Note 11 - Equity Offerings

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Equity [Text Block]

Note 11. Equity Offerings

September 2024 Public Offering

On August 30, 2024, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Ladenburg Thalmann & Co. Inc. as representative (the “Representative”) of the underwriters named in the Underwriting Agreement (the “Underwriters”). Pursuant to the Underwriting Agreement, the Company completed a public offering of its securities on September 3, 2024 (the “September 2024 Public Offering”) and sold an aggregate of (i) 805,900 Common Stock Units and (ii) 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 collected gross proceeds of approximately $3.6 million before deducting underwriting discounts, commissions, and offering expenses payable by the Company 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 condensed 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. Furthermore, the Company assessed the Series K Warrants and Placement Agent Warrants and determined that they do not require liability classification pursuant to ASC 480. The Series K Warrants and Placement Agent Warrants do not have any net cash settlement provisions that would preclude equity classification under ASC 815-40. Accordingly, the Series K Warrants and Placement Agent Warrants were recorded to additional paid-in capital in the condensed consolidated balance sheets.

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  March 31, 2025, the Company held an aggregate of 2,157,000 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, 2024	19,635,513
Issued	—
Exercised	(939,000	)
Expired	(578,900	)
Warrants outstanding, March 31, 2025	18,117,613

As of  March 31, 2025 and December 31, 2024, all warrants outstanding are recorded in additional paid-in capital in the condensed 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 March 31, 2025:

	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 Prepaid Series H Warrants (1)		657,000	$	—	None
September 2024 Series I Warrants		1,078,900	$	0.70	3/3/2026
September 2024 Prepaid Series I Warrants (1)		1,500,000	$	—	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
		18,117,613

As of March 31, 2025, the warrants issued by the Company had a weighted average exercise price of $2.20.

(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 10, Net Loss Per Share).

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 approximat ely $1.4 million r elated to the 2022 Offerings is included in accrued expenses in the condensed consolidated balance sheets as of  March 31, 2025 and December 31, 2024. 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