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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2013
Commitments and Contingencies  
Commitments and Contingencies
9. Commitments and Contingencies

 

General

 

Please refer to Note 3 — Significant Contracts for further discussion of certain of the Company’s commitments and contingencies.

 

Leases

 

The following is a summary of the Company’s contractual obligations and commitments relating to its facilities leases as at December 31, 2013 (in $000s):

    Operating
Lease
Obligations		  
       
2014   $ 499  
2015     585  
2016     585  
2017     456  
2018     431  
Thereafter     2,867  
Total   $ 5,423  

 

Rent expense, which includes lease payments related to the Company’s research and development facilities and corporate headquarters and other rent related expenses was $0.6 million for each of the years ended December 31, 2011 and 2012. For the year ended December 31, 2013, rent expense was $0.8 million.

 

In October 2000, the Company entered into a twenty-five year lease for its research and development facility in Dundee, Scotland. In November 2013, the Company entered into a one year commitment to sublease the aforementioned research and development facility in Dundee, Scotland and recognized approximately $23,000 in sublease income for the year ended December 31, 2013. In May 2011, the Company extended its lease for office space at its headquarters in Berkeley Heights, New Jersey, for an additional five years.

 

Please refer to Note 5 — Fair Value for further discussion of certain of the Company’s commitments and contingencies.

 

Preferred Dividends

 

The Company’s Board of Directors considers numerous factors in determining whether to declare the quarterly dividend pursuant to the certificate of designation governing the terms of the Company’s outstanding 6% Convertible Exchangeable Preferred Stock, including the requisite financial analysis and determination of a surplus. Accrued and unpaid dividends in arrears on preferred stock were $2.3 million, or $1.90 per share of preferred stock, as of December 31, 2012 and $0.6 million, or $1.90 per share, of preferred stock, as of December 31, 2013.

 

Legal Proceedings

 

On April 27, 2010, the Company was served with a complaint filed by Celgene Corporation in the United States District Court for the District of Delaware seeking a declaratory judgment that four of the Company’s own patents, claiming certain uses of romidepsin were invalid and not infringed by Celgene’s sale of ISTODAX® (romidepsin for injection). The Company subsequently counterclaimed for infringement of these four patents. On April 3, 2013, the Company entered into a definitive agreement with Celgene to sell to Celgene the four Cyclacel-owned patents related to uses of romidepsin and their foreign counterparts. In connection with the definitive agreement, in April 2013, Celgene made a one-time payment of $5.5 million to Cyclacel. As a result, the litigation between Cyclacel and Celgene in the United States District Court for the District of Delaware, case number 1:10-cv-00348-GMS, was dismissed by virtue of a jointly filed stipulation requesting the Court to enter an Order dismissing the litigation and the entry of such an Order. The $5.5 million gain from the sale of patents has been recorded in other income (expense), net, in the consolidated statement of operations.