Cyclacel (now Bio Green Med Solution) agrees to sell $3.1 million of preferred stock

The preferred stock purchase

Cyclacel Pharmaceuticals, Inc. said on January 3, 2025 that it had signed a securities purchase agreement with investor David Lazar. Lazar agreed to subscribe for 1,000,000 shares of Series C Convertible Preferred Stock and 2,100,000 shares of Series D Convertible Preferred Stock at $1.00 a share, for aggregate gross proceeds of $3.1 million. The release is issued under the Nasdaq symbols CYCC and CYCCP. The 8-K that carries it is recorded under the name Bio Green Med Solution, Inc., and the release does not explain that difference in names.

The Series C purchase, for $1,000,000, was due at an initial closing on or about January 3, 2025. Each Series C share converts into 2.65 common shares. Until stockholders approve the share issuance, conversion is subject to a 5% beneficial ownership limitation. The Series D purchase, for $2,100,000, is due at a second closing within two business days after stockholder approval of the issuance that Nasdaq rules require. Each Series D share converts into 110 common shares. The release gives no total number of common shares the Series D conversion would produce.

The company said the proceeds will settle outstanding liabilities and fund general corporate and operating purposes. The release does not say how the $3.1 million will be split between those uses, and it gives no balance-sheet figures for the liabilities involved.

Leadership and the board

Spiro Rombotis stepped down as chief executive, and Lazar was appointed interim chief executive. Five directors resigned from the board: Dr. Kenneth Ferguson, Dr. Christopher Henney, Dr. Brian Schwartz, Dr. Robert Spiegel and Ms. Karin Walker. Dr. Samuel Barker continues as chairman, and Paul McBarron and Spiro Rombotis continue as directors. David Natan, whom the release describes as a financial executive with biopharmaceutical industry experience, joins the board and will chair the audit committee.

Warrants, costs and the listing deadline

On January 2, 2025 the company agreed to exchange certain existing warrants held by one holder for 24,844,725 shares of common stock and $1,100,000 in cash. That exchange also depends on stockholder approval under Nasdaq rules, and the closing is expected to take place at about the same time. Where the holder's ownership would exceed its beneficial ownership limit after the exchange, the excess is to be issued as pre-funded warrants. The company also agreed to register the new shares for resale. The release does not say what the $1,100,000 cash payment will be used for.

The board has told management to reduce operating costs while the company explores strategic alternatives. The release says there is no assurance that this review will produce an agreement or transaction, or when one might come. It also says there is no assurance that Cyclacel will receive the stockholder approvals for the preferred stock and the warrant exchange.

Cyclacel said it received a written communication from Nasdaq, in response to its request for an extension, that the new deadline to demonstrate compliance with the minimum stockholders' equity requirement is February 6, 2025. The company expects to receive formal notification of that date. If it fails to regain compliance in the period, its securities would be subject to delisting.

The pipeline

Cyclacel describes itself as a clinical-stage biopharmaceutical company developing cancer medicines. Its transcriptional regulation program is evaluating fadraciclib, a CDK2/9 inhibitor in Phase 2 clinical trials. Its anti-mitotic program is evaluating plogosertib, a PLK1 inhibitor in Phase 1 trials, in patients with solid tumors and hematological malignancies. The release reports no trial results, and it does not link the pipeline to the financing or the leadership change.

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