On September 2, 2022, the Company entered into the ATM Agreement under which the Company could sell its common stock from time to time having an aggregate offering price of up to $7.6 million. The Company sold 333,184 shares of common stock under the offering through September 30, 2022, resulting in net proceeds of $2.5 million, after deducting offering fees. Net proceeds receivable of $0.4 million at September 30, 2022 relates to sales of common stock under the ATM Agreement prior to or on September 30, 2022 that settled after that date. See Note 14. Subsequent Events.

On July 22, 2022, the Company reduced the exercise price of all outstanding warrants, consisting of Series A warrants and Series B warrants, that were issued in the public offering on February 8, 2022 (the “Offering”) from $25.00 per share to $14.00 per share (the “Warrant Repricing”). Following the Warrant Repricing, the Company entered into warrant inducement offer letters (the “Inducement Letters”) with certain investors. In response to the Inducement Letters, investors exercised approximately 0.4 million Series A warrants and no Series B warrants. Investors who exercised their Series A warrants received Series C warrants to purchase 100% of the shares exercised pursuant to the Series A warrants, The Series C warrants have an exercise price of $14.00, are immediately exercisable and expire in five years. The Company received net proceeds of

approximately $4.9 million from the exercises of the Series A warrants, after deducting underwriter commissions and fees withheld of $0.6 million and other offering expenses paid or payable of $0.7 million.

The Warrant Repricing resulted in an immediate and incremental increase of approximately $2.3 million in the estimated fair value of the Series A warrants and Series B warrants issued in the Company’s February 2022 public offering (the “Offering”).

The Series A warrants and Series B warrants were valued on the date of the Warrant Repricing using the Black-Scholes option pricing model (“Black-Scholes model”) based on the following assumptions:

	Series A			Series B
Risk-free interest rate		2.97	%		2.85	%
Volatility		137.87	%		90.44	%
Expected dividend yield		0.00	%		0.00	%
Expected life (in years)		0.6			6.6

The Series C warrants were valued at approximately $2.3 million using the Black-Scholes model based on the following assumptions:


Risk-free interest rate	2.87	%
Volatility	96.70	%
Expected dividend yield	0.00	%
Expected life (in years)	5.0

The Company is contractually obligated to pay a former placement agent a cash tail fee equal to 7.5% cash compensation for the gross proceeds raised and to issue warrants equal to 7.0% of the number of shares of common stock sold to any investor contacted by the former placement during the term of its engagement with the Company (“Tail Fees”). Thus, the Company is obligated to pay such placement agent Tail Fees related to the Warrant Repricing consisting of cash tail fees of approximately $0.5 million and to issue a warrant to purchase approximately 31,000 shares of common stock with an exercise price of $17.50 per share which represents 125% of the exercise price of the Series C warrants issued pursuant to the Inducement Letters. Such warrant would be immediately exercisable and expire five years from its issuance date. This warrant was valued at approximately $0.2 million on the Warrant Repricing date using the Black-Scholes model based on the following assumptions: expected volatility of 96.7%, risk-free interest rate of 2.87%, expected dividend yield of 0% and an expected term of 5.0 years. This warrant has not been issued by the Company as of the date of this Quarterly Report. The cash tail fees are included in accrued expenses in the condensed balance sheet as of September 30, 2022.

On February 8, 2022, the Company completed the Offering in which it issued and sold (i) 190,700 shares of common stock, (ii) 480,052 warrants to purchase one share of common stock at an exercise price of $25.00 that were immediately exercisable and expire one year from the date of issuance, or Series A warrants, and (iii) 480,052 warrants to purchase one share of common stock at an exercise price of $25.00 that were immediately exercisable and expire seven years from the date of issuance, or Series B warrants, and (iv) 289,352 pre-funded warrants to purchase one share of common stock at an exercise price of $0.005 per share that were immediately exercisable and expire twenty years from the date of issuance. In addition, the Company granted the underwriters of the Offering a 45-day option (the “Overallotment Option”) to purchase up to (i) 72,000 additional shares of common stock, (ii) 72,000 additional Series A warrants and/or (iii) 72,000 additional Series B warrants, solely to cover overallotments.

The Series A warrants and Series B warrants were valued at approximately $11.6 million using the Black-Scholes model based on the following assumptions:

	Series A			Series B
Risk-free interest rate		0.91	%		1.93	%
Volatility		131.07	%		85.38	%
Expected dividend yield		0.00	%		0.00	%
Expected life (in years)		1.0			7.0

Pursuant to the exercise of the Overallotment Option in February 2022, the Company issued 24,902 shares of common stock, 72,000 Series A warrants and 72,000 Series B warrants, net of underwriting discounts. On various dates in February 2022 and March 2022, the Company issued 289,352 shares of common stock upon the exercise of all of the pre-funded warrants issued in the Offering. In addition, in March 2022, the Company issued 1,000 shares of common stock in connection

with the exercise of 500 each of Series A warrants and Series B warrants issued in the Offering. In July 2022, the Company issued 800 shares of common stock in connection with the exercise of 800 Series A warrants issued in the Offering.

Net proceeds from the Offering were approximately $9.7 million, after deducting underwriter commissions and fees withheld of approximately $1.1 million and offering expenses paid or payable of $1.8 million.

The Company is contractually obligated to pay a former placement agent Tail Fees related to the Offering consisting of cash tail fees of approximately $0.9 million and a warrant to purchase approximately 33,000 shares of common stock at an exercise price of $31.25 per share, which represents 125% of the exercise price in the Offering. Such warrant would be immediately exercisable and expire five years from its issuance date. This warrant was originally valued at approximately $0.4 million on the date of the Offering using the Black-Scholes model based on the following assumptions: expected volatility of 93.25%, risk-free interest rate of 1.81%, expected dividend yield of 0% and an expected term of 5 years. On the date of the Warrant Repricing, this warrant was revalued at approximately $0.4 million using the Black-Scholes model based on the following assumptions: expected volatility of 98.9%, risk-free interest rate of 2.87%, expected dividend yield of 0% and an expected term of 4.6 years. This warrant had not been issued by the Company as of the date of this Quarterly Report. The cash tail fees are included in accrued expenses in the condensed balance sheet as of September 30, 2022.

At September 30, 2022, the Company had 1,150,686 shares of common stock reserved for issuance pursuant to the warrants issued by the Company at a weighted average exercise price of $33.67.