Note 5 - Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Disclosure Text Block [Abstract]

Stockholders' Equity

. Stockholders’ Equity

Classes of Stock

As of June 30, 2022 and December 31, 2021, the Company was authorized to issue 300,000,000 shares of $0.01 par value common stock and 7,000,000 shares of $0.01 par value preferred stock of which 200,000 shares have been designated as Series A 4.5% Convertible Preferred Stock ("Series A Convertible Preferred Stock"). Each share of common stock shall entitle the holder thereof to one (1) vote on each matter submitted to a vote at a meeting of stockholders. As of June 30, 2022, the Company's Series A Convertible Preferred Stock issued in the amount of 200,000 is convertible into 6,479 shares of common stock.

Prior to the completion of the Merger, LBS was authorized to issue 6,797,500 shares of $0.01 par value common stock and 33,594,625 shares of $0.001 par value Series C Convertible Preferred Stock. In connection with the Merger, the issued and outstanding Series C Convertible Preferred Stock shares in the amount of 11,674,131 were converted to 317,420 shares of the Company's common stock.

May 2022 Registered Direct Offering

On May 6, 2022, the Company entered into securities purchase agreements with certain investors pursuant to which it agreed to sell and issue, in a registered direct offering (the “May 2022 Registered Direct Offering”), an aggregate of 3,646,690 shares of its common stock, par value $0.01 per share, at a purchase price per share of $0.55 and, in a concurrent private placement, also agreed to sell and issue to such purchasers warrants (the “May 2022 Purchase Warrants”) to purchase up to 3,646,690 shares of common stock at an exercise price of $0.7105 per share.

In connection with the May 2022 Registered Direct Offering and concurrent private placement transaction, the Company engaged a placement agent. The Company issued placement agent warrants (“May 2022 Placement Agent Warrants”) to purchase an aggregate of 218,801 shares of its common stock. The May 2022 Placement Agent Warrants have an exercise price of $0.7105 per share. The May 2022 Placement Agent Warrants and the May 2022 Purchase Warrants are referred to collectively as the May 2022 Warrants.

The aggregate net proceeds from the May 2022 Registered Direct Offering of $1.4 million consisted of aggregate consideration of $2.0 million less equity issuance costs of approximately $0.6 million. The fair value of the May 2022 Placement Agent Warrants was recognized as an equity issuance cost.

The shares of common stock (but not the warrants or the shares of common stock underlying such warrants) offered in the Registered Offering were offered and sold by the Company pursuant to a "shelf" registration statement on Form S-3, including a base prospectus, previously filed with and declared effective by the SEC on April 26, 2022. The May 2022 Warrants and shares of common stock underlying such warrants were later registered for resale on a separate registration statement on Form S-1.

August 2022 Public Offering

On August 12, 2022, the Company entered into an underwriting agreement pursuant to which the Company agreed to issue and sell, in a registered public offering (the “August 2022 Public Offering”), (i) 42,160,000 shares of common stock, (ii) 1,460 shares of Series B convertible preferred stock, (iii) 48,000,000 Series 1 Warrants with an exercise price of $0.25 per share and a term of one year following the issuance date, and (iv) 48,000,000 Series 2 Warrants

with an exercise price of $0.25 per share and a term of five years following the issuance date. The price per share of common stock, Series 1 Warrant and Series 2 Warrant is $0.25. The price per share of Series B convertible preferred stock, Series 1 Warrant to purchase 4,000 shares of common stock and Series 2 Warrant to purchase 4,000 shares of common stock is $1,000. The warrants will be exercisable beginning on the date of stockholder approval of the exercisability of the warrants. The pricing of the August 2022 Public Offering is for gross proceeds of $12.0 million and net proceeds of approximately $10.5 million after deducting estimated equity issuance costs of approximately $1.5 million. The closing of the August 2022 Public Offering is subject to the satisfaction or waiver of customary closing conditions.