged sentences

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

On April 28, 2023, 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 900,000 shares.

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

As of March 31, 2023, the Company has reserved 142,158 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 June 13, 2023, the Company’s stockholders approved an amendment of the 2018 Plan to increase the number of shares of Common Stock available for issuance under the 2018 Plan by 900,000 shares.

As of June 30, 2023, the Company has reserved 323,326 shares of the Company’s common stock under the 2018 Plan for future issuances.

Stock option awards granted under the Company’s equity incentive plans have a maximum life of 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, 2023, 120,000 shares under the Inducement Plan have been issued, leaving a remaining reserve of 80,000 shares.

As of June 30, 2023, 120,000 shares under the Inducement Plan have been issued, leaving 80,000 shares in reserve.

Option Grants and Exercises

There were 11,000 options granted during the three months ended March 31, 2023.

There were 650,128 options granted during the six months ended June 30, 2023.

These options had a grant date fair value ranging between $ 0.42 -$ 0.73 per option.

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

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.

Of the options granted during the six months ended June 30, 2023, 384,500 shall vest on the third anniversary of their date of grant, or earlier if either of the certain performance conditions are met relating to enrollment goals for various clinical studies.

For purposes of the below calculations, the Company has assumed that these awards will vest after three years as satisfaction of the performance conditions is not probable at this time.

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, 2023

March 31, 2022

Six months ended

June 30, 2023

June 30, 2022

Expected term (years)

3 unchanged sentences

Expected dividend yield over expected term

There were no stock options exercised during each of the three months ended March 31, 2022 and 2023, respectively.

There were no stock options exercised during each of the six months ended June 30, 2023 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.

4 unchanged sentences

Cancelled/forfeited

Options outstanding at March 31, 2023

Unvested at March 31, 2023

Vested and exercisable at March 31, 2023

Options outstanding at June 30, 2023

Unvested at June 30, 2023

Vested and exercisable at June 30, 2023

Restricted Stock Units

The Company issued 257,000 restricted stock units during the three months ended March 31, 2023.

These restricted stock units shall vest on the third anniversary of their date of grant, or earlier if certain defined clinical trial related performance targets are met.

The Company issued 384,314 restricted stock units during the six months ended June 30, 2023.

The 127,314 restricted stock units issued in June 2023 vest on the first anniversary of the date of grant.

Each of these restricted stock units were valued at $0.59 at the date of grant, which was equivalent to the market price of a share of the Company’s common stock on that date.

The 257,000 restricted stock units issued in January 2023 vest on the third anniversary of their date of grant, or earlier if certain defined clinical trial related performance targets are met.

A three year vesting assumption was applied to these restricted stock units as satisfaction of the performance conditions is not probable at this time.

Each restricted stock unit was valued at $ 0.90 based on their fair value at the date of grant, which was equivalent to the market price of a share of the Company’s common stock on the date of grant.

Each restricted stock unit was valued at $ 0.90 at the date of grant, which was equivalent to the market price of a share of the Company’s common stock on that date.

The Company issued 118,665 restricted stock units during the year ended December 31, 2022.

These restricted stock units will vest over a period of one year for grants to directors and three years for grants to employees.

These restricted stock units vest over a period of one year for awards granted 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.

Summarized information for restricted stock units as of March 31, 2023 is as follows:

Summarized information for restricted stock units as of June 30, 2023 is as follows:

Value Per Share

Restricted Stock Units outstanding at March 31, 2023

Unvested at March 31, 2023

Vested and exercisable at March 31, 2023

Restricted Stock Units outstanding at June 30, 2023

Unvested at June 30, 2023

Vested and exercisable at June 30, 2023

Stockholders Equity

7 unchanged sentences

The sale of these shares may be subject to potential rescission rights by certain shareholders.

As of March 31, 2023, there have been no claims or demands to exercise such rights.

As of June 30, 2023, there have been no claims or demands to exercise such rights.

As a result of these potential rescission rights, the Company reclassified 3,117,100 shares, with an aggregate purchase price of $ 4,494,496 of its common stock as outside stockholders’ equity.

4 unchanged sentences

December 2020 Warrants

As of March 31, 2023, warrants to purchase 669,854 shares of common stock issued pursuant to a securities purchase agreement in a December 2020 financing transaction remained outstanding.

As of June 30, 2023, warrants to purchase 669,854 shares of common stock issued pursuant to a securities purchase agreement in a December 2020 financing transaction 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, 2023 or March 31, 2022.

There were no exercises of these warrants during the six months ended June 30, 2023 or June 30, 2022.

April 2020 Warrants

As of March 31, 2023, 2,190,000 warrants issued pursuant to a securities purchase agreement in connection with an April 2020 equity financing remained outstanding, each with an exercise price of $ 5.00 .

As of June 30, 2023, 2,190,000 warrants issued pursuant to a securities purchase agreement in connection with an April 2020 equity financing remained outstanding, each with an exercise price of $ 5.00 .

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 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.

4 unchanged sentences

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

There were no warrants exercised during the three months ended March 31, 2023 or March 31, 2022.

There were no exercises of these warrants during the six months ended June 30, 2023 or June 30, 2022.

July 2017 Warrants

As of March 31, 2023, 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, 2023, 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, 2023 or March 31, 2022.

There were no exercises of these warrants during the six months ended June 30, 2023 or June 30, 2022.

Series B Preferred Stock

1 unchanged sentence

Each share of Series B Preferred Stock shall initially be convertible into five shares of Common Stock, subject to adjustment in accordance with the Certificate of Designation.

As of March 31, 2023, 237,745 shares of the Series B Preferred Stock remained issued and outstanding.

As of June 30, 2023, 237,745 shares of the Series B Preferred Stock remained issued and outstanding.

Holders of Series B Preferred Stock are entitled to receive dividends on shares of Series B Preferred Stock equal, on an as-if-converted-to-common-stock basis, and in the same form as dividends actually paid on shares of the Company’s common stock.

Except as otherwise required by law, the Series B Preferred Stock does not have voting rights.

adversely affects any rights of the holders of Series B Preferred Stock, (d) increase the number of authorized shares of Series B Preferred Stock, (e) pay certain dividends or (f) enter into any agreement with respect to any of the foregoing.

However, as long as any shares of Series B Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series B Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock, (b) alter or amend the Certificate of Designation, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series B Preferred Stock, (d) increase the number of authorized shares of Series B Preferred Stock, (e) pay certain dividends or (f) enter into any agreement with respect to any of the foregoing.

The Series B Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

3 unchanged sentences

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, 2023, 264 shares of the Series A Preferred Stock remained issued and outstanding .

As of June 30, 2023, 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, 2023 are convertible into 6,600 shares of common stock.

The 264 shares of Series A Preferred Stock issued and outstanding at June 30, 2023 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, 2023, 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, 2023, 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.

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 March 31, 2023, accrued and unpaid dividends amounted to $ 50,291 .

As of June 30, 2023, 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 8, 2023 , 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, 2023 to the holders of record of the 6 % Preferred Stock as of the close of business on April 21, 2023 .

On June 13, 2023 , 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 August 1, 2023 to the holders of record of the 6 % Preferred Stock as of the close of business on July 21, 2023 .

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