Stockholders' Equity |
9 Months Ended | ||
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Sep. 30, 2024 | |||
| Stockholders' Equity [Abstract] | |||
| Stockholders' Equity |
Amendment to
Articles of Incorporation
At the Company’s 2024 annual meeting of stockholders held on
June 11, 2024, the Company’s stockholders voted to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation that resulted in an increase in the number of authorized shares of the Company’s common stock
from 75 million to 125
million shares. The increase in authorized shares became effective on June 12, 2024.
Lincoln Park
Purchase Agreement
On August 10, 2023, the Company
entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Purchase Agreement”). The Purchase Agreement provides that, subject to the terms and conditions set
forth therein, the Company has the sole right, but not the obligation, to direct Lincoln Park to purchase up to $50 million
of shares of the Company’s common stock from time to time over the 30-month term of the Purchase Agreement. Concurrently
with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park (the “Registration Rights Agreement”), pursuant to which the Company agreed to register the resale of the shares
of the Company’s common stock that have been and may be issued to Lincoln Park under the Purchase Agreement pursuant to a registration statement. Lincoln Park has agreed not to cause or engage in any manner whatsoever in any direct or
indirect short selling or hedging of the Company’s common stock.
A total of 400,000 shares were issued under the Purchase Agreement during the nine months ended
September 30, 2024 for net proceeds of $0.7 million. The Company incurred de minimis issuance costs during the nine months ended
September 30, 2024. There was no activity under the Purchase agreement during the three months ended September 30, 2024.
A total of 800,000
shares of the Company’s common stock were sold under the Purchase Agreement for net proceeds in the amount of $3.1
million during the three and nine months ended September 30, 2023. The Company incurred issuance costs of $0.2 million,
consisting of investor expense reimbursement and legal costs, during the three- and nine-months periods ended September 30, 2023 which were recorded as a component of financing costs in the accompanying statements of comprehensive
(loss) income during the three and nine month periods ended September 30, 2023.
In addition to the initial commitment shares issued upon the execution of the Purchase Agreement of 246,792, a total of 1,700,000 shares of common
stock were sold under the Purchase Agreement for gross proceeds through September 30, 2024 in the amount of $5.2 million
and with issuance costs in the aggregate of $1.4 million.
Under the Purchase Agreement, on
any business day selected by the Company, the Company may direct Lincoln Park to purchase up to 50,000 shares of its
common stock on such business day (or the purchase date) (a “Regular Purchase”), provided that the closing sale price of the Company’s common stock on Nasdaq on the applicable purchase date is not below $0.25 and subject to other adjustments. A Regular Purchase may be increased to up to 70,000 shares based on the share price on the applicable purchase date. The Company may direct Lincoln Park to purchase shares in Regular Purchases as often as
every business day.
In addition, the Company may also direct Lincoln Park, on any business
day on which the Company has submitted a Regular Purchase notice for the maximum amount allowed for such Regular Purchase, to purchase an additional amount of the Company’s common stock (an “Accelerated Purchase”) based on certain
market and trading conditions.
The pricing and settlement provisions in the Purchase Agreement
result in the recognition of a derivative liability accounted for on a fair value basis under the provisions of ASC 815 - Derivatives and Hedging. A Monte Carlo simulation model was
used to estimate future stock pricing and purchase activity to determine the fair value of the derivative liability. As of September 30, 2024, the change in the derivative liability from December 31, 2023 was de minimis. The fair value change in the derivative liability is recorded in the fair value change in derivative liabilities line item in the accompanying condensed statements of comprehensive (loss) income during
periods with valuation changes.
At-The-Market Program
On February 4, 2021, the Company filed a Form S-3 shelf registration under the Securities Act of 1933 which was declared effective by the SEC on February 12, 2021 (the “2021 Shelf”)
under which the Company may offer and sell, from time to time in its sole discretion, securities having an aggregate offering price of up to $125
million. In connection with the 2021 Shelf, on March 11, 2021, the Company entered into a sales agreement with JonesTrading Institutional Services LLC (“JonesTrading”) under which the Company may offer and sell, from time to time at its
sole discretion, to or through JonesTrading, acting as agent and/or principal, shares of its common stock having an aggregate offering price of up to $40 million (the “2021 ATM”).
During the three and nine months ended September 30, 2024,
219,406 and 1,608,522
shares of common stock were sold under the ATM, respectively, for aggregate gross proceeds in the amount of $0.5 million and
$3.8 million, respectively,
before deducting issuance expenses, including the placement agent’s fees, legal and accounting expenses, in the amount of $42,000
and $232,000, respectively.
During the three and nine months ended September 30, 2023, 577,555 shares of common stock were sold under the 2021 ATM for aggregate gross proceeds in the amount of $2.4 million before deducting issuance expenses, including the placement agent’s fees, legal and accounting expenses, in the amount of $69,000.
As
of September 30, 2024. 7,653,838 shares of common stock were sold under the ATM since its inception for gross proceeds in
the amount of $26.4 million and with issuance costs in the aggregate of $0.9 million.
Registered Direct Offering
On June 4, 2021, the Company entered
into a placement agency agreement for a registered direct offering (“RDO”) with A.G.P./Alliance Global Partners (“AGP”). Pursuant to the terms of the placement agency agreement, AGP on June 8, 2021 sold an aggregate of 3,076,923 shares of the Company’s common stock and warrants to purchase 1,538,461 shares of the Company’s common stock (the “RDO Warrants”) at an offering price of $4.875 per one share and per of each RDO
Warrant. The RDO was made pursuant to the Company’s 2021 shelf registration.
The RDO Warrants have an exercise
price of $6.09 per share, are exercisable from the initial issuance date of June 8, 2021, and will expire five years following the initial issuance date. As of September 30, 2024, 1,538,461 RDO Warrants were outstanding and none have been exercised since issuance.
Subject to limited exceptions, a holder of a RDO Warrant will not have the right to exercise any portion of its RDO Warrants if the holder, together with its affiliates,
would beneficially own in excess of 4.99% (or, at the election of a holder prior to the date of issuance, 9.99%) of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise; provided that upon
prior notice to the Company, the holder may increase or decrease the beneficial ownership limitation, provided further that in no event shall the beneficial ownership limitation exceed 9.99%.
Pre-Merger Financing
On June 17,
2020, the Company, Rexahn and certain investors entered into a Securities Purchase Agreement, which was amended and restated in its entirety on June 29, 2020 (as amended and restated, the “Securities Purchase Agreement”). Pursuant to the
Securities Purchase Agreement, the investors invested a total of $21.15 million in cash, including $300,000 invested by five
directors of the Company prior to the Rexahn Merger and one director of Rexahn upon closing of the Rexahn Merger (the
“Pre-Merger Financing”). The Pre-Merger Financing also included the issuance of Series A Warrants and Series B Warrants discussed further below.
Series A Warrants
The Series A
Warrants were issued on November 19, 2020 at an initial exercise price of $4.4795 per share, were immediately exercisable upon
issuance and have a term of five years from the date of issuance. The Series A Warrants are exercisable for 5,665,838 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein) and were outstanding
as of September 30, 2024. The Series A Warrants were accounted for and classified as equity on the accompanying balance sheets.
Series B Warrants
The Series B
Warrants had an exercise price of $0.0001, were exercisable upon issuance and would have expired on the day following the later
to occur of (i) the Reservation Date (as defined therein) or (ii) the date on which the investor’s Series B Warrants would have been exercised in full (without giving effect to any limitation on exercise contained therein). None of the Series B Warrants were outstanding as of September 30, 2024 or December 31, 2023.
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