Cyclacel Pharmaceuticals, Inc.(CYCCP) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements for the period ended June 30, 2025, reflect significant corporate changes, including the deconsolidation of the UK subsidiary, resulting in a $5.0 million gain, and a shift from a $2.2 million stockholders' deficit to a $3.6 million equity, with net loss improving to $1.4 million from $6.2 million Consolidated Balance Sheets As of June 30, 2025, total assets were $4.4 million, liabilities $0.77 million, and stockholders' equity $3.6 million, a significant improvement from a $2.2 million deficit in 2024 due to reduced liabilities and increased cash Consolidated Balance Sheet Summary (in $000s) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $4,275 | $3,137 | | Total current assets | $4,383 | $3,674 | | Total assets | $4,401 | $4,094 | | Liabilities & Equity | | | | Accounts payable | $221 | $4,599 | | Total current liabilities | $760 | $6,268 | | Total liabilities | $770 | $6,268 | | Total stockholders' equity (deficit) | $3,631 | $(2,174) | Consolidated Statements of Operations For the six months ended June 30, 2025, the company reported zero revenue and a net loss of $1.4 million, a substantial improvement from $6.2 million in 2024, driven by a $4.9 million deconsolidation gain and reduced R&D expenses Consolidated Statements of Operations Highlights (in $000s, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenues | $0 | $33 | | Research and development | $890 | $4,825 | | General and administrative | $5,463 | $3,207 | | Operating loss | $(6,353) | $(7,999) | | Gain on deconsolidation of subsidiary | $4,947 | $0 | | Net loss | $(1,399) | $(6,203) | | Net loss per share – basic and diluted | $(1.62) | $(509.96) | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities was $4.3 million, offset by $5.5 million from financing, leading to a net increase of $1.1 million and an ending cash balance of $4.3 million Cash Flow Summary (in $000s) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,303) | $(3,567) | | Net cash used in investing activities | $0 | $0 | | Net cash provided by financing activities | $5,526 | $6,210 | | Net increase in cash and cash equivalents | $1,138 | $2,622 | | Cash and cash equivalents, end of period | $4,275 | $6,000 | Notes to Unaudited Consolidated Financial Statements The notes detail the deconsolidation of the UK subsidiary, generating a $5.0 million gain, two reverse stock splits, and management's substantial doubt about the company's going concern ability, with $4.3 million cash only funding operations into Q4 2025 - The company's UK subsidiary, Cyclacel Limited, entered into creditors voluntary liquidation and was deconsolidated as of January 24, 2025, resulting in a gain of approximately $5.0 million[34] - The company executed a 1-for-16 reverse stock split on May 12, 2025, and a further 1-for-15 reverse stock split on July 7, 2025, with all share and per-share data retroactively adjusted[37] - Management has concluded there is substantial doubt about the company's ability to continue as a going concern, as its cash and cash equivalents of $4.3 million as of June 30, 2025, are only sufficient to meet liquidity requirements into the fourth quarter of 2025[39] - In June 2025, the company raised $3.0 million in gross proceeds through the sale of 3,000,000 shares of Series F Convertible Preferred Stock and associated warrants to accredited investors[82] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the strategic shift to focus solely on the plogosertib clinical program, highlighting a significant going concern risk with $4.3 million cash expected to last only into Q4 2025, while exploring a potential business combination with FITTERS Diversified Berhad - Following the liquidation of its UK subsidiary, the company has focused its development efforts exclusively on the plogosertib ('Plogo') clinical program, having repurchased the related assets for approximately $0.3 million[145] - The company has substantial doubt about its ability to continue as a going concern, with cash of $4.3 million as of June 30, 2025, expected to fund operations only into Q4 2025[149] - The company has entered into an Exchange Agreement with FITTERS Diversified Berhad, which, if completed, will result in a business combination where Cyclacel stockholders will own approximately 80.01% of the combined entity, and the company will be renamed Bio Green Med Solution, Inc[13] Liquidity and Capital Resources As of June 30, 2025, the company held $4.3 million in cash and $3.6 million in working capital, relying on equity financing with an accumulated deficit of $441.8 million, and faces uncertainty in raising additional capital for drug development Key Liquidity Measures (in $000s) | Measure | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,275 | $6,000 | | Working capital | $3,623 | $521 | - As of June 30, 2025, the company had an accumulated deficit of $441.8 million and has historically relied on equity sales to finance operations[159] Results of Operations For the six months ended June 30, 2025, R&D expenses decreased by $3.9 million (82%) to $0.9 million, while G&A expenses increased by $2.3 million (70%) to $5.5 million due to one-time costs, and other income surged by $4.9 million from a deconsolidation gain Research and Development Expenses by Program (in $000s) | Program | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Transcriptional Regulation (fadraciclib) | $389 | $3,244 | $(2,855) | (88)% | | Anti-mitotic (plogosertib) | $423 | $1,466 | $(1,043) | (71)% | | Total R&D Expenses | $890 | $4,825 | $(3,935) | (82)% | - General and administrative expenses increased by $2.3 million for the six months ended June 30, 2025, mainly due to one-time costs from two changes of control, including stock compensation ($1.3M), D&O insurance ($0.7M), and other compensation ($0.3M)[179] - Total other income increased by $4.9 million year-over-year, driven by a $5.0 million gain on the deconsolidation of the company's UK subsidiary in January 2025[181][182] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Cyclacel is not required to provide quantitative and qualitative disclosures about market risk[189] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with the only change to internal control over financial reporting being the hiring of a new chief financial officer - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[190] - The hiring of a new chief financial officer was the only change in internal control over financial reporting during the quarter ended June 30, 2025[191] PART II - OTHER INFORMATION Item 1. Legal Proceedings On August 6, 2025, a minority shareholder filed a lawsuit against the company and its CEO, alleging breach of fiduciary duty and contract, seeking over $12.5 million in damages, which the company deems meritless - A complaint was filed on August 6, 2025, by minority shareholder David Lazar against the company and its CEO, alleging breach of fiduciary duty, minority shareholder oppression, and breach of contract[193] - The lawsuit seeks damages of $11,882,683.45 for the first two causes of action and $629,501.36 for the third, plus interest and fees, with the company considering the claims meritless[193] Item 1A. Risk Factors No material changes to the company's risk factors were reported from its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the company's risk factors from its 2024 Form 10-K were reported[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 - None reported[195]