XML 34 R19.htm IDEA: XBRL DOCUMENT v3.25.4
Capital Stock
 12 Months Ended
Dec. 31, 2025
Capital Stock [Abstract]  
Capital Stock

Note 12 – Capital Stock

 

Authorized Classes of Stock

 

As of December, 2025, the Company’s Board of Directors has authorized two classes of preferred stock. The Board has authorized 1,550,000 shares of preferred stock as Series A preferred stock, par value $0.0001 per share, none of which are issued and outstanding at December 31, 2025 and 2024. The Board has also authorized 3,079,864 shares of preferred stock as Series B preferred stock, par value $0.0001 per share, none of which are issued and outstanding at December 31, 2025 and 2024.

 

Series A Convertible Preferred Offering

 

From November 10, 2021 through November 17, 2021, the Company conducted a private placement offering (the “Private Placement”) pursuant to securities purchase agreements (the “Preferred Stock SPAs”) with 7 accredited investors (the “Series A Investors”), whereby the Series A Investors purchased from the Company an aggregate of 1,545,459 shares of the Company’s newly created Series A convertible preferred stock, par value $0.0001 per share (the “Series A Preferred Stock”) and warrants to purchase 1,545,459 shares of the Company’s common stock (the “Preferred Warrants”) for an aggregate purchase price of $8.5 million. The Private Placement was completed and closed to further investment on November 17, 2021.

 

The Preferred Warrants were two-year warrants to purchase shares of the Company’s common stock at an exercise price of $7.00 per share, subject to adjustment, and as of December 31, 2023, all of the Preferred Warrants had expired unexercised.

 

In connection with the Preferred Stock SPAs, the Company and the Series A Investors entered into a registration rights agreement pursuant to which on April 27, 2022 the Company filed a Registration Statement on Form S-3 to register the resale of the shares of common stock. The SEC declared the Form S-3 effective on June 2, 2022.

 

On March 19, 2024, the Company entered into a Redemption and Waiver Agreement (the “Series A Redemption Agreement”) with the current holders (the “Series A Holders”) of the Series A Preferred Stock. Accordingly, $8.195 million of additional paid in capital was reclassified from shareholders’ equity to mezzanine equity (the “Mezzanine Equity”) on the Company’s condensed consolidated balance sheet as of March 31, 2024, in accordance with Accounting Series Release No. 268, Presentation in Financial Statements of “Redeemable Preferred Stocks”. The Mezzanine Equity is valued at the date of the Private Placement issuance. Pursuant to the Series A Redemption Agreement, the Company agreed to redeem all outstanding shares of Series A Preferred Stock for an aggregate cash purchase price of $8,195,000, or $5.50 per share, at its sole discretion, in 18 monthly payments. In addition, the Series A Holders agreed to waive, on a month-by-month basis following each monthly payment, certain rights granted to them in (i) the Certificate of Designations of the Series A Preferred Stock, including for the accrual and payment of accrued and future dividends; and (ii) the Preferred Stock SPA. As of December 31, 2024 and December 31, 2025, there were no shares of Series A Preferred Stock outstanding. During the year ended December 31, 2024, the Company redeemed 745,047 shares of Series A Preferred Stock for approximately $4.1 million in cash paid to the Series A Holders.

 

During November 2024 and December 2024, the Series A Holders converted 744,957 shares of Series A Preferred Stock into 744,957 shares of the Company’s common stock. As of December, 2024, there were no shares of Series A Preferred Stock issued and outstanding and the Mezzanine Equity valuation was reduced to zero.

At-the-Market Facility

 

On October 28, 2022, the Company filed a shelf registration statement on Form S-3 under the Securities Act of 1933, as amended, which the SEC declared effective on November 8, 2022 (the “2022 shelf”). Under the 2022 Shelf at the time of effectiveness, the Company had the ability to raise up to $100 million by selling common stock, preferred stock, debt securities, warrants and units. On December 5, 2022, the Company entered into an At-the-Market Issuance Sales Agreement (the “ATM Agreement”) with Ascendiant Capital Markets, LLC (“Ascendiant”) whereby the Company may, but is not obligated to, offer and sell, from time to time, shares of its common stock (the “ATM Facility”), and incorporated the ATM Agreement into the 2022 Shelf by amendment that the SEC declared effective January 10, 2023. On August 17, 2023, the Company and Ascendiant entered into an amendment to the ATM Agreement, increasing the amount of common stock that the Company could offer and sell via the ATM Facility from $25 million to $50 million (the “ATM Upsize”). Following the ATM Upsize, the Company filed a prospectus supplement, dated August 18, 2023, with the SEC and became able to offer and sell shares of the Company’s common stock having an aggregate offering price of up to $27,362,717 via the ATM Facility.

 

The Company did not sell any shares through the ATM Facility during the year ended December 31, 2025. During the years ended December 31, 2024 and 2023, the Company sold 23,679,391 and 17,571,926 shares of common stock, respectively, through its At-The-Market (ATM) facility, managed by Ascendiant Capital Markets, LLC, at an average price of $1.21. The Company received net proceeds of $48.5 million, of which $23.8 million and $24.7 was received during the years ended December 31, 2024 and 2023, respectively.

 

Private Placement Offering

 

On January 7, 2025, the Company entered into securities purchase agreements (the “January SPAs”) for a private placement offering (the “January Private Placement”) to sell an aggregate of 8,163,266 shares (the “January Placement Shares”) of the Company’s common stock at a purchase price of $12.25 per share. The January Private Placement closed on January 9, 2025, and resulted in gross proceeds of $100 million before deducting placement agent commissions and other offering expenses of $6.4 million. Furthermore, the Company filed a registration statement registering the resale of the January Placement Shares on January 2, 2025, which the SEC declared effective February 3, 2025.

 

In conjunction with the January SPAs, the Company also entered into a placement agency agreement with Titan Partners Group LLC, a division of American Capital Partners, LLC (“Titan”), dated January 7, 2025, pursuant to which Titan acted as the exclusive placement agent for the Company in connection with the January SPAs. The Company agreed to pay Titan a cash fee of 6% of the gross proceeds from the January SPAs and to issue to the December Placement Agent (or its designees) 326,531 five-year warrants (representing 4% of the securities sold in the Offerings), which will be exercisable beginning on July 6, 2025, and have an initial exercise price per share of the Company’s common stock of $14.0875.

 

On June 22, 2025, the “Company entered into securities purchase agreements (the “Purchase Agreements”) pursuant to which the Company agreed to issue to the Purchasers (as defined therein), in a private placement (the “Placement”), an aggregate of 14,035,089 shares (the “Placement Shares”) of the Company’s common stock at a purchase price of $14.25 per share. The closing of the Placement occurred on June 24, 2025. The Placement resulted in gross proceeds of approximately $200 million before deducting placement agent commissions and other offering expenses of $12 million.

 

The Company was required to file a registration statement providing for the resale of the Placement Shares by July 9, 2025, and it filed the registration statement on Form S-1 on July 3, 2025, which the SEC declared effective on July 14, 2025.

 

Pursuant to the Purchase Agreements and the Placement Agency Agreement (as defined below), the Company agreed not to issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of its common stock or common stock equivalents, or file any registration statement or any amendment or supplement thereto, through September 7, 2025, subject to certain customary exceptions, without the consent of the Placement Agent.

Placement Agency Agreement

 

The Company also entered into a Placement Agency Agreement (the “Placement Agency Agreement”) with Titan, dated June 22, 2025, pursuant to which Titan acted as the exclusive placement agent for the Company in connection with the Placement. The Company agreed to pay Titan a cash fee based on the total size of the Placement according to a formula set forth in the Placement Agency Agreement. In addition, the Company agreed to reimburse Titan for up to $100,000 of its fees and expenses in connection with the Placement.

 

The Placement Agency Agreement contains customary representations, warranties, and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties, and termination provisions.

 

Lock-Up Agreements

 

Pursuant to Lock-Up Agreements with the Company, the Company’s directors and executive officers agreed for a period of 60 days after the closing date of the Placement, subject to certain exceptions, not to directly or indirectly offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position with respect to, any shares of the Company’s common stock or securities convertible, exchangeable or exercisable into common stock, that they beneficially own, hold, or thereafter acquire, or make any demand for or exercise any right or cause to be filed a registration, including any amendments thereto, with respect to the registration of any common stock or common stock equivalents or publicly disclose the intention to do any of the foregoing.

 

Private Placement Offering

 

On September 21, 2025, the Company entered into securities purchase agreements (the “September Purchase Agreements”) pursuant to which the Company agreed to issue to the Purchasers (as defined therein), in a private placement (the “September Placement”), an aggregate of 26,867,276 shares (the “September Placement Shares”) of the Company’s common stock. The closing of the September Placement occurred on September 24, 2025. The September Placement resulted in gross proceeds of approximately $500 million before deducting placement agent commissions and other offering expenses.

 

The Company was required to file a registration statement providing for the resale of the September Placement Shares by October 9, 2025. The Company filed a registration statement on Form S-3ASR on October 1, 2025.

 

Pursuant to the September Purchase Agreements and the September Placement Agency Agreement (as defined below), the Company has agreed not to issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock equivalents, or file any registration statement or any amendment or supplement thereto, for a period of 75 days after the closing date of the September Placement, subject to certain customary exceptions, without the consent of the Placement Agent and the Purchasers.

 

Placement Agency Agreement

 

The Company also entered into a Placement Agency Agreement (the “September Placement Agency Agreement”) with Titan dated September 21, 2025, pursuant to which Titan acted as the exclusive placement agent for the Company in connection with the September Placement. The Company agreed to pay Titan a 5% cash fee based on the total size of the September Placement, as set forth in the September Placement Agency Agreement. In addition, the Company agreed to reimburse Titan for up to $100,000 of its fees and expenses in connection with the September Placement.

 

The September Placement Agency Agreement contains customary representations, warranties, and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties, and termination provisions.

Lock-Up Agreements

 

Pursuant to Lock-Up Agreements with the Company, the Company’s directors and executive officers agreed for a period of 60 days after the closing date of the September Placement, subject to certain exceptions, not to directly or indirectly offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position with respect to, any shares of the Company’s common stock or securities convertible, exchangeable or exercisable into common stock, that they beneficially own, hold, or thereafter acquire, or make any demand for or exercise any right or cause to be filed a registration, including any amendments thereto, with respect to the registration of any common stock or common stock equivalents or publicly disclose the intention to do any of the foregoing.

 

Private Placement Offering

 

On October 5, 2025, the Company entered into securities purchase agreements (the “October Purchase Agreements”) pursuant to which the Company agreed to issue to the Purchasers (as defined therein), in a private placement (the “October Placement”), an aggregate of 37,183,937 shares (the “October Placement Shares”) of the Company’s common stock. The closing of the October Placement occurred on October 8, 2025. The October Placement resulted in gross proceeds of approximately $750 million before deducting placement agent commissions and other offering expenses.

 

The Company was required to file a registration statement providing for the resale of the October Placement Shares by October 23, 2025. The Company filed such registration statement on Form S-3ASR on October 10, 2025.

 

Pursuant to the October Purchase Agreements and the October Placement Agency Agreement (as defined below), the Company has agreed not to issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock equivalents, or file any registration statement or any amendment or supplement thereto, for a period of 75 days after the closing date of the October Placement, subject to certain customary exceptions, without the consent of Titan and the Purchasers.

 

Placement Agency Agreement

 

The Company also entered into a Placement Agency Agreement (the “October Placement Agency Agreement”) with Titan dated October 5, 2025, pursuant to which Titan acted as the exclusive placement agent for the Company in connection with the October Placement. The Company agreed to pay Titan a 4% cash fee based on the total size of the October Placement, as set forth in the October Placement Agency Agreement. In addition, the Company agreed to reimburse Titan for up to $100,000 of its fees and expenses in connection with the October Placement.

 

The October Placement Agency Agreement contains customary representations, warranties, and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties, and termination provisions.

 

Lock-Up Agreements

 

Pursuant to Lock-Up Agreements with the Company, the Company’s directors and executive officers agreed for a period of 60 days after the closing date of the October Placement, subject to certain exceptions, not to directly or indirectly offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position with respect to, any shares of the Company’s common stock or securities convertible, exchangeable or exercisable into Common Stock, that they beneficially own, hold, or thereafter acquire, or make any demand for or exercise any right or cause to be filed a registration, including any amendments thereto, with respect to the registration of any common stock or common stock equivalents or publicly disclose the intention to do any of the foregoing.

 

The total amount of net proceeds raised during the year ended December 31, 2025 was $1,475.1 million, which includes $2.4 million resulting from exercise of warrants.

Registered Direct Offering

 

On November 14, 2024, the Company entered into securities purchase agreements (the “November RDO SPAs”) for a registered direct offering (the “November RDO”) to sell an aggregate of 16 million shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $2.50 per share (the “November RDO Shares”), resulting in gross proceeds of $40 million, before deducting placement agent commissions and other offering expenses. On November 18, 2024, the Company completed the sale of the November RDO Shares and announced its intention to use the net proceeds from the November RDO for the repayment of debt, working capital, and general corporate purposes. Specifically, the Company used approximately $9.3 million of the gross proceeds to pay in full the Streeterville Convertible Note.

 

In conjunction with the November RDO SPAs, the Company also entered into a placement agency agreement with Titan Partners Group LLC (“Titan”), a division of American Capital Partners, LLC (the “November Placement Agent”) dated November 14, 2024, pursuant to which the November Placement Agent will act as the exclusive placement agent for the Company in connection with the November RDO. The Company agreed to pay the November Placement Agent a cash fee of 7.25% of the gross proceeds from the November RDO and to issue to the November Placement Agent (or its designees) 800,000 five-year warrants representing 5% of the securities sold in the November RDO, which will be exercisable beginning on May 13, 2025, and have an initial exercise price per share of the Company’s common stock of $2.875. In addition, the Company agreed to reimburse the November Placement Agent for up to $100,000 of its fees and expenses in connection with the November RDO.

 

Registered Direct and Private Placement Offerings

 

On December 10, 2024, the Company entered into securities purchase agreements (the “December RDO SPAs”) for a registered direct offering (the “December RDO”), an aggregate of 1,540,000 shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $5.00 per share. Also on December 10, 2024, the Company entered into securities purchase agreements (the “December Placement SPAs” and together with the December RDO SPAs, the “Purchase Agreements”), pursuant to which the Company agreed to issue in a concurrent private placement (the “December Private Placement” and together with the December RDO, the “December SPAs”), an aggregate of 8,460,000 shares (the “December Placement Shares”) of common stock at a purchase price of $5.00 per share. The December SPAs closed on December 12, 2024. The December RDO resulted in gross proceeds of $7.7 million and the December Private Placement resulted in gross proceeds of $42.3 million, in each case before deducting placement agent commissions and other offering expenses. Furthermore, the Company filed a registration statement providing for the resale of the December Placement Shares on December 20, 2024, which went effective January 6, 2025.

 

In conjunction with the December SPAs, the Company also entered into a placement agency agreement with Titan (the “December Placement Agent”), dated December 10, 2024, pursuant to which the December Placement Agent will act as the exclusive placement agent for the Company in connection with the December SPAs. The Company agreed to pay the December Placement Agent a cash fee of 7% of the gross proceeds from the December SPAs and to issue to the December Placement Agent (or its designees) 500,000 five-year warrants (representing 5% of the securities sold in the Offerings), which will be exercisable beginning on June 8, 2025, and have an initial exercise price per share of the Company’s common stock of $5.75. In addition, the Company agreed to reimburse the December Placement Agent for up to $100,000 of its fees and expenses in connection with the December SPAs.

 

The combined amount of net proceeds raised from the ATM and RDOs was $106.8 million and $24.7 million for the years ended December 31, 2024 and 2023, respectively.

Warrants

 

The table below summarizes the warrants outstanding at December 31, 2025 (in thousands, except exercise prices):

 

Issuance Date  Expiration Date  Exercise Price   Issued   Exercised   Forfeited /
Canceled		   Warrants
Outstanding		 
August 18, 2020  August 18, 2025  $2.00    171    (171)   
-
    
-
 
June 16, 2022  May 9, 2027  $0.0001    6,325    (1,187)   (4,338)   800 
November 18, 2024  November 18, 2029  $2.875    800    (304)   
-
    496 
December 12, 2024  December 12, 2029  $5.75    500    (100)   
-
    400 
January 9. 2025  January 9, 2030  $14.0875    327    (65)   
-
    262 
                           1,958 

 

In connection with a restricted stock units offering in June 2020, the Company issued warrants in August 2020 to purchase 171,000 shares of the Company’s common stock, at an exercise price of $2.00. As of December 31, 2025, all of these warrants were exercised.

 

On June 16, 2022, the Company issued 6.3 million QPhoton Warrants to purchase shares of the Company’s common stock at an exercise price of $0.0001 per share. Those warrants are exercisable when and if stock options and warrants issued by the Company and outstanding as of June 15, 2022 (the “Underlying Options”) are exercised. As of December 31, 2025, the Company expects 758 thousand (the “In-the-Money QPhoton Warrants) of the 800 thousand outstanding QPhoton Warrants are likely to be exercised as the exercise prices of the Underlying Options associated with the In-the-Money QPhoton Warrants are below the closing of the Company’s bid stock price of $10.26 per share as of December 31, 2025. The 6.3 million issued warrants represent a portion of the 7.0 million QPhoton Warrants, having been received by two former QPhoton shareholders. A third shareholder rejected the Merger Consideration and commenced litigation, and as of December 31, 2025 that litigation was resolved and the associated 702,834 warrants were forfeited, of which 481,949 would have been canceled to date due to forfeitures of Underlying Options. See Part I, Item 3, Legal Proceedings, for additional information on the status of the litigation.

 

During the year ended December 31, 2025, a total of 469,306 of the Placement Agent warrants were exercised by principals of Titan Capital Partners, resulting in proceeds to the Company of $2.4 million. The warrants exercised were 304,000 at an exercise price of $2.875, 100,000 at an exercise price of $5.75 and 65,306 at an exercise price of $14.0875. In addition, during the year ended December 31, 2025 1.187 million QPhoton warrants were exercised, at an exercise price of $0.0001, resulting in proceeds to the Company of $119. Due to the exercise of these QPhoton warrants, $21.0 million of the derivative liability was reclassified to additional paid-in capital during the year ended December 31, 2025. Total shares issued due to exercise of all warrants during the year ended December 31, 2025, were 1,677,439 (including 1.656 million shares from exercise of the Placement Agent warrants) and proceeds to the Company from all warrant exercises during the year ended December 31, 2025 were $2.411 million.

 

As of December 31, 2025, of the 6.3 million QPhoton Warrants issued, approximately 69% have been forfeited because the corresponding Underlying Options had expired or been forfeited. Further, as discussed in Note 4, Fair Value of Financial Instruments, the QPhoton Warrants are considered Level 3 liabilities for fair value measurement on the valuation hierarchy. In determining the fair market value of the QPhoton Warrants, the Company determines which underlying options and warrants are in-the-money or out-of-the-money at period end by comparing to the bid price of the Company’s common stock and then accounting for changes period-over-period by realizing a mark-to-market gain or loss for the period. Due to the difference between the exercise price and the market value of the Company’s common stock as of the consolidated balance sheet dates and the probability of the underlying options and warrants being exercised are the only significant inputs in the valuation of the warrant liability. The market value of the Company’s stock was $10.26 per share and $16.55 per share as of December 31, 2025 and December 31, 2024, respectively (the “Balance Sheet Date Stock Prices”), and the probability of exercise was determined based on whether the exercise price of the underlying options and warrants was above or below the Balance Sheet Date Stock Prices, resulting in the QPhoton Warrants being out-of-the-money or in-the-money, respectively. Accordingly, the Company recognized a mark-to-market gain of $11.8 million, a mark-to-market loss of $40.5 million and a mark-to-market gain of $528 thousand during the years ended December 31, 2025, 2024 and 2023, respectively. In addition, due to the exercise of QPhoton warrants, $21.0 million of the derivative liability was reclassified to additional paid-in capital during the year ended December 31, 2025. As of December 31, 2025 and 2024, the QPhoton Warrants have a carrying value of $7.8 million and $40.5 million, respectively, as a liability on the Company’s consolidated balance sheets.