Quarterly report pursuant to Section 13 or 15(d)

RESTATEMENT OF PREVIOUSLY ISSUED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

v2.4.1.9
RESTATEMENT OF PREVIOUSLY ISSUED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 9 Months Ended
Sep. 30, 2014
Accounting Changes and Error Corrections [Abstract]  
Accounting Changes and Error Corrections [Text Block]
1A. RESTATEMENT OF PREVIOUSLY ISSUED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
Overview
 
On August 20, 2014, Cellectar Biosciences, Inc. (the “Company”) completed an underwritten public offering of 3,583,333 shares of its common stock and warrants to purchase 3,833,333 shares of its common stock at an exercise price of $4.68 per share, expiring on August 20, 2019 (the “August 2014 Underwritten Offering”). In conjunction with the August 2014 Underwritten Offering, all of the holders of the debentures issued in February 2013 elected to participate in the offering of common stock and warrants at the combined offering price of $3.76 per share. As a result, $4,000,000 principal amount of debentures and accrued interest of $172,435 was extinguished in exchange for 1,109,690 shares of the Company’s common stock and warrants to purchase 1,109,690 shares of common stock at $4.68 per share (the “August 2014 Debenture Tender and Exchange”). See Note 4 for further discussion of the August 2014 Underwritten Offering and the August 2014 Debenture Tender and Exchange (together the “August 2014 Offering”).
 
On May 14, 2015, the Audit Committee of the Company’s Board of Directors (the “Audit Committee”), in consultation with management, determined that due to a misapplication of the guidance on accounting for certain of its warrants issued in the August 2014 Offering, the Company’s previously issued financial statements for the periods ended September 30, 2014 and December 31, 2014 (the “Affected Periods”) should no longer be relied upon. As a result, the Company has restated the financial statements for the Affected Periods.These restatements result in non-cash, non-operating financial statement corrections and have no impact on the Company’s current or previously reported cash position, operating expenses or total operating, investing or financing cash flows.
 
The warrants issued in the August 2014 Offering (the “August 2014 Warrants”) contain a cash settlement feature applicable in circumstances where there is no current prospectus to support the issuance of registered common stock, and a warrant holder wishing to exercise the warrant, requests gross settlement rather than the net settlement via cashless exercise provided in the warrant. Based on Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), warrant instruments that could potentially require net cash settlement in the absence of express language precluding such settlement and those which include “down-round provisions” should be initially classified as derivative liabilities at their estimated fair values, regardless of the likelihood that such instruments will ever be settled in cash. In periods subsequent to issuance, changes in the estimated fair value of the derivative instruments should be reported in the statement of operations.
 
Of the August 2014 Warrants, 4,943,023 contain the cash settlement feature. Previously classified as equity, these warrants have been reclassified as a derivative  liability in the restated information. These warrants are listed on the NASDAQ Capital Market under the symbol CLRBW; therefore, the Company has established their fair value based upon the market value (see Note 2). The impact of the restatement on the condensed consolidated balance sheet, statement of operations and cash flows, as of September 30, 2014, and for the three months and nine months ended September 30, 2014, is presented below.
 
 
 
As of September 30, 2014
 
 
 
As Previously
Reported
 
 
Adjustment
 
 
As Restated
 
Consolidated Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liability
 
$
820,124
 
 
$
3,272,971
 
 
$
4,093,095
 
Total current liabilities
 
 
2,065,074
 
 
 
3,272,971
 
 
 
5,338,045
 
Total liabilities
 
 
2,570,167
 
 
 
3,272,971
 
 
 
5,843,138
 
Additional paid-in capital
 
 
69,744,261
 
 
 
(4,102,709
)
 
 
65,641,552
 
Accumulated deficit
 
 
(56,594,533
)
 
 
829,738
 
 
 
(55,764,795
)
Total stockholders’ equity
 
 
13,149,804
 
 
 
(3,272,971
)
 
 
9,876,833
 
 
 
 
Three Months Ended September 30, 2014
 
 
 
As Previously
Reported
 
 
Adjustment
 
 
As Restated
 
Consolidated Statement of Operations Data:
 
 
 
 
 
 
 
 
 
 
 
 
Gain on revaluation of derivative warrants
 
$
2,020,433
 
 
$
829,738
 
 
$
2,850,171
 
Total other income, net
 
 
1,767,375
 
 
 
829,738
 
 
 
2,597,113
 
Net income (loss)
 
 
(505,716
)
 
 
829,738
 
 
 
324,022
 
Basic and diluted net income (loss) per common share
 
 
(0.10
)
 
 
0.17
 
 
 
0.06
 
 
 
 
Nine Months Ended September 30, 2014
 
 
 
As Previously
Reported
 
 
Adjustment
 
 
As Restated
 
Consolidated Statement of Operations Data:
 
 
 
 
 
 
 
 
 
 
 
 
Gain on revaluation of derivative warrants
 
$
2,539,239
 
 
$
829,738
 
 
$
3,368,977
 
Total other income, net
 
 
2,102,967
 
 
 
829,738
 
 
 
2,932,705
 
Net income (loss)
 
 
(5,534,965
)
 
 
829,738
 
 
 
(4,705,227
)
Basic and diluted net income (loss) per common share
 
 
(1.54
)
 
 
0.23
 
 
 
(1.31
)
 
 
 
Nine Months Ended September 30, 2014
 
 
 
As Previously
Reported
 
 
Adjustment
 
 
As Restated
 
Consolidated Statement of Cash Flows Data:
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 
 
(5,534,965
)
 
 
829,738
 
 
 
(4,705,227
)
Gain on revaluation of derivative warrants
 
 
(2,539,239
)
 
 
(829,738
)
 
 
(3,368,977
)