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Common Stock and Warrants
 12 Months Ended
Dec. 31, 2023
Common Stock and Warrants  
Common Stock and Warrants

12. Common Stock and Warrants

 

Authorized Shares

 

On February 25, 2022, at the Company’s Annual Stockholders Meeting, the stockholders of the Company approved an amendment to its Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock by 5,000,000 shares from 15,000,000 to 20,000,000 shares.

 

The stockholders also approved an amendment to the Company’s 2012 Stock Option Plan (the “2012 Plan”) to increase the number of shares available under the Plan by 943,000 shares, from 307,000 to 1,250,000 shares, which, together with 150,000 shares that were added to the 2012 Plan in 2020, were registered by the Company on a Form S-8 Registration Statement with the Securities and Exchange Commission on March 15, 2021. In addition, the stockholders also approved the adoption of the Company’s 2022 Equity Incentive Plan (the “2022 Plan”) providing for the issuance of up to 1,750,000 shares plus outstanding options granted under the Company’s 2012 Stock Option Plan that expire or are forfeited. The 2022 Plan provides various stock awards including incentive and nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards, which can be awarded to employees and directors of the Company and its subsidiaries.

 

On November 29, 2023, the board of directors of the Company adopted a resolution approving a certificate of amendment to the Company’s Certificate of Incorporation, as amended, to increase in the number of authorized shares of common stock of the Company from 20,000,000 shares of common stock, par value $0.05 per share, to 30,000,000 shares of common stock, par value $0.05 per share (the “Authorized Capital Increase”). On December 7, 2023, the Company obtained the written consent of stockholders of the Company holding greater than 50% of the voting securities of the Company approving the Authorized Capital Increase.

Issuance and Sale of Common Stock

 

2021 Securities Purchase Agreement

 

On April 29 2021, the Company received proceeds of approximately $ 7,580,400 from the sale of its securities to private investors upon the issuance of 1,595,880 shares of the Company’s Common Stock at an offering price of $4.75 per share which included warrants to purchase up to 797,940 shares of the Company’s Common Stock exercisable at $ 9.50 per share, and in June 2021 the Company received an additional $9.5 million through the sale of an additional 2,000,000 shares of the Company’s Common Stock at $ 4.75 per share which also included warrants to purchase up to 999,993 of the Company’s Common Stock exercisable at $9.50 per shares. These warrants are exercisable immediately and expire five years from date of issuance. The Company utilized the services of brokers for both transactions and incurred a total of approximately $1.3 million in issuance related costs for broker and legal fees. The Company was required under a registration rights agreement to register the shares, which it did through an S-1 Registration Statement filed with the Securities and Exchange Commission, which became effective on August 13, 2021. The proceeds were used for the Aquila acquisition with the remainder earmarked for the Bioprocessing Systems Operations.

 

2022 Securities Purchase Agreement

 

On March 2, 2022, the Company entered into a Securities Purchase Agreement with certain private investors pursuant to which the Company issued and sold an aggregate of 545,456 shares of common stock and warrants to purchase up to an additional 274,727 shares of common stock, at an offering price of $5.50 per share, for a gross consideration of $3,000,000. The issuance cost related to this private placement stock issuance amounted to approximately $272,800. Under the terms of Securities Purchase Agreement between the Company and the investors, the Company must use commercially reasonable efforts to file a registration statement with the SEC within 90 days of the closing date to register for resale the shares of common stock sold in the private offering, including the shares of common stock issuable upon the exercise of the warrant. The Company filed a S-1 Registration Statement with the Securities and Exchange Commission, which became effective on June 13, 2022.

 

2023 Securities Purchase Agreement

 

On December 13, 2023, the Company entered into a Securities Purchase Agreement (“the 2023 Purchase Agreement”) with certain Investors pursuant to which the Investors agreed to subscribe and purchase up to 3,500,000 Units at a price per Unit of $2.00, or an aggregate purchase price of $7,000,000 at one or more closings (the “Offering”), with each Unit comprised of (a) one newly-issued share of Common Stock, par value $0.05 per share (the “Shares”), and (b) a warrant (the “Warrants”) to purchase either 100% or 160%, depending on the number of Units purchased by an Investor, of the number of shares of Common Stock included in the Units purchased by an Investor (the “Warrant Shares”) at an exercise price of $2.50 per share. The Warrants are immediately exercisable and expire five years from their date of issuance. If at any time commencing 12 months from the date of the issuance of a Warrant, but before the expiration of the Warrant, the volume weighted average pricing of the Company’s common stock exceeds $5.00 (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like) for each of thirty consecutive trading days, then the Company may, at any time in its sole discretion, call for the exercise of the Warrants, in their entirety. 

 

On December 13, 2023, the Company issued and sold an aggregate of 2,638,076 Units, comprised of 2,638,076 shares of the Company’s common stock and Warrants to purchase 3,673,076 Warrant Shares for a total consideration of $5,276,152 pursuant to the Company’s 2023 Purchase Agreement. The Company recognized $970,200 of issuance cost, which includes $427,500 attributable to legal and placement agent fees and $542,700 attributable to the fair value of 131,904 warrants, issued to the private placement agent, to purchase up to 131,904 shares of Common Stock at an exercise price of $2.00 per share on substantially the same terms as the Warrants issued to the Investors.  The Company intends to use the net proceeds from the sale of the Units for working capital needs of its Bioprocessing Systems Operations.

 

On December 19, 2023, and December 20, 2023 the Company sold an aggregate of 432,935 and 70,601 Units, respectively, comprised of 432,935 and 70,601 shares of the Company’s Common Stock and Warrants to purchase 432,935 and 70,601 shares of Common Stock for a total consideration of $865,870 and $141,202, respectively, pursuant to the Company’s 2023 Purchase Agreement. The Company recognized $206,900 of issuance cost, which includes $104,500 attributable to legal and placement agent fees and $102,400 attributable to the fair value of 25,177 warrants, issued to the private placement agent, to purchase up to 25,177 shares of Common Stock at an exercise price of $2.00 per share on substantially the same terms as the Warrants issued to the Investors.  The Company intends to use the net proceeds from the sale of the Units for working capital needs of its Bioprocessing Systems Operations.

Warrants

 

Replacements Warrants

 

As an incentive to certain Investors of the Company who participated in previous private placements (“Existing Investors”) and received as part of those financings, warrants (“Outstanding Warrants”) to purchase shares of Common Stock, the Company agreed that, if any Existing Investor were to purchase Units at a certain level in the offering thereof under the 2023 Purchase Agreement (the “Offering”), the Company would reduce the exercise price of the Outstanding Warrants held by such Existing Investor to $2.50 per share and extend the period in which such Outstanding Warrants could be exercised to the period ending on the fifth anniversary of the date on which the Existing Investor purchased Units under the 2023 Purchase Agreement. Each such Existing Investor purchasing Units at the requisite level will receive a new warrant (the “Replacement Warrants”) to replace such Existing Investor’s Outstanding Warrants.

 

As a result of their December 13, 2023, December 19, 2023, and December 20, 2023 purchase of Units, Existing Investors became entitled to receive Replacement Warrants to replace 1,257,331, 559,905 and 17,631, respectively, of their Outstanding Warrants. The Company measured and recognized a fair value change of $2,112,800 related to the modification and issuance of the Replacement Warrants, recorded as equity issuance cost in the statement of changes in stockholders’equity.

 

Underwriter Warrants

 

As part of its compensation as placement agent for the 2023 Purchase Agreement described above, the Company issued to the placement agent or its designees warrants to purchase up to 157,081 shares of Common Stock at an exercise price of $2.00 per share on substantially the same terms as the Warrants issued to the Investors . The Warrants were valued on each closing grant date, using the Black-Scholes-Merton option pricing model and the Company recognized $645,100 as equity issuance cost in the statement of changes in stockholders’equity.

 

During the year ended December 31, 2023, in connection to underwriter/consulting services, the Company issued 100,000 warrants to purchase up to 100,000 shares of Common Stock at an exercise price of $2.50 per share. The Warrants are immediately exercisable and expire five years from their date of issuance. If at any time commencing 12 months from the date of the issuance of a Warrant, but before the expiration of the Warrant, the volume weighted average pricing of the Company’s common stock exceeds $5.00 (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like) for each of thirty consecutive trading days, then the Company may, at any time in its sole discretion, call for the exercise of the Warrants, in their entirety. The Warrants were valued on the grant date of December 13, 2023, using the Black-Scholes-Merton option pricing model and the Company recognized $161,000 as general and administration expense during the year ended December 31, 2023.

 

The following table summarizes information about shares issuable under warrants outstanding during the year ended December 31, 2023, the six months ended December 31, 2022 and the fiscal year ended June 30, 2022, respectively.

 

 

 

Warrant Shares Outstanding

 

 

Weighted Average Exercise Price

 

 

Weighted Average Remaining Life

 

Outstanding and exercisable as of June 30, 2021

 

 

3,147,783

 

 

$9.29

 

 

 

4.51

 

Issued

 

 

274,727

 

 

 

5.50

 

 

 

4.67

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

Expired or cancelled

 

 

-

 

 

 

-

 

 

 

-

 

Outstanding and exercisable as of June 30, 2022

 

 

3,422,510

 

 

$8.98

 

 

 

3.60

 

Issued

 

 

-

 

 

 

-

 

 

 

-

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

Expired or cancelled

 

 

-

 

 

 

-

 

 

 

-

 

Outstanding and exercisable as of December 31, 2022

 

 

3,422,510

 

 

$8.98

 

 

 

3.10

 

Issued

 

 

6,268,560

 

 

 

2.49

 

 

 

4.96

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

Expired or cancelled

 

 

(1,834,867)

 

 

8.87

 

 

 

2.36

 

Outstanding and exercisable as of December 31, 2023

 

 

7,856,203

 

 

$3.82

 

 

 

4.32

 

Terms of the outstanding warrants as of December 31, 2023 are as follow:

 

Warrant Issue Date

 

Outstanding Warrants

 

 

 Exercise Price

 

 

Expiration Date

 

6/19/2020

 

 

1,034,350

 

 

$9.00

 

 

6/18/2025

 

4/30/2021

 

 

443,469

 

 

$9.50

 

 

4/29/2026

 

6/21/2021

 

 

83,155

 

 

$9.50

 

 

6/18/2026

 

3/2/2022

 

 

26,669

 

 

$5.50

 

 

3/2/2027

 

12/13/2023

 

 

5,030,407

 

 

$2.50

 

 

12/13/2028

 

12/13/2023

 

 

131,904

 

 

$2.00

 

 

12/13/2028

 

12/19/2023

 

 

992,840

 

 

$2.50

 

 

12/19/2028

 

12/19/2023

 

 

21,647

 

 

$2.00

 

 

12/19/2028

 

12/20/2023

 

 

88,232

 

 

$2.50

 

 

12/20/2028

 

12/20/2023

 

 

3,530

 

 

$2.00

 

 

12/20/2028

 

 

 

 

7,856,203