Cellectar Biosciences, Inc. 10-K

Item 9A. Controls and Procedures. Management's report on internal control over financial reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management's evaluation included such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023, because of the material weaknesses identified below. This annual report does not include an attestation report of the Company’s independent 78 Table of Contents registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm, as allowed by the SEC. During the period ended December 31, 2023, management identified a material weakness in our internal control over financial reporting because we failed to design and implement adequate internal controls over financial reporting as it relates to the proper fair value methodologies and assumptions used to value Level 3 instruments. Our management, with oversight from our Audit Committee, is in the process of developing and implementing remediation plans in response to the identified material weakness. During the period ended December 31, 2023, management identified a material weakness in our recording of stock - based compensation because we failed to design and implement adequate internal controls over the recording of such transactions. Our management has developed a remediation plan that will allow such transactions to be properly recorded in the future through the implementation of a control design change and the addition of personnel to the accounting function. This remediation plan, with oversight from our Audit Committee, is in the process of implementation in response to the identified material weakness. During the period ended December 31, 2023, management also identified a material weakness in our internal control over financial reporting as a result of the limited number of staff in our finance and accounting function. It is difficult to design and maintain appropriate segregation of duties in the initiation, recording, and approval of transactions within financial systems with a limited number of personnel. This, coupled with management having not designed and maintained user access controls that adequately restrict user and privileged access to financial applications, and the absence of sufficient other mitigating controls, created a segregation of duties weakness which could potentially have resulted in a material misstatement. Management has identified remediation actions that require the addition of personnel to the finance and accounting function, which will allow the Company to design the control environment in a manner that provides effective segregation of duties, beginning with personnel having been added to the finance function in early 2024. The material weaknesses described herein did not result in any identified material misstatements in the consolidated financial statements, and there were no changes to our historical consolidated financial statements. Notwithstanding such material weaknesses, our consolidated financial statements and other financial information included in this Annual Report on Form 10-K present fairly, in all material respects, our financial condition, results of operations, and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States. Changes in internal control over financial reporting. There have not been any significant changes in the Company’s internal control over financial reporting other than the material weaknesses and related remediation measures as described above. Important Considerations. Any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part on certain assumptions about the likelihood of future events. The effectiveness of our disclosure controls and procedures is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Because of these and other inherent limitations of control systems, there can be no assurance that any system of disclosure controls and procedures will be successful in achieving its stated goals, including but not limited to preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management, under all potential future conditions, regardless of how remote. Item 9B. Other Information. N o n e . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. PART III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2024 Annual Meeting of Stockholders under the captions “Election of Directors,” “Officers and Directors” and “Corporate Governance.” 79 Table of Contents Code of Ethics The board of directors has adopted a Code of Ethics applicable to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. A copy of the Code of Ethics is available at our website www.cellectar.com. Item 11. Executive Compensation. Compensation of Directors and Executive Officers The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2024 Annual Meeting of Stockholders under the caption “Compensation of Executive Officers and Directors ¾ Executive Compensation.” Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this item with respect to the security ownership of certain beneficial owners and the security ownership of management is incorporated herein by reference to our definitive proxy statement for our 2024 Annual Meeting of Stockholders under the caption “Security Ownership of Certain Beneficial Owners and Management.” Equity compensation plans The information required by this item with respect to the equity compensation plans is incorporated herein by reference to this annual report on Form 10-K, Item 5, under the caption “Equity compensation plans.” Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this item with respect to certain relationships and related transactions is incorporated herein by reference to our definitive proxy statement for our 2024 Annual Meeting of Stockholders under the caption “Certain Relationships and Related-Person Transactions.” The information required by this item with respect to director independence is incorporated herein by reference to our definitive proxy statement for our 2024 Annual Meeting of Stockholders under the caption “Corporate Governance — Director Independence.” Item 14. Principal Accounting Fees and Services. The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2024 Annual Meeting of Stockholders under the captions “Ratification of Appointment of our Independent Registered Public Accounting Firm” and “Audit Committee Matters — Audit and Other Fees.” ​ 80 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules. (a) Documents filed with this annual report on Form 10-K. (1) Financial Statements i. All financial statements of the Company as set forth under Item 8 of this annual report on Form 10-K (2) Exhibits – The exhibits to this annual report on Form 10-K are listed on the Exhibit Index below. Exhibit Index Incorporated by Reference Exhibit No. Description Form Filing Date Exhibit No. 2.1 Agreement and Plan of Merger by and among Novelos Therapeutics, Inc., Cell Acquisition Corp. and Cellectar, Inc. dated April 8, 2011 8-K April 11, 2011 2.1 3.1 Second Amended and Restated Certificate of Incorporation 8-K April 11, 2011 3.1 3.2 Certificate of Ownership and Merger of Cellectar Biosciences, Inc. with and into Novelos Therapeutics, Inc. 8-K February 13, 2014 3.1 3.3 Certificate of Amendment to Second Amended and Restated Certificate of Incorporation 8-K June 13, 2014 3.1 3.4 Certificate of Amendment to Second Amended and Restated Certificate of Incorporation 8-K June 19, 2015 3.2 3.5 Certificate of Amendment to Second Amended and Restated Certificate of Incorporation 8-K March 4, 2016 3.1 3.6 Certificate of Amendment to Second Amended and Restated Certificate of Incorporation 8-K June 1, 2017 3.2 3.7 Certificate of Amendment of Second Amended and Restated Certificate of Incorporation 8-K July 13, 2018 3.1 3.8 Certificate of Amendment of Second Amended and Restated Certificate of Incorporation 8-K February 25, 2021 3.1 3.9 Amended and Restated By-laws 8-K June 1, 2011 3.1 3.10 Form of Certificate of Designation of Series C Preferred Stock S-1/A July 18, 2018 3.11 3.11 Form of Certificate of Designation of Series D Preferred Stock certificate 8-K December 28, 2020 3.1 4.1 Form of common stock certificate S-1/A November 9, 2011 4.1 4.2 Form of Series D Preferred Stock certificate 8-K December 28, 2020 4.1 4.3 Description of Securities Registered under Section 12(b) of the Securities Exchange Act of 1934 10-K ​ March 9, 2023 ​ 4.3 10.1 Form of Restricted Common Stock Agreement** 10-Q August 14, 2017 10.1 10.2 Form of Series D Common Stock Purchase Warrant 8-K October 11, 2017 4.1 10.3 Registration Rights Agreement, dated as of October 10, 2017, by and among Cellectar Biosciences, Inc. and the Purchasers 8-K October 11, 2017 10.2 10.4 Form of Non-Statutory Stock Option** S-8 November 9, 2017 10.2 10.5 Stock Option Agreement with James V. Caruso** S-8 November 9, 2017 10.4 10.6 Stock Option Agreement with Jarrod Longcor** S-8 November 9, 2017 10.5 10.7 Series E Common Stock Purchase Warrant S-1/A July 18, 2018 4.5 10.8 Form of Warrant Agency Agreement S-1/A July 18, 2018 4.7 10.9 Agreement of Lease between the Company and KBS II 100-200 Campus Drive, LLC S-1/A July 18, 2018 10.35 10.10 Form of Non-Statutory Stock Option (Definitive/Contingent – Employees)** 10-Q November 13, 2018 10.3 10.11 Form of Non-Statutory Stock Option (Definitive/Contingent – Directors)** 10-Q November 13, 2018 10.4 81 Table of Contents 10.12 Amended and Restated Employment Agreement between the Company and James Caruso, dated April 15, 2019** 8-K April 19, 2019 10.1 10.13 Amended and Restated Employment Agreement between the Company and Jarrod Longcor, dated April 15, 2019** 8-K April 19, 2019 10.2 10.14 Form of Series F Common Stock Purchase Warrant 8-K May 20, 2019 4.1 10.15 Form of Series G Common Stock Purchase Warrant 8-K May 20, 2019 4.2 10.16 Registration Rights Agreement, dated as of May 16, 2019, by and among Cellectar Biosciences, Inc. and the Purchasers 8-K May 20, 2019 10.3 10.17 Cellectar Biosciences, Inc. Amended and Restated 2015 Stock Incentive Plan** 8-K June 14, 2019 10.1 10.18 Amendment to Amended and Restated Employment Agreement between the Company and Jarrod Longcor dated November 10, 2019** 10-Q November 12, 2019 10.2 10.19 Form of Underwriting Agreement S-1/A May 20, 2020 1.1 10.20 Form of Series H Warrant S-1/A May 20, 2020 4.3 10.21 Form of Warrant Agency Agreement 8-K June 5, 2020 4.3 10.22 Equity Distribution Agreement between Cellectar Biosciences, Inc. and Oppenheimer & Co. Inc., dated August 11, 2020 8-K August 11, 2020 10.1 10.23 Form of Securities Purchase Agreement 8-K December 28, 2020 10.1 10.24 Form of Registration Rights Agreement 8-K December 28, 2020 10.2 10.25 ​ Employment Agreement between the Company and Chad Kolean dated February 23, 2022 ​ 8-K ​ February 25, 2022 ​ 10.1 10.26 ​ Form of First Amendment of Lease, dated December 30, 2022 ​ 8-K ​ January 4, 2023 ​ ​ 21.1* List of Subsidiaries 23.1* Consent of Independent Registered Public Accounting Firm 24.1* Power of Attorney (included on the Signatures page of this Annual Report on Form 10-K) 31.1* Certification of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of chief financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1* Certification of chief executive officer and chief financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101* Interactive Data Files 104* ​ Cover Page Interactive Data File ​ ​ ​ ​ ​ ​ * Filed herewith. ** Management contract or compensatory plan or arrangement. Item 16. Form 10-K Summary None. ​ 82 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CELLECTAR BIOSCIENCES, INC. By: /s/ James V. Caruso James V. Caruso Title: Chief Executive Officer March 27, 2024 ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints James V. Caruso and Chad J. Kolean, jointly and severally, as his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. By: /s/ James V. Caruso James V. Caruso Title: Chief Executive Officer and Director (Principal Executive Officer) March 27, 2024 By: /s/ Chad J. Kolean Chad J. Kolean Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) March 27, 2024 By: /s/ Frederick W. Driscoll Frederick W. Driscoll Title: Director March 27, 2024 By: /s/ Asher Alban Chanan-Khan Asher Alban Chanan-Khan Title: Director March 27, 2024 By: /s/ Stefan D. Loren Stefan D. Loren Title: Director March 27, 2024 By: /s/ John L. Neis John L. Neis Title: Director March 27, 2024 83 Table of Contents By: /s/ Douglas J. Swirsky Douglas J. Swirsky Title: Director March 27, 2024 ​ ​ ​ ​ ​ 84