Bio Green Med Solution, Inc. 10-K/A

Item 8. Financial Statements and Supplementary Data INDEX TO CYCLACEL PHARMACEUTICALS, INC. FINANCIAL STATEMENTS ​ ​ Page ​ ​ Report of Independent Registered Public Accounting Firm (PCAOB ID: 49 ) 78 Consolidated Balance Sheets as of December 31, 2021 and 2022 (Restated) 80 Consolidated Statements of Operations (Loss) for the years ended December 31, 2021 and 2022 (Restated) 81 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2021 and 2022 (Restated) 82 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2021 and 2022 (Restated) 83 Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2022 (Restated) 84 Notes to Consolidated Financial Statements (Restated) 85 ​ ​ ​ 77 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Cyclacel Pharmaceuticals, Inc. ​ Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Cyclacel Pharmaceuticals, Inc. and its subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations (loss), comprehensive loss, stockholders' equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Restatement of 2022 and 2021 Financial Statements As discussed in Note 1 to the consolidated financial statements, the 2022 and 2021 financial statements have been restated to correct misstatements. ​ Substantial Doubt About the Company’s Ability to Continue as a Going C o ncern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company does not currently have sufficient funds to complete development and commercialization if they are unable to raise additional capital for operations. This raises substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. ​ Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ( PCAOB ) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. ​ 78 Table of Contents Clinical Trial Accrual and Expenses As discussed in Notes 3 and 9 of the consolidated financial statements, the Company’s total accrued expenses for research and development were $3.6 million at December 31, 2022, which included the estimated obligation for pre-clinical and clinical trial expenses incurred as of December 31, 2022, but not paid as of that date. The Company’s clinical trial expenses are based on the Company’s estimates of the level of services performed each period pursuant agreements with third parties that conduct research and development on the Company’s behalf, which results in an accrual or prepaid at period end. ​ We identified the Company’s accrued clinical trial expenses as a critical audit matter because auditing the application of significant management judgment over the estimate of services provided but not yet invoiced required significant audit effort and a high degree of auditor judgment and subjectivity to evaluate the audit evidence obtained. Specifically, the amount of accrued clinical trial expenses recognized is dependent on the availability of information to make the estimate, including information from multiple sources, the level of effort expended as of the balance sheet date and the associated cost of such services. Additionally, due to the timing of invoicing received from third parties, the actual amounts incurred are not typically known on the date the Company issues its financial statements. ​ Our audit procedures to evaluate the Company’s estimate of services incurred as of period end pursuant to its clinical trials included, among others: ​ ● We tested the accuracy and completeness of the underlying data used in the estimates and evaluated the significant assumptions stated above that are used by management to estimate the recorded amounts. ​ ● To assess the reasonableness of the significant assumptions, we obtained information regarding the nature and extent of progress of clinical trials from the Company’s research and development personnel that oversee the clinical trials and obtained information directly from third parties which indicated the third parties’ estimate of costs incurred to date. ​ ● To evaluate the completeness and valuation of the accrual clinical trial expenses, we compared invoices received by the Company subsequent to December 31, 2022, to the amounts recognized by the Company as of that date. ​ ● We inspected the Company’s contracts with third parties and any pending change orders to assess the impact to the amounts recorded. ​ ​ ​ ​ RSM US LLP We have served as the Company's auditor since 2013. Stamford, Connecticut March 8, 2023, except for Notes 1, 15 and 17, as to which the date is November 28, 2023 ​ ​ 79 Table of Contents CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 ​ ​ As restated (see Note 1) As restated (see Note 1) ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 18,345 ​ $ 36,559 Prepaid expenses and other current assets ​ 6,066 ​ 4,383 Total current assets ​ 24,411 ​ 40,942 Property and equipment, net ​ 32 ​ 64 Right-of-use lease asset ​ ​ 142 ​ ​ 30 Non-current deposits ​ ​ 3,465 ​ ​ 2,100 Total assets ​ $ 28,050 ​ $ 43,136 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 2,561 ​ $ 2,117 Accrued and other current liabilities ​ 4,950 ​ 3,296 Total current liabilities ​ 7,511 ​ 5,413 Lease liability ​ ​ 106 ​ ​ 30 Total liabilities ​ 7,617 ​ 5,443 ​ ​ ​ ​ ​ ​ ​ Redeemable common stock, $ 0.001 par value; ​ ​ ​ ​ ​ ​ 3,117,100 and 0 shares issued and outstanding at December 31, 2022 and December 31, 2021 (Note 11). ​ ​ 4,494 ​ — ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.001 par value; 5,000,000 shares authorized at December 31, 2022 and December 31, 2021; ​ ​ 6 % Convertible Exchangeable preferred stock; 335,273 shares issued and outstanding at December 31, 2022 and December 31, 2021. Aggregate preference in liquidation of  $ 4,006,512 as of December 31, 2022 and December 31, 2021. ​ — ​ — Series A convertible preferred stock, $ 0.001 par value; 264 shares issued and outstanding at December 31, 2022 and December 31, 2021. ​ — ​ — Series B convertible preferred stock, $ 0.001 par value; 237,745 shares issued and outstanding at December 31, 2022 and December 31, 2021. ​ — ​ — Common stock, $ 0.001 par value; 100,000,000 shares authorized at December 31, 2022 and December 31, 2021; 9,422,089 and 9,993,135 shares issued and outstanding at December 31, 2022 and December 31, 2021 ​ 9 ​ 10 Additional paid-in capital ​ 422,973 ​ 422,960 Accumulated other comprehensive loss ​ ( 1,316 ) ​ ( 748 ) Accumulated deficit ​ ( 405,727 ) ​ ( 384,529 ) Total stockholders’ equity ​ 15,939 ​ 37,693 Total liabilities and stockholders’ equity ​ $ 28,050 ​ $ 43,136 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 80 Table of Contents CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (LOSS) (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2022 2021 ​ ​ ​ As restated (see Note 1) ​ ​ As restated (see Note 1) Revenues ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ Research and development ​ 20,274 ​ 14,928 General and administrative ​ 7,382 ​ 7,461 Total operating expenses ​ 27,656 ​ 22,389 Operating loss ​ ( 27,656 ) ​ ( 22,389 ) Other income (expense): ​ ​ Foreign exchange gains (losses) ​ 233 ​ 44 Interest income ​ 210 ​ 16 Other income, net ​ 1,298 ​ 144 Total other income, net ​ 1,741 ​ 204 Loss before taxes ​ ( 25,915 ) ​ ( 22,185 ) Income tax benefit ​ 4,717 ​ 3,728 Net loss ​ ( 21,198 ) ​ ( 18,457 ) Dividend on convertible exchangeable preferred shares ​ ( 201 ) ​ ( 201 ) Net loss applicable to common shareholders ​ $ ( 21,399 ) ​ $ ( 18,658 ) Basic and diluted earnings per common share: ​ ​ Net Loss per share - basic and diluted (common shareholders) ​ $ ( 1.91 ) ​ $ ( 2.09 ) Net Loss per share - basic and diluted (redeemable common shareholders) ​ $ (1.82) ​ $ — ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 81 Table of Contents CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2022 2021 ​ ​ ​ ​ ​ ​ As restated (see Note 1) Net loss ​ $ ( 21,198 ) ​ $ ( 18,457 ) Translation adjustment ​ 20,598 ​ 2,123 Unrealized foreign exchange gain (loss) on intercompany loans ​ ( 21,166 ) ​ ( 2,125 ) Comprehensive loss ​ $ ( 21,766 ) ​ $ ( 18,459 ) ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 82 Table of Contents CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, preferred stock and associated warrants on underwritten offering, net of expenses — ​ — 2,078,214 ​ 2 ​ 13,500 ​ — ​ — ​ 13,502 Issue of common stock in At Market Issuance sales agreement, net of expenses ​ — ​ — 752,425 ​ 1 ​ 3,869 ​ — ​ — ​ 3,870 Warrant & stock option exercises — ​ — 915,600 ​ 1 ​ 4,564 ​ — ​ — ​ 4,565 Stock-based compensation — ​ — — ​ — ​ 1,157 ​ — ​ — ​ 1,157 Preferred stock dividends — ​ — — ​ — ​ ( 201 ) ​ — ​ — ​ ( 201 ) Unrealized foreign exchange on intercompany loans ​ — ​ — — ​ — ​ — ​ ( 2,125 ) ​ — ​ ( 2,125 ) Translation adjustment ​ — ​ — — ​ — ​ — ​ 2,123 ​ — ​ 2,123 Loss for the period (restated) ​ — ​ — — ​ — ​ — ​ — ​ ( 18,457 ) ​ ( 18,457 ) Balances at December 31, 2021 (restated) 573,282 ​ $ — 9,993,135 ​ $ 10 ​ $ 422,960 ​ $ ( 748 ) ​ $ ( 384,529 ) ​ $ 37,693 Issue of common stock in At Market Issuance sales agreement, net of expenses ​ — ​ — 541,542 ​ 0 ​ 478 ​ — ​ — ​ 478 Reclassification of redeemable common stock ​ — ​ — ( 1,130,000 ) ​ ( 1 ) ​ ( 1,635 ) ​ — ​ — ​ ( 1,636 ) Accretion on redeemable comon stock — ​ — — ​ — ​ ( 135 ) ​ — ​ — ​ ( 135 ) Stock-based compensation ​ — ​ — 17,412 ​ — ​ 1,506 ​ — ​ — ​ 1,506 Preferred stock dividends ​ — ​ — — ​ — ​ ( 201 ) ​ — ​ — ​ ( 201 ) Unrealized foreign exchange on intercompany loans — ​ — — ​ — ​ — ​ ( 21,166 ) ​ — ​ ( 21,166 ) Translation adjustment — ​ — — ​ — ​ — ​ 20,598 ​ — ​ 20,598 Loss for the period — ​ — — ​ — ​ — ​ — ​ ( 21,198 ) ​ ( 21,198 ) Balances at December 31, 2022 (restated) 573,282 ​ $ — 9,422,089 ​ $ 9 ​ $ 422,973 ​ $ ( 1,316 ) ​ $ ( 405,727 ) ​ $ 15,939 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 83 Table of Contents CYCLACEL PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2022 2021 ​ ​ ​ ​ ​ ​ As restated (see Note 1) Operating activities: ​ ​ ​ ​ Net loss ​ $ ( 21,198 ) ​ $ ( 18,457 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Depreciation ​ ​ 32 ​ ​ 43 Stock-based compensation ​ ​ 1,506 ​ ​ 1,157 Changes in lease liability ​ ​ 40 ​ ​ 172 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Prepaid expenses and other assets ​ ​ ( 3,784 ) ​ ​ ( 4,480 ) Accounts payable, accrued and other current liabilities ​ ​ 2,577 ​ ​ 3,025 Net cash used in operating activities ​ ​ ( 20,827 ) ​ ​ ( 18,540 ) Investing activities: ​ ​ ​ ​ Purchase of property, plant and equipment ​ ​ ( 7 ) ​ ​ ( 27 ) Net cash used in investing activities ​ ​ ( 7 ) ​ ​ ( 27 ) Financing activities: ​ ​ ​ ​ Proceeds, net of issuance costs, from issuing common stock and warrants ​ ​ 3,199 ​ ​ 17,371 Proceeds from the exercise of stock options and warrants, net of issuance costs ​ ​ — ​ ​ 4,567 Payment of preferred stock dividend ​ ​ ( 201 ) ​ ​ ( 201 ) Net cash provided by financing activities ​ ​ 2,998 ​ ​ 21,737 ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash and cash equivalents ​ ​ ( 378 ) ​ ​ ( 17 ) Net (decrease) increase in cash and cash equivalents ​ ​ ( 18,214 ) ​ ​ 3,153 Cash and cash equivalents, beginning of period ​ ​ 36,559 ​ ​ 33,406 Cash and cash equivalents, end of period ​ $ 18,345 ​ $ 36,559 Supplemental cash flow information: ​ ​ ​ ​ Cash received during the period for: ​ ​ ​ ​ Interest ​ $ 211 ​ $ 17 Research & Development Tax Credits ​ $ 3,312 ​ $ 1,358 ​ ​ ​ ​ ​ ​ ​ Non cash financing activities: ​ ​ ​ ​ Accrual of preferred stock dividends ​ $ 50 ​ $ 50 Deemed dividend on redeemable common stock ​ $ 135 ​ $ - ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 84 Table of Contents CYCLACEL PHARMACEUTICALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Restatement of Prior Financial Information During recent contract renegotiations with a contract counterparty related to the Company’s 065-102 study and the consequential return to the Company of the original contract deposit of $1.0 million and the subsequent preparation of the Company’s financial statements for the period ended September 30, 2023, the Company identified an error in the accounting treatment of contract deposit-related invoices during the period September 2021 to November 2021. Vendor invoices totaling $549,295 related to contractually required deposits received during September 2021 and November 2021 were incorrectly expensed to the income statement instead of being capitalized on the balance sheet as non-current deposits. The amounts were contractually required to remain on deposit until the end of the related contract. This resulted in an overstatement of operating loss of $293,845 for the quarter ended September 30, 2021 and $255,450 for the quarter ended December 31, 2021 and a corresponding understatement of non-current deposits in the same periods. In addition, the Company’s UK research and development tax credits were consequentially overstated by $64,000 for the quarter ended September 30, 2021 and $55,000 for the quarter ended December 31, 2021. On August 12, 2022, we became aware that our shelf registration statement on Form S-3 had expired on June 21, 2022. Prior to becoming aware of the expiration, but following the expiration, we sold an aggregate of 1,987,100 shares of our common stock at market prices for aggregate proceeds of approximately $2,721,187. The sale of these shares were subject to potential rescission rights by certain stockholders. As a result of these rescission rights, we classified 3,117,100 shares (including 1,130,000 previously issued and outstanding shares sold for which the Company did not receive proceeds and which were reclassified to temporary equity as of September 30, 2022), with an aggregate redemption value of $4,494,496 of our common stock as stock outside stockholders equity. In connection with the third quarter financial statement close process, the Company determined that it should have recorded 798,200 shares subject to potential rescission rights as temporary equity as of June 30, 2022 and these should have been reclassified out of temporary equity as of June 30, 2023 upon expiration of the rescission rights. The Company had recorded reclassification of these 798,200 shares sold in the second quarter of 2022, which had a redemption value of $1,105,507 to temporary equity as of September 30, 2022. Moreover, the Company has determined that it did not properly account for the $135,000 of aggregate fees paid in connection with the sale of those shares as a dividend to those stockholders. The $135,000 of fees should be accounted for as accretion to the maximum redemption amount of the shares subject to potential rescission in the computation of loss per share as of June 30, 2022 and September 30, 2022 and the year ended December 31, 2022, as well as of March 31, 2023 and June 30, 2023, as is required by ASC 480-10-S99-3A(20). The Company has restated herein its consolidated financial statements as of December 31, 2022 and 2021 and for each of the years ended December 31, 2022 and 2021 and to its consolidated financial statements for the quarter ended September 30, 2021 and each of the quarters ended March 31, 2022, June 30, 2022 and September 30, 2022, in accordance with Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, for the matters discussed above as well as other immaterial items. 85 Table of Contents The effect of the error corrections are as follows (in thousands, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ 2022 ​ ​ ​ 2022 CONSOLIDATED BALANCE SHEETS ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current deposits ​ $ 2,916 ​ $ 549 ​ $ 3,465 Total assets ​ $ 27,501 ​ $ 549 ​ $ 28,050 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Accrued and other current liabilities ​ $ 4,831 ​ $ 119 ​ $ 4,950 Total current liabilities ​ 7,392 ​ 119 ​ ​ 7,511 Total liabilities ​ $ 7,498 ​ $ 119 ​ $ 7,617 Accumulated deficit ​ ( 406,157 ) ​ 430 ​ ​ ( 405,727 ) Total stockholders’ equity ​ 15,509 ​ 430 ​ ​ 15,939 Total liabilities and stockholders’ equity ​ $ 27,501 ​ $ 549 ​ $ 28,050 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ ​ ​ 2022 CONSOLIDATED STATEMENTS OF INCOME As previously reported ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss applicable to common shareholders ​ $ ( 21,399 ) ​ $ — ​ $ ( 21,399 ) Basic and diluted earnings per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss per share - basic and diluted (common shareholders) ​ $ ( 1.90 ) ​ $ ( 0.01 ) ​ $ ( 1.91 ) Net Loss per share - basic and diluted (redeemable common shareholders) ​ $ — ​ $ ( 1.82 ) ​ $ ( 1.82 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY 2022 ​ ​ ​ 2022 ​ ​ As previously reported ​ Adjustments As Restated Accumulated Deficit (Balances at December 31, 2022) ​ $ ( 406,157 ) ​ $ 430 ​ $ ( 405,727 ) Total Stockholders' Equity (Balances at December 31, 2022) ​ $ 15,509 ​ $ 430 ​ $ 15,939 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ 2021 ​ ​ ​ 2021 CONSOLIDATED BALANCE SHEETS ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current deposits ​ $ 1,551 ​ $ 549 ​ $ 2,100 Total assets ​ $ 42,587 ​ $ 549 ​ $ 43,136 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Accrued and other current liabilities ​ $ 3,177 ​ $ 119 ​ $ 3,296 Total current liabilities ​ 5,294 ​ 119 ​ ​ 5,413 Total liabilities ​ $ 5,324 ​ $ 119 ​ $ 5,443 Accumulated deficit ​ ( 384,959 ) ​ 430 ​ ​ ( 384,529 ) Total stockholders’ equity ​ 37,263 ​ 430 ​ ​ 37,693 Total liabilities and stockholders’ equity ​ $ 42,587 ​ $ 549 ​ $ 43,136 ​ 86 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 ​ ​ ​ 2021 CONSOLIDATED STATEMENTS OF INCOME As previously reported ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 15,477 ​ $ ( 549 ) ​ $ 14,928 Total operating expenses ​ 22,938 ​ ( 549 ) ​ ​ 22,389 Operating loss ​ ( 22,938 ) ​ 549 ​ ​ ( 22,389 ) Loss before taxes ​ ( 22,734 ) ​ 549 ​ ​ ( 22,185 ) Income tax benefit ​ 3,847 ​ ( 119 ) ​ ​ 3,728 Net loss ​ ( 18,887 ) ​ 430 ​ ​ ( 18,457 ) Net loss applicable to common shareholders ​ $ ( 19,088 ) ​ $ 430 ​ $ ( 18,658 ) Basic and diluted earnings per common share: ​ ​ ​ ​ Net loss per share – basic and diluted ​ $ ( 2.14 ) ​ $ 0.05 ​ $ ( 2.09 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 ​ ​ ​ 2021 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 18,887 ) ​ $ 430 ​ $ ( 18,457 ) Comprehensive loss ​ $ (18,887) ​ $ 430 ​ $ (18,457) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY 2021 ​ ​ ​ 2021 ​ ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated Deficit (Loss for the period) ​ $ ( 18,887 ) ​ $ 430 ​ $ ( 18,457 ) Accumulated Deficit (Balances at December 31, 2021) ​ $ ( 384,959 ) ​ $ 430 ​ $ ( 384,529 ) Total Stockholders' Equity (Balances at December 31, 2021) ​ $ 37,263 ​ $ 430 ​ $ 37,693 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 ​ ​ ​ 2021 CONSOLIDATED STATEMENTS OF CASH FLOWS ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 18,887 ) ​ $ 430 ​ $ ( 18,457 ) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Prepaid expenses and other assets ​ ​ ( 3,931 ) ​ ​ ( 549 ) ​ ​ ( 4,480 ) Accounts payable, accrued and other current liabilities ​ ​ 2,906 ​ ​ 119 ​ ​ 3,025 ​ With respect to the consolidated statements of cash flows for 2021, all adjustments are to line items within operating cash flows and there was no impact to the subtotal of operating, investing or financing cash flows for such periods. The remainder of the notes to the Company’s consolidated financial statements have been updated and restated, as applicable, to reflect the impacts of the restatement described above and have been notated as such. 2. Organization of the Company and Basis of Presentation 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. 87 Table of Contents 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. As of December 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. The Company is subject to risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, the fact that drug candidates developed by the Company typically will require approvals or clearances from the U.S. Food and Drug Administration, the European Medicines Agency or other similar regulatory agencies in other countries prior to commercial sales. There can be no assurance that the Company’s drug candidates will receive any of the required approvals or clearances. If any of the Company’s drug candidates are denied approval or clearance or such approval is delayed, or if the Company is unable to obtain the necessary financing to complete development and approval, there will be a material adverse impact on the Company’s financial condition and results of operations. Through December 31, 2022, the Company has funded all of its operations and capital expenditures with proceeds from the issuance of public equity securities, private placements of securities, government grants, research and development tax credits, interest on investments, royalty income, product revenue and licensing revenue. The Company has incurred recurring losses since its inception, including net losses of $ 18.5 million and $ 21.2 million for the years ended December 31, 2021 and 2022, respectively. As of December 31, 2022, the Company had an accumulated deficit of $405.7 million. The Company expects to continue to generate operating losses for the foreseeable future due to, among other things, costs related to the clinical development of its drug candidates, its preclinical programs and its administrative organization. Going Concern Pursuant to the requirements of Accounting Standard Codification (ASC) 205-40, Presentation of Financial Statements-Going Concern , management is required at each reporting period to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effects of its plans sufficiently alleviate the substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern for one year after the date that these financial statements are issued. In performing its analysis, management excluded certain elements of its operating plan that cannot be considered probable. Under ASC 205-40, the future receipts of potential funding from future equity or debt issuances or by entering into partnership agreements cannot be considered probable at this time because these plans are not entirely within the Company’s control nor have they been approved by the Board of Directors as of the date of these consolidated financial statements. Based on the Company’s current operating plan, it is anticipated that cash and cash equivalents of $ 18.3 million as of December 31, 2022 will allow it to meet liquidity requirements to the fourth quarter of 2023. 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. While the Company has plans in place to mitigate this risk, which primarily consist of raising additional capital through a combination of public or private equity or debt financings or by entering into partnership agreements for further development of our drug candidates, there is no guarantee that it will be successful in these 88 Table of Contents mitigation efforts.The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP and include the financial statements of Cyclacel Pharmaceuticals, Inc. and all of the Company’s wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. 3. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Critical estimates include inputs used to determine clinical trial accruals and stock-based compensation expense. Cyclacel reviews its estimates on an ongoing basis. The estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ from these estimates. Cyclacel believes the judgments and estimates required by the following accounting policies to be significant in the preparation of the Company’s consolidated financial statements. Foreign Currency and Currency Translation Transactions that are denominated in a foreign currency are remeasured into the functional currency at the current exchange rate on the date of the transaction. Any foreign currency-denominated monetary assets and liabilities are subsequently remeasured at current exchange rates, with gains or losses recognized as foreign exchange (losses) gains in the statement of operations. The assets and liabilities of the Company’s international subsidiary are translated from its functional currency into United States dollars at exchange rates prevailing at the balance sheet date. Average rates of exchange during the period are used to translate the statement of operations, while historical rates of exchange are used to translate any equity transactions. Translation adjustments arising on consolidation due to differences between average rates and balance sheet rates, as well as unrealized foreign exchange gains or losses arising from translation of intercompany loans that are of a long-term-investment nature, are recorded in other comprehensive loss. Cash and Cash Equivalents Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company considers all highly liquid investments with an original maturity of three months or less at the time of initial purchase to be cash equivalents. The objectives of the Company’s cash management policy are to safeguard and preserve funds, to maintain liquidity sufficient to meet Cyclacel’s cash flow requirements and to attain a market rate of return. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents. The Company’s cash and cash equivalents balance at December 31, 2022 was $18.6 million and it maintains its cash accounts in several entities both within the United States and the United Kingdom. The cash balances for amounts held in the United States are insured by the Federal Deposit Insurance Corporation, or FDIC up to $ 250,000 per account. The Company has cash balances exceeding the balance insured by the FDIC that totaled approximately $ 17.8 million at December 31, 2022. The cash balances for amounts held in the United Kingdom are insured by the UK Government Financial Services Compensation Scheme, or FSCS up to £ 85,000 per account. The Company has cash balances exceeding the balance insured by the FSCS that totaled approximately $ 0.2 million at December 31, 2022. 89 Table of Contents Property and Equipment The components of property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the related assets, which are generally three to five years . Amortization of leasehold improvements is performed using the straight-line method over the shorter of the remaining lease term or the estimated useful life of the related assets, currently less than one year. Upon sale or retirement of assets, the costs and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss on sale is reflected as a component of operating income or loss. Expenditures for maintenance and repairs are charged to operating expenses as incurred. Impairment of Long-lived Assets The Company reviews property and equipment for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company assesses the recoverability of the potentially affected long-lived assets by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. Impairment, if any, is measured as the amount by which the carrying amount of a long-lived asset or asset group exceeds its fair value. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value are classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. ● Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of cash and cash equivalents, other receivables, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. Segments The Company is managed and operated as one business which is focused on using cell cycle, transcriptional regulation and mitosis control biology to develop innovative, targeted medicines for cancer and other proliferative diseases. The entire business is managed by a single management team that reports to the Chief Executive Officer. The Company does not operate separate lines of business with respect to any of its products or product candidates and the Company does not prepare discrete financial information with respect to separate products or product candidates or by location. Accordingly, the Company views its business as one reportable operating segment with development operations in two geographic areas, namely the United States and the United Kingdom. 90 Table of Contents Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers . The Company had no revenue in 2021 or 2022 under such contracts. Royalty income, if any, is recognized when the licensee sells the underlying product to which the royalty relates. Other Income Other income is primarily related to royalty income received under a historical Asset Purchase Agreement for activities which are not part of the Company’s ongoing operations and activities. Research and Development Costs Research and development expenses consist primarily of costs associated with the development of the Company’s product candidates, including upfront fees, milestones, compensation and other expenses for research and development personnel, supplies and development materials, costs for consultants and related contract research, facility costs and depreciation. Expenditures relating to research and development are expensed as incurred. Clinical Trial Accounting Data management and monitoring of the Company’s clinical trials are performed with the assistance of contract research organizations, or CROs or clinical research associates, or CRAs in accordance with the Company’s standard operating procedures. Typically, CROs and CRAs bill monthly for services performed, and others bill based upon milestones achieved. The Company accrues unbilled clinical trial expenses based on estimates of the level of services performed each period. Clinical trial costs related to patient enrollment are accrued as patients are entered into and progress through the trial. Patent Costs Patent prosecution costs are charged to general and administrative expenses as incurred as recoverability of such expenditure is uncertain. Leases The Company accounts for lease contracts in accordance with ASC 842. As of December 31, 2021 and 2022, all of the Company’s leases are classified as operating leases. The Company recognizes an asset for the right to use an underlying leased asset for the lease term and records lease liabilities based on the present value of the Company’s obligation to make lease payments under the lease. As the Company’s leases do not indicate an implicit rate, the Company uses a best estimate of its incremental borrowing rate to discount the future lease payments. The Company estimates its incremental borrowing rate based on observable information about risk-free interest rates that are the same tenure as the lease term, adjusted for various factors, including the effects of assumed collateral, the nature of how a loan would be repaid (e.g., amortizing versus bullet), and the Company’s credit risk. The Company evaluates options included in its lease agreements to extend or terminate the lease. The Company will reflect the effects of exercising those options in the lease term when it is reasonably certain that the Company will exercise that option. In assessing whether it is reasonably certain that the Company will exercise an option, the Company considers factors such as: ● The lease payments due in any optional period; ● Penalties for failure to exercise (or not exercise) the option; ● Market factors, such as the availability of similar assets and current rental rates for such assets; ● The nature of the underlying leased asset and its importance to the Company’s operations; and 91 Table of Contents ● The remaining useful lives of any related leasehold improvements. Lease expense for the Company’s operating leases is recognized on a straight-line basis over the lease term and is reported as a component of general and administrative expense. 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. Stock-based Compensation The Company measures all stock options and other stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards 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. Many awards granted by the Company vest ratably over three or four years . However, certain awards granted to members of the Company’s Board of Directors vest in their entirety on the one-year anniversary following the date of grant. Generally, the Company issues stock options and restricted stock awards to employees with only service-based vesting conditions and records the expense for these awards using the straight-line method. However, in certain years, the Company will grant share-based payment awards to employees that are dependent upon the fulfillment of certain clinical and financial conditions. In such instances where the performance condition must be met for the award to vest, the company only recognizes compensation expense when the award is probable of vesting (See Note 12 — Stock-Based Compensation). The Company classifies stock-based compensation expenses in its statement of operations in the same manner in which the award recipient’s payroll costs are classified. The Company accounts for forfeitures as they occur. The fair value of restricted stock and restricted stock units is determined based on the number of shares granted and the quoted price of the Company’s common stock on the date of grant. The determination of grant-date fair value for stock option awards is estimated using the Black-Scholes model, which includes variables such as the expected volatility of the Company’s share price, expected term of the award, interest rates, and dividend yields. The Company relies on its historical volatility as an input to the option pricing model as management believes that this rate will be representative of future volatility over the expected term of the options. The expected term assumption is estimated using past history of early exercise behavior and expectations about future behaviors. The weighted average risk-free interest rate represents the interest rate for treasury constant maturities published by the Federal Reserve Board. If the term of available treasury constant maturity instruments is not equal to the expected term of an employee option, Cyclacel interpolates a discount rate based on the two Federal Reserve securities closest to the expected term of the employee option. The expected dividend yield is zero, as the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends on common stock in the foreseeable future. Income Taxes The Company accounts for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. 92 Table of Contents The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not-to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves for unrecognized tax benefits that are considered appropriate as well as the related net interest and penalties. Credit is taken in the accounting period for research and development tax credits, which will be claimed from H.M. Revenue & Customs, or HMRC, the United Kingdom’s taxation and customs authority, in respect of qualifying research and development costs incurred in the same accounting period. Net Loss Per Common Share The Company calculates net loss per common share in accordance with ASC 260 “Earnings Per Share”. Basic and diluted net loss per common share was determined by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Beginning in the second quarter of 2022, the Company began calculating loss per share using the two-class method. The two-class method is an allocation formula that determines loss per share for each share of common stock and redeemable common stock (see note 15) , a participating security, according to dividends declared and participation rights in undistributed earnings. The reconciliation showing the loss per share attributable to common and redeemable common stockholders is discussed in Note 15 of the Notes to the Consolidated Financial Statements accompanying this Annual Report on Form 10-K. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to common stockholders for the years ended December 31, 2021 and 2022. 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 as applicable, to arrive at comprehensive income (loss). No taxes were recorded on items of other comprehensive income (loss). There were no reclassifications out of other comprehensive income (loss) during the years ended December 31, 2021 and 2022. Recently Issued Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848)”. This standard provides optional expedients and exceptions for applying 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. Following the issuance of ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”, the relief remains effective for all entities as of March 12, 2020 through December 31, 2024. The Company does not currently have any contracts affected by this guidance. 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 93 Table of Contents ASC 958-605 or based on International Accounting Standard No. 20 . ASU 2021-10 which became effective for us on January 1, 2022. The Company has evaluated the effect that this guidance has on its Consolidated Financial Statements and has 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 the Company 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 . 4. Significant Contracts Distribution, Licensing and Research Agreements The Company has entered into licensing and similar agreements with academic and research organizations. Under the terms of these agreements, the Company has received licenses to technology and patent applications. The Company may be required to pay royalties on future sales of products employing the technology or falling under claims of patent applications. Under a 2003 license agreement, the Company licensed certain patent rights for sapacitabine. The Company will not be pursuing further development of sapacitabine and has notified Daiichi Sankyo Co., Ltd., the licensor, that it wishes to terminate the sapacitabine license agreement effective as of March 23, 2023 for commercial reasons. The three-year term of the Clinical Collaboration Agreement, or CCA with The University of Texas MD Anderson Cancer Center, or MD Anderson ended in September 2021, in accordance with its terms. The main objective of the CCA was to clinically evaluate the safety and efficacy of three Cyclacel medicines in patients with hematological malignancies, including chronic lymphocytic leukemias, acute myeloid leukemias, myelodysplastic syndromes and other advanced leukemias. Under the terms of the CCA, MD Anderson conducted four clinical studies and under the risk-sharing agreement MD Anderson assumed the patient costs for all studies and Cyclacel, who is the sponsor, provided investigational drugs and other limited support. The agreement provided that the Company would make certain payments to MD Anderson upon first commercial sale in specific indications studied in the alliance. There were no such payments earned in 2021 or 2022. 5. Cash and Cash Equivalents The following is a summary of cash and cash equivalents at December 31, 2021 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2022 2021 Cash ​ $ 13,798 ​ $ 32,082 Cash equivalents ​ 4,547 ​ 4,477 Total cash and cash equivalents ​ $ 18,345 ​ $ 36,559 ​ Cash equivalents are made up entirely of money market funds. 94 Table of Contents 6. Fair Value of Financial Assets and Liabilities The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements ​ ​ ​ ​ as of December 31, 2021 Using: ​ ​ ​ ​ Level 1 Level 2 Level 3 Total Assets: ​ ​ ​ ​ Cash equivalents ​ $ 4,477 ​ $ — ​ $ — ​ $ 4,477 Total Assets ​ $ 4,477 ​ $ — ​ $ — ​ $ 4,477 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements ​ ​ ​ ​ as of December 31, 2022 Using: ​ ​ ​ ​ Level 1 Level 2 Level 3 Total Assets: ​ ​ ​ ​ Cash equivalents ​ $ 4,547 ​ $ — ​ $ — ​ $ 4,547 Total Assets ​ $ 4,547 ​ $ — ​ $ — ​ $ 4,547 ​ 7. Prepaid Expenses and Other Assets The following is a summary of prepaid expenses and other current assets at December 31, 2021 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Research and development tax credit receivable ​ $ 4,664 ​ $ 3,727 Prepayments and VAT receivable ​ ​ 976 ​ 577 Other current assets ​ 426 ​ ​ 79 ​ ​ $ 6,066 ​ $ 4,383 ​ As at December 31, 2022, the Company had non-current assets of $ 3.5 million, which comprised clinical trial deposits held by a contract research organization in relation to the Company’s Phase 1/2 clinical trials. 8. Property and Equipment Property and equipment consisted of the following at December 31, 2021 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ Lives in years 2022 2021 Leasehold improvements ​ 2 to 15 ​ $ 6 ​ $ 6 Office equipment and furniture 3 to 5 ​ 409 ​ 419 ​ ​ ​ ​ 415 ​ 425 Less: accumulated depreciation and amortization ​ ( 383 ) ​ ( 361 ) ​ ​ ​ ​ $ 32 ​ $ 64 ​ ​ 95 Table of Contents 9. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following at December 31, 2021 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 ​ ​ ​ As restated (see Note 1) ​ ​ As restated (see Note 1) Accrued research and development ​ $ 3,611 ​ $ 2,310 Accrued legal and professional fees ​ 333 ​ 233 Other current liabilities ​ 1,006 ​ 753 ​ ​ $ 4,950 ​ $ 3,296 ​ ​ Other current liabilities include accrued payroll costs of approximately $ 680,000 and $ 495,000 for the years ended December 31, 2022 and 2021 respectively. 10. Commitments and Contingencies General Please refer to Note 4 — Significant Contracts for further discussion of certain of the Company’s commitments and contingencies. Leases In October 2000, the Company entered into a twenty-five-year lease for its research and development facility in Dundee, Scotland. In May 2021, the Company vacated its former facility in Dundee, Scotland and assigned the related lease and all future commitments to a third party. Accordingly, the Company derecognized the associated right-of-use lease asset of $ 1.1 million as well as the associated lease liability of $ 1.2 million, with the balancing $ 0.1 million credited to general and administrative expenses. Costs of $ 0.4 million relating to the assignment of the lease were also recorded within the consolidated statement of operations. In April 2022, the Company extended for a further three years , expiring in July 2025, the lease for its corporate headquarters facility in Berkeley Heights, New Jersey. Rent expense, which includes lease payments related to the Company’s research and development facilities and corporate headquarters and other rent related expenses was $ 0.2 million for the year ended December 31, 2021 and decreased to $ 0.1 million for the year ended December 31, 2022, the reduction due to the assignment of the Company’s former facility in Dundee, Scotland. Rent expense is reported as a component of General and Administrative expense. The following is a summary of the Company’s future contractual obligations and commitments relating to its facilities lease as at December 31, 2022 (in thousands): ​ ​ ​ ​ ​ Operating Lease ​ Obligation 2023 ​ $ 63 2024 ​ 65 2025 ​ 38 2026 ​ — 2027 ​ — thereafter ​ — Total future minimum lease obligation ​ $ 166 ​ ​ 96 Table of Contents 11. Stockholders’ Equity The Company has completed the following equity issuances during the periods presented in the consolidated financial statements. 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 the Company could issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $ 50.0 million through Cantor as the sales agent. Cantor could 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. On August 12, 2022, the Company became aware that the shelf registration statement on Form S-3 (file number 333-231923) (the “Registration Statement”) associated with this Sales Agreement had expired on June 21, 2022. Prior to becoming aware of the expiration, the Company sold an aggregate of 1,987,100 shares of its common stock at the market price, following the expiration of the Registration Statement and through August 12, 2022, for aggregate proceeds of approximately $ 2,721,187 . There was no sale of shares post August 12, 2022. The sale of these shares may be subject to potential rescission rights by certain stockholders. As of December 31, 2022, there have been no claims or demands to exercise such rights. As a result of these potential rescission rights, the Company classified 3,117,100 shares (including 1,130,000 shares sold for which the Company did not receive proceeds and which were reclassified to temporary equity during the third quarter of 2022), with an aggregate redemption value of $4,494,496 of its common as stock outside stockholders’ equity. The reclassification of these shares shall remain for a period of one year from transaction date. These shares have been treated as issued and outstanding for earnings per share and financial reporting purposes. On August 15, 2022, due to expiry of the Registration Statement, the Sales Agreement was mutually terminated. A total of 3,281,067 shares, for gross proceeds of approximately $ 7.6 million, had been sold pursuant to the Sales Agreement, including 2,528,642 shares during the year ended December 31, 2022 for gross proceeds of approximately $ 3.4 million. 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. Warrants December 2020 Warrants As of December 31, 2022, warrants to purchase 669,854 shares of common stock issued 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. 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 year ended December 31, 2022 or December 31, 2021. 97 Table of Contents April 2020 Warrants As of December 31, 2022, 2,190,000 warrants issued 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 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 year ended December 31, 2022, and a total of 909,000 warrants exercised during the year ended December 31, 2021. July 2017 Warrants As of December 31, 2022, 374,525 warrants issued in connection with a 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. 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 portion of these warrants exercised during each of the years ended December 31, 2021 and 2022. Series B Preferred Stock 237,745 shares of the Company’s Series B Preferred Stock were issued in a December 2020 Securities Purchase Agreement. Each share of Series B Preferred Stock shall initially be convertible into five shares of Common Stock (the “Conversion Shares”), subject to adjustment in accordance with the Certificate of Designation. 98 Table of Contents 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 Common Stock. Except as otherwise required by law, the Series B Preferred Stock does not have voting rights. 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. The Purchaser may convert shares of Series B Preferred Stock through a conversion into shares of Common Stock if and solely to the extent that such conversion would not result in the Purchaser beneficially owning in excess of 9.99 % of then-outstanding Common Stock or aggregate voting power of the Company (such limitation, the “Ownership Limitation”) and any portion in excess of such limitation will remain outstanding as Series B Preferred Stock. Series A Preferred Stock 8,872 shares of the Company’s Series A Preferred Stock were issued in a July 2017 Underwritten Public Offering. Each share of Series A Preferred Stock is convertible at any time at the option of the holder thereof, into a number of shares of common stock determined by dividing $ 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. As of December 31, 2021 and 2022, 264 shares of the Series A Preferred Stock remain issued and outstanding. The 264 shares of Series A Preferred Stock issued and outstanding at December 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 may participate on an as-converted-to-common-stock basis in any distribution of assets of the Company. The Company shall not pay any dividends on shares of common stock (other than dividends in the form of common stock) unless and until such time as dividends on each share of Series A Preferred Stock are paid on an as-converted basis. There is no restriction on the Company’s ability to repurchase shares of Series A Preferred Stock while there is any arrearage in the payment of dividends on such shares, and there are no sinking fund provisions applicable to 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, or 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 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. 6 % Convertible Exchangeable Preferred Stock As of December 31, 2022, there were 335,273 shares of the Company’s 6 % Convertible Exchangeable, or Preferred Stock issued and outstanding at an issue price of $ 10.00 per share. Dividends on the Preferred Stock are cumulative from the date of original issuance at the annual rate of 6 % of the liquidation preference of the Preferred Stock, and if declared, 99 Table of Contents 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 Preferred Stock has a liquidation preference of $ 10.00 per share, plus accrued and unpaid dividends. The Company’s Board of Directors considers numerous factors in determining whether to declare the quarterly dividend pursuant to the Certificate of Designations governing the terms of the Company’s Preferred Stock, including the requisite financial analysis and determination of a surplus. Accumulated but unpaid dividends in arrears on preferred stock were $ 0.7 million, or $ 1.95 per share, of preferred stock, as of December 31, 2022. The Preferred Stock is convertible at the option of the holder at any time into the Company’s shares of common stock at a conversion rate of approximately 0.00025 shares of common stock for each share of Preferred Stock based on a price of $ 39,480 . The Company has reserved 85 shares of common stock for issuance upon conversion of the remaining shares of Preferred Stock outstanding at December 31, 2022. The shares of previously converted Preferred Stock have been retired, cancelled and restored to the status of authorized but unissued shares of preferred stock, subject to reissuance by the Board of Directors as shares of Preferred Stock of one or more series. The Company may automatically convert the Preferred Stock into common stock if the closing price of the Company’s common stock has exceeded $ 59,220 , which is 150 % of the conversion price of the 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 Certificate of Designations governing the Preferred Stock provides that if the Company fails to pay dividends on its Preferred Stock for six quarterly periods, holders of Preferred Stock are entitled to nominate and elect two directors to the Company’s Board of Directors. This right accrued to the holders of Preferred Stock as of August 2, 2010 and two directors were nominated and elected at the annual meeting held on May 24, 2011. The 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 Preferred Stock in whole or in part, out of funds legally available at the redemption price of $ 10.00 per share. The 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, or Exchange Date for the Company’s 6 % Convertible Subordinated Debentures, or Debentures at the rate of $ 10.00 principal amount of Debentures for each share of Preferred Stock. The Debentures, if issued, will mature 25 years after the Exchange Date and have terms substantially similar to those of the Preferred Stock. No such exchanges have taken place as of December 31, 2022. For the year ended December 31, 2022, the company declared dividends of $ 0.15 per share quarterly on its 6 % Convertible Exchangeable Preferred Stock. These dividends were paid on May 1, August 1 and November 1, 2022, and February 1, 2023, respectively. 100 Table of Contents 12. Stock-Based Compensation Stock based compensation has been reported within expense line items on the consolidated statement of operations for the years ended 2021 and 2022 as shown in the following table (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, ​ ​ 2022 2021 General and administrative ​ $ 1,051 ​ $ 819 Research and development ​ ​ 455 ​ ​ 338 Stock-based compensation costs before income taxes ​ $ 1,506 ​ $ 1,157 ​ 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 replaced 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 increase of 500,000 shares of common stock to be reserved for issuance under the 2018 Plan. As of December 31, 2022, the Company has 392,396 shares of the Company’s common stock reserved and available for issuance under the 2018 Plan, 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 December 31, 2022, 120,000 shares under the Inducement Plan have been issued, leaving a remaining reserve of 80,000 shares. Option Grants and Exercises There were 552,153 options granted during the year ended December 31, 2021, all issued under the 2018 Plan. There were 522,337 options granted during the year ended December 31, 2022, all issued under the 2018 Plan. The weighted average grant-date fair values of options granted during the years ended December 31, 2021 and 2022 were $ 3.36 and $ 1.76 , respectively. As of December 31, 2022, the total remaining unrecognized compensation cost related to the unvested stock options with service conditions amounted to approximately $ 2.0 million, which will be amortized over the weighted-average remaining requisite service period of 1.4 years. During the years ended December 31, 2021 and 2022, the Company did not settle any equity instruments with cash. There were 6,600 stock option exercises during the year ended 2021. There were no stock option exercises during the year ended 2022. No income tax benefits were recorded for the years ended December 31, 2021 and 2022. 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. 101 Table of Contents 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, 2020 602,683 ​ $ 11.01 9.39 ​ $ 1,861 Granted ​ 552,153 ​ $ 4.26 — ​ — Exercised ​ ( 6,600 ) ​ $ 3.35 — ​ — Cancelled/forfeited ​ ( 48,879 ) ​ $ 14.18 — ​ — Options outstanding at December 31, 2021 1,099,357 ​ $ 7.53 8.99 ​ $ 189 Granted 522,337 ​ $ 2.41 — ​ — Cancelled/forfeited ( 11,104 ) ​ $ 10.49 ​ ​ ​ Options outstanding at December 31, 2022 1,610,590 ​ $ 5.85 8.34 ​ $ — Unvested at December 31, 2022 872,957 ​ $ 3.09 8.92 ​ $ — Vested and exercisable at December 31, 2022 737,633 ​ $ 9.11 7.67 ​ $ — ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ Year ended ​ December 31, 2022 December 31, 2021 Expected term (years) 5  –  6 5  –  6 Risk free interest rate 1.370 % –  3.605 % ​ 0.420 %  –  1.290 % Volatility 86 % –  93 % ​ 95 % –  102 % Expected dividend yield over expected term 0.00 % ​ 0.00 % Resulting weighted average grant date fair value $ 1.76 ​ $ 3.36 ​ ​ ​ ​ ​ ​ Restricted Stock Units The Company issued 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. 102 Table of Contents The Company issued an additional 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 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 December 31, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Average ​ ​ Restricted Grant Date ​ ​ Stock Units ​ Value Per Share Restricted Stock Units outstanding at December 31, 2020 16,524 ​ $ 11.30 Granted 18,992 ​ ​ 6.69 Cancelled/forfeited ( 16,524 ) ​ ​ 15.20 Restricted Stock Units outstanding at December 31, 2021 18,992 ​ $ 6.69 Granted ​ 118,665 ​ ​ 1.11 Restricted Stock Units outstanding at December 31, 2022 ​ 137,657 ​ $ 1.88 ​ ​ ​ ​ ​ ​ Unvested at December 31, 2022 120,248 ​ $ 1.18 Vested and exercisable at December 31, 2022 17,409 ​ $ 6.69 ​ ​ ​ ​ 13. Employee Benefit Plans Pension Plan The Company operates a defined contribution group personal pension plan for all of its UK based employees. Company contributions to the plan totaled approximately $ 42,000 and $ 44,000 for the years ended December 31, 2021 and 2022, respectively. 401(k) Plan The 401(k) Plan provides for matching contributions by the Company in an amount equal to the lesser of 100 % of the employee’s deferral or 6 % of the U.S. employee’s qualifying compensation. The 401(k) Plan is intended to qualify under Section 401(k) of the Internal Revenue Code, so that contributions to the 401(k) Plan by employees or by the Company, and the investment earnings thereon, are not taxable to the employees until withdrawn. Company matching contributions are tax deductible by the Company when made. In 2022, Company employees could elect to reduce their current compensation by up to the statutorily prescribed annual limit of $ 20,500 if under 50 years old and $ 27,000 if over 50 years old and to have those funds contributed to the 401(k) Plan. The Company made contributions of approximately $ 71,000 and $ 95,000 to the 401(k) Plan for the years ended December 31, 2021 and 2022, respectively. 14. Taxes (Loss) income from continuing operations before taxes is comprised of the following components for the years ended December 31, 2021 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 ​ ​ ​ ​ ​ ​ As restated (see Note 1) Domestic ​ $ ( 1,981 ) ​ $ ( 1,622 ) Foreign ​ ( 23,934 ) ​ ( 20,563 ) Loss from continuing operations before taxes ​ $ ( 25,915 ) ​ $ ( 22,185 ) ​ 103 Table of Contents The benefit (provision) for income taxes from continuing operations consists of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 ​ ​ ​ ​ ​ ​ As restated (see Note 1) Current  –  domestic ​ $ ( 2 ) ​ $ ( 2 ) Current  –  foreign ​ 4,719 ​ 3,730 Current  –  total ​ 4,717 ​ 3,728 Deferred  –  domestic ​ — ​ — Income tax benefit ​ $ 4,717 ​ $ 3,728 ​ The Company has incurred a taxable loss in each of the operating periods since incorporation. The income tax credits of $ 3.7 million and $ 4.7 million for the years ended December 31, 2021 and 2022, respectively, represent UK research and development (“R&D”) tax credits for expenditures in the United Kingdom that are refundable. A reconciliation of the (benefit) provision for income taxes from continuing operations with the amount computed by applying the statutory federal tax rate to loss from continuing operations before income taxes is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 ​ ​ ​ ​ ​ ​ As restated (see Note 1) Loss from continuing operations before taxes ​ $ ( 25,915 ) ​ $ ( 22,185 ) Income tax expense computed at statutory federal tax rate ​ ( 5,442 ) ​ ( 4,659 ) Disallowed expenses and non-taxable income ​ 369 ​ 328 Loss surrendered to generate R&D credit ​ 6,169 ​ 4,892 Additional research and development tax relief ​ ( 4,719 ) ​ ( 3,730 ) Stock Compensation ​ ​ 105 ​ ​ — Change in valuation allowance ​ 2,310 ​ 15,260 Foreign items, including change in tax rates, and other ​ ( 20 ) ​ ( 181 ) Change in UK Tax Rate ​ ( 2 ) ​ ( 12,831 ) Other foreign items ​ ( 3,487 ) ​ ( 2,807 ) ​ ​ $ ( 4,717 ) ​ $ ( 3,728 ) ​ Significant components of the Company’s deferred tax assets are shown below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 ​ ​ ​ ​ ​ ​ As restated (see Note 1) Net operating loss and tax credit carryforwards ​ $ 53,092 ​ $ 56,593 Depreciation, amortization and impairment of property and equipment ​ 61 ​ 34 Stock options ​ 153 ​ 67 Right of use asset ​ ​ ( 40 ) ​ ​ ( 32 ) Lease liability ​ ​ 40 ​ ​ 32 Deferred tax assets ​ 53,306 ​ 56,694 Valuation allowance for deferred tax assets ​ ( 53,306 ) ​ ( 56,694 ) Net deferred tax assets ​ $ — ​ $ — ​ A valuation allowance has been established, as realization of such assets is uncertain. The Company’s management evaluated the positive and negative evidence bearing upon the realizability of its deferred assets, and has determined that, at present, the Company may not be able to recognize the benefits of the deferred tax assets under the more likely than not criteria. Accordingly, a valuation allowance of approximately $53.3 million has been established at December 31, 2022. The valuation allowance has decreased by approximately $ 3.3 million in 2022. 104 Table of Contents As specified in the Tax Reform Act of 1986, due to ownership changes, the Company’s ability to utilize its net operating loss (“NOL”) carryforwards may be limited. Utilization of the NOLs may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership change limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. The Company completed a Section 382 study and has concluded that an ownership change occurred on March 4, 2015 and July 21, 2017. As a result of the ownership changes, the NOLs are limited. As of December 31, 2021 and 2022, the Company has federal NOLs of $ 2.5 million and $ 3.6 million, respectively. The federal NOLs have an indefinite life. As of December 31, 2021 and 2022, the Company has state NOLs of $ 21.1 million and $ 22.1 million, respectively, which will begin to expire in 2028 . As of December 31, 2021 and 2022, the Company had foreign NOLs of $ 218.3 million and $ 203.0 million, respectively. The Company’s foreign NOL’s do not expire under UK tax law however the use of these NOLs is restricted to an annual £ 5 million allowance in each standalone company or group and above this allowance, there will be a 50 % restriction in the profits that can be covered by losses brought forward. Management has evaluated all significant tax positions at December 31, 2021 and 2022 and concluded that there are no material uncertain tax positions. The Company would recognize both interest and penalties related to unrecognized benefits in income tax expense. The Company has not recorded any interest and penalties on any unrecognized tax benefits since its inception. Tax years 2018 - 2021 remain open to examination by major taxing jurisdictions to which the Company is subject, which are primarily in the United Kingdom and the United States, as carryforward attributes generated in years past may still be adjusted upon examination by the United Kingdom’s H.M. Revenue & Customs, the Internal Revenue Service (“IRS”) or state tax authorities. The Company is currently not under examination by the IRS or any other jurisdictions for any tax years. We have not provided a deferred tax liability on the cumulative amount of unremitted foreign earnings of international subsidiaries because it is our intent to permanently reinvest such earnings outside of the United States. The Company has an aggregate deficit in foreign earnings and therefore has not provided any deferred tax liability on its outside book-tax basis difference in its foreign subsidiaries and because it is also our intent to permanently reinvest any earnings outside of the United States. We would recognize this deferred tax liability if we were to experience a change in circumstances producing a change in that intention. As a result of the repeal of Section 902 foreign tax credit under the Tax Act, future distributions would not be offset by a foreign tax credit. On December 27, 2020, the Consolidations Appropriations Act, 2021 (“CAA” or the “Act”) was signed into law and included government appropriations and additional economic stimulus. Notable provisions of the CAA included changes to the Paycheck Protection Program including legislation concluding that expenses used to obtain loan forgiveness are tax deductible, as well as extension and expansion of other COVID-19 relief programs and payroll tax credits. The Company evaluated the various aspects of the Act and did not pursue any payroll tax credits or deferrals. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act provides for economic and cash liquidity stimulus through various means including payroll tax credits, payroll tax deferral, short term changes in tax deductibility of interest expenses among other things. The Act also permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. Previously, NOLs generated after December 31, 2017 were limited to 80% of taxable income in future years. In addition, the CARES Act allows NOLs incurred in 2018, 2019 and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The CARES Act had no material impact on the Company. Effective for tax years beginning after December 31, 2021, taxpayers are required to capitalize any expenses incurred that are considered incidental to research and experimentation (R&E) activities under IRC Section 174. While taxpayers historically had the option of deducting these expenses under IRC Section 174, the December 2017 Tax Cuts 105 Table of Contents and Jobs Act mandates capitalization and amortization of R&E expenses for tax years tax years beginning after December 31, 2021. Expenses incurred in connection with R&E activities in the US must be amortized over a 5-year period if incurred, and R&E expenses incurred outside the US must be amortized over a 15-year period. R&E activities are broader in scope than qualified research activities that are considered under IRC Section 41 (relating to the research tax credit). For the year ended December 31, 2022, the Company performed an analysis based on available guidance and determined that the company does not have any R&E expenses in the US. The company will continue to monitor this issue for future developments, but it does not expect R&E capitalization and amortization to require it to pay cash taxes now or in the near future. 15. Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders was calculated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ ​ ​ ​ 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ As restated (see Note 1) ​ ​ As restated (see Note 1) ​ ​ ​ ​ ​ ​ Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 21,198 ) $ ( 18,457 ) ​ ​ ​ ​ ​ ​ Dividend on convertible exchangeable preferred shares ​ ​ ( 201 ) ​ ( 201 ) ​ ​ ​ ​ ​ ​ Net loss attributable to common shareholders ​ $ ( 21,399 ) $ ( 18,658 ) ​ ​ ​ ​ ​ ​ Deemed dividend on accretion of redeemable common stock ​ ​ ( 135 ) ​ ​ — ​ ​ ​ ​ ​ ​ Remaining undistributed loss ​ ​ ( 21,534 ) ​ ​ ( 18,658 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, 2022 ​ Years ended December 31, 2021 ​ ​ Common Shareholders Redeemable Common Shareholders ​ Common Shareholders Redeemable Common Shareholders Allocation of undistributed loss ​ $ ( 18,872 ) ​ $ ( 2,662 ) ​ $ ( 18,658 ) ​ $ - Deemed dividend on accretion of redeemable common stock ​ ​ ​ ​ ​ 135 ​ ​ ​ ​ ​ - Net loss attributable to common shareholders ​ ​ ( 18,872 ) ​ ​ ( 2,527 ) ​ ​ ( 18,658 ) ​ ​ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average number of common shares used in loss per share – basic and diluted ​ ​ 9,864,296 ​ ​ 1,391,381 ​ ​ 8,926,173 ​ ​ - Loss per share - basic and diluted ​ $ ( 1.91 ) $ ( 1.82 ) ​ $ ( 2.09 ) $ - Distributed earnings ​ ​ — ​ ​ 0.09 ​ ​ — ​ ​ - Undistributed loss ​ ​ ( 1.91 ) ​ ​ ( 1.91 ) ​ ​ ( 2.09 ) ​ ​ - Net loss per share ​ $ ( 1.91 ) ​ $ ( 1.82 ) ​ $ ( 2.09 ) ​ $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 106 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three And Six Months Ended June 30, 2022 (Unaudited) ​ ​ ​ ​ ​ ​ ​ Three Months Six Months ​ ​ ​ ​ ​ ​ ​ ​ ​ As restated (see Note 1) ​ As restated (see Note 1) ​ ​ ​ ​ ​ ​ Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 4,575 ) $ ( 8,683 ) ​ ​ ​ ​ ​ ​ Dividend on convertible exchangeable preferred shares ​ ​ ( 50 ) ​ ( 101 ) ​ ​ ​ ​ ​ ​ Net loss attributable to common shareholders ​ $ ( 4,625 ) $ ( 8,784 ) ​ ​ ​ ​ ​ ​ Deemed dividend on accretion of redeemable common stock ​ ​ ( 33 ) ​ ​ ( 33 ) ​ ​ ​ ​ ​ ​ Remaining undistributed loss ​ ​ ( 4,658 ) ​ ​ ( 8,817 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2022 (Unaudited) ​ Six Months Ended June 30, 2022 (Unaudited) ​ ​ Common Shareholders Redeemable Common Shareholders ​ Common Shareholders Redeemable Common Shareholders Allocation of undistributed loss ​ $ ( 4,646 ) ​ $ ( 12 ) ​ $ ( 8,805 ) ​ $ ( 12 ) Deemed dividend on accretion of redeemable common stock ​ ​ ​ ​ ​ 33 ​ ​ ​ ​ ​ 33 Net loss attributable to common shareholders ​ ​ (4,646) ​ ​ 21 ​ ​ (8,805) ​ ​ 21 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average number of common shares used in loss per share – basic and diluted ​ ​ 10,109,466 ​ ​ 26,623 ​ ​ 10,051,622 ​ ​ 13,385 Loss per share - basic and diluted ​ $ ( 0.46 ) $ 0.78 ​ $ ( 0.88 ) $ 1.59 Distributed earnings ​ ​ — ​ ​ 1.24 ​ ​ — ​ ​ 2.47 Undistributed loss ​ ​ ( 0.46 ) ​ ​ ( 0.46 ) ​ ​ ( 0.88 ) ​ ​ ( 0.88 ) Net loss per share ​ $ ( 0.46 ) ​ $ 0.78 ​ $ ( 0.88 ) ​ $ 1.59 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 107 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three And Nine Months Ended September 30, 2022 (Unaudited) ​ ​ ​ ​ ​ ​ ​ Three Months Nine Months ​ ​ ​ ​ ​ ​ ​ ​ ​ As restated (see Note 1) ​ ​ As restated (see Note 1) ​ ​ ​ ​ ​ ​ Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 5,096 ) $ ( 13,779 ) ​ ​ ​ ​ ​ ​ Dividend on convertible exchangeable preferred shares ​ ​ ( 50 ) ​ ( 151 ) ​ ​ ​ ​ ​ ​ Net loss attributable to common shareholders ​ $ ( 5,146 ) $ ( 13,930 ) ​ ​ ​ ​ ​ ​ Deemed dividend on accretion of redeemable common stock ​ ​ ( 102 ) ​ ​ ( 135 ) ​ ​ ​ ​ ​ ​ Remaining undistributed loss ​ ​ ( 5,248 ) ​ ​ ( 14,065 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2022 (Unaudited) ​ Nine Months Ended September 30, 2022 (Unaudited) ​ ​ Common Shareholders Redeemable Common Shareholders ​ Common Shareholders Redeemable Common Shareholders Allocation of undistributed loss ​ $ ( 4,235 ) ​ $ ( 1,013 ) ​ $ ( 13,040 ) ​ $ ( 1,025 ) Deemed dividend on accretion of redeemable common stock ​ ​ ​ ​ ​ 102 ​ ​ ​ ​ ​ 135 Net loss attributable to common shareholders ​ ​ (4,235) ​ ​ (911) ​ ​ (13,040) ​ ​ (890) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average number of common shares used in loss per share – basic and diluted ​ ​ 9,937,958 ​ ​ 2,376,721 ​ ​ 10,013,317 ​ ​ 809,821 Loss per share - basic and diluted ​ $ ( 0.43 ) $ ( 0.38 ) ​ $ ( 1.30 ) $ ( 1.10 ) Distributed earnings ​ ​ — ​ ​ 0.04 ​ ​ — ​ ​ 0.17 Undistributed loss ​ ​ ( 0.43 ) ​ ​ ( 0.42 ) ​ ​ ( 1.30 ) ​ ​ ( 1.27 ) Net loss per share ​ $ ( 0.43 ) ​ $ ( 0.38 ) ​ $ ( 1.30 ) ​ $ ( 1.10 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 108 Table of Contents Potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Stock options 1,610,590 1,099,357 Restricted Stock Units 137,657 18,992 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 6,178,036 5,548,138 ​ ​ 16. Geographic Information Geographic information for the years ended December 31, 2021 and 2022 is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 ​ ​ ​ ​ ​ ​ As restated (see Note 1) Revenue ​ ​ United Kingdom ​ $ — ​ $ — Total Revenue ​ $ — ​ $ — Net loss ​ ​ United States ​ $ ( 1,983 ) ​ $ ( 1,624 ) United Kingdom ​ ( 19,215 ) ​ ( 16,833 ) Total Net Loss ​ $ ( 21,198 ) ​ $ ( 18,457 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2022 2021 ​ ​ ​ As restated (see Note 1) ​ ​ As restated (see Note 1) Total Assets ​ ​ United States ​ $ 18,220 ​ $ 36,144 United Kingdom ​ 9,830 ​ 6,992 Total Assets ​ $ 28,050 ​ $ 43,136 Long Lived Assets, net ​ ​ United States ​ $ — ​ $ — United Kingdom ​ 32 ​ 64 Total Long Lived Assets, net ​ $ 32 ​ $ 64 ​ ​ 17. Restatement of Quarterly Financial Information (Restated and Unaudited) ​ In connection with the restatement explained in Note 1 — “Restatement of Prior Financial Information”, the Company has restated herein its consolidated financial statements at September 30, 2021, March 31, 2022, June 30, 2022, and September 30, 2022 and for each of the three months ended September 30, 2021, March 31, 2022, June 30, 2022, September 30, 2022, and for the six months ended June 30, 2022, and for each of the nine months ended September 30, 2021 and September 30, 2022, in accordance with ASC Topic 250, Accounting Changes and Error Corrections. 109 Table of Contents The effect of the error corrections are as follows (in thousands, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ (Unaudited) ​ March 31, ​ 2022 ​ ​ ​ 2022 CONSOLIDATED BALANCE SHEETS ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current deposits ​ $ 2,980 ​ $ 549 ​ $ 3,529 Total assets ​ $ 39,629 ​ $ 549 ​ $ 40,178 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Accrued and other current liabilities ​ $ 3,354 ​ $ 119 ​ $ 3,473 Total current liabilities ​ 6,204 ​ 119 ​ ​ 6,323 Total liabilities ​ $ 6,219 ​ $ 119 ​ $ 6,338 Accumulated deficit ​ ( 389,067 ) ​ 430 ​ ​ ( 388,637 ) Total stockholders’ equity ​ 33,410 ​ 430 ​ ​ 33,840 Total liabilities and stockholders’ equity ​ $ 39,629 ​ $ 549 ​ $ 40,178 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ Three Months Ended March 31, CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY 2022 ​ ​ ​ 2022 ​ ​ As previously reported ​ Adjustments As Restated Accumulated Deficit (Balances at March 31, 2022) ​ $ ( 389,067 ) ​ $ 430 ​ $ ( 388,637 ) Total Stockholders' Equity (Balances at March 31, 2022) ​ $ 33,410 ​ $ 430 ​ $ 33,840 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ June 30, 2022 ​ ​ ​ June 30, 2022 CONSOLIDATED BALANCE SHEETS ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current deposits ​ $ 3,060 ​ $ 549 ​ $ 3,609 Total assets ​ $ 35,346 ​ $ 549 ​ $ 35,895 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Accrued and other current liabilities ​ $ 2,821 ​ $ 119 ​ $ 2,940 Total current liabilities ​ 5,026 ​ 119 ​ ​ 5,145 Total liabilities ​ $ 5,139 ​ $ 119 ​ $ 5,258 Temporary Equity ​ ​ — ​ 1,105 ​ ​ 1,105 Common Stock ​ ​ 11 ​ ​ ( 1 ) ​ ​ 10 Additional paid-in capital ​ ​ 425,114 ​ ​ ( 1,104 ) ​ ​ 424,010 Accumulated deficit ​ (393,642) ​ 430 ​ ​ (393,212) Total stockholders’ equity ​ 30,207 ​ (675) ​ ​ 29,532 Total liabilities and stockholders’ equity ​ $ 35,346 ​ $ 549 ​ $ 35,895 ​ 110 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ Six Months Ended June 30, ​ 2022 ​ ​ ​ 2022 ​ 2022 ​ ​ ​ 2022 CONSOLIDATED STATEMENTS OF INCOME ​ As previously reported ​ Adjustments ​ As Restated ​ ​ As previously reported ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss applicable to common shareholders ​ $ (4,625) ​ $ — ​ ​ (4,625) ​ $ (8,784) ​ — ​ ​ (8,784) Basic and diluted earnings per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss per share - basic and diluted (common shareholders) ​ $ ( 0.46 ) ​ $ — ​ ​ ( 0.46 ) ​ $ ( 0.87 ) ​ $ ( 0.01 ) ​ ​ ( 0.88 ) Net Income (Loss) per share - basic and diluted (redeemable common shareholders) ​ $ — ​ $ 0.78 ​ ​ 0.78 ​ $ — ​ $ 1.59 ​ ​ 1.59 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ Three Months And Six Months Ended June 30, CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY 2022 ​ ​ ​ 2022 ​ ​ As previously reported ​ Adjustments As Restated Accumulated Deficit (Balances at December 31, 2021) ​ $ ( 384,959 ) ​ $ 430 ​ $ ( 384,529 ) Total Stockholders' Equity (Balances at December 31, 2021) ​ ​ 37,263 ​ ​ 430 ​ ​ 37,693 Accumulated Deficit (Balances at March 31, 2022) ​ $ ( 389,067 ) ​ $ 430 ​ $ ( 388,637 ) Total Stockholders' Equity (Balances at March 31, 2022) ​ ​ 33,410 ​ ​ 430 ​ ​ 33,840 Common Stock Par Value (Reclassification of redeemable common stock) ​ ​ — ​ ​ ( 1 ) ​ ​ ( 1 ) Common Stock (Balances at June 30, 2022) ​ $ 11 ​ $ ( 1 ) ​ $ 10 Additional Paid-In Capital (Reclassification of redeemable common stock) ​ ​ — ​ ​ ( 1,071 ) ​ ​ ( 1,071 ) Additional Paid-In Capital (Accretion of redeemable common stock) ​ ​ — ​ ​ ( 33 ) ​ ​ ( 33 ) Additional Paid-In Capital (Balances at June 30, 2022) ​ $ 425,114 ​ $ ( 1,104 ) ​ $ 424,010 Accumulated Deficit (Balances at June 30, 2022) ​ $ ( 393,642 ) ​ $ 430 ​ $ ( 393,212 ) Total Stockholders' Equity (Balances at June 30, 2022) ​ $ 30,207 ​ $ ( 675 ) ​ $ 29,532 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock No. Shares (Reclassification of redeemable common stock) ​ ​ — ​ ​ (798,200) ​ ​ (798,200) Common Stock No. Shares (Balance at June 30, 2022) ​ ​ 11,350,289 ​ ​ ( 798,200 ) ​ ​ 10,552,089 ​ 111 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ (Unaudited) ​ September 30, ​ 2022 ​ ​ ​ 2022 CONSOLIDATED BALANCE SHEETS ​ As previously reported ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current deposits ​ $ 2,916 ​ $ 549 ​ $ 3,465 Total assets ​ $ 31,021 ​ $ 549 ​ $ 31,570 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Accrued and other current liabilities ​ $ 3,370 ​ $ 119 ​ $ 3,489 Total current liabilities ​ 4,353 ​ 119 ​ ​ 4,472 Total liabilities ​ $ 4,460 ​ $ 119 ​ $ 4,579 Accumulated deficit ​ ( 398,738 ) ​ 430 ​ ​ ( 398,308 ) Total stockholders’ equity ​ 22,067 ​ 430 ​ ​ 22,497 Total liabilities and stockholders’ equity ​ $ 31,021 ​ $ 549 ​ $ 31,570 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ Nine Months Ended September 30, ​ 2022 ​ ​ ​ 2022 ​ 2022 ​ ​ ​ 2022 CONSOLIDATED STATEMENTS OF INCOME ​ As previously reported ​ Adjustments ​ As Restated ​ ​ As previously reported ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss applicable to common shareholders ​ $ (5,146) ​ $ — ​ $ (5,146) ​ $ (13,930) ​ $ — ​ $ (13,930) Basic and diluted earnings per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss per share - basic and diluted (common shareholders) ​ $ ( 0.42 ) ​ $ ( 0.01 ) ​ $ ( 0.43 ) ​ $ ( 1.29 ) ​ $ ( 0.01 ) ​ $ ( 1.30 ) Net Loss per share - basic and diluted (redeemable common shareholders) ​ $ — ​ $ ( 0.38 ) ​ $ ( 0.38 ) ​ $ — ​ $ ( 1.10 ) ​ $ ( 1.10 ) ​ 112 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ Three And Nine Months Ended September 30, CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY 2022 ​ ​ ​ 2022 ​ ​ As previously reported ​ Adjustments As Restated Accumulated Deficit (Balances at December 31, 2021) ​ $ ( 384,959 ) ​ $ 430 ​ $ ( 384,529 ) Total Stockholders' Equity (Balances at December 31, 2021) ​ $ 37,263 ​ $ 430 ​ $ 37,693 Accumulated Deficit (Balances at March 31, 2022) ​ ​ ( 389,067 ) ​ ​ 430 ​ ​ ( 388,637 ) Total Stockholders' Equity (Balances at March 31, 2022) ​ $ 33,410 ​ $ 430 ​ $ 33,840 Common Stock (Reclassification of redeemable common stock) ​ ​ — ​ ​ ( 1 ) ​ ​ ( 1 ) Common Stock (Balances at June 30, 2022) ​ $ 11 ​ $ ( 1 ) ​ $ 10 Additional Paid-In Capital (Reclassification of redeemable common stock) ​ ​ — ​ ​ ( 1,071 ) ​ ​ ( 1,071 ) Additional Paid-In Capital (Accretion of redeemable common stock) ​ ​ — ​ ​ ( 33 ) ​ ​ ( 33 ) Additional Paid-In Capital (Balances at June 30, 2022) ​ $ 425,114 ​ $ ( 1,104 ) ​ $ 424,010 Accumulated Deficit (Balances at June 30, 2022) ​ $ ( 393,642 ) ​ $ 430 ​ $ ( 393,212 ) Total Stockholders' Equity (Balances at June 30, 2022) ​ $ 30,207 ​ $ ( 675 ) ​ $ 29,532 Common Stock (Reclassification of redeemable common stock) ​ ​ 1 ​ ​ (1) ​ ​ — Common Stock (Reclassification of redeemable common stock) ​ ​ (3) ​ ​ 2 ​ ​ (1) Common Stock (Reclassification of redeemable common stock) ​ ​ — ​ ​ (1) ​ ​ (1) Common Stock (Balances at September 30, 2022) ​ $ 9 ​ $ — ​ $ 9 Additional Paid-In Capital (Issue of common stock At Market, net of expenses) ​ ​ 1,581 ​ ​ ( 1,581 ) ​ ​ — Additional Paid-In Capital (Reclassification of redeemable common stock) ​ ​ (4,491) ​ ​ 2,787 ​ ​ (1,704) Additional Paid-In Capital (Accretion of redeemable common stock) ​ ​ — ​ ​ ( 102 ) ​ ​ ( 102 ) Additional Paid-In Capital (Balances at September 30, 2022) ​ $ 422,542 ​ $ 1,104 ​ $ 422,542 Accumulated Deficit (Balances at September 30, 2022) ​ $ ( 398,738 ) ​ $ 430 ​ $ ( 398,308 ) Total Stockholders' Equity (Balances at September 30, 2022) ​ $ 22,067 ​ $ 430 ​ $ 22,497 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock No. Shares (Reclassification of redeemable common stock) ​ ​ — ​ ​ (798,200) ​ ​ (798,200) Common Stock No. Shares (Issue of AT Market common stock) ​ ​ 1,188,900 ​ ​ (1,188,900) ​ ​ — Common Stock No. Shares (Reclassification of redeemable common stock) ​ ​ (3,117,100) ​ ​ 1,987,100 ​ ​ (1,130,000) Common Stock No. Shares (Balance at September 30, 2022) ​ ​ 9,422,089 ​ ​ — ​ ​ 9,422,089 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ (Unaudited) ​ September 30, ​ 2021 ​ ​ ​ 2021 CONSOLIDATED BALANCE SHEETS ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current deposits ​ $ 1,509 ​ $ 294 ​ $ 1,803 Total assets ​ $ 44,999 ​ $ 294 ​ $ 45,293 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Accrued and other current liabilities ​ $ 2,076 ​ $ 64 ​ $ 2,140 Total current liabilities ​ 3,591 ​ 64 ​ ​ 3,655 Total liabilities ​ $ 3,635 ​ $ 64 ​ $ 3,699 Accumulated deficit ​ ( 379,664 ) ​ 230 ​ ​ ( 379,434 ) Total stockholders’ equity ​ 41,364 ​ 230 ​ ​ 41,594 Total liabilities and stockholders’ equity ​ $ 44,999 ​ $ 294 ​ $ 45,293 ​ 113 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ Nine Months Ended September 30, ​ 2021 ​ ​ ​ 2021 ​ 2021 ​ ​ ​ 2021 CONSOLIDATED STATEMENTS OF INCOME ​ As previously reported ​ Adjustments ​ As Restated ​ ​ As previously reported ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 4,217 ​ $ ( 294 ) ​ $ 3,923 ​ $ 10,884 ​ $ ( 294 ) ​ $ 10,590 Total operating expenses ​ 5,998 ​ ( 294 ) ​ ​ 5,704 ​ 16,404 ​ ( 294 ) ​ ​ 16,110 Operating loss ​ ( 5,998 ) ​ 294 ​ ​ ( 5,704 ) ​ ( 16,404 ) ​ 294 ​ ​ ( 16,110 ) Loss before taxes ​ ( 5,985 ) ​ 294 ​ ​ ( 5,691 ) ​ ( 16,243 ) ​ 294 ​ ​ ( 15,949 ) Income tax benefit ​ 998 ​ ( 64 ) ​ ​ 934 ​ 2,650 ​ ( 64 ) ​ ​ 2,586 Net loss ​ ( 4,987 ) ​ 230 ​ ​ ( 4,757 ) ​ ( 13,593 ) ​ 230 ​ ​ ( 13,363 ) Net loss applicable to common shareholders ​ $ (5,037) ​ $ 230 ​ $ (4,807) ​ $ (13,744) ​ $ 230 ​ $ (13,514) Basic and diluted earnings per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share – basic and diluted ​ $ ( 0.54 ) ​ $ 0.03 ​ $ ( 0.51 ) ​ $ ( 1.60 ) ​ $ 0.02 ​ $ ( 1.58 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2021 ​ ​ ​ 2021 ​ 2021 ​ ​ ​ 2021 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ​ As previously reported ​ Adjustments As Restated ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 4,987 ) ​ $ 230 ​ $ ( 4,757 ) ​ $ ( 13,593 ) ​ $ 230 ​ $ ( 13,363 ) Comprehensive loss ​ $ ( 5,082 ) ​ $ 230 ​ $ ( 4,852 ) ​ $ ( 13,600 ) ​ $ 230 ​ $ ( 13,370 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ Three Months Ended September 30, CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY 2021 ​ ​ ​ 2021 ​ ​ As previously reported ​ Adjustments As Restated Accumulated Deficit (Loss for the period) ​ $ ( 4,987 ) ​ $ 230 ​ $ ( 4,757 ) Accumulated Deficit (Balances at September 30, 2021) ​ $ ( 379,664 ) ​ $ 230 ​ $ ( 379,434 ) Total Stockholders' Equity (Balances at September 30, 2021) ​ $ 41,364 ​ $ 230 ​ $ 41,594 ​ 114 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ Nine Months Ended September 30, ​ 2021 ​ ​ ​ 2021 CONSOLIDATED STATEMENTS OF CASH FLOWS ​ As previously reported ​ Adjustments As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 13,593 ) ​ $ 230 ​ $ ( 13,363 ) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Prepaid expenses and other assets ​ ​ ( 2,655 ) ​ ​ 294 ​ ​ ( 2,361 ) Accounts payable, accrued and other current liabilities ​ ​ 1,195 ​ ​ 64 ​ ​ 1,259 ​ With respect to the consolidated statements of cash flows for 2022 and 2021, all adjustments are to line items within operating cash flows and there was no impact to the subtotal of operating, investing or financing cash flows for such periods. 18. Subsequent Events On December 6, 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 February 1, 2023 to the holders of record of the Preferred Stock as of the close of business on January 13, 2023 . ​ 115 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.