Cyclacel Pharmaceuticals amends agreement with CEO

Cyclacel Pharmaceuticals , Inc. (NASDAQ:CYCC), whose stock has declined over 87% in the past year according to InvestingPro data, announced today it has amended a key investment agreement with its interim Chief Executive Officer, David Lazar. The amendment, made to a securities purchase agreement originally dated February 4, 2025, now includes a revised purchase price mechanism and a six-month lock-up period. With a current market capitalization of just $2.1 million and trading at $0.34 per share, this financing move comes at a crucial time for the company.

Under the terms of the amended agreement, dated February 20, 2025, Cyclacel has the right, but not the obligation, to direct Lazar to purchase up to $8 million of the company’s common stock in private placement offerings until September 30, 2026. The adjusted purchase price for the shares will be the greater of the consolidated closing bid price prior to the original agreement date or the consolidated closing bid price on the trading day immediately before the purchase, if the transaction occurs before market close, or at the closing bid at market close if the purchase is made after the market closes.

The company clarified that the issuance of shares to Lazar will not be registered under the Securities Act of 1933, as amended, and will rely on exemptions from registration provided by Section 4(a)(2) of the Act and Regulation S or Regulation D promulgated thereunder.

The lock-up addendum introduced in the amendment stipulates that any shares acquired by Lazar through these private placements will be subject to a six-month lock-up period, restricting their sale post-issuance.

This strategic move by Cyclacel Pharmaceuticals, a Delaware-incorporated biopharmaceutical company specializing in pharmaceutical preparations, reflects a continued partnership with Lazar, who has been serving as the interim CEO. The company, based in Berkeley Heights, New Jersey, has not disclosed further details about the potential use of funds to be raised from these private placements. InvestingPro analysis reveals the company is quickly burning through cash, with analysts not expecting profitability this year. Investors can access 13 additional key insights and detailed financial metrics through InvestingPro’s comprehensive research report.The company is scheduled to report its next earnings on March 5, 2025, which could provide more clarity on its financial trajectory.

The information regarding this amendment is based on the latest 8-K filing by Cyclacel Pharmaceuticals with the Securities and Exchange Commission.

In other recent news, Cyclacel Pharmaceuticals has undergone several notable developments. The company recently announced amendments to its corporate structure, including the removal of ownership limitations on its Series C and Series D Convertible Preferred Stock, which were approved by stockholders and filed with the Delaware Secretary of State. This change allows for unrestricted conversions and voting rights, potentially enabling larger investments or shifts in company control. Additionally, Cyclacel has increased its authorized common stock from 100 million to 250 million shares, a move often seen as a strategy to provide flexibility for future financial maneuvers.

In a strategic move to streamline operations, Cyclacel has decided to liquidate its UK subsidiary, Cyclacel Limited, to focus on key drug development. The company plans to acquire plogosertib, a drug in Phase 1 clinical studies, from the liquidators and intends to develop a new oral formulation. This decision will result in the deconsolidation of Cyclacel Limited’s financial results, increasing the parent company’s stockholders’ equity by approximately $5.6 million.

Furthermore, Cyclacel corrected a board appointment error in a Securities Purchase Agreement, clarifying that David E. Lazar was not appointed to the board or as Chairman. Instead, Lazar’s right was limited to appointing a single member, leading to the nomination of David Natan as the chairman of the audit committee. These changes reflect Cyclacel’s commitment to maintaining transparent corporate governance practices.

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