Cellectar Biosciences, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2023

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS.

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

14. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

As described in Note 2 and detailed below, in July 2024 the Company determined that it was necessary to re-evaluate its accounting treatment for certain previously issued warrants and preferred stock. The Company identified five areas where the historical accounting treatment applied to previously issued warrants and preferred stock required modification:

Contractual terms contained within the agreements governing the warrants issued to its investors in prior periods required further evaluation under Topic 815. After consultation with external advisors and completing an extensive review process, management concluded that the classification of certain previously issued warrants as equity was not consistent with Topic 815 and has restated them as liabilities. This also results in the requirement to account for the change in the fair value of the liability classified warrants through the Consolidated Statements of Operations at each reporting date they remain outstanding. Additionally, upon the issuance of the 2022 common warrants, pre-funded warrants and common stock, the Company determined the fair value of each security issued and booked a charge for the amount that the fair value exceeded the proceeds received (see Note 6).

Upon the issuance of the Series E Preferred Stock in September 2023, the contractual language required the 2022 Pre-Funded Warrants be reclassified from equity to liability.

The Series D Preferred Stock issued in 2020 was determined to be temporary, or mezzanine equity upon issuance and was so recorded.

The accounting treatment for the Tranche A and B warrants issued as part of the September 2023 financing (See Note 6) continues to be appropriate; however, as part of the work performed for the restatement, the warrant valuation was adjusted to correct prior errors in the valuation.

Certain operating costs previously recorded as research and development expenses were corrected to general and administrative expenses.

The impact on the consolidated financial statements is as follows (lettered for reference to the financial statement adjustments):

All the outstanding common warrants were corrected from permanent equity to Warrant Liability, and the Series D Preferred Stock was corrected from permanent equity to Mezzanine Equity as of December 31, 2021.

The proceeds from the October 2022 financing were adjusted as described in Note 6. Additionally, the cost of the 2022 financing allocated to the issuance of the 2022 Warrants, which was $463,000, was removed from Additional Paid-In Capital and charged to Other Expense.

After the issuance of the Series E Preferred in September 2023, the 2022 Pre-Funded Warrants were corrected from Additional Paid-In Capital to Warrant Liability.

At each reporting period the warrants accounted for as liabilities were marked to market with the adjustment reflected in Other Income (Expense).

Certain operating costs previously recorded as research and development expenses were corrected to general and administrative expenses.

Adjusted the balance sheet as of December 31, 2021 by reducing additional paid-in capital and increasing accumulated deficit by $25,300,000 which was the change from the initial fair value amount of the warrants issued in 2017, 2018 and 2020 through December 31, 2021.

Below are the Company’s restated consolidated balance sheets as of December 31, 2023 and 2022, and the restated consolidated statements of operations, statements of convertible preferred stock and stockholders’ equity (deficit), and statements of cash flows, with adjustments, for the years ended December 31, 2023 and 2022.

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED BALANCE SHEETS


	December 31, 2023
	As Previously		Restatement
	Reported		Adjustments		Reference	As Restated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	9,564,988	$	—		$	9,564,988
Prepaid expenses and other current assets		888,225		—			888,225
Total current assets		10,453,213		—			10,453,213
Property, plant & equipment, net		1,090,304		—			1,090,304
Operating lease right-of-use asset		502,283		—			502,283
Other long-term assets		29,780		—			29,780
TOTAL ASSETS	$	12,075,580	$	—		$	12,075,580

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	9,178,645	$	—		$	9,178,645
Warrant liability		3,700,000		12,420,898	A, C		16,120,898
Lease liability, current		58,979		—			58,979
Total current liabilities		12,937,624		12,420,898			25,358,522
Lease liability, net of current portion		494,003		—			494,003
TOTAL LIABILITIES		13,431,627		12,420,898			25,852,525
COMMITMENTS AND CONTINGENCIES (Note 10)
MEZZANINE EQUITY:
Series D preferred stock, 111.11 shares authorized, issued and outstanding as of December 31, 2023		—		1,382,023	A		1,382,023
STOCKHOLDERS’ (DEFICIT) EQUITY:
Series D convertible preferred stock, 111.11 shares authorized, issued and outstanding as of December 31, 2023		1,382,023		(1,382,023)	A		—
Series E-2 preferred stock, 1,225.00 shares authorized; 319.76 shares issued and outstanding as of December 31, 2023		4,677,632		—			4,677,632
Common stock, $0.00001 par value; 170,000,000 shares authorized; 20,744,110 shares issued and outstanding as of December 31 2023		207		—			207
Additional paid-in capital		210,066,630		(27,142,420)	A, B, C, F		182,924,210
Accumulated deficit		(217,482,539)		14,721,522	B, D, F		(202,761,017)
Total stockholders’ (deficit) equity		(1,356,047)		(13,802,921)			(15,158,968)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	12,075,580	$	—		$	12,075,580

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED BALANCE SHEETS


	December 31, 2022
	As Previously		Restatement
	Reported		Adjustments		Reference	As Restated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	19,866,358	$	—		$	19,866,358
Prepaid expenses and other current assets		663,243		—			663,243
Total current assets		20,529,601		—			20,529,601
Property, plant & equipment, net		418,641		—			418,641
Operating lease right-of-use asset		560,334		—			560,334
Other long-term assets		81,214		—			81,214
TOTAL ASSETS	$	21,589,790	$	—		$	21,589,790

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	5,478,443	$	—		$	5,478,443
Warrant liability		—		5,972,252	A		5,972,252
Lease liability, current		50,847		—			50,847
Total current liabilities		5,529,290		5,972,252			11,501,542
Lease liability, net of current portion		552,981		—			552,981
TOTAL LIABILITIES		6,082,271		5,972,252			12,054,523
COMMITMENTS AND CONTINGENCIES (Note 10)
MEZZANINE EQUITY:
Series D convertible preferred stock, 111.11 shares authorized, issued and outstanding as of December 31, 2023		—		1,382,023	A		1,382,023
STOCKHOLDERS’ (DEFICIT) EQUITY:
Series D preferred stock, 111.11 shares authorized, issued and outstanding as of December 31, 2022		1,382,023		(1,382,023)	A		—
Common stock, $0.00001 par value; 170,000,000 shares authorized; 9,385,272 shares issued and outstanding as of December 31 2022		94		—			94
Additional paid-in capital		193,624,445		(25,480,888)	A, B, F		168,143,557
Accumulated deficit		(179,499,043)		19,508,636	B, D, F		(159,990,407)
Total stockholders’ (deficit) equity		15,507,519		(7,354,275)			8,153,244
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	21,589,790	$	—		$	21,589,790

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED STATEMENTS OF OPERATIONS


	Year Ended December 31, 2023
	As Previously
	Reported		Adjustments		Reference	As Restated

OPERATING EXPENSES:
Research and development	$	28,211,460	$	(945,184)	E	$	27,266,276
General and administrative		10,749,183		945,184	E		11,694,367
Total operating expenses		38,960,643		—			38,960,643
LOSS FROM OPERATIONS		(38,960,643)		—			(38,960,643)
OTHER INCOME (EXPENSE):
Warrant issuance expense		(470,000)		—			(470,000)
Gain (loss) on valuation of warrants		1,000,000		(4,787,114)	D		(3,787,114)
Interest income		387,147		—			387,147
Total other income (expense), net		917,147		(4,787,114)			(3,869,967)
LOSS BEFORE INCOME TAXES		(38,043,496)		(4,787,114)			(42,830,610)
INCOME TAX BENEFIT		(60,000)		—			(60,000)
NET LOSS	$	(37,983,496)	$	(4,787,114)		$	(42,770,610)
NET LOSS PER SHARE — BASIC AND DILUTED	$	(3.11)	$	(0.39)		$	(3.50)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING — BASIC AND DILUTED		12,221,571		—			12,221,571

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED STATEMENTS OF OPERATIONS


	Year Ended December 31, 2022
	As Previously
	Reported		Adjustments		Reference	As Restated

OPERATING EXPENSES:
Research and development	$	19,219,603	$	(953,892)	E	$	18,265,711
General and administrative		9,594,170		953,892	E		10,548,062
Total operating expenses		28,813,773		—			28,813,773
LOSS FROM OPERATIONS		(28,813,773)		—			(28,813,773)
OTHER INCOME (EXPENSE):
Warrant issuance expense		—		(6,824,605)	B, D		(6,824,605)
Gain (loss) on valuation of warrants		—		3,633,241	D		3,633,241
Interest income		152,519		—			152,519
Total other income (expense), net		152,519		(3,191,364)			(3,038,845)
LOSS BEFORE INCOME TAXES		(28,661,254)		(3,191,364)			(31,852,618)
INCOME TAX BENEFIT		(60,000)		—			(60,000)
NET LOSS	$	(28,601,254)	$	(3,191,364)		$	(31,792,618)
NET LOSS PER SHARE — BASIC AND DILUTED	$	(4.05)	$	(0.45)		$	(4.51)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING — BASIC AND DILUTED		7,055,665		—			7,055,665

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY


	Series D
	Preferred Stock			Preferred Stock			Common Stock							Total
								Par		Additional		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Paid-In Capital		Deficit		Equity (Deficit)
Previously Reported
Balance at December 31, 2021	—	$	—	111.11	$	1,382,023	6,110,125	$	61	$	182,560,859	$	(150,897,789)	$	33,045,154
Issuance of common stock, pre-funded warrants and warrants, net of issuance costs	—		—	—		—	3,275,153		33		9,610,622		—		9,610,655
Stock-based compensation	—		—	—		—	—		—		1,452,964		—		1,452,964
Retired shares	—		—	—		—	(6)		—		—		—		—
Net loss	—		—	—		—	—		—		—		(28,601,254)		(28,601,254)
Balance at December 31, 2022	—		—	111.11		1,382,023	9,385,272		94		193,624,445		(179,499,043)		15,507,519
Stock-based compensation	—		—	—		—	—		—		2,410,288		—		2,410,288
Exercise of warrants into common stock	—		—	—		—	1,197,622		12		789,630		—		789,642
Issuance of preferred stock, net of issuance costs (Note 6)	—		—	1,225.00		17,920,000	—		—		—		—		17,920,000
Conversion of preferred stock to common stock	—		—	(905.24)		(13,242,368)	9,947,684		99		13,242,269		—		—
Stock awards (Note 7)	—		—	—		—	213,532		2		(2)		—		—
Net loss	—		—	—		—	—		—		—		(37,983,496)		(37,983,496)
Balance at December 31, 2023	—	$	—	430.87	$	6,059,655	20,744,110	$	207	$	210,066,630	$	(217,482,539)	$	(1,356,047)
Adjustments
Balance at December 31, 2021 (A, F)	111.11	$	1,382,023	(111.11)	$	(1,382,023)	—	$	—	$	(25,300,000)	$	22,700,000	$	(3,982,023)
Reclassification of warrants to liability (A)	—		—	—		—	—		—		(7,005,493)		—		(7,005,493)
Warrant-related issuance expense (B)	—		—	—		—	—		—		6,824,605		—		6,824,605
Net loss (B, D)	—		—	—		—	—		—		—		(3,191,364)		(3,191,364)
Balance at December 31, 2022	111.11		1,382,023	(111.11)		(1,382,023)	—		—		(25,480,888)		19,508,636		(7,354,275)
Exercise of warrants into common stock (A)	—		—	—		—	—		—		1,677,580		—		1,677,580
Reclassification of warrants to liability (C)	—		—	—		—	—		—		(3,239,112)		—		(3,239,112)
Issuance of Series E-2 preferred stock, net of issuance costs (Note 6) (D)	—		—	—		(100,000)	—		—		—		—		(100,000)
Conversion of preferred stock to common stock (D)	—		—	—		100,000	—		—		(100,000)		—		—
Net loss (D)	—		—	—		—	—		—		—		(4,787,114)		(4,787,114)
Balance at December 31, 2023	111.11	$	1,382,023	(111.11)	$	(1,382,023)	—	$	—	$	(27,142,420)	$	14,721,522	$	(13,802,921)
As Restated
Balance at December 31, 2021	111.11	$	1,382,023	—	$	—	6,110,125	$	61	$	157,260,859	$	(128,197,789)	$	29,063,131
Issuance of common stock and pre-funded warrants net of issuance costs	—		—	—		—	3,275,153		33		9,429,734		—		9,429,767
Stock-based compensation	—		—	—		—	—		—		1,452,964		—		1,452,964
Retired shares	—		—	—		—	(6)		—		—		—		—
Net loss	—		—	—		—	—		—		—		(31,792,618)		(31,792,618)
Balance at December 31, 2022	111.11		1,382,023	—		—	9,385,272		94		168,143,557		(159,990,407)		8,153,244
Stock-based compensation (Note 7)	—		—	—		—	—		—		2,410,288		—		2,410,288
Exercise of warrants into common stock	—		—	—		—	1,197,622		12		2,467,210		—		2,467,222
Issuance of Series E-2 preferred stock, net of issuance costs (Note 6)	—		—	1,225.00		17,820,000	—		—		—		—		17,820,000
Conversion of preferred stock to common stock	—		—	(905.24)		(13,142,368)	9,947,684		99		13,142,269		—		—
Reclassification of pre-funded warrants to liability liability	—		—	—		—	—		—		(3,239,112)		—		(3,239,112)
Stock awards (Note 7)	—		—	—		—	213,532		2		(2)		—		—
Net loss	—		—	—		—	—		—		—		(42,770,610)		(42,770,610)
Balance at December 31, 2023	111.11	$	1,382,023	319.76	$	4,677,632	20,744,110	$	207	$	182,924,210	$	(202,761,017)	$	(15,158,968)

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year Ended December 31, 2023
	As Previously
	Reported		Adjustments		Reference	As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(37,983,496)	$	(4,787,114)	D	$	(42,770,610)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization		192,375		—			192,375
Stock-based compensation		2,410,288		—			2,410,288
Loss on disposal of asset		—		—			—
Costs to issue warrants		470,000		—			470,000
Change in fair value of warrants		(1,000,000)		4,787,114	D		3,787,114
Change in operating lease right-of-use asset		58,051		—			58,051
Changes in:
Prepaid expenses and other assets		(173,548)		—			(173,548)
Accounts payable and accrued liabilities		3,700,202		—			3,700,202
Lease liability		(50,846)		—			(50,846)
Cash used in operating activities		(32,376,974)		—			(32,376,974)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant & equipment		(864,038)		—			(864,038)
Cash used in investing activities		(864,038)		—			(864,038)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock and warrants, net of issuance costs		22,150,000		—			22,150,000
Proceeds from exercise of warrants		789,642		—			789,642
Cash provided by financing activities		22,939,642		—			22,939,642
DECREASE IN CASH AND CASH EQUIVALENTS		(10,301,370)		—			(10,301,370)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		19,866,358		—			19,866,358
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	9,564,988	$	—		$	9,564,988
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Conversion of preferred stock to common stock	$	13,242,368	$	—		$	13,242,368
Conversion of mezzanine equity to permanent equity (Note 6)	$	17,920,000	$	(100,000)		$	17,820,000
Conversion of pre-funded warrants to liability	$	—	$	3,239,112		$	3,239,112

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year Ended December 31, 2022
	As Previously
	Reported		Adjustments		Reference	As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(28,601,254)	$	(3,191,364)	B, D	$	(31,792,618)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization		148,435		—			148,435
Stock-based compensation		1,452,964		—			1,452,964
Loss on disposal of asset		3,386		—			3,386
Costs to issue warrants		—		6,824,605	B		6,824,605
Change in fair value of warrants		—		(3,633,241)	D		(3,633,241)
Change in operating lease right-of-use asset		90,432		—			90,432
Changes in:
Prepaid expenses and other assets		204,242		—			204,242
Accounts payable and accrued liabilities		1,623,529		—			1,623,529
Lease liability		(144,035)		—			(144,035)
Cash used in operating activities		(25,222,301)		—			(25,222,301)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant & equipment		(225,971)		—			(225,971)
Cash used in investing activities		(225,971)		—			(225,971)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock and warrants, net of issuance costs		9,610,655		—			9,610,655
Cash provided by financing activities		9,610,655		—			9,610,655
DECREASE IN CASH AND CASH EQUIVALENTS		(15,837,617)		—			(15,837,617)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		35,703,975		—			35,703,975
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	19,866,358	$	—		$	19,866,358