Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

This report contains certain statements that may be deemed 'forward-looking statements' within the meaning of United States securities laws. All statements, other than statements of historical fact, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Certain factors that could cause results to differ materially from those projected or implied in the forward-looking statements are set forth in this Annual Report on Form 10-K for the year ended December 31, 2025 under the caption "Item 1A - Risk factors".

We encourage you to read those descriptions carefully. We caution you not to place undue reliance on the forward-looking statements contained in this report. These statements, like all statements in this report, speak only as of the date of this report (unless an earlier date is indicated) and we undertake no obligation to update or revise the statements except as required by law. Such forward-looking statements are not guarantees of future performance and actual results will likely differ, perhaps materially, from those suggested by such forward-looking statements.

On May 12, 2025, the Company effected a one-for-sixteen reverse stock split of its common stock and subsequently on July 7, 2025, effected a further one-for-fifteen reverse stock split of its common stock. All share and per share data for all periods presented in the consolidated financial statements have been retrospectively adjusted to give effect to these reverse stock splits, for all periods presented, unless otherwise indicated.

Recent developments

Equity Transactions

In December 2024, Bio Green Med Solution, Inc. ("BGMS" or the "Company"), a Delaware corporation formerly known as Cyclacel Pharmaceuticals, Inc., announced that it was in the process of exploring and reviewing strategic alternatives on an expedited basis in order to preserve the Company's cash, including a potential transaction with investor, David E. Lazar of Activist Investing, LLC ("Lazar"). On January 2, 2025, the Company entered into a securities purchase agreement with Lazar, pursuant to which he agreed to purchase from the Company, 1,000,000 shares of Series C Convertible Preferred Stock and 2,100,000 shares of Series D Convertible Preferred Stock of Cyclacel at a purchase price of $1.00 per share for aggregate gross proceeds of $3.1 million, subject to the terms and conditions of the securities purchase agreement (together, the Series C Convertible Preferred Stock and Series D Convertible Preferred Stock are the "Securities"). The proceeds of the transaction were used to settle outstanding liabilities of the Company and other general corporate and operating purposes.

On February 11, 2025, Lazar, who was serving as the Company's interim Chief Executive Officer and Secretary, entered into a securities purchase agreement (the "Purchase Agreement") with an investor, Datuk Dr. Doris Wong Sing Ee (the "Investor") pursuant to which the Investor agreed to purchase all 1,000,000 shares of Series C Convertible Preferred Stock, and 1,745,262 of the 2,100,000 shares of Series D Convertible Preferred Stock, currently held by Lazar, so that Purchaser would hold seventy percent (70%) of the fully diluted issued and outstanding shares of the Company. The Purchase Agreement closed on February 26, 2025 (the "Closing Date"). Additionally, the Investor succeeded to all of Lazar's rights and interests under that certain securities purchase agreement between the Lazar and the Company dated January 2, 2025.

The Securities were convertible into shares of the common stock, par value $0.001 per share (the "Common Stock") of the Company at the election of the Investor as follows: (i) the 1,000,000 shares of the Series C were convertible into 11,042 shares of Common Stock, and (ii) 1,745,262 of the Series D were convertible into 799,911 shares of Common Stock. On the Closing Date, the Investor exercised the conversion rights related to the Series C and Series D shares into Common Stock in full resulting in the Investor owning 810,952 shares of Common Stock.

On May 12, 2025, the Company effected a one-for-sixteen reverse stock split of its common stock and subsequently on July 7, 2025, effected a further one-for-fifteen reverse stock split of its common stock. All share and per share data for all periods presented in the consolidated financial statements have been retrospectively adjusted to give effect to these reverse stock splits, consistent with the treatment followed by other public companies in similar circumstances.

Disposal of Cyclacel Limited

Historically, the Company's clinical research programs were conducted through Cyclacel Limited, a wholly owned subsidiary of the Company, and all intellectual property and rights to those programs were owned by that entity. On January 31, 2025, the creditors voluntary liquidation of Cyclacel Limited was announced in the London Gazette, one of the official public records of the government of the United Kingdom. Upon the commencement of the liquidation of the Cyclacel Limited, the Company lost operational and strategic control over the Cyclacel Limited and its financial results have been deconsolidated from Company as of January 31, 2025. On the date of deconsolidation, stockholders' equity increased by approximately $4.9 million.

Following the creditors' voluntary liquidation of Cyclacel Limited, the Company intended to focus on the development of the plogosertib ("Plogo") clinical program only. Accordingly, on March 10, 2025, the Company repurchased certain assets related to Plogo from Cyclacel Limited with the approval of the joint liquidator in exchange for approximately $0.3 million in cash. On October 6, 2025, the Company entered into an Asset Purchase Agreement (the "Purchase Agreement") with Tethra Biosciences Inc., a Delaware corporation (the "Buyer"). Under the terms of the Purchase Agreement, the Company agreed to sell, and the Buyer agreed to purchase, certain assets, including all patent rights of the Company related to Plogo for a purchase price of $300,000, plus a further potential Milestone payment (as defined in the Purchase Agreement) of $170,000.

Cyclacel Limited's other drug development program, fadraciclib, continues to be marketed for sale by the joint liquidator. The Company has no plans at this time to repurchase any rights to or assets of the fadraciclib program.

Acquisition of FITTERS Diversified Berhad

On May 6, 2025, and as amended on July 7, 2025, the Company entered into an Exchange Agreement (collectively, the "Exchange Agreement") with FITTERS Diversified Berhad (9318.KL; "FITTERS"), an investment holding company engaged, through its subsidiaries, in the business of the sale of fire safety materials, equipment and fire prevention systems, "Waste-To-Resource" services and real estate development and construction. Pursuant to the Exchange Agreement, all of the ordinary shares owned by FITTERS of its wholly-owned subsidiary, Fitters Sdn. Bhd., a Malaysia-based private limited company ("Fitters Sub") were to be exchanged for common stock, par value $0.001, of the Company (the "Purchaser Stock"), and Fitters Sub would continue as a wholly-owned subsidiary of the Company (the "Transaction"). As part of the Transaction, BGMS would issue an amount of Purchaser Stock equal to 19.99 percent, or 699,158 of its common shares and BGMS stockholders would own approximately 80.01% of the combined company. Following the closing of the Transaction on September 12, 2025, the Company's common shares continued to be listed on the Nasdaq Capital Market under a new ticker symbol (BGMS) and Cyclacel Pharmaceuticals Inc. was renamed Bio Green Med Solution, Inc.

Overview

Following our sale of Plogo and the closing of the Transaction on September 12, 2025, we now specialize in the supply and trading of protective and fire safety equipment providing a wide range of fire safety products, including fire extinguishers, foam system, fire-resistant doors, personal protective equipment, and fire safety apparel. Our mission is to deliver high-quality, certified safety solutions that enhance protection across commercial, industrial, healthcare, and residential sectors with a focus on trading and distribution to position us as a key player in Malaysia's fire safety market, with a reputation for reliability and compliance with stringent regulatory standards.

Our principal executive office is located at Level 10, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, Kuala Lumpur, Malaysia, and our telephone number is (908) 955-0526. Our website address is www.bgmsglobal.com. The information contained on, or that can be accessed through, our website is not part of, and is not incorporated by reference into, this Annual Report.

Revenue

Following our acquisition of Fitters Sdn. Bhd. on September 12, 2025, we recognized $0.7 million of revenue for the year ended December 31, 2025 in relation to the provision of fire safety and protection equipment.

In 2024, we recognized revenue of $43,000 related to the recovery of clinical manufacturing costs associated with an investigator sponsored study managed by Cedars Sinai Medical Center. We are no longer in the pharmaceutical development business and will not generate any revenues from this activity in the future.

Funding Requirements and Going Concern

As of December 31, 2025, we had cash and cash equivalents of $3.5 million We have incurred losses since our inception and as of December 31, 2025, we had an accumulated deficit of $454.4 million. We expect to continue to incur operating losses for the foreseeable near term future.

Our future funding requirements will depend on many factors, including but not limited to:

	●	the costs of acquiring or investing in new businesses;
	●	the ability to continue generating sufficient revenues and margins from the sale of fire safety equipment;
	●	the timely cash receipts from revenue generation;
	●	the effect of competing technological and market developments; and
	●	the economic and other terms and timing of any collaboration, licensing or other arrangements into which we may enter.

Until we can generate a sufficient amount of product revenue to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through public or private equity offerings, debt financings or strategic collaborations. Although we are not reliant on institutional credit finance and therefore not subject to debt covenant compliance requirements or potential withdrawal of credit by banks, we are reliant on the availability of funds and activity in equity markets. We do not know whether additional funding will be available on acceptable terms, or at all. If we are not able to secure additional funding when needed, we may have to reduce the scope of or eliminate one or more of our products or make changes to our operating plan.

Since our inception, we have relied primarily on the proceeds from sales of common and preferred equity securities to finance our operations and internal growth. Additional funding has come through research and development tax credits, government grants, the sale of product rights, interest on investments, licensing revenue, royalty income, and a limited amount of product revenue from operations discontinued in September 2012.

As discussed in Note 1 of the Notes to the Consolidated Financial Statements accompanying this Annual Report on Form 10-K, under ASC Topic 205-40, Presentation of Financial Statements - Going Concern, management is required at each reporting period to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity's ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management's plans that have not been fully implemented as of the date the financial statements are issued.

Based on our current operating plan, we anticipate that our cash and cash equivalents of $3.5 million as of December 31, 2025, will allow us to meet our liquidity requirements into the third quarter of 2026. We continue to work to raise additional capital however as of the date of the Consolidated Financial Statements accompanying this Annual Report on Form 10-K, there is no guarantee that we will be able to raise additional funds to extend operations beyond the third quarter of 2026. Our history of losses, our negative cash flows from operations, our liquidity resources currently on hand, and our dependence on the ability to obtain additional financing to fund our operations after the current resources are exhausted, about which there can be no certainty, have resulted in our assessment that there is substantial doubt about our ability to continue as a going concern for a period of at least twelve months from the issuance date of this Annual Report on Form 10-K. While we have plans in place to mitigate this risk, which primarily consist of raising additional capital through a combination of public or private equity or debt financings or by entering into partnership agreements, there is no guarantee that we will be successful in these mitigation efforts.

Agreements to Sell Securities

On November 5, 2025, we entered into a Warrant Exchange Agreement (the "Exchange Agreement") with certain accredited investors (the "Holders") of certain existing warrants (the "Exchanged Warrants") to purchase an aggregate of 1,402,605 shares of the Company's common stock, par value $0.001 per share (the "Common Stock"). The Exchanged Warrants were originally issued pursuant to a securities purchase agreement, dated as of June 20, 2025 by and between us and each Holder. Pursuant to the Exchange Agreement, we agreed to exchange with the Holders, respectively, the Exchanged Warrants for an aggregate of 1,402,605 shares of Common Stock (the "New Shares"). We recorded a deemed dividend of approximately $9.5 million representing the difference between the fair value of the New Shares and the fair value of the Exchanged Warrants on the exchange date.

On September 4, 2025, we entered into a separate Warrant Exchange Agreement (the "September Exchange Agreement") with certain accredited investors (the "Holders") of existing Series C common stock purchase warrants (the "September Exchanged Warrants") to purchase an aggregate of 559,395 shares of the Company's common stock, par value $0.001 per share (the "Common Stock"). The September Exchanged Warrants were originally issued pursuant to a securities purchase agreement, dated as of June 20, 2025 by and between us and each Holder. Pursuant to the September Exchange Agreement, we agreed to exchange with the Holders, respectively, the September Exchanged Warrants for an aggregate of 559,395 shares of Common Stock (the "September New Shares"). We recorded a deemed dividend of approximately $1.5 million representing the difference between the fair value of the September New Shares and the fair value of the September Exchanged Warrants on the exchange date.

On June 20, 2025, we entered into a Securities Purchase Agreement (the "Purchase Agreement") with certain accredited investors (the "Investors"), pursuant to which the Investors agreed to purchase an aggregate of 3,000,000 shares of Series F Convertible Preferred Stock (the "Series F Preferred Stock") at a purchase price of $1.00 per share for aggregate gross proceeds of $3,000,000, subject to the terms and conditions of the Purchase Agreement. In connection with the transaction, we issued a series A common stock purchase warrant, series B common stock purchase warrant and series C common stock purchase warrant to each Investor (collectively, the "Warrants"). The proceeds of the transaction were used for general corporate and operating purposes.

In sum, the Investors agreed to invest a total of $3,000,000 at the closing of the transactions under the Purchase Agreement in exchange for an aggregate of 3,000,000 shares of Series F Preferred Stock and 1,962,000 Warrants, which occurred on or about June 20, 2025 (the "Closing").

Each share of Series F Preferred Stock was convertible into 0.218 shares of the Company's common stock, par value $0.001 per share ("Common Stock"). All 3,000,000 shares of Series F Preferred Stock were converted into 654,000 shares of Common Stock during 2025.

The series A common stock purchase warrants entitle each Investor to purchase 218,000 shares of Common Stock at an exercise price of $7.65 per share with an expiration date five years from the date of issuance. The series B common stock purchase warrants entitle each Investor to purchase 218,000 shares of Common Stock at an exercise price of $9.00 per share with an expiration date five years from the date of issuance. The series C common stock purchase warrants entitle each Investor to purchase 218,000 shares of Common Stock of the Company at an exercise price of $10.20 per share with an expiration date five years from the date of issuance.

On March 21, 2025, we entered into a Securities Purchase Agreement (the "March Purchase Agreement") with certain accredited investors (the "Investors"), pursuant to which the Investors agreed to purchase 1,000,000 shares of Series E Convertible Preferred Stock (the "Series E Preferred Stock") at a purchase price of $1.00 per share for aggregate gross proceeds of $1 million, subject to the terms and conditions of the Purchase Agreement. The proceeds of the transaction were used for general corporate and operating purposes.

Each share of Series E Preferred Stock was convertible into 0.458333 shares of the Company's common stock, par value $0.001 per share ("Common Stock"). All 1,000,000 shares of Series E Preferred Stock were converted into 458,333 shares of Common Stock during 2025.

On February 5, 2025, we entered into a securities purchase agreement (the "February Purchase Agreement") with Helena Special Opportunities 1 Ltd. ("Helena"). Under this agreement, we have the right, but not the obligation, to sell to Helena up to the lesser of (i) $25 million of newly issued shares (the "Purchase Shares") of our Common Stock and (ii) the Exchange Cap (as defined below). As consideration for Helena's execution and delivery of the February Purchase Agreement, we issued Helena shares of our Common Stock having a value of approximately $125,000 (the "Commitment Shares" and, together with the Purchase Shares, the "Securities"). Specifically, we issued to Helena (i) on the trading day immediately following execution of the Purchase Agreement, 758 shares of Common Stock with a value of about $62,500 and (ii) 90 days later, 885 shares of Common Stock also with a value of approximately $62,500. The shares issued were based on the volume weighted average price of our Common stock over the three trading days preceding each issuance. The average of those volume weighted average prices is known as the "Commitment Share Reference Price" in the February Purchase Agreement. The sum of the shares issued pursuant to clauses (i) and (ii) above is referred to as the "Original Commitment Fee Share Amount".

If the closing price of our Common Stock on the trading day immediately preceding the one-year anniversary of the execution date is less than the Commitment Share Reference Price, we must issue to Helena additional shares of Common Stock as Commitment Shares (the "Make-Whole Shares") promptly following such one-year anniversary. The amount of Make-Whole Shares to be issued will be equal to the quotient obtained by dividing (a) $125,000, by (b) the closing price of the Common Stock on the trading day immediately preceding the one-year anniversary of the execution date, minus the Original Commitment Fee Share Amount. In lieu of delivering the Make-Whole Shares, the Company may elect to pay to the Investor the cash value of the Make-Whole Shares by paying to the Investor a cash payment equal to the closing price of the Common Stock on the trading day immediately preceding the one-year anniversary of the execution date multiplied by the Make-Whole Share Amount. In February 2026, we issued to Helena an additional 119,136 shares of Common Stock as Make-Whole Shares.

Until March 2028, we may direct Helena to purchase a specified number of shares of Common Stock (a "Fixed Purchase") generally at a purchase price equal to 95% of the daily volume weighted average price (the "VWAP") of the Common Stock for the two business days immediately preceding the applicable Purchase Date for such Fixed Purchase, so long as the previous business day's closing sale price of the Common Stock was equal to or greater than $0.20 (each, a "Purchase Date").

If we make certain issuances of our securities within a specified period of time after a Purchase Date and such securities are issued at prices (the "New Issuance Price") less than the prices to be paid by Helena, the purchase price paid by Helena at each appliable Purchase Date would be reduced to the New Issuance Price, subject to the terms and conditions set forth in the February Purchase Agreement.

There are standard beneficial ownership limitations on the number of shares that Helena can own.

As we seek funding from alternative sources, we have no immediate or near term plans to issue shares under the February Purchase Agreement.

On February 20, 2025, we amended, through addendum, our securities purchase agreement (the "Lazar Purchase Agreement") with David Lazar (the "Purchaser"), its interim Chief Executive Officer, which was initially entered into on February 4, 2025 (the "Amendment"). Pursuant to the Lazar Purchase Agreement, we had the right, but not the obligation, to direct the Purchaser, until September 30, 2026, to purchase up to $8,000,000 (the "Aggregate Purchase Price") of shares of common stock, par value $0.001 per share (the "Common Stock") of the Company (the "Shares") in one or more private placement offerings. The applicable purchase price was to be the greater of (i) the consolidated closing bid price immediately prior to the entry into the Lazar Purchase Agreement and (ii) the consolidated closing bid price on the Trading Day (as defined in the Lazar Purchase Agreement) immediately preceding the applicable Purchase Date (as defined in the Lazar Purchase Agreement). We did not issue any shares of our Common Stock under this agreement.

On January 2, 2025, we entered into a Securities Purchase Agreement (the "January Purchase Agreement") with David E. Lazar, pursuant to which he agreed to purchase from the Company 1,000,000 shares of Series C Convertible Preferred Stock (the "Series C Preferred Stock") and 2,100,000 shares of Series D Convertible Preferred Stock (the "Series D Preferred Stock" and, together with the Series C Preferred Stock, the "Preferred Stock") of the Company at a purchase price of $1.00 per share for aggregate gross proceeds of $3.1 million, subject to the terms and conditions of the Purchase Agreement. The proceeds of the transaction were used to repay and settle outstanding liabilities of the Company and for other general corporate and operating purposes.

Each share of Series C Preferred Stock was convertible into 0.11 shares of the Company's common stock, par value $0.001 per share ("Common Stock"), and each share of Series D Preferred Stock was convertible into 0.458333 shares of Common Stock. All 1,000,000 shares of Series C Preferred Stock were converted into 11,042 shares of Common Stock during 2025, and all 2,100,000 shares of Series D Preferred Stock were converted into 962,500 shares of Common Stock during 2025.

On November 13, 2024, we entered into a letter agreement (the "Warrant Exercise and Reload Agreement") with the holder (the "Holder") of its issued and outstanding Series B Warrants (the "Prior Warrants") to purchase an aggregate of 20,703 shares of Common Stock, offering the Holder the opportunity to exercise all of its Prior Warrants for cash at a reduced exercise price equal to $99.60 per share provided the Prior Warrants were exercised in full for cash on or before 12:30 P.M. Eastern Time on the date of the Warrant Exercise and Reload Agreement. In consideration for the exercise of the Prior Warrants, the Holder received new unregistered Series C Warrants (the "Series C Warrants") exercisable for up to an aggregate of 41,407 shares of common stock (the "Series C Warrant Shares") and new unregistered Series D Warrants (the "Series D Warrants" and, together with the Series C Warrants, the "New Warrants") exercisable for up to an aggregate of 41,407 shares of common stock (the "Series D Warrant Shares" and, together with the Series C Warrant Shares, the "New Warrant Shares"). The Series C Warrants are exercisable for a period of five and one-half (5.5) years following the Stockholder Approval Date and the Series D Warrants are exercisable beginning on the Stockholder Approval Date for a period of eighteen (18) months. The New Warrants each have an exercise price of $99.60 per share. The shares of common stock issued upon exercise of the Prior Warrants are registered pursuant to an effective registration statement on Form S-1 (No. 333-279157).

On April 30, 2024, we entered into a securities purchase agreement (the "Purchase Agreement") with an institutional investor (the "Purchaser") for the issuance and sale in a private placement (the "Private Placement") of (i) 604 shares of the Company's common stock, (ii) pre-funded warrants to purchase up to 20,099 shares of common stock (the "Pre-Funded Warrants"), (iii) series A warrants to purchase up to 20,703 shares of common stock (the "Series A Warrants"), and (iv) series B warrants to purchase up to 20,703 shares of common stock (the "Series B Warrants" and together with the Series A Warrants, the "Common Warrants"). The purchase price of each share of common stock and associated Common Warrants was $386.40 and the purchase price of each Pre-Funded Warrant and associated Common Warrants was $386.38.

The Common Warrants were exercisable immediately upon issuance at an exercise price of $326.40 per share. The Series A Warrants will expire five and one-half years from the date of issuance and the Series B Warrants will expire eighteen months from the date of issuance. The Pre-Funded Warrants were exercisable immediately upon issuance at an exercise price of $0.024 per share and were entirely exercised by the end of 2024.

Dividend on Preferred Stock

On January 12, 2026, the Board of Directors of Bio Green Med Solution, Inc. (the "Company") declared a quarterly cash dividend of $0.15 per share on the Company's 6% Convertible Exchangeable Preferred Stock (the "Preferred Stock"). The dividend was paid on February 1, 2026, to Preferred Stock stockholders of record as of the close of business on January 22, 2026.

Results of Operations

Years Ended December 31, 2025 and 2024

Results of Continuing Operations

Revenues

The following table summarizes the revenues for years ended December 31, 2025 and 2024 (in thousands except percentages):

		Year ended December 31,								Difference
		2025				2024				$				%
Product Sales - Fire Safety			747				-				747				-
Clinical trial supply			-				43				(43	)			(100	)
Total Revenue		$	747			$	43			$	704				1,637

Following our acquisition of Fitters Sdn. Bhd. On September 12, 2025, we recognized $0.7 million of revenue for the year ended December 31, 2025 in relation to the provision of fire safety and protection equipment.

We recognized $0 of revenue relating to clinical trial supply for the year ended December 31, 2025 and $43,000 for the comparative period in 2024. This revenue relates to recovery of clinical manufacturing costs associated with an investigator sponsored study managed by Cedars-Sinai Medical Center.

We expect our revenues in fire safety in general to grow modestly in the near term, but expect more elevated growth in revenues for fire safety equipment, to service the rapid expansion of data centers in Southern Malaysia. We do not expect to report clinical trial supply or any other pharmaceutical development revenue for the foreseeable future.

Cost of sales

The following table summarizes the cost of sales for the years ended December 31, 2025 and 2024 (in thousands except percentages):

		Year Ended
		December 31,								Difference
		2025				2024				$				%
Cost of sales		$	609			$	-			$	609				100

Total cost of sales represented 7% and 0% of our operating expenses for the years ended December 31, 2025 and 2024, respectively. Our gross margins across all revenue streams approximate to 19% of gross revenues. Around 80% of our gross margins are generated from low margin product sales with the remaining 20% generated from higher margin maintenance and service revenues. We do not expect the product mix or margins to change significantly in the near term. We are, however, susceptible to potential increased costs brought about by geo-political events such as adverse movements in world oil prices.

Research and development

We expense all research and development costs as they are incurred. Research and development expenses primarily include:

	●	Clinical trial and regulatory-related costs;
	●	Payroll and personnel-related expenses, including consultants and contract research organizations;
	●	Preclinical studies and materials;
	●	Technology license costs;
	●	Stock-based compensation; and
	●	Rent and facility expenses for the portion of our office housing research and development personnel.

The following table provides information with respect to our research and development expenditures for the years ended December 31, 2025 and 2024 (in thousands except percentages):

		Year Ended
		December 31,								Difference
		2025				2024				$				%
Transcriptional Regulation (fadraciclib)		$	389			$	4,970			$	(4,581	)			(92	)
Anti-mitotic (plogo)			423				1,566				(1,143	)			(73	)
Other research and development expenses			36				119				(83	)			(70	)
Total research and development expenses		$	848			$	6,655			$	(5,807	)			(87	)

Research and development expenses represented 9% and 55% of our operating expenses for the years ended December 31, 2025 and 2024, respectively.

Research and development expenses decreased by $5.8 million from $6.7 million for the year ended December 31, 2024 to $0.9 million for the year ended December 31, 2025. Expenditure for the transcriptional regulation program ceased as a result of the Company's UK subsidiary, Cyclacel Limited, being liquidated on January 24, 2025. Research and development expenses relating to plogosertib decreased by $1.1 million relative to the respective comparative period while we paused our clinical trials and explored alternative salt, oral formulation with improved bioavailability.

Following the liquidation of Cyclacel Limited, and therefore the loss of ownership of our transcriptional regulation program, coupled with the sale of our remaining anti-mitotic asset, plogosertib in early October 2025, we do not expect to incur any further material research and development expenditures.

General and administrative

General and administrative expenses include costs for administrative personnel, legal and other professional expenses and general corporate expenses. The following table summarizes the total general and administrative expenses for the years ended December 31, 2025 and 2024 (in thousands except percentages):

		Year Ended
		December 31,								Difference
		2025				2024				$				%
Total general and administrative expenses		$	7,717			$	5,392			$	2,225				43

Total general and administrative expenses represented 84% and 45% of our operating expenses for the years ended December 31, 2025 and 2024, respectively.

Our general and administrative expenditures increased by $2.3 million from $5.4 million for the year ended December 31, 2024 to $7.7 million for the year ended December 31, 2025. This increase was primarily due to several one-time costs associated with the two changes of control of the Company; primarily stock compensation expense of $1.3 million, D&O insurance costs of $0.7 million, and compensation expense of $0.3 million. The acquisition of Fitters Sdn. Bhd. On September 12, 2025, resulted in a further $0.1m of general and administrative expenditures during the year ended December 31, 2025.

The future

We expect general and administrative expenditures for the year ended December 31, 2026 to reduce significantly compared to the year ended December 31, 2025 following the deconsolidation of Cyclacel Limited and elimination of nonrecurring costs related to two changes of control.

Other expense, net

The following table summarizes the other income (expense) for years ended December 31, 2025 and 2024 (in thousands except percentages):

		Year Ended
		December 31,								Difference
		2025				2024				$				%
Foreign exchange gains (losses)		$	73			$	(54	)		$	127				(235	)
Interest income			62				12				50				417
Gain on deconsolidation of subsidiary			4,947				-				4,947				-
Other income, net			354				52				302				581
Total other income (expense), net		$	5,436				10			$	5,426				54,260

Total other income, net, increased by $5.4 million from $10,000 for the year ended December 31, 2024 to $5.4 million for the year ended December 31, 2025. The increase in other income, net primarily relates to the liquidation of our formerly wholly owned subsidiary Cyclacel Limited, and the subsequent deconsolidation thereof in January 2025, which resulted in a $4.9 million gain on deconsolidation. Other income, net relates primarily to $0.3 million received from the sale of our research and development anti-mitotic asset, plogosertib in early October 2025. Furthermore, we received royalties under a December 2005 Asset Purchase Agreement, or APA, whereby Xcyte Therapies, Inc., or Xcyte (a business acquired by us in March 2006) sold through the APA and other related agreements certain assets and intellectual property which are not related to our product development plans to ThermoFisher Scientific Company, or TSC. Accordingly, we presented $0 and $52,000 as other income received from TSC during the years ended December 31, 2025 and 2024 respectively. We have no knowledge of TSC's activities and cannot predict when we may receive income under the APA, if any.

Foreign exchange losses

Favorable foreign exchange movements increased by $127,000 to a gain of $73,000 for the year ended December 31, 2025 compared to a loss of $54,000 for the year ended December 31, 2024.

Historically, we have had intercompany loans in place between our parent company and our former subsidiary based in the UK. As a result of the liquidation of the UK subsidiary in January 2025, the intercompany loans have been forgiven. The accumulated translation adjustments previously recorded in other comprehensive income within equity have been reclassified from accumulated other comprehensive income and recorded as part of the gain/loss from deconsolidation of the subsidiary.

Income tax benefit

We record research and development tax credits within income taxes. Credit is taken for research and development tax credits, which are claimed from the United Kingdom's taxation and customs authority (HMRC), in respect of qualifying research and development costs incurred.

The following table summarizes total income tax benefit from such credits for the years ended December 31, 2025 and 2024 (in thousands except percentages):

		Year Ended
		December 31,								Difference
		2025				2024				$				%
Income tax benefit (charge)		$	(7	)		$	782			$	(789	)			(101	)
Total income tax benefit (charge)		$	(7	)		$	782			$	(789	)			(101	)

The income tax benefit decreased significantly by approximately $0.8 million, from $0.8 million benefit for the year ended December 31, 2024 to $7,000 charge for the year ended December 31, 2025, due to the ineligibility to recover in 2025 qualifying research and developments expenditure incurred during 2024. The level of tax credits recoverable is linked directly to qualifying research and development expenditure incurred in any one year and the availability of trading losses.

Following the liquidation of the UK Subsidiary, we are no longer eligible to receive United Kingdom research and development tax credits.

Liquidity and Capital Resources

The following is a summary of our key liquidity measures as of December 31, 2025 and 2024 (in thousands):

		December 31,
		2025				2024
Cash and cash equivalents		$	3,505			$	3,137
Working capital:
Current assets		$	6,256			$	3,674
Current liabilities			(1,332	)			(6,268	)
Total working capital (deficit)		$	4,924			$	(2,594	)

Cash Flows

Cash provided by (used in) operating, investing and financing activities for the years ended December 31, 2025 and 2024 is summarized as follows (in thousands):

		Year Ended December 31,
		2025				2024
Net cash used in operating activities		$	(4,770	)		$	(7,990	)
Net cash used in investing activities			-				-
Net cash provided by financing activities			5,264				7,822

Operating activities

Net cash used in operating activities decreased by $3.1 million, from $8.0 million for the year ended December 31, 2024 to $4.8 million for the year ended December 31, 2025. The decrease in cash used by operating activities was primarily the result of a decrease in net loss of $8.3 million, and add backs for non-cash stock based compensation of $1.7 million. Offsetting these movements was a gain on deconsolidation of Cyclacel Limited of $4.9 million. In addition, we experienced an $11.9 million change in working capital primarily related to the settlement of accounts payable and accrued liabilities associated with our former UK subsidiary Cyclacel Limited.

Investing activities

There was no net cash used in investing activities for either of the years ended December 31, 2025 and December 31, 2024.

Financing activities

Net cash provided by financing activities was $5.3 million for the year ended December 31, 2025 as a direct result of receiving approximately $6.4 million, net of expenses, from the issuance of preferred stock under Securities Purchase Agreements, offset by:

-	$1.1 million in net payments under the November 2024 Warrant Exchange Agreement, as amended.
-	$0.1 million in dividend payments to the holders of our 6% Convertible Exchangeable Preferred Stock

Net cash provided by financing activities was $7.8 million for the year ended December 31, 2024 as a direct result of receiving approximately:

-	$6.2 million, net of expenses, from the issuance of common stock and warrants under a Securities Purchase Agreement with an institutional investor,
-	$1.6 million in net proceeds from a warrant exercise and reload agreement

Contractual Obligations

The following table summarizes our long-term contractual obligations as of December 31, 2025 (in thousands):

						Payments Due by Period
		Total				Less than 1 year				1 - 3 years				3 - 5 years				More than 5 years
Operating Lease Obligations (1)		$	20			$	18			$	2			$	-			$	-

(1)

Operating lease obligations relates to leasing office space at our Kuala Lumpur, Malaysia location. Effective March 1, 2025, the Company entered into a two year lease agreement for our corporate headquarters at Level 10, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia. Following the acquisition of Fitters Sdn Bhd on September 12, 2025, the Company has three additional facilities in Malaysia, all on short term lease agreements.

Off-Balance Sheet Arrangements

Since our inception, we have not had any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or variable interest entities, which are typically established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Recently Issued Accounting Pronouncements

Please see Note 2 to the consolidated financial statements for a discussion of the potential effects that recently issued, but not yet effective, accounting standards will have on our financial statements when adopted in a future period.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. We review our estimates on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. We believe the judgments and estimates required by the following accounting policies to be critical in the preparation of our consolidated financial statements.

Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in this report. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated financial statements.

Valuation of Net Assets Acquired and Goodwill

We recognize the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values, based on the price that would be received from the sale of such assets, or paid to transfer such liabilities, in an orderly transaction between market participants per the principles of ASC 820, Fair Value Measurement. Goodwill primarily represents the value of the assembled workforce and synergies that cannot be individually identified and recognized as a separate intangible asset.

Stock-based Compensation

We grant stock options, restricted stock units and restricted stock to officers, employees, directors and consultants under our 2018 Equity Incentive Plan (the 2018 Plan) and the 2020 Inducement Equity Incentive Plan. We measure compensation cost for all stock-based awards at fair value on date of grant and recognize compensation over the requisite service period. The fair value of restricted stock and restricted stock units is determined based on the number of shares granted and the quoted price of our common stock on the date of grant. The determination of grant-date fair value for stock option awards is estimated using an option-pricing model, which includes variables such as the expected volatility of our share price, the anticipated exercise behavior of our employees, interest rates, and dividend yields. These variables are projected based on our historical data, experience, and other factors. Changes in any of these variables could result in significant adjustments to the costs recognized for share-based payments.