Stockholders' Equity

9 Months Ended

Dec. 31, 2023

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

As of December 31, 2023, 750,000,000 shares of common stock are authorized, of which 63,195,948 shares of common stock were issued and outstanding, and 5,000,000 shares of preferred stock are authorized, none of which were issued and outstanding. The Company’s Board of Directors has the ability to designate the rights, preferences and privileges for the preferred stock.

Common Stock

Common stockholders are entitled to dividends, as and when declared by the Company’s Board of Directors, subject to the priority dividend rights of the holders of any then-outstanding preferred stock. There have been no dividends declared to date. The holder of each share of common stock is entitled to one vote.

The Company has reserved shares of common stock for future issuance as of the date presented as follows:

	December 31, 2023
Equity incentive plans	11,099,382
Common stock warrants	4,027,929
Total	15,127,311

April 2023 Private Placement of Common Stock, Warrant Repricing, and Warrant Issuance

On April 3, 2023, the Company entered into warrant exercise inducement offer letters with certain holders of outstanding warrants to purchase shares of the Company’s common stock, pursuant to which such warrant holders agreed to exercise, for cash, then-existing warrants to purchase, in the aggregate, 1,815,848 shares of the Company’s common stock, in exchange for the Company’s agreement to (i) lower the exercise price of the then-existing warrants to $4.00 per share and (ii) issue new warrants (the “April 2023 Inducement Warrants”) to the warrant holders to purchase, in the aggregate, up to 2,269,810 shares of the Company’s common stock. The April 2023 Inducement Warrants have an exercise price of $5.00 per share, provide for a cashless exercise feature, and are exercisable until April 3, 2026.

The Company determined that the modification was not executed in contemplation of an imminent equity offering, financing transaction nor represented compensation for goods and services and is not within the scope of another ASC Topic. As such, the Company concluded that the $0.8 million incremental fair value of the modified warrants and the $4.9 million fair value of the April 2023 Inducement Warrants should be treated as deemed dividends to the warrant holders in accordance with ASC Subtopic 815-40 – Derivatives and Hedging – Contracts in Entity’s Own Equity.

Also on April 3, 2023, the Company entered into securities purchase agreements with two accredited investors that are affiliated with each other (the “Purchasers”) pursuant to which the Company agreed to sell to the Purchasers in a private placement (the “Private Placement”) for an aggregate purchase price of $2.0 million (i) an aggregate of 500,000 shares of the Company’s common stock at a purchase price of $4.00 per share and (ii) warrants to purchase an aggregate of 250,001 shares of the Company’s common stock (the “Warrants”). The Warrants have an exercise price of $5.00 per share, provide for a cashless exercise feature, and are exercisable until April 3, 2026.

In connection with the April 2023 warrant repricing and Private Placement, the Company received $7.3 million from the exercise of then-existing warrants and $2.0 million from the sale of common stock in the Private Placement, for total aggregate gross proceeds of approximately $9.3 million (before deducting legal costs of $0.1 million).

December 2023 Warrant Repricing and Warrant Issuance

On December 21, 2023, the Company entered into warrant exercise inducement offer letters with certain holders of outstanding warrants to purchase shares of the Company’s common stock, pursuant to which such warrant holders agreed to exercise, for cash, then-existing warrants to purchase, in the aggregate, 1,069,272 shares of the Company’s common stock, in exchange for the Company’s agreement to (i) lower the exercise price of the then-existing warrants to $2.80 per share and (ii) issue new warrants (the “December 2023 Inducement Warrants”) to the warrant holders to purchase, in the aggregate, up to 1,069,272 shares of the Company’s common stock. The December 2023 Inducement Warrants have an exercise price of $3.80 per share, provide for a cashless exercise feature, and are exercisable until December 21, 2026.

The Company determined that the modification was not executed in contemplation of an imminent equity offering, financing transaction nor represented compensation for goods and services and is not within the scope of another ASC Topic. As such, the Company concluded that the $0.8 million incremental fair value of the modified warrants and the $1.9 million fair value of the December 2023 Inducement Warrants should be treated as deemed dividends to the warrant holders in accordance with ASC Subtopic 815-40 – Derivatives and Hedging – Contracts in Entity’s Own Equity.

In connection with the December 2023 warrant repricing, the Company received aggregate gross proceeds of $3.0 million from the exercise of then-existing warrants (before deducting legal costs of $0.1 million).

The following warrants to purchase common stock were outstanding as of December 31, 2023:

Number of Warrant Shares	Exercise Price	Expiration Date
360,938	6.00	November 5, 2024
67,568	9.25	December 7, 2024
281,081	9.25	December 10, 2024
10,116	8.48	December 10, 2025
45,000	3.30	December 23, 2025
84,000	4.00	April 3, 2026
2,100,539	5.00	April 3, 2026
1,069,272	3.80	December 21, 2026
6,046	34.74	5 years after an initial public offering of the Company
3,369	54.41	5 years after an initial public offering of the Company
4,027,929

The following table summarizes stock warrant activity for the periods presented:

	Number of Warrant Shares
Outstanding at March 31, 2023	3,323,966
Stock warrants issued	3,589,083
Stock warrants exercised	(2,885,120)
Outstanding and exercisable at December 31, 2023	4,027,929

Rights Offering

On July 5, 2023, the Company distributed to all holders of record of its common stock as of 5:00 p.m., Eastern Daylight Time, on June 26, 2023, for each share of common stock held as of June 26, 2023, one non-transferable subscription right. Each subscription right carried with it (i) a basic subscription right, which entitled the holder to purchase 0.07655623 of a share of common stock and (ii) an over-subscription privilege, which entitled a holder that had exercised its basic subscription right in full to subscribe for additional shares of common stock that were offered in the rights offering, to the extent other holders did not exercise their basic subscription rights in full. The subscription price was $3.30 per whole share of common stock.

The Company completed the rights offering in August 2023 and issued 2,404,758 shares of common stock, which generated approximately $7.9 million in gross proceeds (before deducting legal costs of $0.3 million).