Stockholders' Equity

6 Months Ended

Jun. 30, 2024

Stockholders' Equity

Stockholders' Equity

10. Stockholders’ Equity

Common Stock and Common Stock with Warrant Offering

On March 9, 2024, the Company closed the offering contemplated by the Underwriting Agreement that the Company entered into on March 7, 2024 (the “Agreement”) with ThinkEquity, LLC, as representative of the several underwriters named therein, pursuant to which the Company issued and sold 50,000 shares of our Common Stock at a price of $30.00 per share for net proceeds of $1.2 million.

On May 16, 2024, the Company consummated a public offering (the “Offering”) of 149,100 units (the “Unit” or “Units”) and 150,900 pre-funded units (“Pre-Funded Units”) for a purchase price of $20.00 per Unit and for a purchase price of $19.96 per Pre-Funded Unit (inclusive of the pre-funded warrant exercise price), resulting in aggregate gross proceeds of approximately $6.0 million, before deducting underwriting discounts and other offering expenses. Each Unit consists of (i) one share (the “Shares”) of common stock and (ii) one warrant (the “Common Warrants”) to purchase one share of common stock (the “Common Warrant Shares”), at an exercise price of $24.00 per share (120% of the offering price per Unit). Each Pre-Funded Unit consists of (i) one pre-funded warrant (the “Pre-Funded Warrants”) to purchase one share of common stock (the “Pre-Funded Warrant Shares”), and (ii) one Common Warrant. The Pre-Funded Warrants are immediately exercisable for one share of common stock at an exercise price of $0.0002 per share and will remain exercisable until exercised in full. The Common Warrants will be immediately exercisable for one share of common stock upon issuance for a period of five years following the date of issuance.

Per ASC 815, the Common Warrants and Pre-Funded Warrants met the applicable criteria to qualify for equity classification and the Company applied the relative fair value method to allocate proceeds between the respective warrants and are included in stockholders equity. The fair value of the Common Warrants and Pre-Funded Warrants when issued on May 16, 2024 were $0.8 and $0.0998 per share, respectively, using the Black-Scholes option pricing model based on the following assumptions: 1) estimated volatility of 114% based on future stock price; 2) expected term of 5.0 years: 3) annual risk-free interest rate of 4.4%; and 4) expected dividend rate of 0%.

Common Stock Warrants

As of June 30, 2024, the Company had outstanding warrants to purchase 299,112 shares of common stock issuable at a weighted average exercise price of $24.00 per share.  As of  December 31, 2023, the Company had no outstanding warrants.

The following table summarizes the activity of the Company’s common stock warrant activity for the six months ended June 30, 2024, and 2023, respectively.

	Common Stock
	Warrants
Outstanding, December 31, 2023	—
Issued	306,545
Exercised	(7,433)
Outstanding, June 30, 2024	299,112

	Common Stock
	Warrants
Outstanding, December 31, 2022	3,739
Expired	(2,170)
Outstanding, June 30, 2023	1,569

All outstanding common stock warrants are recorded in equity at June 30, 2024, following the guidance established by ASC Topic 815-40. The Company’s common stock warrants allow for potential settlement in cash if certain extraordinary events are effected by the Company, including a 50% or greater change of control in the Company’s common stock. Since those events have been deemed to be within the Company’s control, the Company applies equity treatment for these common stock warrants.

Equity Compensation Plans

The Company maintains various equity compensation plans (“Plans”) with substantially similar provisions under which it may award employees, directors and consultants incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the plans.

Accounting for Stock-Based Compensation:

Stock Compensation Expense - For the three and six months ended June 30, 2024, the Company recorded $0.2 million and $0.5 million of stock-based compensation expense. For the three and six months ended June 30. 2023, the Company recorded $0.7 million and $1.4 million of stock-based compensation. No compensation expense for employees with stock awards was capitalized during the three and six months ended June 30, 2024 and 2023.

Stock Options - Under the Plans, the Company has issued stock options. A stock option grant gives the holder the right, but not the obligation, to purchase a certain number of shares at a predetermined price for a specific period of time. The Company typically issues options that vest over four years in equal installments beginning on the first anniversary of the date of grant. Under the terms of the Plans, the contractual life of the option grants may not exceed ten years

Fair Value Determination – The Company has used the Black-Scholes option pricing model to determine the fair value of its stock option awards on the date of grant. The Company will reconsider the use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated under this model.

Stock Option Activity – No options were granted during the six months ended June 30, 2024 or June 30, 2023.

The following is a summary of the stock option activity for the six months ended June 30, 2024:

		Weighted				Weighted
		Average		Aggregate		Average
		Exercise		Intrinsic		Remaining
	Shares	Price		Value		Contractual Life
Stock options outstanding at December 31, 2023	32,194	$	725.86	$	9,052
Expired	(1,057)		1,929.56
Forfeited	(199)		500.20
Stock options outstanding and expected to vest at June 30, 2024	30,938	$	686.19	$	427	7.7	Years
Stock options exercisable at June 30, 2024	24,198	$	803.73	$	427	7.5	Years

Unrecognized compensation expense related to unvested stock options was $1.4 million as of June 30, 2024, which is expected to be recognized over a weighted-average period of 0.8 years and will be adjusted for forfeitures as they occur.

Restricted Stock - Under the Plans, the Company has issued restricted stock. A restricted stock award is an issuance of shares that cannot be sold or transferred by the recipient until the vesting period lapses. The grant date fair value of the restricted stock is equal to the closing market price of the Company’s common stock on the date of grant. There was no restricted stock award activity for the six months ended June 30, 2024.

The following is a summary of restricted stock unit activity for the six months ended June 30, 2023:

		Weighted
		Average
	Shares	Fair Value
Restricted stock at December 31, 2022	170	$	644.00
Vested	(170)		(644.00)
Restricted stock at June 30, 2023	—	$	—

Restricted Stock Units - Under the Plans, the Company may issue time-based Restricted Stock Units (“RSUs”). RSUs are not actual shares, but rather a right to receive shares in the future. The shares are not issued and the employee cannot sell or transfer shares prior to vesting and has no voting rights until the RSUs vest. The employees' time-based RSUs vest pro-rata over 36 months. The grant date fair value of the RSUs is equal to the closing market price of the Company’s common stock on the grant date. The Company recognizes the grant date fair value of RSUs the Company expects to issue as compensation expense ratably over the requisite service period.

The following is a summary of restricted stock unit activity for the six months ended June 30, 2024 and June 30, 2023, respectively:

		Weighted
		Average
	Shares	Fair Value
RSUs at December 31, 2023	1,250	$	236.00
Vested	(50)		236.00
Cancelled	(1,200)		236.00
RSUs at June 30, 2024	—	$	—

		Weighted
		Average
	Shares	Fair Value
RSUs at December 31, 2022	—	$	—
Granted	1,800		236.00
Vested	(250)		236.00
RSUs at June 30, 2023	1,550	$	236.00