Note 13 - Equity Offerings

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Equity [Text Block]

Note 13. Equity Offerings

2023 Warrant Inducement Offer

On January 9, 2023, the Company reduced the exercise price of certain existing warrants (the “2023 Existing Warrants) held by an investor (the “Investor”) with exercise prices ranging from $140.00 to $5,265 per share of common stock to $40.00 per share of common stock (the “2023 Warrant Repricing”). The 2023 Existing Warrants were exercisable for 33,161 shares of the Company’s common stock. In connection with the 2023 Warrant Repricing, the Company entered into a Warrant Inducement Offer Letter with the Investor pursuant to which the Investor agreed to exercise the 2023 Existing Warrants at the reduced exercise price of $40.00 per share of common stock (the "2023 Warrant Inducement Offer"). The Company received approximately $1.3 million in gross proceeds. The Company paid placement agent aggregate cash fees plus other offering costs of approximately $0.2 million, resulting in net proceeds of $1.1 million. In consideration for exercising the 2023 Existing Warrants, the Company issued the Investor a new Series E common stock purchase warrant (the "Series E Warrant") to purchase 33,161 shares of common stock at an exercise price of $40.00 per share. The Series E Warrant is exercisable for five years from the date of stockholder approval. Exercise of the Series E Warrant in full was subject to approval of the Company's stockholders other than the Investor, which was obtained at a special meeting of the Company's stockholders held on March 21, 2023 (the "Stockholders' Meeting"). The incremental fair value of the repriced warrants amounted to $0.3 million and the fair value of Series E Warrants totaled $1.9 million. The relative fair value of such amounts was recorded to additional paid-in capital concurrent with the exercise of the 2023 Existing Warrants.

As a result of the 2023 Warrant Inducement Offer, the Company presents a deemed dividend for the modification of the 2023 Existing Warrants and issuance of the Series E Warrants of $0.8 million for the year ended December 31, 2023. The deemed dividend was included in net loss attributable to common stockholders in the calculation of net loss per share in the consolidated statements of operations.

The 2023 Existing Warrants were valued on the date of the 2023 Warrant Repricing using the Black-Scholes model based on the following assumptions:

	5/22/2020 Raise			8/3/2020 Raise			Series B			Series C
Risk-free interest rate		4.06	%		4.06	%		3.60	%		3.66	%
Volatility		135.35	%		132.55	%		115.42	%		127.65	%
Expected dividend yield		0.00	%		0.00	%		0.00	%		0.00	%
Expected life (in years)		2.4			2.6			6.5			4.5

The Series E Warrants were also valued on the date of the 2023 Warrant Repricing at approximately $1.9 million using the Black-Scholes model based on the following assumptions:

Risk-free interest rate	3.66	%
Volatility	124.07	%
Expected dividend yield	0.00	%
Expected life (in years)	5.0

Private Placement

On January 9, 2023, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) for a private placement (“Private Placement”) with the Investor. Pursuant to the Securities Purchase Agreement, the Investor agreed to purchase, for an aggregate purchase price of approximately $8.0 million, (a) Class A Units at a price that was the lower of $3.00 per unit and 90% of the 5 day volume weighted average price of the Company’s common stock immediately prior to obtainment of the approval of the Company’s stockholders to convert the PIPE Preferred Stock and PIPE Warrants (as each are defined below), without adjusting such price for the reverse stock split, each consisting of one tenth of one share of common stock, one tenth of one Series F common stock purchase warrant (“Series F Warrant”) and one tenth of one Series G common stock purchase warrant (“Series G Warrant”, and together with the Series F Warrants, the “PIPE Warrants”) and (b) Class B Units at a price of $1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock (the “PIPE Preferred Stock”), par value $0.0001, and one tenth of one Series F Warrant and one tenth of one Series G Warrant for each one-tenth of one share of the Company’s common stock underlying the PIPE Preferred Stock (each share of which is convertible into a number of shares of the Company’s common stock equal to $1,000 divided by the lower of $30.00 and 90% of the 5 day volume weighted average closing price, multiplied by ten in order to reflect the impact of the reverse stock split of the Company’s common stock immediately prior to the obtainment of the approval of the Company’s stockholders of the conversion of the PIPE Preferred Stock and PIPE Warrants, or the Preferred Conversion Rate). The closing under the Securities Purchase Agreement and the sale and issuance of the Class A Units and Class B Units (and the issuance of any underlying common stock) were approved at the Stockholders’ Meeting. At the closing of the Private Placement, the Company issued 497,908 Class A Units for proceeds of approximately $0.9 million and 7,203 Class B Units for proceeds of approximately $7.1 million, which contained preferred shares that were convertible into up to 450,123 shares of common stock, as well as the issuance of warrants described below.

The PIPE Warrants, including Series F Warrants and Series G Warrants, were exercisable at an exercise price of $30.00 per share, subject to adjustments as provided under the terms of the PIPE Warrants. The PIPE Warrants were exercisable at any time on or after the closing date of the Private Placement until the expiration thereof, except that the PIPE Warrants could not be exercised if, after giving effect thereto, the purchaser would beneficially own more than 4.99%, or the Maximum Percentage, of the outstanding shares of common stock of the Company, which Maximum Percentage could be increased or decreased by the purchaser with written notice to the Company to any other percentage specified not in excess of 9.99%. The Series F Warrants had a term of two years from the date of stockholder approval, and the Series G Warrants had a term of six years from the date of stockholder approval. The Series F Warrants and Series G Warrants were approved at the Stockholders’ Meeting.

The Series F Warrants and Series G Warrants were valued, in aggregate, at approximately $5.5 million using the Black-Scholes model based on the following assumptions:

	Series F			Series G
Risk-free interest rate		3.8	%		3.4	%
Volatility		80.0	%		74.0	%
Expected dividend yield		0.0	%		0.0	%
Expected life (in years)		2.0			6.0

The proceeds from the Securities Purchase Agreement were allocated to the equity instruments issued based on their relative fair values and recorded in additional paid-in capital.

Shares of PIPE Preferred Stock, the conversion of which was approved at the Stockholders’ Meeting, were convertible into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below. The conversion price was subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of PIPE Preferred Stock did not have the right to convert any portion of their Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or up to 9.99% at the election of the holder) of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of PIPE Preferred Stock were entitled to receive dividends on shares of PIPE Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock. Except as otherwise required by law, the PIPE Preferred Stock did not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the resale of the shares of common stock, the shares issuable upon exercise of the Warrants and the shares issuable upon the conversion of the PIPE Preferred Stock.

Placement fees

In connection with offerings completed by the Company in 2022, (the "2022 Offerings"), the Company entered into an agreement with a placement agent that, subject to satisfaction of the requirements contained therein, called for a placement fee payable based on capital raised from certain investors for a definitive time following the expiration of the agreement. The accrued placement fee of approximately $1.4 million related to the 2022 Offerings is included in accrued expenses in the consolidated balance sheets as of December 31, 2024 and 2023. Additionally, the agreement called for the issuance of warrants with the following terms:

Number of shares	Exercise Price		Expiration
3,300	$	312.50	5 years
3,100	$	175.00	5 years

The warrants were valued on the date of the 2022 Offerings using the Black-Scholes model based on the following assumptions:

Value ($ in millions)		Expected Volatility			Risk-Free Interest Rate			Expected Dividend Yield			Expected Term (years)
$	0.4		93.25	%		1.81	%		0	%		5.0
$	0.2		96.70	%		2.87	%		0	%		5.0

September 2024 Public Offering

On September 3, 2024, in connection with the September Public Offering (see Note 1), the Company sold an aggregate of 805,900 Common Stock Units and 2,773,000 Pre-Funded Warrant Units at a public offering price of $1.00 per Common Stock Unit and $0.9999 per Pre-Funded Warrant Unit. The Company received gross proceeds of approximately $3.6 million less underwriting discounts and commissions of $1.0 million, resulting in net proceeds of $2.6 million.

Each Common Stock Unit consists of: (i) one share of the Company's Common Stock, (ii) a Series H Warrant to purchase one share of Common Stock at an exercise price of $1.00 per share that expires six months from the date of issuance, (iii) a Series I Warrant to purchase one share of Common Stock at an exercise price of $1.00 per share that expires eighteen months from the date of issuance, and (iv) a Series J Warrant to purchase one share of Common Stock at an exercise price of $1.00 per share that expires five years from the date of issuance.

Each Pre-Funded Warrant Unit consists of: (i) one Pre-Funded Warrant to purchase one share of Common Stock at an exercise price of $0.0001 per share with no expiration date, (ii) one Series H Warrant, (iii) one Series I Warrant (iv) and one Series J Warrant.

Pursuant to the Underwriting Agreement, the Company granted the Representative a 45-day Overallotment Option to purchase up to (i) 468,041 additional shares of Common Stock, (ii) 468,041 additional Series H Warrants, (iii) 468,041 additional Series I Warrants, and/or (iv) 468,041 additional Series J Warrants, solely to cover over-allotments. On August 30, 2024, the Underwriters partially exercised the Overallotment Option to purchase an additional 458,623 shares of Common Stock, 458,623 Series H Warrants, 458,623 Series I Warrants, and 458,623 Series J Warrants, or 458,623 Common Stock Units. The Common Stock Units issued through the exercise of the Overallotment Option are included in the 805,900 Common Stock Units noted above. The Overallotment Option expired on October 14, 2024.

Furthermore, at the closing date, the Company agreed to deliver to the Representative warrants to purchase an aggregate number of shares of Common Stock equal to 6% of the shares of Common Stock (i) issued in connection with the September 2024 Public Offering and (ii) issuable upon the exercise of the Pre-Funded Warrants. Therefore, the Company issued 214,734 warrants to the Representative and its designees (the “Representative Warrants”). The Representative Warrants are part of the underwriter costs and commissions incurred in connection with the September 2024 Public Offering. The Representative Warrants may be exercised to purchase one share of Common Stock at an exercise price of $1.55 per share and expire five years from the date of issuance.

Each Series H Warrant, Series I Warrant, Series J Warrant (collectively, the “Series Warrants”), and Pre-Funded Warrant is immediately exercisable. The exercise price of the Series Warrants and Pre-Funded Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s Common Stock. Subject to limited exceptions, a holder of the Series Warrants will not have the right to exercise any portion of its Series Warrants if the holder (together with such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99%, or in the case of certain holders 9.99%, of the shares of Common Stock then outstanding (the “Beneficial Ownership Limitation”). Similarly, a holder of the Pre-Funded Warrants has a Beneficial Ownership Limitation of 9.99%. At the holder’s option, the holder of the Series Warrants may increase the beneficial ownership limitation to 19.99% of the shares of Common Stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company.

The Representative Warrants are exercisable six months after the effective date of the Registration Statement filed by the Company on August 29, 2024. The Representative Warrants further have a Beneficial Ownership Limitation of 4.99%, which may be increased to 9.99% of the shares of Common Stock then outstanding at the option of the Representative. Any increase in the Beneficial Ownership Limitation will become effective upon 61 days’ prior notice to the Company.

The Company assessed the Series Warrants, Pre-Funded Warrants, and Representative Warrants issued in connection with the September 2024 Public Offering (collectively, the “September 2024 Warrants”) and determined that they do not require liability classification pursuant to ASC 480. Furthermore, the September 2024 Warrants do not have any net cash settlement provisions that would preclude equity classification under ASC 815-40. Accordingly, the September 2024 Warrants were recorded to additional paid-in capital in the consolidated balance sheets.

2024 Warrant Inducement Offer 

On October 25, 2024, the Company executed the 2024 Warrant Inducement Offer (see Note 1) with certain holders of the Company’s existing warrants (Series E, Series F, Series G, Series H and Series I Warrants, collectively the “2024 Existing Warrants”). Pursuant to the terms of the 2024 Warrant Inducement Offer, the Company agreed to lower the exercise price per share of common stock for all holders of the 2024 Existing Warrants, including those that did not participate in the 2024 Warrant Inducement Offer. The 2024 Existing Warrants had exercise prices ranging from $1.00 to $40.00 per share of Common Stock. Following the closing of the 2024 Warrant Inducement Offer, the Holders immediately exercised an aggregate of (i) 33,160.8 Series E Warrants, (ii) 499,909.34 Series F Warrants, (iii) 499,909.34 Series G Warrants, (iv) 1,990,000 Series H Warrants, and (v) 2,325,000 Series I Warrants to purchase 5,347,981 shares of common stock at a reduced exercise price of $0.70 per share. The Company received aggregate gross proceeds of $3.7 million in cash, prior to deducting placement agent fees and offering expense of $0.4 million.

In consideration for the immediate exercise of the 2024 Existing Warrants for cash, the Company issued unregistered new Series K common stock purchase warrants (“Series K Warrants”) to purchase up to 10,695,962 shares of common stock. The Series K Warrants have an exercise price of $0.70 per share of common stock, were not exercisable until stockholders approval was obtained (“Stockholder Approval”), and have a term of 5.5 years following Stockholder Approval. Stockholder Approval was obtained on January 13, 2025.

In connection with the closing, the Company issued Placement Agent Warrants to the Placement Agent to purchase up to 320,879 shares of common stock on the same terms as the Series K Warrants, except that the exercise price is $1.085 per share and the warrants are exercisable six months after the date of issuance.

As a result of the 2024 Warrant Inducement Offer, the Company recorded a deemed dividend for the modification of the 2024 Existing Warrants and issuance of the Series K Warrants of $5.2 million for the year ended December 31, 2024. The deemed dividend was included in net loss attributable to common stockholders in the calculation of net loss per share in the consolidated statements of operations.

Pursuant to the terms of the 2024 Warrant Inducement Offer, in the event that the exercise of the 2024 Existing Warrants would cause a holder to exceed the beneficial ownership limitations included therein, the Company would issue the number of shares of common stock that would not cause a holder to exceed such beneficial ownership limitations and hold the remaining balance of shares of common stock in abeyance. Accordingly, as of  December 31, 2024, the Company held an aggregate of 3,096,000 shares of common stock in abeyance (the “Abeyance Shares”). The Abeyance Shares are evidenced through the holder’s existing warrants, which are deemed to be prepaid. The Abeyance Shares will be held by the Company until the holder sends notice that the remaining balance of shares of common stock may be issued without surpassing the beneficial ownership limitations. Until such time, the Abeyance Shares are evidenced through the holder’s existing warrants ( September 2024 Prepaid Series H Warrants and September 2024 Prepaid Series I Warrants) and are included in the Company’s table of outstanding warrants below.

Warrants

The following table presents the number of common stock warrants outstanding:

Warrants outstanding, December 31, 2023	1,104,217
Issued	24,741,275
Exercised	(6,209,979	)
Expired	—
Warrants outstanding, December 31, 2024	19,635,513

As of  December 31, 2024 and December 31, 2023, all warrants outstanding are recorded in additional paid-in capital in the consolidated balance sheets. The following table presents the number and type of common stock purchase warrants outstanding, their exercise price, and expiration dates as of December 31, 2024:

	Warrants
Warrant Type	Outstanding		Exercise Price		Expiration Date
May 2020 Warrants		1,275	$	5,625.00	5/20/2025
May 2020 Placement Agent Warrants		124	$	7,031.25	5/20/2025
August 2020 Warrants		1,943	$	4,375.00	8/3/2025
August 2020 Placement Agent Warrants		192	$	5,468.75	7/30/2025
August 2021 Pharos Banker Warrants		148	$	1,495.00	8/16/2026
February 2022 Series B Warrants		39,153	$	140.00	2/4/2029
July 2022 Series C Warrants		28,402	$	140.00	7/22/2027
September 2024 Series H Warrants		578,900	$	0.70	3/3/2025
September 2024 Prepaid Series H Warrants (1)		1,366,000	$	—	None
September 2024 Series I Warrants		1,078,900	$	0.70	3/3/2026
September 2024 Prepaid Series I Warrants (1)		1,730,000	$	—	None
September 2024 Series J Warrants		3,578,901	$	1.00	9/3/2029
September 2024 Representative Warrants		214,734	$	1.55	8/29/2029
October 2024 Series K Warrants		10,695,962	$	0.70	7/13/2030
October 2024 Placement Agent Warrants		320,879	$	1.09	4/25/2030
		19,635,513

As of December 31, 2024, the warrants issued by the Company had a weighted average exercise price of $2.05.

(1) In calculating net loss per share, the Abeyance Shares were included in the weighted-average number of common shares and excluded from the anti-dilutive number of warrants excluded from the net loss per share calculation (see Note 12, Net Loss Per Share).