Cyclacel Pharmaceuticals adjusts shareholder rights, amends stock

Cyclacel Pharmaceuticals , Inc. (NASDAQ:CYCC), a biopharmaceutical company with a market capitalization of just $1.92 million, has made significant changes to its corporate structure and shareholder rights, following recent approvals from its board of directors and stockholders. The company, which according to InvestingPro data is quickly burning through cash and trading near its 52-week low at $0.31, filed amendments with the Delaware Secretary of State to modify the rights associated with its Series C and Series D Convertible Preferred Stock and to increase its authorized common stock.

On Monday, Cyclacel’s stockholders approved the removal of ownership limitations on the company’s Series C Convertible Preferred Stock, which previously restricted conversions and voting to prevent any single holder from exceeding certain ownership percentages. This amendment was filed on February 10, 2025, and it eliminates these restrictions, allowing conversions and voting without such limitations.

Similarly, the company’s board and a significant shareholder, David Lazar, consented to an amendment regarding the Series D Convertible Preferred Stock. This amendment, filed on February 6, 2025, also removes the ownership limitations that were in place. Subsequently, Cyclacel issued 2.1 million shares of the Series D Convertible Preferred Stock to David Lazar under a previously disclosed securities purchase agreement.

Furthermore, Cyclacel’s stockholders have authorized an increase in the number of authorized shares of common stock from 100 million to 250 million. This amendment to the Company’s Certificate of Incorporation was filed and became effective on February 10, 2025.

These changes, particularly the increase in authorized common stock, could potentially dilute existing shares. Such moves are often made by companies seeking flexibility for future financing, acquisitions, stock splits, or to introduce new equity incentives for employees. InvestingPro analysis reveals that Cyclacel’s current ratio stands at 0.77, indicating its short-term obligations exceed liquid assets. With 13 additional exclusive ProTips and comprehensive financial metrics available on InvestingPro, investors can gain deeper insights into the company’s financial health and strategic positioning.

The amendments to the preferred stock are significant because they remove barriers that previously prevented larger stakes in the company by individual holders, potentially paving the way for more substantial investments or changes in control. This comes at a critical time for Cyclacel, as InvestingPro data shows the company has reported a net loss of $13.48 million in the last twelve months, with analysts not anticipating profitability this year.

Cyclacel Pharmaceuticals, known for its focus on cancer therapies, is based in Berkeley Heights, New Jersey. The company’s actions are detailed in a recent 8-K filing with the SEC, a standard form used by public companies to notify investors of events that may be important to shareholders or the SEC.

In other recent news, Cyclacel Pharmaceuticals has been making strategic moves to streamline its operations. The pharmaceutical firm recently announced the voluntary liquidation of its UK subsidiary, Cyclacel Limited, as part of a plan to reduce operating costs and concentrate on key drug development. The liquidation is expected to increase the parent company’s stockholders’ equity by approximately $5.6 million. Cyclacel Pharmaceuticals also aims to acquire plogosertib, a Polo-like kinase inhibitor, from the liquidators and develop a new oral formulation with improved bioavailability.

In a separate development, Cyclacel Pharmaceuticals corrected an error regarding board appointments in a previous Securities Purchase Agreement. The company clarified that David E. Lazar was not appointed as a member and Chairman of Cyclacel’s board of directors, as previously indicated. Instead, Lazar’s right was limited to appointing a single member to the board, which resulted in the nomination of David Natan, who now serves as the chairman of the audit committee.

Finally, Cyclacel Pharmaceuticals has announced a change in its independent registered public accounting firm. The company’s Audit Committee approved the dismissal of Crowe LLP and immediately engaged Bush & Associates CPA LLP for the fiscal year ending December 31, 2024. The decision came after a disagreement over the classification of certain warrant provisions. These are the latest developments in Cyclacel Pharmaceuticals’ ongoing efforts to ensure transparent and accurate corporate governance practices.

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