Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
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 disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in connection with the period ending December 31, 2024. Based on that evaluation, management has concluded that as of the respective period, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below.
Notwithstanding the material weaknesses in our internal control over financial reporting, management has concluded that the audited consolidated financial statements included in this Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.
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 Rules 13a-15(f) and 15d-15(f) under the Exchange Act for the Company. Management assessed the effectiveness of internal control over financial reporting as of the year ended December 31, 2024. In making this assessment, our management used the criteria set forth in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Framework”). Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024, because of the material weaknesses described below.
This annual report does not include an attestation report of the Company’s independent 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.
Material Weaknesses
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected on a timely basis.
Management concluded that material weaknesses existed as of the year ended December 31, 2024. Specifically, management identified deficiencies in the principles associated with the control environment, risk assessment, control activities, information and communication and monitoring components of internal control, based on the criteria established by the COSO Framework, that constitute material weaknesses, either individually or in the aggregate.
● Control Environment: The Company lacked appropriate policies and resources to develop and operate effective internal control over financial reporting, which contributed to the Company’s inability to properly analyze, record and disclose accounting matters accurately and timely. This was further impacted by the limited number of staff in the Company’s accounting and finance function. This material weakness contributed to additional material weaknesses further described below.
● Risk Assessment: The Company does not have a formal process to identify, update, and assess risks, including risks around the accounting for complex transactions, that could significantly impact the design and operation of the Company’s control activities.
84
Table of Contents
● Control Activities: Management did not design and implement effective control activities and identified the following material weaknesses:
o Management failed to design and implement adequate internal controls over financial reporting which resulted in the inaccurate accounting of preferred equity and warrants
o Management failed to design and implement adequate internal controls over the recording of stock-based compensation expense related to the restricted stock awards granted in December 2023.
o Management 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 financial instruments, specific to the assumptions utilized in the valuation of the preferred warrants.
● Information and Communication: As noted above, the Company had a limited number of staff in its finance and accounting function, and therefore was unable to design and maintain appropriate segregation of duties in the initiation, recording, and approval of transactions within its financial systems. 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 segregation of duties deficiencies.
● Monitoring Activities: Management did not appropriately select, develop, and perform ongoing evaluations to ascertain whether the components of internal controls are present and functioning
These material weaknesses resulted in errors that required the restatement of the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2023 and December 31, 2022, as well as the restatement of the Company’s condensed consolidated financial statements as of and for the interim periods ended September 30, 2023, June 30, 2023, March 31, 2023, September 30, 2022, June 30, 2022, and March 31, 2022. Additionally, these material weaknesses could result in a misstatement of the account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or timely detected.
Management’s Plan to Remediate the Material Weaknesses
The process of designing and maintaining effective internal control over financial reporting is a continuous effort that requires management to anticipate and react to changes in our business, economic and regulatory environments and to expend significant resources. In early 2024, the Company began recruiting and hired qualified accounting and financial reporting personnel to supplement our level of knowledge and experience with internal control over financial reporting in order to begin to design and implement a formal control environment and risk assessment process. Such process includes identification of risks, the level of detail in our risk assessment, and the clarity of the linkage between risks and internal controls. The results of this effort are expected to enable us to effectively identify, develop, evolve and implement controls and procedures to address risks. Additionally, the Company has also initiated the implementation of an ERP system, which will provide a system-based control structure for all financial transactions.
As our remediation efforts are still on-going, we will continue to consider the need for additional resources and implement further enhancements to our policies and procedures as necessary to further improve our internal control over financial reporting. As we work to improve our internal control over financial reporting, we may modify our remediation plan and may implement measures as we continue to review, optimize and enhance our financial reporting controls and procedures in the ordinary course. The material weaknesses will not be considered remediated until the remediated controls have been operating for a sufficient period of time and can be evidenced through testing that these are operating effectively.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting during the period ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
Certain information regarding annual incentive bonus is included under Item 11 of this Form 10-K.
85
Table of Contents
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 2025 Annual Meeting of Stockholders under the captions “Election of Directors,” “Officers and Directors” and “Corporate Governance.”
Insider Trading Policy
We have adopted an Insider Trading Policy which governs the purchase, sale and/or any other dispositions of our securities by the Company and its directors, officers and employees and is reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable exchange listing standards. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
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
Executive Compensation
This section provides information, in tabular and narrative formats specified in applicable SEC rules, regarding the amounts of compensation paid to each of our named executive officers, or NEOs, and related information. As a smaller reporting company, the Company has presented such information in accordance with the scaled disclosure requirements permitted under applicable SEC regulations.
The following table sets forth certain information concerning all cash and non-cash compensation awarded to, earned by or paid to our each of NEOs for the years ended December 31, 2024 and 2023:
2024 Summary Compensation Table
Non-Equity
Stock
Option
Incentive Plan
All Other
Salary
Awards
Awards
Compensation
Compensation
Name and Principal Position
Year
($)
($) (1)
($) (1)
($) (2)
($) (3)
Total ($)
James V. Caruso
2024
650,000
–‒
2,214,000
178,750
–‒
3,042,750
President and Chief Executive Officer
2023
600,000
107,582
715,140
450,000
92,418
1,965,140
Jarrod Longcor
2024
500,000
–‒
1,230,000
100,000
–‒
1,830,000
Chief Operating Officer
2023
480,000
113,758
394,560
288,000
86,242
1,362,560
Chad J. Kolean
2024
425,000
–‒
713,400
85,000
–‒
1,223,400
Chief Financial Officer
2023
390,000
112,770
284,960
234,000
87,230
1,108,960
(1) The reported amounts represent the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“ASC 718”). In the case of stock awards, the grant date fair value was determined based on the stock price on the grant date. All assumptions made regarding the valuation of option awards can be referenced in Note 7 in the Notes to Restated Consolidated Financial Statements included in this prospectus. The amounts reported for 2024 include stock option awards to Messrs. Caruso, Longcor and Kolean with respect to 900,000 shares, 500,000 shares, and 290,000 shares, respectively, which awards were approved by the Compensation
86
Table of Contents
Committee on November 30, 2023, subject to stockholder approval of an amendment to the Company’s 2021 Stock Incentive Plan (the “2021 Plan”) at the 2024 annual meeting of stockholders. Because stockholder approval was received in 2024, these stock option awards are considered granted in 2024 under ASC 718 and are reflected as 2024 compensation in the 2024 Summary Compensation Table.
(2) Amounts in this column represent bonuses approved by the Compensation Committee based on its annual review of the performance of the executive officers against predetermined financial and strategic objectives established for the year. NEOs are paid the same percentage upon the achievement of financial objectives and may be paid varied percentages upon the achievement of strategic objectives depending on the subject matter.
(3) The methodology used to compute the aggregate incremental cost of perquisites and other personal benefits for each individual NEO is based on the total cost to the Company, and such costs are required to be reported under SEC rules when the total costs are equal to or greater than $10,000 in the aggregate for a NEO. The amounts presented are exclusively cash bonuses paid to the NEOs to satisfy the tax withholding obligations associated with fully vested stock awards received by the NEOs on December 8, 2023 following the release of positive top-line data.
Equity Awards
As described in Note (1) to the 2024 Summary Compensation Table above, on November 30, 2023 the Compensation Committee approved stock option awards to Messrs. Caruso, Longcor and Kolean with respect to 900,000 shares, 500,000 shares, and 290,000 shares, respectively, subject to stockholder approval of an amendment to the 2021 Plan at the 2024 annual meeting of stockholders. These options are scheduled to vest one-third on the first anniversary of the grant date and in 24 equal monthly installments thereafter, subject to continuous employment with the Company through each vesting date.
Employment Agreements
James V. Caruso. We entered into an employment agreement with Mr. Caruso as of June 15, 2015, as amended and restated on April 15, 2019, pursuant to which Mr. Caruso serves as President and Chief Executive Officer of the Company. Under the agreement, the Company pays Mr. Caruso a base salary that is adjusted from time to time. Mr. Caruso is also eligible for an annual bonus, based on performance, with an initial target of up to 50% of his base salary at the discretion of the Compensation Committee. If Mr. Caruso is terminated other than for cause or by Mr. Caruso for good reason within 12 months after a change in control (i.e. double trigger), he is entitled to severance in an amount equal to (i) 24 months of base salary, (ii) his then applicable target bonus payable over 24 months (a total of 1.5x the annual target bonus payable at the time of termination) and (iii) 24 months of payment or reimbursement of health insurance (equal to the premium paid by the Company prior to the date of termination), each payable in installments over 24 months. Following a termination of employment by the Company without cause or by Mr. Caruso for good reason that is not within 12 months after a change in control, Mr. Caruso is entitled to severance in an amount equal to 12 months base salary plus payment or reimbursement of health insurance for 12 months (equal to the premium paid by the Company prior to the date of termination). Each of the foregoing severance benefits is conditioned on Mr. Caruso’s execution of a release agreement in favor of the Company.
Jarrod Longcor. We entered into an employment agreement with Mr. Longcor as of July 15, 2016, as amended and restated on April 15, 2019, and amended on November 10, 2019. Under the agreement, Mr. Longcor receives a base salary that may be adjusted from time to time. Mr. Longcor is eligible for an annual bonus, based on performance, with an initial target of up to 30% of his base salary. If Mr. Longcor’s employment is terminated other than for cause or by Mr. Longcor for good reason, contingent upon the execution of a release agreement in favor of the Company, Mr. Longcor is entitled to (i) severance in an amount equal to nine months of Mr. Longcor’s annual base salary, provided that if such termination occurs within 12 months after a change in control (i.e. double trigger), such severance is increased to 18 months of Mr. Longcor’s full base salary, each payable in monthly installments, (ii) payment or reimbursement of health insurance (for nine or 18 months, as applicable), each payable in monthly installments, (iii) a payment amount equal to the annual bonus Mr. Longcor would have received for the calendar year in which the termination occurred prorated for the number of days elapsed in such year, and (iv) outplacement services not to exceed $7,500.
Chad J. Kolean. We entered into an employment agreement with Mr. Kolean as of February 22, 2022. Pursuant to his employment agreement, Mr. Kolean receives a base salary that may be adjusted from time to time and is eligible to receive an annual performance bonus with a target amount equal to 40% of his base salary. In the event of a dismissal without cause or resignation by Mr. Kolean for good reason, Mr. Kolean will be entitled to nine months of severance. In the event of dismissal without cause or
87
Table of Contents
resignation by Mr. Kolean for good reason, within the eighteen months following a change in control, Mr. Kolean will be entitled to eighteen months of severance.
2024 Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information with respect to outstanding equity awards as of December 31, 2024, with respect to our NEOs.
Option Awards
Stock Awards
Market
Number of
Value
Number of
Number of
Shares or
of Shares or
securities
securities
Units of
Units of
underlying
underlying
Option
Stock
Stock
unexercised
unexercised
Exercise
Option
that Have
that Have
options (#)
options (#)
Price
Expiration
Not
Not
Name
Date of Award
exercisable
unexercisable
($/share)
date
Vested (#)
Vested ($)
James V. Caruso
11/30/2023(1)
300,060
599,940
$
2.65
11/30/2033
—
—
1/17/2023(1)
333,518
188,482
$
1.68
1/17/2033
—
—
1/25/2022(1)
137,958
3,942
$
5.50
1/25/2032
—
—
3/4/2021
160,000
—
$
17.40
3/4/2031
—
—
2/3/2020
10,000
—
$
27.10
2/3/2030
—
—
1/17/2019
7,500
—
$
19.90
1/17/2029
—
—
10/12/2018
15,000
—
$
26.10
10/12/2028
—
—
5/12/2016
2,000
—
$
148.00
5/12/2026
—
—
6/15/2015
375
—
$
2,640.00
6/15/2025
—
—
Jarrod Longcor
11/30/2023(1)
166,700
333,300
$
2.65
11/30/2033
1/17/2023(1)
184,010
103,990
$
1.68
1/17/2033
—
—
1/25/2022(1)
46,180
1,320
$
5.50
1/25/2032
—
—
3/4/2021
45,000
—
$
17.40
3/4/2031
—
—
2/3/2020
4,000
—
$
27.10
2/3/2030
—
—
1/17/2019
3,000
—
$
19.90
1/17/2029
—
—
10/12/2018
6,300
—
$
26.10
10/12/2028
—
—
9/18/2017
250
—
$
183.00
9/18/2027
—
—
7/15/2016
750
—
$
293.00
7/15/2026
—
—
Chad J. Kolean
11/30/2023(1)
96,686
193,314
$
2.65
11/30/2033
1/17/2023(1)
132,896
75,104
$
1.68
1/17/2033
—
—
2/22/2022(2)
10,000
5,000
$
4.90
2/21/2032
—
—
(1) These options are scheduled to vest one-third on the first anniversary of the grant date and in 24 equal monthly installments thereafter, subject to continuous employment with the Company through each vesting date.
(2) These options are scheduled to vest annually in increments of one-third over three years from the date of grant.
Pursuant to the terms of the option award agreements, options granted pursuant to the Amended and Restated 2015 Stock Incentive Plan and the 2021 Plan become fully vested upon a termination event within one year following a change in control, as defined in such plans. A termination event is defined as either termination of employment other than for cause or constructive termination resulting from a significant reduction in either the nature or scope of duties and responsibilities, a reduction in compensation or a required relocation.
Risks Related to Compensation Policies and Practices
When determining our compensation policies and practices, the Compensation Committee considers various matters relevant to the development of a reasonable and prudent compensation program, including whether the policies and practices are reasonably likely to have a material adverse effect on us. We believe that the mix and design of our executive compensation plans and policies do not encourage management to assume excessive risks and are not reasonably likely to have a material adverse effect on us.
88
Table of Contents
Pay Versus Performance
Pay Versus Performance
Average
Summary
Average
Value of
Compensation
Compensation
Initial Fixed
Table Total
Actually Paid
$100
Summary
Compensation
for Non-PEO
to Non-PEO
Investment
Compensation
Actually Paid
Named
Named
Based On:
Table
to
Executive
Executive
Total
Net Income
Total for PEO
PEO
Officers
Officers
Shareholder Return
(Loss)
Year(1)
($)(2)
($)(3)
($)(2)
($)(4)
($)(5)
($)
2024
3,042,750
1,321,211
1,526,700
708,983
$
1.44
(44,581,446)
2023
1,965,140
2,350,558
1,235,760
1,336,841
$
13.32
(42,770,610)
2022
1,463,172
146,850
514,617
294,040
$
8.22
(31,792,618)
(1)
James V. Caruso, served as the Company’s principal executive officer (“PEO”) for the entirety of 2024, 2023 and 2023 and the Company’s other NEOs for the entirety of 2024, 2023 and 2022 were Jarrod Longcor and Chad J. Kolean.
(2)
Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in the case of Mr. Caruso and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s NEOs reported for the applicable year other than the principal executive officer for such years.
(3)
Amounts reported in this column represent the compensation actually paid to Mr. Caruso as the Company’s President and Chief Executive Officer in the indicated fiscal years, based on his total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the table below:
PEO
2024
2023
2022
Summary Compensation Table - Total Compensation(a)
$
3,042,750
$
1,965,140
$
1,463,172
- Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year(b)
(2,214,000)
(822,722)
(616,697)
+Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards Granted in Fiscal Year(c)
83,992
1,148,400
127,710
+Change in Fair Value of Outstanding and Unvested Option Awards Granted in Prior Fiscal Years(d)
(388,965)
108,626
(430,237)
+Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year(e)
690,143
69,462
178,023
+Change in Fair Value as of Vesting Date of Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year(f)
139,727
(3,874)
(84,783)
- Fair Value as of Prior Fiscal Year-End of Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year(g)
(32,436)
(114,474)
(490,338)
= Compensation Actually Paid
$
1,321,211
$
2,350,558
$
146,850
(a)
Represents Total Compensation as reported in the Summary Compensation Table for the indicated fiscal year.
(b)
Represents the aggregate grant date fair value of the stock awards and option awards granted to Mr. Caruso during the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(c)
Represents the aggregate fair value as of the indicated fiscal year-end of Mr. Caruso’s outstanding and unvested option awards granted during such fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
89
Table of Contents
(d)
Represents the aggregate change in fair value during the indicated fiscal year of the outstanding and unvested option awards held by Mr. Caruso as of the last day of the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(e)
Represents the aggregate fair value at vesting of the stock awards and option awards that were granted to Mr. Caruso and vested during the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(f)
Represents the aggregate change in fair value, measured from the prior fiscal year-end to the vesting date, of each option award held by Mr. Caruso that was granted in a prior fiscal year and which vested during the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(g)
Represents the aggregate fair value as of the last day of the prior fiscal year of Mr. Caruso’s option awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(4)
Amounts reported in this column represent the compensation actually paid to the Company’s NEOs other than Mr. Caruso in the indicated fiscal year, based on the average total compensation for such NEOs reported in the Summary Compensation Table for the indicated fiscal year and adjusted as shown in the table below:
Other NEOs Average(a)
2024
2023
2022
Summary Compensation Table - Total Compensation(b)
$
1,526,700
$
1,235,760
$
514,617
- Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year(c)
(971,700)
(453,024)
(132,258)
+Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards Granted in Fiscal Year(d)
36,863
545,600
28,350
+Change in Fair Value of Outstanding and Unvested Option Awards Granted in Prior Fiscal Years(e)
(186,868)
21,375
(61,221)
+Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year(f)
269,728
10,771
26,358
+Change in Fair Value as of Vesting Date of Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year(g)
49,799
(766)
(12,048)
- Fair Value as of Prior Fiscal Year-End of Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year(h)
(15,539)
(22,875)
(69,758)
= Compensation Actually Paid
$
708,983
$
1,336,841
$
294,040
(a)
See footnote 1 for the NEOs included in the average for each indicated fiscal year.
(b)
Represents the average Total Compensation as reported in the Summary Compensation Table for the reported NEOs in the indicated fiscal year.
(c)
Represents the average aggregate grant date fair value of the stock awards and option awards granted to the reported NEOs during the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(d)
Represents the average aggregate fair value as of the indicated fiscal year-end of the reported NEOs’ outstanding and unvested option awards granted during such fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(e)
Represents the average aggregate change in fair value during the indicated fiscal year of the outstanding and unvested option awards held by the reported NEOs as of the last day of the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
90
Table of Contents
(f)
Represents the average aggregate fair value at vesting of the stock awards and option awards that were granted to the reported NEOs and vested during the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(g)
Represents the average aggregate change in fair value, measured from the prior fiscal year-end to the vesting date, of each option award held by the reported NEOs that was granted in a prior fiscal year and which vested during the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(h)
Represents the average aggregate fair value as of the last day of the prior fiscal year of the reported NEOs’ option awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(5)
Pursuant to rules of the SEC, the comparison assumes $100 was invested on December 31, 2021, in our common stock. Historic stock price performance is not necessarily indicative of future stock price performance.
2024 Director Compensation
The following table sets forth certain information about the compensation of our non-employee directors who served during the year ended December 31, 2024:
Director
Option
Fees
Awards
Name
Year
($) (1)
($) (2)
Total ($)
Asher Chanan-Khan, M.B.B.S., M.D.
2024
$
60,000
$
148,200
$
208,200
Frederick W. Driscoll
2024
60,000
148,200
208,200
Stefan D. Loren, Ph.D.
2024
60,000
148,200
208,200
John Neis
2024
60,000
148,200
208,200
Douglas J. Swirsky
2024
90,000
222,300
312,300
(1)
Director fees consist of annual cash fees for service.
(2)
Granted on December 15, 2023, subject to stockholder approval of an amendment to the 2021 Plan at the 2024 annual meeting of stockholders. Because stockholder approval was received in 2024, these stock option awards are considered granted in 2024 under ASC 718 and are reflected as 2024 compensation in the 2024 Director Compensation Table. These stock options have an exercise price of $2.58 per share and fully vest on the first anniversary of the grant date, subject to continued service through applicable vesting date. The reported amounts represent the aggregate grant date fair value computed in accordance with ASC 718. All assumptions made regarding the valuation of equity awards can be referenced in Note 7 in the Notes to Restated Consolidated Financial Statements included in this prospectus.
During 2024, we paid each of our non-employee directors a quarterly cash fee of $15,000 ($22,500 for Mr. Swirsky). In addition, in December 2023, we granted to each non-employee director stock options to purchase 60,000 shares (90,000 shares for Mr. Swirsky), which were subject to the approval of an amendment to the 2021 Plan at the 2024 annual meeting of stockholders. Mr. Swirsky receives additional cash remuneration and option awards for his service as Chairman of the Board of the Company. We reimbursed directors for reasonable out-of-pocket expenses incurred in attending Board and committee meetings and undertaking certain matters on our behalf. Directors who are our employees do not receive additional fees for their service as directors.
91
Table of Contents
The aggregate number of option awards outstanding as of December 31, 2024, for each non-employee director was as follows:
Stock
Options
Name
Outstanding
Asher Chanan-Khan, M.B.B.S., M.D.
100,600
Frederick W. Driscoll
107,650
Stefan D. Loren, Ph.D.
107,885
John Neis
107,885
Douglas J. Swirsky
161,925
Clawback Policy
Under the Sarbanes-Oxley Act, in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our executive officers. The SEC also recently adopted rules which direct national stock exchanges to require listed companies to implement policies intended to recoup bonuses paid to executives if we are found to have misstated its financial results. We have adopted our Executive Compensation Clawback Policy (the “Clawback Policy”) in order to comply with the final clawback rules adopted by the SEC under the Rule, and the listing standards, as set forth in the Nasdaq Listing Rule 5608 (the “Final Clawback Rules”).
The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from our current and former executive officers as defined in the Rule (“Covered Officers”) in the event that we are required to prepare an accounting restatement, in accordance with the Final Clawback Rules. The recovery of such compensation applies regardless of whether a Covered Officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement. Under the Clawback Policy, our board of directors may recoup from the Covered Officers erroneously awarded incentive compensation received within a lookback period of the three completed fiscal years preceding the date on which we are required to prepare an accounting restatement. The foregoing description of the Clawback Policy does not purport to be complete and is qualified in its entirety by the terms and conditions of the Clawback Policy, a copy of which is attached hereto as Exhibit 97 and is incorporated herein by reference.
Timing of Grants of Options
We do not grant option awards in anticipation of the release of material nonpublic information and we do not time the release of material nonpublic information based on option award grant dates or for the purpose of affecting the value of executive compensation. In addition, we do not take material nonpublic information into account when determining the timing and terms of such awards . In fiscal year 2024, we did not grant option awards to our named executive officers during the time period outlined in Item 402(x) of Regulation S-K
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 2025 Annual Meeting of Stockholders under the caption “Security Ownership of Certain Beneficial Owners and Management.”
92
Table of Contents
Equity compensation plans
The following table provides information as of December 31, 2024, regarding shares authorized for issuance under our equity compensation plans, including individual compensation arrangements.
Equity compensation plan information
Number of shares
Weighted-average
remaining available for
Number of shares to
exercise price of
future issuance under
be issued upon
outstanding
equity compensation plans
exercise of outstanding
options
(excluding shares reflected
Plan category
options and rights (#)
and rights ($)
in column (a)) (#)
(a)
(b)
(c)
Equity compensation plans approved by stockholders
4,404,229
$
3.90
4,746,451
Equity compensation plans not approved by stockholders
182,789
$
8.81
n/a
Total
4,587,018
$
4.10
4,746,451
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 2025 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 2025 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 2025 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.”
93
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 of 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
Certificate of Correction of Certificate of Amendment of Second Amended and Restated Certificate of Incorporation
10-Q
May 10, 2022
3.1
3.10
Certificate of Amendment to Second Amended and Restated Certificate of Incorporation
8-K
July 21, 2022
3.1
3.11
Certificate of Amendment to Second Amended and Restated Certificate of Incorporation
8-K
October 27, 2023
3.1
3.12
Amended and Restated By-laws
8-K
December 2, 2022
3.1
3.13
Certificate of Designation of Preferences, Rights and Limitations of the Series D Convertible Preferred Stock
8-K
December 28, 2020
3.1
3.14
Certificate of Elimination of the Series A Convertible Preferred Stock, the Series B Convertible Preferred Stock and the Series C Convertible Preferred Stock
8-K
September 8, 2023
3.1
3.15
Amendment No. 1 to Certificate of Designation of the Series D Preferred Stock
8-K
September 8, 2023
3.2
3.16
Certificate of Designation of Preferences, Rights and Limitations of the Series E Convertible Voting Preferred Stock
8-K
September 8, 2023
3.3
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
Form of Tranche A Warrant
8-K
September 8, 2023
4.1
4.4
Form of Tranche B Warrant
8-K
September 8, 2023
4.2
4.5
Form of Common Stock Purchase Warrant A
8-K
July 22, 2024
4.1
4.6
Form of Common Stock Purchase Warrant B
8-K
July 22, 2024
4.2
94
Table of Contents
4.7
Form of Common Stock Purchase Warrant C
8-K
July 22, 2024
4.3
4.8
Description of Securities Registered under Section 12(b) of the Securities Exchange Act of 1934
10-K/A
April 1, 2024
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
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
2021 Stock Incentive Plan**
8-K
June 24, 2021
10.1
10.19
Amendment 1 to the 2021 Stock Incentive Plan**
8-K
June 27, 2022
10.1
10.20
2021 Stock Incentive Plan, as Amended**
8-K
June 29, 2023
10.1
10.21
2021 Stock Incentive Plan, as Amended**
8-K
June 14, 2024
10.1
10.22
Amendment to Amended and Restated Employment Agreement between the Company and Jarrod Longcor dated November 10, 2019**
10-Q
November 12, 2019
10.2
10.23
Form of Underwriting Agreement
S-1/A
May 20, 2020
1.1
10.24
Form of Series H Warrant
S-1/A
May 20, 2020
4.3
10.25
Form of Warrant Agency Agreement
8-K
June 5, 2020
4.3
10.26
Equity Distribution Agreement between Cellectar Biosciences, Inc. and Oppenheimer & Co. Inc., dated August 11, 2020
8-K
August 11, 2020
10.1
10.27
Form of Securities Purchase Agreement
8-K
December 28, 2020
10.1
10.28
Form of Registration Rights Agreement
8-K
December 28, 2020
10.2
10.29
Employment Agreement between the Company and Chad Kolean dated February 23, 2022
8-K
February 25, 2022
10.1
10.30
Form of First Amendment of Lease, dated December 30, 2022
8-K
January 4, 2023
10.31
Form of Common Warrant
8-K
October 25, 2022
4.1
10.32
Form of Pre-Funded Warrant
8-K
October 25, 2022
4.2
10.33
Form of Registration Rights Agreement, dated as of October 20, 2022, by and between the Company and the purchasers named therein
8-K
October 25, 2022
10.3
10.34
Form of Indemnification Agreement
8-K
December 2, 2022
10.1
10.35
Inducement Letter in consideration for Exercise of the Tranche B warrants
8-K
July 22, 2024
10.1
10.36
Form of Indenture
S-3
May 24, 2024
4.7
16.1
Letter Regarding Change in Certifying Accountant
8-K
July 11, 2024
16.1
95
Table of Contents
19.1*
Insider Trading Policy
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
97
Clawback Policy
101*
Interactive Data Files (formatted in Inline XBRL)
104*
Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed herewith.
** Management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary
None.
96
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 13, 2025
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 13, 2025
By:
/s/ Chad J. Kolean
Chad J. Kolean
Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
March 13, 2025
By:
/s/ Frederick W. Driscoll
Frederick W. Driscoll
Title: Director
March 13, 2025
By:
/s/ Asher Alban Chanan-Khan
Asher Alban Chanan-Khan
Title: Director
March 13, 2025
By:
/s/ Stefan D. Loren
Stefan D. Loren
Title: Director
March 13, 2025
By:
/s/ John L. Neis
John L. Neis
Title: Director
March 13, 2025
By:
/s/ Douglas J. Swirsky
Douglas J. Swirsky
Title: Director
March 13, 2025
97