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Stockholders' Equity
 12 Months Ended
Dec. 31, 2014
Stockholders' Equity  
Stockholders' Equity
10. Stockholders’ Equity

 

Preferred Stock

 

As of December 31, 2014, there were 335,273 shares of Preferred Stock issued and outstanding at an issue price of $10.00 per share. Dividends on the Preferred Stock are cumulative from the date of original issuance at the annual rate of 6% of the liquidation preference of the Preferred Stock, payable quarterly on the first day of February, May, August and November, commencing February 1, 2005. Any dividends must be declared by the Company’s Board of Directors and must come from funds that are legally available for dividend payments. The Preferred Stock has a liquidation preference of $10.00 per share, plus accrued and unpaid dividends.

 

The Preferred Stock is convertible at the option of the holder at any time into the Company’s shares of common stock at a conversion rate of approximately 0.06079 shares of common stock for each share of Preferred Stock based on a price of $164.50. The Company has reserved 20,381 shares of common stock for issuance upon conversion of the remaining shares of Preferred Stock outstanding at December 31, 2014. The shares of previously-converted Preferred Stock have been retired, cancelled and restored to the status of authorized but unissued shares of preferred stock, subject to reissuance by the Board of Directors as shares of Preferred Stock of one or more series.

 

The Company may automatically convert the Preferred Stock into common stock if the closing price of the Company’s common stock has exceeded $246.75, which is 150% of the conversion price of the Preferred Stock, for at least 20 trading days during any 30-day trading period, ending within five trading days prior to notice of automatic conversion.

 

The Certificate of Designations governing the Preferred Stock provides that if the Company fails to pay dividends on its Preferred Stock for six quarterly periods, holders of Preferred Stock are entitled to nominate and elect two directors to the Company’s Board of Directors. This right accrued to the holders of Preferred Stock as of August 2, 2010 and two directors were nominated and elected at the annual meeting held on May 24, 2011.

 

The Preferred Stock has no maturity date and no voting rights prior to conversion into common stock, except under limited circumstances.

 

The Company may, at its option, redeem the Preferred Stock in whole or in part, out of funds legally available at the redemption price of $10.00 per share.

 

The Preferred Stock is exchangeable, in whole but not in part, at the option of the Company on any dividend payment date beginning on November 1, 2005 (the “Exchange Date”) for the Company’s 6% Convertible Subordinated Debentures (“Debentures”) at the rate of $10.00 principal amount of Debentures for each share of Preferred Stock. The Debentures, if issued, will mature 25 years after the Exchange Date and have terms substantially similar to those of the Preferred Stock. No such exchanges have taken place to date.

 

Conversion of Convertible Preferred Stock

 

During 2013, Cyclacel entered into agreements to exchange the Company’s Preferred Stock into shares of common stock. There were no exchanges of the Company’s Preferred Stock into shares of common stock during the year ended December 31, 2014. The table below provides details of the aggregate activities in 2013:

 

   

Year Ended

December 31,

2013

  
Preferred shares exchanged     877,869  
Shares of common stock issued:        
At stated convertible option     53,366  
Incremental shares issued under the exchange transaction     1,631,105  
Total shares of common stock issued     1,684,471  

 

As the Preferred Stock stockholders received additional shares of common stock issued to them upon conversion as compared to what they would have been entitled to receive under the stated rate of exchange, the Company recorded the excess of (1) the fair value of all securities and other consideration transferred to the holders of the Preferred Stock and (2) the fair value of securities issuable pursuant to the original conversion terms as a deemed dividend resulting in an increase in the net loss attributable to common shareholders. Specifically, the Company recorded deemed dividends related to the additional shares issued under the exchange transactions of $9.0 million for the year ended December 31, 2013.

 

Common Stock

 

April 2014 Underwriting Agreement

 

On April 3, 2014, the Company entered into an underwriting agreement relating to the public offering and sale of 2,857,143 shares of the Company’s common stock, par value $0.001 per share, at a price to the public of $3.50 per share, for proceeds, net of certain fees and expenses, of approximately $9.3 million.

 

November 2013 Stock Purchase Agreement

 

On November 14, 2013, the Company entered into a common stock Purchase Agreement with Aspire (the “Purchase Agreement”). Upon execution of the Purchase Agreement, Aspire purchased 511,509 shares of common stock for an aggregate purchase price of $2.0 million. Under the terms of the Purchase Agreement, Aspire has committed to purchase up to an additional 3,042,038 shares from time to time as directed by the Company or, in certain instances, as agreed to by both parties, over the next two years at prices derived from the market prices on or near the date of each sale. However, such commitment is limited to an additional $18.0 million of share purchases. In consideration for entering into the Purchase Agreement, concurrent with the execution of the Purchase Agreement, the Company issued 166,105 shares of the Company’s common stock to Aspire in lieu of a commitment fee. The fair value of these shares has been recorded as a component of other assets and will continue to be remeasured each reporting period, until the agreement is exhausted or expired, with gains or losses reported in the consolidated statements of operations. During the year ended December 31, 2014, the Company sold 950,000 shares to Aspire under the Purchase Agreement for proceeds of $3.1 million.

 

May 2013 Underwriting Agreement

 

On May 16, 2013, the Company entered into an underwriting agreement relating to the public offering and sale of up to 6,666,667 shares of the Company’s common stock, par value $0.001, at a price to the public of $3.00 per share. On May 21, 2013, the Company closed the public offering and completed the sale of 6,833,334 shares of its common stock, which includes 166,667 shares that were subject to the underwriters’ over-allotment option, at a price to the public of $3.00 per share, for proceeds, net of certain fees and expenses, of approximately $19.0 million.

 

Summary of Outstanding Warrants

 

The following table summarizes information about warrants outstanding at December 31, 2014:

 

Issued in Connection With  

Expiration

Date

  

Common

Shares

Issuable

    

Weighted

Average

Exercise

Price

  
January 2010 stock issuance   2015     101,785     $ 22.82  
January 2010 stock issuance   2015     100,714     $ 19.95  
October 2010 stock issuance   2015     594,513     $ 13.44  
July 2011 stock issuance   2016     544,117     $ 9.52  
Total         1,341,129     $ 13.05  

 

There were no exercises of warrants during the years ended December 31, 2013 and 2014. Warrants for 151,773 shares of common stock, issued in connection with the February 2007 stock issuance and warrants for 98,893 shares of common stock, issued in connection with the July 2009 Series II stock issuance, expired during the year ended December 31, 2014.

 

Exercise of Stock Options

 

No stock options were exercised during the years ended December 31, 2013 and 2014.