Cyclacel(CYCC) - 2023 Q1 - Quarterly Report

Part I. Financial Information Item 1. Financial Statements (Unaudited) Unaudited Q1 2023 financials show no revenue, increased net loss, and significant cash decline, raising going concern doubts Consolidated Balance Sheets Total assets declined to $22.1 million by March 31, 2023, driven by reduced cash, while equity decreased Consolidated Balance Sheet Summary (in $000s) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $11,435 | $18,345 | | Total current assets | $18,974 | $24,411 | | Total assets | $22,060 | $27,501 | | Liabilities & Equity | | | | Total current liabilities | $7,338 | $7,392 | | Total liabilities | $7,418 | $7,498 | | Total stockholders' equity | $10,148 | $15,509 | | Total liabilities and stockholders' equity | $22,060 | $27,501 | Consolidated Statements of Operations Q1 2023 saw no revenue, with net loss widening to $5.9 million due to higher R&D and lower other income Consolidated Statement of Operations Summary (in $000s, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Revenues | $0 | $0 | | Research and development | $5,674 | $4,954 | | General and administrative | $1,645 | $1,605 | | Operating loss | ($7,319) | ($6,559) | | Net loss | ($5,804) | ($4,108) | | Net loss applicable to common shareholders | ($5,854) | ($4,158) | | Net loss per share – basic and diluted | ($0.47) | ($0.42) | Consolidated Statements of Cash Flows Net cash used in operations was $6.9 million in Q1 2023, leading to a significant drop in cash to $11.4 million Consolidated Statement of Cash Flows Summary (in $000s) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,861) | ($6,775) | | Net cash used in investing activities | ($6) | ($4) | | Net cash provided by financing activities | ($50) | ($50) | | Net (decrease) in cash and cash equivalents | ($6,910) | ($6,920) | | Cash and cash equivalents, end of period | $11,435 | $29,639 | Notes to Unaudited Consolidated Financial Statements Notes highlight clinical stage, going concern doubts, no revenue, and potential rescission risk for 3.1 million shares - Management concluded there is substantial doubt about the Company's ability to continue as a going concern, with cash and cash equivalents of $11.4 million as of March 31, 2023, plus $4.7 million in R&D tax credits received in April 2023, expected to fund operations only through the end of 2023[27] - The company recognized no revenue in the first quarters of 2023 and 2022[42] - The company sold 3.1 million shares for approximately $4.5 million under an expired registration statement, which may be subject to potential rescission rights and reclassified outside of stockholders' equity[62] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses clinical drug candidates, increased R&D, and significant going concern doubts from limited cash Overview Clinical-stage biopharmaceutical firm developing cancer medicines, fadraciclib and plogosertib, in Phase 1/2 studies - The company's primary focus is on its transcriptional regulation program with fadraciclib (CDK2/9 inhibitor) and its anti-mitotic program with plogosertib (PLK1 inhibitor)[93] - Fadraciclib is being evaluated in two Phase 1/2 studies: one for advanced solid tumors and lymphoma (065-101) and another for hematological malignancies (065-102)[95][97] - Plogosertib is being evaluated in a Phase 1/2 registration-directed trial (140-101) for advanced solid tumors and lymphoma, with the first patient dosed in April 2022[98] Results of Operations Q1 2023 reported no revenue, R&D expenses increased 15% to $5.7 million, and other income significantly decreased Research and Development Expenses (in $000s) | Program | Q1 2023 | Q1 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Transcriptional Regulation (fadraciclib) | $4,087 | $3,645 | 12% | | Anti-mitotic (plogosertib) | $1,351 | $1,122 | 20% | | Total R&D Expenses | $5,674 | $4,954 | 15% | - General and administrative expenses were consistent at $1.6 million for both Q1 2023 and Q1 2022[111] - Total other income decreased by 85% to $0.2 million in Q1 2023 from $1.3 million in Q1 2022, mainly due to a reduction in royalty income from an asset sale agreement with ThermoFisher Scientific[113] Liquidity and Capital Resources Cash and equivalents of $11.4 million as of March 31, 2023, projected to last only through 2023, raise going concern doubts - The company's cash and cash equivalents as of March 31, 2023, were $11.4 million, down from $29.6 million a year prior[119] - Net cash used in operating activities was $6.9 million for Q1 2023, slightly higher than the $6.8 million used in Q1 2022[122][123] - The company explicitly states that its cash on hand, including tax credits received in April 2023, will only fund operations through the end of 2023, resulting in substantial doubt about its ability to continue as a going concern[131] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide market risk disclosures - The company is not required to provide information for this item as it qualifies as a smaller reporting company[136] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no significant changes - Management concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective[137] - No significant changes were made to internal controls over financial reporting during the quarter[138] Part II. Other Information Item 1. Legal Proceedings No legal proceedings were reported by the company during the period - There are no legal proceedings to report[140] Item 1A. Risk Factors No material changes to previously disclosed risk factors were reported from the 2022 Annual Report - No material changes to the risk factors from the Annual Report on Form 10-K for the year ended December 31, 2022, were reported[141] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported during the period - None reported[142] Item 6. Exhibits Exhibits filed with Form 10-Q include Sarbanes-Oxley certifications and financial statements in iXBRL format - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906[147] - The filing includes financial statements and notes formatted in Inline eXtensible Business Reporting Language (iXBRL)[147]