Equity

6 Months Ended

Jun. 30, 2023

Equity

Equity

9. Equity

Preferred stock

The Company has authorized preferred stock amounting to 10,000,000 shares as of June 30, 2023 and December 31, 2022, respectively.

Common stock

The Company has authorized common stock amounting to 500,000,000 shares of $0.0001 par value as of June 30, 2023 and December 31, 2022, respectively.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any. No dividends have been declared or paid by the Company since its inception.

At-the-Market Offering

In July 2022, the Company entered into a Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), under which the Company may offer and sell, from time to time, shares of common stock having aggregate gross proceeds of up to $50.0 million (the “ATM Shares”). The Company will pay Cowen a commission of up to 3% of the gross proceeds of any sales of the ATM Shares pursuant to the Sales Agreement. As of June 30, 2023, the Company has not sold any shares under the Sales Agreement.

June 2023 Public Offering

On June 8, 2023, Elevation entered into an Underwriting Agreement (the “Purchase Agreement”) with SVB Securities LLC and Cowen and Company, LLC, as representatives of the several underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell an aggregate of 17,810,000 shares of its common stock, par value $0.0001 per share (each a “Share” and collectively the “Shares”), pre-funded warrants to purchase 4,440,000 shares of its common stock (the “Pre-Funded Warrants”) and common stock warrants (the “Common Warrants” and collectively with the Pre-Funded Warrants, the “Warrants”) to purchase 22,250,000 shares of its common stock to the Underwriters (collectively, the “Offering”). Each full Share was sold together with one Common Warrant at the public offering price of $2.25 per share, less underwriting discounts and commissions. Each full Pre-Funded Warrant was sold together with one Common Warrant at a public offering price of $2.2499 per Pre-Funded Warrant, which represents the per Share and Common Warrant public offering price less a $0.0001 per share exercise price for each such Pre-Funded Warrant.

The Common Warrants are exercisable at any time after the date of issuance and have an exercise price of $2.25 per share, subject to adjustment. The Common Warrants expire five years from the date of issuance. The Pre-Funded Warrants are exercisable at any time after the date of issuance and do not expire. The aggregate exercise price of the Pre-Funded Warrants, except for a nominal exercise price of $0.0001 per share of common stock, was pre-funded to the Company and, consequently, no additional consideration (other than the nominal exercise price of $0.0001 per share of common stock) is required for the exercise of the Pre-Funded Warrants.

The Offering closed on June 13, 2023, and the Company received gross proceeds of $50.1 million before deducting underwriting discounts, commissions and offering expenses. As of the close of the Offering, the Company issued 17,810,000 shares of common stock and Common Warrants to purchase 17,810,000 shares of common stock for a total consideration of $40.1 million and 4,440,000 shares of common stock and Pre-Funded Warrants to purchase 4,440,000 shares of common stock for a total consideration of $10.0 million. The terms and conditions of the Warrants are as noted and governed by the agreements entered into with the holders on June 13, 2023. Underwriting discount and commissions and other offering expenses of approximately $3.6 million incurred directly related to the offering were reflected as a reduction in additional paid-in capital.

All of the Warrants are outstanding as of June 30, 2023.

	Shares	Initial Recognition Date	Exercise Price		Expiration Date
Common Warrants	22,250,000	June 13, 2023	$	2.2500	June 13, 2028
Pre-funded Warrants	4,440,000	June 13, 2023	$	0.0001	Upon full exercise of the Pre-Funded Warrants

The fair value of the Common Warrants and Pre-Funded Warrants issued to the Investors in the offering was approximately $35.6 million. The fair value of the Common Warrants was measured using a Monte Carlo simulation model with the following assumptions:

Stock price	$1.65
Strike price	$2.25
Volatility (annual)	110.00%
Risk-free rate	3.93%
Estimated time to expiration (years)	5
Dividend yield	—%

Total proceeds were allocated between the Shares and Warrants on a relative fair value basis given both securities are equity classified.