Cyclacel(CYCC) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents Cyclacel Pharmaceuticals, Inc.'s unaudited consolidated financial statements and management's analysis Item 1. Financial Statements Presents Cyclacel's unaudited consolidated financial statements, highlighting improved equity, reduced net loss, and a deconsolidation gain Consolidated Balance Sheets Cash and cash equivalents increased, total liabilities decreased, and stockholders' equity shifted from deficit to positive | Metric | June 30, 2025 ($000s) | December 31, 2024 ($000s) | Change ($000s) | Change (%) | | :-------------------------------- | :--------------------- | :------------------------ | :-------------- | :--------- | | Cash and cash equivalents | 4,275 | 3,137 | 1,138 | 36.28% | | Total current assets | 4,383 | 3,674 | 709 | 19.29% | | Total assets | 4,401 | 4,094 | 307 | 7.50% | | Accounts payable | 221 | 4,599 | (4,378) | -95.20% | | Accrued and other current liabilities | 539 | 1,669 | (1,130) | -67.70% | | Total current liabilities | 760 | 6,268 | (5,508) | -87.88% | | Total liabilities | 770 | 6,268 | (5,498) | -87.71% | | Total stockholders' equity (deficit) | 3,631 | (2,174) | 5,805 | 267.02% | - The company's total stockholders' equity shifted from a deficit of $2.174 million at December 31, 2024, to a positive equity of $3.631 million at June 30, 2025, indicating a significant improvement in financial position[18] Consolidated Statements of Operations The company reported no revenue, significantly reduced net loss due to a deconsolidation gain, and decreased R&D expenses | Metric ($000s) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (6 Months) | | :-------------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Revenues | — | 4 | (4) | — | 33 | (33) | | Research and development | 68 | 2,023 | (1,955) | 890 | 4,825 | (3,935) | | General and administrative | 1,249 | 1,625 | (376) | 5,463 | 3,207 | 2,256 | | Operating loss | (1,317) | (3,644) | 2,327 | (6,353) | (7,999) | 1,646 | | Gain on deconsolidation of subsidiary | — | — | — | 4,947 | — | 4,947 | | Net loss | (1,318) | (3,257) | 1,939 | (1,399) | (6,203) | 4,804 | | Net loss per share – basic and diluted | (0.98) | (172.18) | 171.2 | (1.62) | (509.96) | 508.34 | - The company reported $0 revenue for both the three and six months ended June 30, 2025, a decrease from $4 thousand and $33 thousand respectively in the prior year periods[21] - Net loss significantly decreased for the six months ended June 30, 2025, to $(1.399) million from $(6.203) million in the prior year, primarily due to a $4.947 million gain on deconsolidation of a subsidiary[21] Consolidated Statements of Comprehensive Loss Comprehensive loss significantly decreased for the six months ended June 30, 2025, driven by lower net loss and positive translation adjustment | Metric ($000s) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (6 Months) | | :-------------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Net loss | (1,318) | (3,257) | 1,939 | (1,399) | (6,203) | 4,804 | | Translation adjustment | — | (521) | 521 | 3,271 | 1,619 | 1,652 | | Unrealized foreign exchange gain (loss) on intercompany loans | — | 504 | (504) | (2,380) | (1,626) | (754) | | Comprehensive loss | (1,318) | (3,274) | 1,956 | (508) | (6,210) | 5,702 | - Comprehensive loss for the six months ended June 30, 2025, significantly decreased to $(508) thousand from $(6.210) million in the prior year, driven by a lower net loss and a positive translation adjustment[24] Consolidated Statements of Stockholders' Equity (Deficit) Total stockholders' equity shifted from a deficit to positive equity due to new preferred stock issuances and conversions | Metric ($000s) | December 31, 2024 | June 30, 2025 | | :-------------------------------- | :------------------ | :------------ | | Total Stockholders' Equity (Deficit) | (2,174) | 3,631 | | Additional Paid-in Capital | 438,211 | 445,405 | | Accumulated Deficit | (439,494) | (441,779) | - Total stockholders' equity shifted from a deficit of $2.174 million at December 31, 2024, to a positive equity of $3.631 million at June 30, 2025, primarily due to new preferred stock issuances and conversions, and the deconsolidation of a foreign operation[26][28] - Significant activities in the first six months of 2025 included the issuance of Series C, D, E, and F preferred stock, and the conversion of Series C, D, and E preferred stock into common stock[26][28] Consolidated Statements of Cash Flows Net cash used in operating activities increased, while net cash provided by financing activities decreased | Metric ($000s) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($000s) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------- | | Net cash used in operating activities | (4,303) | (3,567) | (736) | | Net cash used in investing activities | — | — | — | | Net cash provided by financing activities | 5,526 | 6,210 | (684) | | Net increase (decrease) in cash and cash equivalents | 1,138 | 2,622 | (1,484) | | Cash and cash equivalents, end of period | 4,275 | 6,000 | (1,725) | - Net cash used in operating activities increased by $0.7 million to $4.3 million for the six months ended June 30, 2025, compared to the same period in 2024[31][161] - Net cash provided by financing activities decreased by $0.7 million to $5.5 million for the six months ended June 30, 2025, primarily from preferred stock issuances, offset by warrant payments[31][163] Notes to Unaudited Consolidated Financial Statements This section provides detailed notes explaining the accounting policies and specific financial statement items 1. Company Overview Cyclacel is a clinical-stage biopharmaceutical company focused on cancer medicines, with its UK subsidiary entering liquidation - Cyclacel Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on developing cancer medicines based on cell cycle, transcriptional regulation, epigenetics, and mitosis control biology[33] - The company's wholly-owned UK subsidiary, Cyclacel Limited, entered creditors voluntary liquidation on January 24, 2025, leading to its deconsolidation and a gain of approximately $5.0 million on the income statement[34] 2. Summary of Significant Accounting Policies This section outlines the key accounting principles and policies applied in preparing the consolidated financial statements Basis of Presentation The unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and SEC rules - The consolidated financial statements are unaudited and prepared in accordance with GAAP for interim financial information and SEC rules, not including all disclosures required for a complete set of annual financial statements[36] Reverse Stock Splits The Company effected two reverse stock splits in May and July 2025, retrospectively adjusting all share data - The Company effected a one-for-sixteen reverse stock split on May 12, 2025, and a further one-for-fifteen reverse stock split on July 7, 2025. All share and per share data have been retrospectively adjusted[37] Going Concern Management has substantial doubt about the Company's ability to continue as a going concern due to losses and financing dependence - Management has assessed that there is substantial doubt about the Company's ability to continue as a going concern for at least twelve months from the issuance date of the financial statements, due to a history of losses, negative cash flows, and dependence on additional financing[39] - Cash and cash equivalents of $4.3 million as of June 30, 2025, are anticipated to meet liquidity requirements only into the fourth quarter of 2025[39] - The Company regained compliance with Nasdaq's equity requirement on February 25, 2025, but is subject to a Mandatory Panel Monitor for one year[40] Newly Adopted Accounting Pronouncements The Company adopted ASU 2023-09 on January 1, 2025, requiring specified captions for tax rate reconciliation and disaggregated income taxes paid - On January 1, 2025, the Company adopted ASU 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' which requires specified captions for tax rate reconciliation and disaggregated income taxes paid[42] Recently Issued Accounting Pronouncements The FASB issued ASU 2024-03, effective after December 15, 2026, which the Company is currently evaluating - The FASB issued ASU 2024-03, 'Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,' effective for annual periods after December 15, 2026, which the Company is currently evaluating[43] Fair Value of Financial Instruments The carrying amounts of cash equivalents, accounts payable, and accrued liabilities approximate their fair values - The carrying amounts of cash equivalents, accounts payable, and accrued liabilities approximate their fair values due to their short maturities[44] Comprehensive Income (Loss) Upon deconsolidation of the UK subsidiary, $0.9 million of accumulated comprehensive income (loss) was reclassified into earnings - Upon deconsolidation of the UK subsidiary on January 24, 2025, $0.9 million of accumulated comprehensive income (loss) was reclassified into earnings as part of the gain on deconsolidation[45] Foreign Currency and Currency Translation Foreign currency-denominated assets and liabilities are remeasured at current exchange rates, with gains or losses recognized in operations - Foreign currency-denominated monetary assets and liabilities are remeasured at current exchange rates, with gains or losses recognized in the statement of operations[46] - Prior to January 24, 2025, translation adjustments and unrealized foreign exchange gains/losses on long-term intercompany loans were recorded in other comprehensive loss[47] Leases The Company accounts for operating leases under ASC 842, recognizing right-of-use assets and lease liabilities - The Company accounts for lease contracts under ASC 842, classifying outstanding leases as operating leases and recognizing a right-of-use asset and lease liabilities based on the present value of lease payments[48][49] Revenue Recognition Revenue is recognized using the five-step model of ASC 606, with grant revenue presented as a reduction of R&D expenses - Revenue is recognized using the five-step model provided in ASC 606, with transaction prices including fixed payments and estimated variable consideration, subject to a constraint[52] - Grant revenue from non-customers (e.g., charitable foundations, government agencies) is presented as a reduction against related research and development expenses[58] 3. Revenue The Company recognized no revenue for the three and six months ended June 30, 2025, a decrease from the prior year | Period | Revenue ($000s) | | :--------------------------- | :---------------- | | 3 months ended June 30, 2025 | — | | 3 months ended June 30, 2024 | 4 | | 6 months ended June 30, 2025 | — | | 6 months ended June 30, 2024 | 33 | - The Company recognized no revenue for the three and six months ended June 30, 2025, a decrease from $4 thousand and $33 thousand respectively in the prior year, which was related to clinical manufacturing cost recovery[59] 4. Net Loss per Common Share Potentially dilutive securities were excluded from diluted net loss per share computation as their inclusion would be anti-dilutive - Potentially dilutive securities, including stock options, restricted stock units, preferred stock, and common stock warrants, were excluded from the computation of diluted net loss per share for the six months ended June 30, 2025 and 2024, as their inclusion would have been anti-dilutive[61] Potentially Dilutive Securities | Potentially Dilutive Securities | June 30, 2025 | June 30, 2024 | | :------------------------------ | :------------ | :------------ | | Stock options | 25,106 | 549 | | Restricted Stock Units | 10 | 171 | | Series A preferred stock | 2 | 2 | | Series F preferred stock | 654,000 | — | | Common stock warrants | 1,965,178 | 45,298 | | Total shares excluded | 2,644,296 | 46,020 | 5. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets significantly decreased from $537 thousand to $108 thousand by June 30, 2025 | Category | June 30, 2025 ($000s) | December 31, 2024 ($000s) | | :----------------------- | :-------------------- | :------------------------ | | Prepayments and VAT receivable | 50 | 237 | | Other current assets | 58 | 300 | | Total | 108 | 537 | - Prepaid expenses and other current assets decreased significantly from $537 thousand at December 31, 2024, to $108 thousand at June 30, 2025[62] 6. Non-Current Assets The Company had no non-current assets as of June 30, 2025, a decrease from $0.4 million at December 31, 2024 - The Company had no non-current assets as of June 30, 2025, a decrease from $0.4 million at December 31, 2024, which primarily consisted of deposits held by a contract research organization[63] 7. Accrued and Other Liabilities Accrued and other current liabilities decreased significantly due to a reduction in accrued research and development costs | Category | June 30, 2025 ($000s) | December 31, 2024 ($000s) | | :------------------------------ | :-------------------- | :------------------------ | | Accrued research and development | 1 | 1,299 | | Accrued legal and professional fees | 500 | 87 | | Other current liabilities | 38 | 283 | | Total | 539 | 1,669 | - Accrued and other current liabilities decreased from $1.669 million at December 31, 2024, to $539 thousand at June 30, 2025, primarily due to a significant reduction in accrued research and development costs[64] 8. Leases The Company maintains an operating lease for its Kuala Lumpur facility, with lease expenses significantly decreasing after a headquarters lease termination - The Company currently has an operating lease liability for its Kuala Lumpur, Malaysia facility, with a remaining lease term of approximately 1.7 years as of June 30, 2025[65][66] - Operating lease expenses decreased significantly from $38,062 for the six months ended June 30, 2024, to $3,790 for the same period in 2025, following the termination of its New Jersey headquarters lease[65][66] 9. Stock Based Compensation Total stock-based compensation costs increased significantly, primarily driven by general and administrative expenses and new option grants | Expense Category | 3 Months Ended June 30, 2025 ($000s) | 3 Months Ended June 30, 2024 ($000s) | 6 Months Ended June 30, 2025 ($000s) | 6 Months Ended June 30, 2024 ($000s) | | :----------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | General and administrative | 2 | 168 | 1,595 | 321 | | Research and development | 5 | 21 | 78 | 71 | | Total Stock-based compensation costs | 7 | 189 | 1,673 | 392 | - Total stock-based compensation costs increased significantly to $1.673 million for the six months ended June 30, 2025, from $392 thousand in the prior year, primarily driven by general and administrative expenses[69] - The Company granted 24,812 options during the six months ended June 30, 2025, with a weighted average grant date fair value of $70.79 per option, and accelerated recognition of unrecognized compensation expense for restricted stock units due to impending cancellation from the July 2025 Reverse Stock Split[75][76][80] 10. Stockholders' Equity This section details changes in common stock, warrants, and preferred stock, including issuances, conversions, and exercises Common Stock Equity Offerings The Company issued Series F Convertible Preferred Stock and Warrants in June 2025, raising $3.0 million for general corporate purposes - In June 2025, the Company issued 3,000,000 shares of Series F Convertible Preferred Stock and 1,962,000 Warrants for aggregate gross proceeds of $3.0 million, to be used for general corporate and operating purposes[82][83] - In April 2024, the Company completed a private placement raising approximately $8.0 million gross proceeds from the issuance of common stock, pre-funded warrants, and common warrants[89][92] - In December 2023, the Company completed a registered direct offering and concurrent private placement, raising approximately $1.0 million net proceeds from the sale of common stock, pre-funded warrants, and common warrants[97][98] Warrants 1,962,000 warrants from the June 2025 financing remained outstanding, while 82,816 warrants from November 2024 were exercised - As of June 30, 2025, 1,962,000 warrants from the June 2025 financing transaction remained outstanding, with exercise prices ranging from $7.65 to $10.20 per share and a five-year expiration[104][105] - All 82,816 warrants from the November 2024 agreement were exercised during the six months ended June 30, 2025, resulting in a $1.1 million cash payment by the Company[107][108] - A total of 20,704 Series A warrants from the April 2024 financing were exercised during the six months ended June 30, 2025[110] Preferred Stock 3,000,000 shares of Series F Preferred Stock were issued, while Series C, D, and E Preferred Stock were fully converted - 3,000,000 shares of Series F Preferred Stock were issued in June 2025 for $3.0 million, convertible into 0.218 shares of common stock each, with all shares remaining outstanding as of June 30, 2025[116][117][118] - All 1,000,000 shares of Series E Preferred Stock, issued in March 2025 for $1.0 million, were converted into 458,333 shares of Common Stock during the six months ended June 30, 2025[119][120][122] - Series C and D Preferred Stock, issued in January 2025 for $3.1 million, were fully converted into common stock by April 2, 2025, with no shares remaining outstanding as of June 30, 2025[123][126][127] - No Series B Preferred Stock remained outstanding as of June 30, 2025, following conversions during the year ended December 31, 2024[129] - 264 shares of Series A Preferred Stock remain outstanding as of June 30, 2025, convertible into 2 shares of common stock, and rank senior to common stock in liquidation[131][134] - 135,273 shares of 6% Convertible Exchangeable Preferred Stock remain outstanding, with a liquidation preference of $10.00 per share plus accrued and unpaid dividends[135] 11. Subsequent Events The board declared a quarterly cash dividend on the 6% Convertible Exchangeable Preferred Stock, paid on August 1, 2025 - On June 3, 2025, the board declared a quarterly cash dividend on the 6% Convertible Exchangeable Preferred Stock, paid on August 1, 2025[139] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the Company's financial condition, strategic shifts, and operational results, highlighting reduced net loss, going concern issues, and a proposed merger Recent Developments The Company underwent a change of control, liquidated its UK subsidiary, repurchased plogosertib assets, and is exploring a merger - In December 2024, the Company began exploring strategic alternatives, including a potential transaction with investor David E. Lazar, leading to a securities purchase agreement on January 2, 2025, for $3.1 million in preferred stock[8] - On February 11, 2025, Datuk Dr. Doris Wong Sing Ee acquired Lazar's preferred stock, resulting in her holding 70% of the fully diluted shares, and subsequently converted Series C and D shares into 810,952 shares of common stock[9][10] - Cyclacel Limited, the Company's UK subsidiary, entered liquidation on January 31, 2025, leading to its deconsolidation and a $5.0 million increase in stockholders' equity[11] - The Company repurchased assets related to the plogosertib ('Plogo') clinical program for approximately $0.3 million, focusing solely on its development, while fadraciclib is being marketed for sale by the liquidator[12] - An Exchange Agreement was entered into with FITTERS Diversified Berhad to acquire its wholly-owned subsidiary, Fitters Sdn. Bhd., in exchange for up to $1.0 million cash and 19.99% of Cyclacel's common stock, with Cyclacel to be renamed Bio Green Med Solution, Inc. (BGMS) and listed on Nasdaq[13] - The Company effected a one-for-sixteen reverse stock split on May 12, 2025, and a further one-for-fifteen reverse stock split on July 7, 2025[14] Overview Cyclacel is a clinical-stage biopharmaceutical company with $0 revenue, focusing solely on the plogosertib program after deconsolidating its UK subsidiary - Cyclacel is a clinical-stage biopharmaceutical company developing cancer medicines, reporting $0 revenue for the six months ended June 30, 2025, and not expecting significant revenue from R&D activities in the foreseeable future[143] - The deconsolidation of the UK subsidiary on January 24, 2025, resulted in a $5.0 million gain on deconsolidation[144] - The Company has decided to focus solely on the plogosertib ('Plogo') clinical program to reduce operating costs[145] Plogosertib Phase 1/2 Study The Plogosertib Phase 1/2 study for advanced solid tumors and lymphoma is progressing, with stable disease observed and a new oral formulation under development - The Plogosertib Phase 1/2 study (140-101; NCT05358379) is an open-label, registration-directed study for advanced solid tumors and lymphoma, aiming to determine the RP2D and then enter a proof-of-concept cohort stage[147] - Fifteen patients have been treated across five dose escalation levels with no dose-limiting toxicities, and stable disease has been observed in pretreated patients with gastrointestinal, lung, and ovarian cancers[148] - A new, alternative salt, oral formulation of plogosertib with improved bioavailability is currently under development[148] Going Concern Substantial doubt exists about the Company's ability to continue as a going concern due to insufficient funding, necessitating strategic alternatives - The Company used $4.3 million in net cash for operating activities during the six months ended June 30, 2025, and its cash and cash equivalents of $4.3 million are expected to meet liquidity requirements only into the fourth quarter of 2025[149] - There is substantial doubt about the Company's ability to continue as a going concern, as indicated by its auditors, due to a lack of revenues and insufficient funding to complete drug development[149][151] - The Board of Directors is actively analyzing strategic alternatives, including additional debt or equity financing, mergers, acquisitions, or share exchanges, to ensure the Company's continuation[152][153] - The Company plans to acquire and consolidate complementary industrial assets, focusing on bulk commodity minerals and chemicals, to generate scalable enterprises and capitalize on valuation differentials[154] Liquidity and Capital Resources Cash and cash equivalents decreased, but working capital improved significantly due to reduced current liabilities, with operations historically funded by equity sales | Metric ($000s) | June 30, 2025 | June 30, 2024 | | :----------------------- | :------------ | :------------ | | Cash and cash equivalents | 4,275 | 6,000 | | Current assets | 4,383 | 7,707 | | Current liabilities | (760) | (7,186) | | Total working capital deficit | 3,623 | 521 | - The Company's cash and cash equivalents decreased to $4.275 million as of June 30, 2025, from $6.0 million as of June 30, 2024[159] - Working capital improved significantly to a surplus of $3.623 million as of June 30, 2025, compared to a surplus of $521 thousand in the prior year, primarily due to a substantial reduction in current liabilities[159] - Since inception, the Company has primarily relied on proceeds from sales of common and preferred equity securities to finance operations, accumulating a deficit of $441.8 million as of June 30, 2025[159] Cash Flows Net cash used in operating activities increased, while net cash provided by financing activities decreased due to preferred stock issuances and warrant payments | Activity ($000s) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | (4,303) | (3,567) | | Net cash used in investing activities | — | — | | Net cash provided by financing activities | 5,526 | 6,210 | - Net cash used in operating activities increased by $0.7 million to $4.3 million for the six months ended June 30, 2025, primarily due to an $11.8 million change in working capital, partially offset by a decrease in net loss and an increase in non-cash stock compensation expense[161] - Net cash provided by financing activities decreased to $5.5 million for the six months ended June 30, 2025, from $6.2 million in the prior year, mainly from preferred stock issuances offset by a $1.1 million warrant payment[163][164] Funding Requirements and Going Concern The Company lacks sufficient funds for drug development and faces substantial doubt about its going concern ability, necessitating future funding - The Company lacks sufficient funds to complete the development and commercialization of its drug candidates and is reliant on future funding through equity offerings, debt financings, or strategic collaborations[165][166] - Substantial doubt exists about the Company's ability to continue as a going concern for at least twelve months, with a risk of curtailing operations, delaying development, ceasing operations, or filing for bankruptcy if additional funding is not secured[169] - Future funding requirements are dependent on factors such as the rate and cost of clinical trials, manufacturing and commercialization capabilities, acquisition costs, intellectual property, and regulatory approvals[170] Results of Operations This section analyzes the Company's revenues, R&D, G&A expenses, and other income/expense Revenues The Company recognized $0 revenue for the three and six months ended June 30, 2025, with anticipated growth if a merger is completed | Period | Revenue ($000s) | | :--------------------------- | :---------------- | | 3 months ended June 30, 2025 | — | | 3 months ended June 30, 2024 | 4 | | 6 months ended June 30, 2025 | — | | 6 months ended June 30, 2024 | 33 | - The Company recognized $0 revenue for the three and six months ended June 30, 2025, a decrease from $4 thousand and $33 thousand respectively in the prior year, which was related to clinical manufacturing cost recovery[171] - Revenue growth is anticipated in the fourth quarter of 2025 if the Exchange Agreement with FITTERS Diversified Berhad is successfully completed[172] Research and Development Expenses Total R&D expenses decreased significantly due to the liquidation of the UK subsidiary and a focus on the anti-mitotic program | Program ($000s) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Transcriptional Regulation (fadraciclib) | 389 | 3,244 | (2,855) | -88% | | Anti-mitotic (plogosertib) | 423 | 1,466 | (1,043) | -71% | | Other research and development expenses | 78 | 115 | (37) | -32% | | Total research and development expenses | 890 | 4,825 | (3,935) | -82% | - Total research and development expenses decreased by $3.9 million (82%) to $0.9 million for the six months ended June 30, 2025, compared to $4.8 million in the prior year[174][176] - Expenditure for the transcriptional regulation program ceased due to the liquidation of the UK subsidiary, and plogosertib R&D decreased while developing an alternative oral formulation[176] - Overall R&D expenses for the year ended December 31, 2025, are anticipated to decrease significantly due to the focus solely on the anti-mitotic program[177] General and Administrative Expenses General and administrative expenses increased significantly due to one-time costs associated with two changes of control | Metric ($000s) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Total general and administrative expenses | 5,463 | 3,207 | 2,256 | 70% | - General and administrative expenses increased by approximately $2.3 million (70%) to $5.5 million for the six months ended June 30, 2025, from $3.2 million in the prior year[178][179] - This increase was primarily due to one-time costs associated with two changes of control, including $1.3 million in stock compensation expense, $0.7 million in D&O insurance, and $0.3 million in compensation expense[179] - G&A expenditures for the full year 2025 are expected to be higher than 2024, with further increases anticipated if the Exchange Agreement with FITTERS Diversified Berhad is completed[180] Other (expense) income, net Total other income increased significantly due to a $5.0 million gain on the deconsolidation of the UK subsidiary | Metric ($000s) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Foreign exchange gains (losses) | (11) | 4 | (15) | -375% | | Interest (expense) income | 8 | (26) | 34 | -131% | | Gain on deconsolidation of subsidiary | 4,947 | — | 4,947 | — | | Other income (expense), net | 12 | 52 | (40) | -77% | | Total other (expense) income, net | 4,956 | 30 | 4,926 | 16420% | - Total other income increased by $4.9 million to $4.9 million for the six months ended June 30, 2025, primarily due to a $5.0 million gain on the deconsolidation of the UK subsidiary[182] - Foreign exchange losses increased by $15 thousand, from a gain of $4 thousand in 2024 to a loss of $11 thousand in 2025[183] - The liquidation of the UK subsidiary in January 2025 resulted in the forgiveness of intercompany loans and the reclassification of accumulated translation adjustments into earnings[185] Income Tax Benefit The Company recorded an income tax charge of $2 thousand, a significant decrease from a tax benefit of $1.8 million in the prior year | Metric ($000s) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Total income tax benefit | (2) | 1,766 | (1,768) | -100% | - The Company recorded an income tax charge of $2 thousand for the six months ended June 30, 2025, a significant decrease from a tax benefit of $1.8 million in the prior year[186] - This change is due to the liquidation of the UK subsidiary, which resulted in the loss of eligibility for recoverable UK research and development tax credits[186][187] Critical Accounting Policies and Estimates There have been no material changes to the Company's critical accounting policies during the six months ended June 30, 2025 - There have been no material changes to the Company's critical accounting policies during the six months ended June 30, 2025[188] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Cyclacel Pharmaceuticals, Inc. is not required to provide specific quantitative and qualitative disclosures about market risk - The Company is exempt from providing quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company[189] Item 4. Controls and Procedures Management evaluated disclosure controls and procedures as effective, with no material changes other than a new CFO Evaluation of Disclosure Controls and Procedures The Company's disclosure controls and procedures were deemed effective as of June 30, 2025, providing reasonable assurance of timely reporting - As of June 30, 2025, the Company's disclosure controls and procedures were deemed effective to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[190] Changes in Internal Control over Financial Reporting No material changes in internal control over financial reporting occurred during the quarter, other than the hiring of a new CFO - Other than the hiring of a new chief financial officer, there were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[191] Inherent Limitation on the Effectiveness of Internal Controls Internal control systems have inherent limitations, providing only reasonable, not absolute, assurances of effectiveness - The effectiveness of any internal control system is subject to inherent limitations, providing only reasonable, not absolute, assurances, and is susceptible to changes in conditions or deterioration in compliance[192] PART II - OTHER INFORMATION This section provides other required information, including legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings A minority shareholder filed a complaint against Cyclacel and its CEO, alleging breach of fiduciary duty and seeking over $12 million in damages - David Lazar filed a complaint on August 6, 2025, against Cyclacel and CEO Datuk Dr. Doris Wong, alleging breach of fiduciary duty, minority shareholder oppression, and breach of contract[193] - The complaint seeks damages of $11.88 million for the first two causes of action and $629.5 thousand for the third, plus interest and attorneys' fees[193] - The Company believes the claims are meritless and intends to vigorously defend the lawsuit[193] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the Company's risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[194] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Company reported no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities or use of proceeds to report[195] Item 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities during the period - There were no defaults upon senior securities to report[196] Item 4. Mine Safety Disclosures This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[197] Item 5. Other Information The Company reported no other information for the period - There is no other information to report[198] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, and iXBRL formatted financial statements - Exhibits include certifications of the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002[199] - The financial statements for the period ended June 30, 2025, are filed in iXBRL (Inline eXtensible Business Reporting Language) format[199] SIGNATURES The Quarterly Report on Form 10-Q was duly signed on behalf of Cyclacel Pharmaceuticals, Inc. by Datuk Dr. Doris Wong, Chief Executive Officer and Executive Director, on August 13, 2025 - The report was signed by Datuk Dr. Doris Wong, Chief Executive Officer and Executive Director, on August 13, 2025[203]