Cyclacel Pharmaceuticals, Inc. [CYCCP] Filings

10-Q 1 cycc-20240630x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


	☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

	☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from __________________ to __________________

Commission file number 000-50626

CYCLACEL PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)


Delaware		91-1707622
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

200 Connell Drive, Suite 1500 Berkeley Heights, New Jersey		07922
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (908) 517-7330

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	CYCC	The Nasdaq Stock Market LLC
Preferred Stock, $0.001 par value	CYCCP	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting filer ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 9, 2024 there were 1,974,204 shares of the registrant’s common stock outstanding.

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CYCLACEL PHARMACEUTICALS, INC.

INDEX

		Page
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
Part II. Other Information
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	31

SIGNATURE PAGE		32

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CYCLACEL PHARMACEUTICALS, INC.

CONSOLIDATED BALANCE SHEETS

(In $000s, except share, per share, and liquidation preference amounts)

(Unaudited)


	June 30,		December 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	6,000	$	3,378
Prepaid expenses and other current assets		1,707		4,066
Total current assets		7,707		7,444
Property and equipment, net		5		9
Right-of-use lease asset		65		93
Non-current deposits		413		1,259
Total assets	$	8,190	$	8,805
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,741	$	3,543
Accrued and other current liabilities		2,445		4,618
Total current liabilities		7,186		8,161
Lease liability		5		37
Total liabilities		7,191		8,198

Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized at June 30, 2024 and December 31, 2023;
6% Convertible Exchangeable preferred stock; 335,273 shares issued and outstanding at June 30, 2024 and December 31, 2023. Aggregate preference in liquidation of $4,006,512 as of June 30, 2024 and December 31, 2023		—		—
Series A convertible preferred stock, $0.001 par value; 264 shares issued and outstanding at June 30, 2024 and December 31, 2023		—		—
Series B convertible preferred stock, $0.001 par value; 0 shares issued and outstanding at June 30, 2024 and 119,000 shares issued and outstanding at December 31, 2023		—		—
Common stock, $0.001 par value; 100,000,000 shares authorized at June 30, 2024 and December 31, 2023; 1,805,204 shares issued and outstanding at June 30, 2024 and 1,058,892 shares issued and outstanding at December 31, 2023		2		1
Additional paid-in capital		436,397		429,796
Accumulated other comprehensive loss		(915)		(908)
Accumulated deficit		(434,485)		(428,282)
Total stockholders’ equity		999		607
Total liabilities and stockholders’ equity	$	8,190	$	8,805

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

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CYCLACEL PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In $000s, except share and per share amounts)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenues:
Clinical trial supply	$	4	$	373		33		373
Revenues	$	4	$	373	$	33	$	373

Operating expenses:
Research and development		2,023		4,727		4,825		10,401
General and administrative		1,625		1,575		3,207		3,220
Total operating expenses		3,648		6,302		8,032		13,621
Operating loss		(3,644)		(5,929)		(7,999)		(13,248)
Other (expense) income:
Foreign exchange gains (losses)		3		(76)		4		(161)
Interest (expense) income		(28)		77		(26)		193
Other income (expense), net		—		(106)		52		58
Total other (expense) income, net		(25)		(105)		30		90
Loss before taxes		(3,669)		(6,034)		(7,969)		(13,158)
Income tax benefit		412		586		1,766		1,906
Net loss		(3,257)		(5,448)		(6,203)		(11,252)
Dividend on convertible exchangeable preferred shares		—		(50)		—		(101)
Net loss applicable to common shareholders	$	(3,257)	$	(5,498)	$	(6,203)	$	(11,353)
Basic and diluted earnings per common share:
Net loss per share – basic and diluted (common shareholders)	$	(0.72)	$	(6.57)	$	(2.13)	$	(13.57)
Net loss per share – basic and diluted (redeemable common shareholders)	$	—	$	(6.57)	$	—	$	(13.57)

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

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CYCLACEL PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In $000s)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net loss	$	(3,257)	$	(5,448)	$	(6,203)	$	(11,252)
Translation adjustment		(521)		(5,450)		1,619		(10,621)
Unrealized foreign exchange gain (loss) on intercompany loans		504		5,577		(1,626)		10,840
Comprehensive loss	$	(3,274)	$	(5,321)	$	(6,210)	$	(11,033)

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

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CYCLACEL PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In $000s, except share amounts)

(Unaudited)


									Accumulated
							Additional		Other				Total
	Preferred Stock			Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Loss		Deficit		Equity
Balances at December 31, 2022	573,282	$	—	628,139	$	1	$	422,981	$	(1,316)	$	(405,727)	$	15,939

Stock-based compensation	—		—	—		—		401		—		—		401
Preferred stock dividends	—		—	—		—		(50)		—		—		(50)
Unrealized foreign exchange on intercompany loans	—		—	—		—		—		5,263		—		5,263
Translation adjustment	—		—	—		—				(5,171)				(5,171)
Loss for the period	—		—	—		—		—		—		(5,804)		(5,804)
Balances at March 31, 2023	573,282	$	—	628,139	$	1	$	423,332	$	(1,224)	$	(411,531)	$	10,578

Issue of common stock on At Market issuance sales agreement, net of expenses	—		—	53,213		—		1,105		—		—		1,105
Stock-based compensation	—		—	—		—		359		—		—		359
Preferred stock dividends	—		—	—		—		(50)		—		—		(50)
Unrealized foreign exchange on intercompany loans	—		—	—		—				5,577				5,577
Translation adjustment	—		—	—		—		—		(5,450)		—		(5,450)
Loss for the period	—		—	—		—		—		—		(5,448)		(5,448)
Balances at June 30, 2023	573,282	$	—	681,352	$	1	$	424,746	$	(1,097)	$	(416,979)	$	6,671


Balances at December 31, 2023	454,537	$	—	1,058,892	$	1	$	429,796	$	(908)	$	(428,282)	$	607
Issue costs on issuance of common stock upon conversion of pre-funded warrants in underwritten offering	—		—	219,700		—		(80)		—		—		(80)
Series B Preferred stock conversions	(119,000)		—	39,667		—		—		—		—		—
Stock-based compensation	—		—	—		—		203		—		—		203
Unrealized foreign exchange on intercompany loans	—		—	—		—		—		(2,130)		—		(2,130)
Translation adjustment	—		—	—		—				2,140				2,140
Loss for the period	—		—	—		—		—		—		(2,946)		(2,946)
Balances at March 31, 2024	335,537	$	—	1,318,259	$	1	$	429,919	$	(898)	$	(431,228)	$	(2,206)

Issue of common stock and pre-funded warrants in Securities Purchase Agreement In Private Placement, net of expenses	—		—	486,945		1		6,289		—		—		6,290
Stock-based compensation	—		—	—		—		189		—		—		189
Unrealized foreign exchange on intercompany loans	—		—	—		—		—		504		—		504
Translation adjustment	—		—	—		—				(521)				(521)
Loss for the period	—		—	—		—		—		—		(3,257)		(3,257)
Balances at June 30, 2024	335,537	$	—	1,805,204	$	2	$	436,397	$	(915)	$	(434,485)	$	999

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

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CYCLACEL PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In $000s)

(Unaudited)


	Six Months Ended
	June 30,
	2024		2023
Operating activities:
Net loss	$	(6,203)	$	(11,252)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		4		16
Stock-based compensation		392		760
Changes in lease liability		(32)		(40)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		3,196		3,289
Accounts payable, accrued and other current liabilities		(924)		(939)
Net cash used in operating activities		(3,567)		(8,166)
Investing activities:
Purchase of property, plant and equipment		—		(6)
Net cash used in investing activities		—		(6)
Financing activities:
Proceeds from issuing common stock and pre-funded warrants, net		6,210		—
Payment of preferred stock dividend		—		(101)
Net cash provided by (used) in financing activities		6,210		(101)

Effect of exchange rate changes on cash and cash equivalents		(21)		92
Net increase (decrease) in cash and cash equivalents		2,622		(8,181)
Cash and cash equivalents, beginning of period		3,378		18,345
Cash and cash equivalents, end of period	$	6,000	$	10,164
Supplemental cash flow information:
Cash received during the period for:
Interest	$	17	$	193
Research & development tax credits	$	3,715	$	4,846

Cash paid during the period for:
Taxes	$	2	$	2

Non cash financing activities:
Accrual of preferred stock dividends	$	—	$	50

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

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CYCLACEL PHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Company Overview

Nature of Operations

Cyclacel Pharmaceuticals, Inc. (“Cyclacel” or the “Company”) is a clinical-stage biopharmaceutical company developing innovative cancer medicines based on cell cycle, transcriptional regulation, epigenetics and mitosis control biology. Cyclacel is a pioneer company in the field of cancer cell cycle biology with a vision to improve patient healthcare by translating insights in cancer biology into medicines that can overcome resistance and ultimately increase a patient’s overall survival.

Through June 30, 2024, substantially all efforts of the Company to date have been devoted to performing research and development, conducting clinical trials, developing and acquiring intellectual property, raising capital and recruiting and training personnel.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated balance sheet as of June 30, 2024, the consolidated statements of operations, comprehensive loss, and stockholders’ equity for the three and six months ended June 30, 2024 and 2023 and the consolidated statements of cash flows for the six months ended June 30, 2024 and 2023, and all related disclosures contained in the accompanying notes, are unaudited. The consolidated balance sheet as of December 31, 2023 is derived from the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) on March 21, 2024. The consolidated financial statements are presented on the basis of accounting principles that are generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for a complete set of financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments necessary to present fairly the consolidated balance sheet as of June 30, 2024, and the results of operations, comprehensive loss, and changes in stockholders’ equity for the three and six months ended June 30, 2024, and cash flows for the six months ended June 30, 2024, have been made. The interim results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other reporting period. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the year ended December 31, 2023 that are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 21, 2023.

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

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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 $6.0 million as of June 30, 2024, will allow it to meet its liquidity requirements into the fourth quarter of 2024. The Company’s history of losses, negative cash flows from operations, potential rescission rights, liquidity resources currently on hand, and its dependence on the ability to obtain additional financing to fund its operations after the current resources are exhausted, about which there can be no certainty, have resulted in the assessment that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the issuance date of these financial statements. 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 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.

Recently Issued Accounting Pronouncements

The FASB has issued ASU 2023-07, “Segment Reporting (Topic 280)”. This standard will require all public entities – even those like the Company that have a single reportable segment – to disclose additional information about the title and position of the Chief Operating Decision Maker (“CODM”), the measure or measures of segment profit and loss used by the CODM in assessing segment performance and deciding how to allocate resources, an explanation of how the CODM uses the reported measure(s) in assessing segment performance, significant segment expenses that are regularly provided to the CODM, and a reconciliation of segment profit and loss to the closest consolidated totals prepared under United States GAAP. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. ASU 2023-07 will not change the way in which reportable segments are determined. However, the Company is currently evaluating the effects of ASU 2023-07 on its financial statement presentation and disclosures.

The FASB has issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This standard will require all entities to disclose the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign for each annual reporting period. The guidance in ASU 2023-09 becomes effective for annual periods beginning after December 15, 2024. The Company does not anticipate that ASU 2023-09 will require significant adjustments to the presentation of that information.

Fair Value of Financial Instruments

Financial instruments consist of cash equivalents, accounts payable and accrued liabilities. The carrying amounts of cash equivalents, accounts payable and accrued liabilities approximate their respective fair values due to the nature of the accounts, notably their short maturities.

Comprehensive Income (Loss)

All components of comprehensive income (loss), including net income (loss), are reported in the financial statements in the period in which they are recognized. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Net income (loss) and other comprehensive income (loss), including foreign currency translation adjustments, are reported, net of any related tax effect, to arrive at comprehensive income (loss). No taxes were recorded on items of other comprehensive income (loss). There were no reclassifications out of other comprehensive income (loss) during the three and six months ended June 30, 2024 and 2023.

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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. This accounting policy is also applied to foreign currency denominated intercompany payables or receivables for which settlement is planned or anticipated in the foreseeable future.

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 for which

settlement is not planned or anticipated in the foreseeable future and that are of a long-term-investment nature, are recorded in other comprehensive loss.

Leases

The Company accounts for lease contracts in accordance with ASC 842. As of June 30, 2024, the Company’s outstanding leases are classified as operating leases.

The Company recognizes an asset for the right to use an underlying leased asset for the lease term and records lease liabilities based on the present value of the Company’s obligation to make lease payments under the lease. 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 the loan is repaid (e.g., amortizing versus bullet), and the Company’s credit risk.

The Company evaluates lessee-controlled 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

●

The remaining useful lives of any related leasehold improvements.

Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease payments, if any, are recognized in the period when the obligation to make those payments is incurred. Lease incentives received prior to lease commencement are recorded as a reduction in the right-of-use asset. Fixed lease incentives received after lease commencement reduce both the lease liability and the right-of-use asset.

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

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Revenue Recognition

When the Company enters into contracts with customers, the Company recognizes revenue using the five step-model provided in ASC 606, Revenue from Contracts with Customers (“ASC 606”):

(1)

identify the contract with a customer;

(2)

identify the performance obligations in the contract;

(3)

determine the transaction price;

(4)

allocate the transaction price to the performance obligations in the contract; and

(5)

recognize revenue when, or as, the Company satisfies a performance obligation.

The transaction price includes fixed payments and an estimate of variable consideration, including milestone payments. The Company determines the variable consideration to be included in the transaction price by estimating the most likely amount that will be received and then applies a constraint to reduce the consideration to the amount which is probable of being received. When applying the constraint, the Company considers:

●

Whether achievement of a development milestone is highly susceptible to factors outside the entity’s influence, such as milestones involving the judgment or actions of third parties, including regulatory bodies;

●

Whether the uncertainty about the achievement of the milestone is not expected to be resolved for a long period of time;

●

Whether the Company can reasonably predict that a milestone will be achieved based on previous experience; and

●

The complexity and inherent uncertainty underlying the achievement of the milestone.

The transaction price is allocated to each performance obligation based on the relative selling price of each performance obligation. The best estimate of the selling price is determined after considering all reasonably available information, including market data and conditions, entity-specific factors such as the cost structure of the deliverable and internal profit and pricing objectives.

The revenue allocated to each performance obligation is recognized as or when the Company satisfies the performance obligation.

The Company recognizes a contract asset, when the value of satisfied (or part satisfied) performance obligations is in excess of the payment due to the Company, and deferred revenue when the amount of unconditional consideration is in excess of the value of satisfied (or part satisfied) performance obligations. Once a right to receive consideration is unconditional, that amount is presented as a receivable.

Grant revenue received from organizations that are not the Company’s customers, such as charitable foundations or government agencies, is presented as a reduction against the related research and development expenses.

3. Revenue

The Company recognized $4,000 and $33,000 of revenue for the three and six months ended June 30, 2024 respectively. This revenue is related to recovery of clinical manufacturing costs associated with an investigator sponsored study managed by Cedar-Sinai Medical Center. Revenues recognized for both the three and six months ended June 30, 2023 were $373,000.

4. Net Loss per Common Share

The Company calculates net loss per common share in accordance with ASC 260 “Earnings Per Share” (“ASC 260”). Basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period.

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The following potentially dilutive securities have not been included in the computation of diluted net loss per share for the three months ended June 30, 2024 and 2023, as the result would be anti-dilutive:


	June 30,	June 30,
	2024	2023
Stock options	131,744	146,356
Restricted Stock Units	40,926	34,798
6% convertible exchangeable preferred stock	6	6
Series A preferred stock	440	440
Series B preferred stock	—	79,248
Common stock warrants	10,871,577	215,625
Total shares excluded from calculation	11,044,693	476,473

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in $000s):


	June 30,		December 31,
	2024		2023
Research and development tax credit receivable	$	974	$	2,933
Prepayments and VAT receivable		433		792
Other current assets		300		341
	$	1,707	$	4,066

6. Non-Current Assets

As of June 30, 2024, the Company had non-current assets of $0.4 million, which is primarily comprised of deposits held by a contract research organization in relation to the Company’s clinical trials.

7. Accrued and Other Liabilities

Accrued and other current liabilities consisted of the following (in $000s):


	June 30,		December 31,
	2024		2023
Accrued research and development	$	1,570	$	3,668
Accrued legal and professional fees		480		570
Other current liabilities		395		380
	$	2,445	$	4,618

8. Leases

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

For the six months ended June 30, 2024 and 2023, the Company recognized operating lease expenses of $38,062 and $36,949 respectively, including $6,008 and $4,896 respectively relating to a short term lease for offices in Dundee, Scotland. Cash payments made during the six months ended June 30, 2024 and 2023 totaled $38,058 and $36,318, respectively, and were presented within cash outflows from operating activities. The remaining lease term as of

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June 30, 2024 is approximately 1.1 years for the Berkeley Heights facility. The discount rate used by the Company in determining the lease liability was 12%.

Remaining lease payments for both facilities are as follows (in $000s):


2024	$	33
2025		38
Thereafter		—
Total future minimum lease obligation	$	71
Less discount		(6)
Total	$	65

9. Stock Based Compensation

ASC 718 requires compensation expense associated with share-based awards to be recognized over the requisite service period which, for the Company, is the period between the grant date and the date the award vests or becomes exercisable. The Company recognizes all share-based awards under the straight-line attribution method, assuming that all granted awards will vest. Forfeitures are recognized in the periods when they occur.

Stock based compensation has been reported within expense line items on the consolidated statement of operations for the three and six months ended June 30, 2024 and 2023 as shown in the following table (in $000s):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
General and administrative	$	168	$	243	$	321	$	522
Research and development		21	$	116		71		238
Stock-based compensation costs	$	189	$	359	$	392	$	760

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 21, 2024, the Company’s stockholders approved an additional 160,000 shares of common stock that may be issued under the 2018 Plan. On June 13, 2023, the Company’s stockholders approved an additional 60,000 shares of common stock that may be issued under the 2018 Plan. As of June 30, 2024, the Company has reserved 190,039 shares of the Company’s common stock under the 2018 Plan for future issuances. Stock option awards granted under the Company’s equity incentive plans have a maximum life of 10 years and generally vest over a one to four-year period from the date of grant.

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 13,333 shares of the Company’s common stock (or the equivalent of such number). As of June 30, 2024, 8,000 shares under the Inducement Plan have been issued, leaving a remaining reserve of 5,333 shares.

Table of Contents

Option Grants and Exercises

There were 12,500 options granted during the six months ended June 30, 2024, all issued under the 2018 Plan. These options had a grant date fair value of $1.77 per option. There were 43,342 options granted during the six months ended June 30, 2023. These options had a grant date fair value ranging between $6.32-$10.98 per option.

All of the options granted during the six months ended June 30, 2024 shall vest six months from their date of grant. Of the options granted during the six months ended June 30, 2023, 25,633 awards shall vest on the third anniversary of their date of grant, or earlier if either of the certain performance conditions are met relating to enrollment goals for various clinical studies. The Company has assumed that these awards will vest after three years as satisfaction of the performance conditions is not probable at this time.

The fair value of the stock options granted is calculated using the Black-Scholes option-pricing model as prescribed by ASC 718 using the following assumptions:



	Six months ended	Six months ended
	June 30, 2024	June 30, 2023
Expected term (years)	6	5 - 6
Risk free interest rate	3.995%	3.660% – 4.050%
Volatility	93%	89% – 92%
Expected dividend yield over expected term	0.00%	0.00%
Resulting weighted average grant date fair value	$1.77	$6.63

There were no stock options exercised during each of the six months ended June 30, 2024 and 2023, respectively. The Company does not expect to be able to benefit from the deduction for stock option exercises that may occur because the company has tax loss carryforwards from prior periods that would be expected to offset any potential taxable income.

As of June 30, 2024, the total remaining unrecognized compensation cost related to the non-vested awards with service conditions amounted to approximately $0.4 million, which will be amortized over the weighted-average remaining requisite service period of 1.46 years.

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, 2023	142,796	$	50.20	7.96	$	—
Granted	12,500	$	2.28	—	$	—
Exercised	—	$	—	—	$	—
Cancelled/forfeited	(23,552)	$	47.39	—	$	—
Options outstanding at June 30, 2024	131,744	$	46.16	7.32	$	—

Unvested at June 30, 2024	27,377	$	16.51	8.72	$	—
Vested and exercisable at June 30, 2024	104,367	$	53.94	6.95	$	—

Restricted Stock Units

The Company issued 12,500 restricted stock units during the six months ended June 30, 2024. These restricted stock units vest monthly over a six-month service period. These restricted stock units were valued at $2.28 at the date of grant, which was equivalent to the market price of a share of the Company’s common stock on that date.

Table of Contents

A total of 17,133 restricted stock units issued in January 2023 vest on the third anniversary of their date of grant, or earlier if certain defined clinical trial related performance targets are met. A three-year vesting assumption was applied to these restricted stock units as satisfaction of the performance conditions is not probable at this time. Each of these restricted stock units was valued at $13.50 at the date of grant, which was equivalent to the market price of a share of the Company’s common stock on that date. During 2023, 300 of these restricted stock units were forfeited as the recipient voluntarily terminated employment with the Company. Through June 30, 2024, an additional 6,072 of these restricted stock units have been forfeited due to the holders’ termination of employment with the Company.

Summarized information for restricted stock units as of June 30, 2024 is as follows:


		Weighted		Weighted
		Average		Average
	Restricted	Grant Date		Remaining
	Stock Units	Value Per Share		Term
Restricted Stock Units outstanding at December 31, 2023	34,498	$	16.26	8.96 years
Granted	12,500		2.28
Cancelled/forfeited	(6,072)		15.76
Restricted Stock Units outstanding at June 30, 2024	40,926	$	12.07	8.80 years

Unvested at June 30, 2024	13,531	$	11.90	8.71 years

Vested at June 30, 2024	27,396	$	12.15	8.84 years

10. Stockholders Equity

April 2024 Securities Purchase Agreement

On April 30, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”) for the issuance and sale in a private placement (the “Private Placement”) of (i) 145,000 shares of the Company’s common stock, (ii) pre-funded warrants to purchase up to 4,823,945 shares of common stock (the “Pre-Funded Warrants”), (iii) series A warrants to purchase up to 4,968,945 shares of common stock (the “Series A Warrants”), and (iv) series B warrants to purchase up to

Cyclacel Pharmaceuticals, Inc. [CYCCP] Filings
Cyclacel Pharmaceuticals, Inc. [CYCC] Filings
10-Q	[2024-08-14]
10-Q	[2024-05-14]
S-1	[2024-05-06]
S-1	[2024-03-22]
10-K	[2024-03-21]
S-1	[2024-01-19]
10-Q	[2023-11-29]
10-Q	[2023-08-10]
10-Q	[2023-05-11]
10-K	[2023-03-08]
10-Q	[2022-11-10]
10-Q	[2022-08-11]
10-Q	[2022-05-12]
10-K	[2022-03-30]
10-Q	[2021-11-12]
10-Q	[2021-08-12]
10-Q	[2021-05-14]
10-K	[2021-03-01]
10-Q	[2020-11-12]
10-Q	[2020-08-13]
10-Q	[2020-05-12]
S-1	[2020-03-13]
10-K	[2020-03-05]
10-Q	[2019-11-13]
10-Q	[2019-08-13]
10-Q	[2019-05-14]
10-K	[2019-03-28]
10-Q	[2018-11-13]
10-Q	[2018-08-09]
10-Q	[2018-05-14]
10-K	[2018-03-30]
10-Q	[2017-11-13]
10-Q	[2017-08-10]
S-1	[2017-05-26]
10-Q	[2017-05-12]
10-K	[2017-03-31]
10-Q	[2016-11-14]
10-Q	[2016-08-11]
10-Q	[2016-05-13]
10-K	[2016-03-29]
10-Q	[2015-11-12]
10-Q	[2015-08-12]
10-Q	[2015-05-12]
10-K	[2015-03-31]
10-Q	[2014-11-12]
10-Q	[2014-08-12]
10-Q	[2014-05-13]
10-K	[2014-03-26]
10-Q	[2013-11-14]
10-Q	[2013-08-14]
10-Q	[2013-05-13]
10-K	[2013-04-01]
S-1	[2012-12-26]
10-Q	[2012-11-16]
10-Q	[2012-08-14]
10-Q	[2012-05-15]
10-K	[2012-03-30]

Cyclacel Pharmaceuticals, Inc. [CYCCP] Filings

Cyclacel Pharmaceuticals, Inc. [CYCC] Filings