Common stock

12 Months Ended

Dec. 31, 2022

Common stock

Common stock

11. Common stock

Common stock

The holders of common stock are entitled to one vote for each share of common stock. Subject to the approval of the majority of shareholders, the holders of common stock shall be entitled to receive dividends out of funds legally available. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the holders of common stock shall be entitled to share ratably in the remaining assets of the Company available for distribution.

On October 1, 2021, the Company entered into the ATM Agreement with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell shares of common stock under the registration statement having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent. The Company filed a shelf registration statement on Form S-3, which was declared effective by the SEC on October 14, 2021, pursuant to which the Company may issue from time-to-time securities with an aggregate value of up to $200.0 million. The company has not sold any shares under the ATM Agreement or the shelf registration statement as of December 31, 2022.

On August 4, 2021, the Company sold 14,115 shares of the Company’s common stock for $15.94 per share to a purchaser in accordance with the Stock Purchase Agreement, or Stock Purchase Agreement.

On April 28, 2021, the Company sold 1,000,000 units, each unit comprising one share of the Company’s common stock and one Series B Warrant (each, a “Series B Warrant”) to purchase one-half of a share of common stock. The units were issued in a private placement at a price of $27.00 per unit for gross proceeds of $27.0 million. The Series B Warrants are equity-classified, exercisable at any time, have an exercise price of $45.00 per share and will terminate three years from the date of issuance. The fair value of the warrants on the date of issuance was $6.0 million. The fair value of the warrants was estimated using a Black-Scholes Option Pricing Model. The significant assumptions used in preparing the option pricing model for valuing the Company's warrants to purchase shares of common stock as of April 28, 2021 included (i) volatility of 82.7%, (ii) risk free interest rate of 0.35%, (iii) strike price of $45.00 per share, (iv) fair value of common stock of $28.70 per share, and (v) expected life of three years. As described below, in September 2022, the Series B Warrants were modified to reduce the strike price to $10.00 per share and to remove the Company’s call right.

Warrants to acquire shares of common stock

On September 2, 2022, the Company notified holders of the Company’s Series B Warrants, or the Holders, of the Company’s agreement to permit Holders to exercise the Series B Warrants at an exercise price of $10.00 per share (reduced from the previous exercise price of $45.00 per share) at any time prior to the expiration date of the Series B Warrants. The Company recognized a deemed dividend of $0.6 million, which represents the incremental fair value of the outstanding warrants as a result of the modification. This deemed dividend is recorded in the Company's statement of operations as an increase to the net loss attributable to common stockholders for purposes of computing net loss per share, basic and diluted. The net impact to the statements of changes in stockholders’ equity was zero because the warrants were equity classified before and after the modification.

At December 31, 2022 common stock warrants outstanding were as follows:

Warrants	Warrants Outstanding	Exercise Price per Share	Expiration Date
Series A	803,112	$ 9.00	June 2, 2023
Series B	500,000	$ 10.00	April 28, 2024

For the year ended December 31, 2022, no warrants were exercised. For the year ended December 31, 2021, 148,653 warrants exercisable for $9.00 per share were exercised, and the Company received proceeds of $1.3 million

and 148,653 shares of the Company’s common stock were issued. Additionally, 83,431 warrants exercisable for $9.00 per share were exercised in cashless transactions during the year ended December 31, 2021 and 52,326 shares of the Company’s common stock were issued.