Common Stock Warrants

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Common Stock Warrant

13. Common Stock Warrants

As described in Note 3, Acquisition of Apexigen, pursuant to the Merger Agreement, each outstanding warrant issued by Apexigen as of the Closing Date was assumed and converted into a warrant to acquire the Company’s common stock, on substantially similar terms and conditions as were applicable under such Apexigen warrant agreements. At the Closing Date, the Company replaced approximately 5,815,613 Apexigen warrants with approximately 1,003,191 Pyxis Oncology warrants. The acquisition date fair value of the Replacement Warrants was $0.6 million, which is included in the provisional purchase price.

The fair value of the Replacement Warrants was determined using the Black-Scholes option-pricing model and the following assumptions:

	As of August 23, 2023
Expected volatility	95.0%
Risk-free interest rate		4.36	%	-	4.50%
Expected dividend yield	0.00%
Expected term (in years)	3.93			-	4.94

As of December 31, 2023, there were 344,259 warrants outstanding with an exercise price of $8.12 per share, 17,212 warrants outstanding with an exercise price of $10.14 per share and 641,720 warrants with an exercise price of $66.67 per share. Each of the warrants with an exercise price of $66.67 per share will expire on the fifth anniversary of July 29, 2022, or earlier upon redemption or liquidation. Each of the warrants with an exercise price of $8.12 per share and $10.14 per share will expire on July 30, 2028, or earlier upon redemption or liquidation.

The Company may call the warrants outstanding with an exercise price of $10.14 per share for redemption:

•in whole or in part;

•at a price of $0.01 per warrant;

•upon a minimum of 30 days’ prior written notice of redemption; and

•if, and only if, the last reported closing price of the ordinary shares equals or exceeds $104.35 per share for any 20 trading days within a 30-trading day period on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

If the Company calls these warrants for redemption, management will have the option to require all holders that wish to exercise these warrants to do so on a “cashless basis,” as described in the warrant agreement.

The Replacement Warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of common shares upon exercise, are indexed to the Company’s common stock and meet the equity classification criteria. In addition, such Warrants do not provide any guarantee of value or return. The Company valued the Replacement Warrants at the Acquisition Date using a relative fair value allocation method and recorded as a component of additional paid-in-capital.