Cellectar Biosciences, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2024

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS.

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

10. RESTATEMENT OF PREVIOUSLY ISSUED QUARTERLY FINANCIAL STATEMENTS (Unaudited)

As described in Note 1 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.

Upon the issuance of the Series E Preferred Stock, the contractual language required the 2022 Pre-Funded Warrants be corrected 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 2) 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 condensed 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 settlement of the Tranche A warrants exercised in the first quarter of 2024 was corrected to be an adjustment to the value of the Series E-3 preferred stock.

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 condensed consolidated balance sheets as of March 31, 2024, and the restated condensed consolidated statements of operations, consolidated statement of convertible preferred stock and stockholders’ equity, and condensed statements of cash flows, with adjustments, for the three months ended March 31, 2024.

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED BALANCE SHEETS


	March 31, 2024
	As Previously		Restatement
	Reported		Adjustments		Reference	As Restated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	40,031,181	$	—		$	40,031,181
Prepaid expenses and other current assets		1,337,184		—			1,337,184
Total current assets		41,368,365		—			41,368,365
Property, plant & equipment, net		1,023,447		—			1,023,447
Operating lease right-of-use asset		486,847		—			486,847
Other long-term assets		29,780		—			29,780
TOTAL ASSETS	$	42,908,439	$	—		$	42,908,439

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	7,393,950	$	—		$	7,393,950
Warrant liability		8,800,000		12,283,028	A, C		21,083,028
Lease liability, current		73,994		—			73,994
Total current liabilities		16,267,944		12,283,028			28,550,972
Lease liability, net of current portion		474,349		—			474,349
TOTAL LIABILITIES		16,742,293		12,283,028			29,025,321
COMMITMENTS AND CONTINGENCIES (Note 10)
MEZZANINE EQUITY:
Series D preferred stock, 111.11 shares authorized, issued and outstanding as of March 31, 2024		—		1,382,023	A		1,382,023
STOCKHOLDERS’ (DEFICIT) EQUITY:
Series D preferred stock, 111.11 shares authorized, issued and outstanding as of March 31, 2024		1,382,023		(1,382,023)	A		—
Series E-2 preferred stock, 1,225.00 shares authorized; 237.50 shares issued and outstanding as of March 31, 2024		3,474,286		—			3,474,286
Series E-3 preferred stock, 2,205.00 shares authorized; 630.00 shares issued and outstanding as of March 31, 2024		12,222,000		1,371,429			13,593,429
Common stock, $0.00001 par value; 170,000,000 shares authorized; 33,164,466 shares issued and outstanding as of March 31 2024		332		—			332
Additional paid-in capital		248,151,681		(23,315,633)	A, C		224,836,048
Accumulated deficit		(239,064,176)		9,661,176	B, D, F		(229,403,000)
Total stockholders’ (deficit) equity		26,166,146		(13,665,051)			12,501,095
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	42,908,439	$	—		$	42,908,439

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended March 31, 2024
	As Previously
	Reported		Adjustments		Reference	As Restated

OPERATING EXPENSES:
Research and development	$	7,377,940	$	(289,898)	E	$	7,088,042
General and administrative		4,623,546		289,898	E		4,913,444
Total operating expenses		12,001,486		—			12,001,486

LOSS FROM OPERATIONS		(12,001,486)		—			(12,001,486)

OTHER INCOME (EXPENSE):
Loss on valuation of warrants		(9,900,000)		(5,060,346)	D		(14,960,346)
Interest income		319,849		—			319,849
Total other income (expense), net		(9,580,151)		(5,060,346)			(14,640,497)
NET LOSS	$	(21,581,637)	$	(5,060,346)		$	(26,641,983)
NET LOSS PER SHARE — BASIC AND DILUTED	$	(0.74)	$	(0.17)		$	(0.91)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING — BASIC AND DILUTED		29,346,679		—			29,346,679

CELLECTAR BIOSCIENCES, INC.

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

(Unaudited)


	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, 2023	—	$	—	430.87	$	6,059,655	20,744,110	$	207	$	210,066,630	$	(217,482,539)	$	(1,356,047)
Stock-based compensation	—		—	—		—	—		—		454,363		—		454,363
Conversion of pre-funded warrants into common stock	—		—	—		—	1,079,132		11		(11)		—		—
Exercise of warrants for preferred stock, net of issuance costs (Note 2)	—		—	2,205.00		42,777,000	—		—		—		—		42,777,000
Conversion of Series E-3 preferred stock into common stock	—		—	(1,575.00)		(30,555,000)	9,890,099		100		30,554,900		—		—
Exercise of warrants for common stock	—		—	—		—	547,177		5		1,072,462		—		1,072,467
Conversion of Series E-2 preferred stock into common stock	—		—	(82.26)		(1,203,346)	903,956		9		1,203,337		—		—
Settlement of warrants to equity (Note 2)	—		—	—		—	—		—		4,800,000		—		4,800,000
Retired shares	—		—	—		—	(8)		—		—		—		—
Net loss	—		—	—		—	—		—		—		(21,581,637)		(21,581,637)
Balance at March 31, 2024	—	$	—	978.61	$	17,078,309	33,164,466	$	332	$	248,151,681	$	(239,064,176)	$	26,166,146

Adjustments
Balance at December 31, 2023 (A, F)	111.11	$	1,382,023	(111.11)	$	(1,382,023)	—	$	—	$	(27,142,420)	$	14,721,522	$	(13,802,921)
Conversion of pre-funded warrants into common stock (C)	—		—	—		—	—		—		3,972,540		—		3,972,540
Settlement of warrants to equity (B)	—		—	—		4,800,000	—		—		(4,800,000)		—		—
Conversion of Series E-3 preferred stock into common stock (B)	—		—	—		(3,428,571)	—		—		3,428,571		—		—
Exercise of warrants for common stock (A)	—		—	—		—	—		—		1,225,676		—		1,225,676
Net loss	—		—	—		—	—		—		—		(5,060,346)		(5,060,346)
Balance at March 31, 2024	111.11	$	1,382,023	(111.11)	$	(10,594)	—	$	—	$	(23,315,633)	$	9,661,176	$	(13,665,051)

As Restated
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)
Stock-based compensation	—		—	—		—	—		—		454,363		—		454,363
Conversion of pre-funded warrants into common shares	—		—	—		—	1,079,132		11		3,972,529		—		3,972,540
Exercise of warrants for preferred stock, net of issuance costs	—		—	2,205.00		47,577,000	—		—		—		—		47,577,000
Conversion of Series E-3 preferred stock into common stock	—		—	(1,575.00)		(33,983,571)	9,890,099		100		33,983,471		—		—
Exercise of warrants for common stock	—		—	—		—	547,177		5		2,298,138		—		2,298,143
Conversion of Series E-2 preferred stock into common stock	—		—	(82.26)		(1,203,346)	903,956		9		1,203,337		—		—
Retired shares	—		—	—		—	(8)		—		—		—		—
Net loss	—		—	—		—	—		—		—		(26,641,983)		(26,641,983)
Balance at March 31, 2024	111.11	$	1,382,023	867.50	$	17,067,715	33,164,466	$	332	$	224,836,048	$	(229,403,000)	$	12,501,095

CELLECTAR BIOSCIENCES, INC.

RESTATED CONSOLIDATED STATEMENT OF CASH FLOWS


	Three Months Ended March 31, 2024
	As Previously
	Reported		Adjustments		Reference	As Restated

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(21,581,637)	$	(5,060,346)	D	$	(26,641,983)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization		88,490		—			88,490
Stock-based compensation		454,363		—			454,363
Change in fair value of warrants		9,900,000		5,060,346	D		14,960,346
Change in operating lease right-of-use asset		15,436		—			15,436
Changes in:
Prepaid expenses and other assets		(448,959)		—			(448,959)
Lease liability		(4,639)		—			(4,639)
Accounts payable and accrued liabilities		(1,784,695)		—			(1,784,695)
Cash used in operating activities		(13,361,641)		—			(13,361,641)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant & equipment		(21,633)		—			(21,633)
Cash used in investing activities		(21,633)		—			(21,633)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants, net of issuance costs (Note 2)		43,849,467		—			43,849,467
Cash provided by financing activities		43,849,467		—			43,849,467
INCREASE IN CASH AND CASH EQUIVALENTS		30,466,193		—			30,466,193
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		9,564,988		—			9,564,988
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	40,031,181	$	—		$	40,031,181
Settlement of warrants to equity	$	4,800,000	$	—		$	4,800,000
Conversion of preferred stock to common stock	$	31,758,346	$	—		$	31,758,346