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Note L - Stock and Warrants
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Equity [Text Block]

L.

Stock and Warrants

 

Authorized, Issued, and Outstanding Common Shares

 

As of December 31, 2024, and 2023, the Company had authorized shares of common stock of 250,000,000 shares. Of the authorized shares, 55,246,401 and 43,110,360 shares of common stock were issued as of December 31, 2024, and 2023, respectively, and 53,670,709 and 41,534,668 shares of common stock were outstanding as of  December 31, 2024, and 2023, respectively.

 

As of December 31, 2024, and 2023, the Company had reserved authorized shares of common stock for future issuance as follows:

 

  

December 31,

 
  

2024

  

2023

 

Outstanding awards under equity incentive plans

  7,789,658   8,023,142 

Outstanding common stock warrants

  5,483,537   5,603,729 

Possible future issuances under equity incentive plans

  5,383,165   1,728,885 

Possible future issuances under employee stock purchase plan

  1,148,012   1,340,172 

Total common shares reserved for future issuance

  19,804,372   16,695,928 

 

Common Stock Activity

 

The following table summarizes common stock activity for the years ended December 31, 2024 and 2023:

 

  

Shares of

 
  

Common Stock

 

Balance as of January 1, 2023

  34,540,304 

Common stock issued as compensation to third-parties

  44,791 

Common stock issued as a result of stock warrants exercised

  110 

Common stock issued as a result of stock options exercised

  7,500 

Common stock repurchased as a result of the Stock Repurchase Program

  (665,739)

Common stock issued in connection with the Merger (Note T)

  7,530,509 

Common stock issued as a result of the Employee Stock Purchase Plan

  77,193 

Balance as of December 31, 2023

  41,534,668 

Common stock issued in connection with the Public Offering (Note B)

  10,615,385 

Common stock issued in connection with restricted stock units

  218,000 

Common stock issued as compensation to third-parties

  92,988 

Common stock issued in connection with vesting of performance-based awards

  547,945 

Common stock issued as a result of stock options exercised

  469,563 

Common stock issued as a result of the Employee Stock Purchase Plan

  192,160 

Balance as of December 31, 2024

  53,670,709 

 

Authorized, Issued, and Outstanding Preferred Stock

 

As of December 31, 2024, and 2023, the Company had 10,000,000 shares of authorized, unallocated and unissued preferred stock. As of  December 31, 2024, and 2023, no shares of preferred stock were designated, issued or outstanding.

 

 

Warrants to Purchase Common Stock 

 

The Company has issued warrants to purchase common stock to various third parties, of which 5,483,537 remain outstanding as of December 31, 2024, and are immediately exercisable. These warrants qualify as participating securities under ASC Topic 260, Earnings per Share, and are treated as such in the net loss per share calculation (Note P). The Company may be required to redeem these warrants for a cash amount equal to the Black-Scholes value of the portion of the warrants to be redeemed (the “Put Option”).

 

In connection with the Merger (Note T), in November 2023, the Company directly issued to certain investors an aggregate of 1,382,489 shares of its common stock, par value $0.0001 per share, and accompanying warrants to purchase up to 1,382,489 shares of its common stock (the "2023 Warrants") at a combined offering price of $4.34 per share of common stock and the Warrants and an aggregate of 917,934 shares of its common stock in exchange for the cancellation of a warrant to purchase 2,920,306 shares of common stock of Acer. The Warrants are immediately exercisable and expire on November 22, 2028. The Company used the net proceeds of approximately $6.0 million from the offering for general corporate purposes. These warrants are separately exercisable by the warrant holders. While the warrants are outstanding (but unexercised), the warrant holders will participate in any dividend or other distribution of the Company’s assets to its common stockholders by way of return of capital or otherwise. As of December 31, 2024, and December 31, 2023, none of the warrants have been exercised. The warrants have been evaluated to determine the appropriate accounting and classification pursuant to ASC 480 and ASC 815. Generally, freestanding warrants should be classified as (i) liabilities if the warrant terms allow settlement of the warrant exercise in cash and (ii) equity if the warrant terms only allow settlement in shares of common stock.

 

The Company determined that its outstanding warrants and the Put Option should be recorded as a liability and stated at fair value at each reporting period. Changes to the fair value of the warrant liability are recorded through the consolidated statements of operations as a fair value adjustment related to warrant and CVR liability. As of December 31, 2024, and December 31, 2023, the fair value of the liability associated with these warrants and the Put Option was approximately $17.8 million and $16.1 million, respectively. The fair value adjustment related to these warrants and the Put Option was approximately $1.7 million of loss and ($1.4) million of income for the years ended December 31, 2024, and 2023, respectively.