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COMMON STOCK, PREFERRED STOCK AND WARRANTS | 9 Months Ended
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Sep. 30, 2024
COMMON STOCK, PREFERRED STOCK AND WARRANTS |
COMMON STOCK, PREFERRED STOCK AND WARRANTS | 6. COMMON STOCK, PREFERRED STOCK AND WARRANTS Public Offering On May 9, 2024, the Company closed on a registered public offering consisting of 704,999 shares of Common Stock (the “2024 Public Offering”), pre-funded warrants to purchase 2,147,222 shares of Common Stock (the “Pre-funded Warrants”) and accompanying Series A Warrants to purchase up to 2,852,221 shares of its Common Stock (“Series A Warrants”) and Series B Warrants to purchase up to 2,852,221 shares of its Common Stock (“Series B Warrants”, and together with the Series A Warrants, the “2024 Public Warrants”). The 2024 Public Offering price per share of Common Stock and accompanying Series A Warrants and Series B Warrants was $2.25, the public offering price per Pre-funded Warrant and accompanying Series A and Series B warrant was $2.249. The Pre-funded Warrants have an exercise price of $0.001 per share and 1,076,445 were exercised on the closing date. Net proceeds from the 2024 Public Offering, after deducting placement agent fees and expenses and other offering costs, were approximately $5.5 million. The 2024 Public Warrants have an exercise price of $2.25 per share and are exercisable upon issuance. The Series A Warrants will expire five years following the date of issuance and the Series B Warrants will expire twelve months following the date of issuance. The Pre-funded Warrants are exercisable upon issuance and may be exercised at any time until the Pre-funded Warrants are exercised in full. At-The-Market Offering On June 23, 2023, the Company entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (“Roth”) to create an at-the-market offering program (“ATM”) under which the Company may offer and sell shares with an aggregate offering price of up to $2.0 million. Roth is entitled to a fixed commission rate equal to up to 3% of the gross proceeds pursuant to the Sales Agreement. As of September 30, 2024, 201,211 shares have been sold under the ATM generating net proceeds of $1.8 million. Series B Preferred Stock On March 23, 2023, the Board of Directors declared a dividend of one one-thousandth of a share of Series B Preferred Stock (“Series B Preferred Stock”) for each outstanding share of Common Stock held of record on April 3, 2023. The value of the Series B Preferred Stock issued in connection with the stock dividend was immaterial. The outstanding shares of Series B Preferred Stock voted together with the outstanding shares of the Company’s Common Stock, as a single class, exclusively with respect to a proposal giving the Board of Directors the authority, as it determines appropriate, to implement a reverse stock split within twelve months following the approval of such proposal by the Company’s stockholders as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the foregoing matters. Each share of Series B Preferred Stock entitled the holder to 1,000,000 votes per share and each fraction of a share of Series B Preferred Stock had a ratable number of votes. The holder of Series B Preferred Stock, as such, are not entitled to receive dividends. At the annual meeting of stockholders of the Company held on May 24, 2023, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of its outstanding Common Stock. All shares of Series B Preferred Stock that did not vote in person or by proxy were redeemed in whole by the Company. Shares of Series B Preferred Stock that did vote in person or by proxy will need to request redemption from the Company at a rate of $0.001 per share in cash. As of September 30, 2024, no shareholders of Series B Preferred Stock have requested such redemption. Warrants The Company issued warrants to purchase an aggregate of 720,000 shares of Common Stock (“2022 Warrants”) in connection with the August 2022 Public Offering, as more fully described in Note 8 to our Consolidated Financial Statements included our 2023 10-K. The 2022 Warrants did not meet the guidance for being classified as an equity instrument due to a potential price reset prompted by a change in an unrelated instrument’s conversion rate or, in the event of a fundamental transaction, settlement rights that differ from those of the underlying common stockholders. Accordingly, the 2022 Warrants are being accounted for as a derivative liability instrument. As a result of the Company’s Reverse Stock Split on August 16, 2023, refer to Note 1, the exercise price on the 2022 Warrants was reset to $6.9135 per share based on the volume-weighted average price (“VWAP”) for the five stock trading days immediately following the Reverse Stock Split. On May 9, 2024, in connection with the 2024 Public Offering, the exercise price of the 2022 Warrants was again reset to $1.6163 per share based on the VWAP for the five stock trading days immediately following the announcement of the 2024 Public Offering. The fair value of the 2022 Warrants as of September 30, 2024 and December 31, 2023 was determined using both a Monte Carlo simulation model, which uses multiple input variables to determine the probability of the occurrence of a price reset or a fundamental transaction and the Black-Scholes option pricing model. The following table includes the share price and the inputs used to estimate the fair value of the warrants: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, | ​ | December 31, |
​ |  | 2024 | ​ | 2023 |
Stock price | ​ | $ | 0.56 | ​ | $ | 8.04 | ​
Warrant term (in years) | ​ |  | 2.86 | ​ |  | 3.61 | ​
Expected volatility | ​ |  | 91.90 | % |  | 84.10 | %
Risk-free interest rate | ​ |  | 3.59 | % |  | 3.96 | %
Dividend rate | ​ |  | 0.00 | % |  | 0.00 | %
​ The fair value of the derivative liability associated with the 2022 Warrants as of September 30, 2024 and December 31, 2023 was $0.2 million and $3.3 million, respectively. The change in the fair value of the derivative liability was recognized as a component of nonoperating income (expense) in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. 2022 Warrants were exercised to purchase of 23,400 shares of Common Stock at $6.9135 per share for $162 thousand in net proceeds and no 2022 Warrants were cancelled during the nine months ended September 30, 2024. The portion of the derivative liability relating to the exercised warrants of $101 thousand was reclassified into stockholders’ equity based on the fair value on the date of reclassification. The remaining outstanding 2022 Warrants to purchase 603,690 shares of Common Stock are classified as a derivative liability as of September 30, 2024, are exercisable upon issuance and will expire five years following the date of issuance. The Company has outstanding equity-classified warrants to purchase 5,951,466 shares of Common Stock at a weighted average exercise price of $3.59, with expiration dates ranging from March 2025 to May 2029. The weighted average exercise price includes 94,444 Pre-funded Warrants with a nominal exercise price of $0.001 outstanding as of September 30, 2024. The weighted average exercise price excluding the outstanding Pre-funded Warrants is $3.65. During the nine months ended September 30, 2024, 2,052,778 equity-classified warrants were exercised for which 2,052,703 equity-classified warrants were settled as the result of the cashless exercise provision.

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