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Stockholders' Equity | 6 Months Ended
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Jun. 30, 2023
Equity [Abstract] |
Stockholders' Equity | Note 9. Stockholders’ Equity 2021 Equity Distribution Agreement On March 31, 2021, the Company filed a registration statement on Form S-3 containing a prospectus and prospectus supplement under which the Company may offer and sell up to $75 million in shares of its common stock, from time to time, pursuant to an open market sale agreement with Jeffries LLC and by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933 (the “ATM Program”). Pursuant to the “baby shelf rules” promulgated by the SEC, if the Company’s public float is less than $75.0 million as of specified measurement periods, the number of shares of common stock that may be offered and sold by the Company under a Form S-3 registration statement, including pursuant to the ATM Program, in any twelve-month period is limited to an aggregate amount that does not exceed one-third of the Company’s public float. As of June 30, 2023, the Company was permitted to sell up to $17.8 million of shares of common stock pursuant to the ATM Program under the SEC’s “baby shelf” rules. The Company will remain subject to the “baby shelf rules” under the Form S-3 registration statement until such time as its public float exceeds $75.0 million. Through June 30, 2023, no shares of common stock have been sold under the ATM program. Under the Securities Purchase Agreement described below in this Note 9, the Company is restricted from selling shares under the ATM Program until the later of (i) 4 months from April 28, 2023 and (ii) ninety days after the registration statement filed pursuant to the Securities Purchase Agreement has been declared effective. The registration statement filed pursuant to the Securities Purchase Agreement was declared effective on June 2, 2023. 2022 Exchange Agreement On January 11, 2022, the Company entered into an exchange agreement (the “Series X 1 Exchange Agreement”) with Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS, L.P., MSI BVF SPV, L.L.C. (collectively, the “BVF Exchanging Stockholders”), pursuant to which the Series X 1 Exchanging Stockholders exchanged (the “Series X 1 Exchange”) 550,000 shares of the Company’s common stock for 9,899.99 shares of Series X 1 Non-Voting Convertible Preferred Stock. 2023 Securities Purchase Agreement On April 28, 2023, the Company entered into the Securities Purchase Agreement with Purchasers, pursuant to which the Company agreed to issue and sell to the Purchasers in the Private Placement (i) in an initial closing, (a) an aggregate of 15,151,518 shares (the “Shares”) of the Company’s common stock, $0.001 par value per share, or pre-funded warrants in lieu thereof (the “Pre-Funded Warrants”), and (b) common stock warrants exercisable into an aggregate of 15,151,518 shares of common stock (or Pre-Funded Warrants in lieu thereof) (the “Common Warrants” and, together with the Pre-Funded Warrants, the “Warrants”); (ii) in a second closing, upon the satisfaction of specified conditions set forth in the Securities Purchase Agreement, an aggregate of 20,202,024 shares of common stock (or Pre-Funded Warrants); and (iii) in a third closing, upon the satisfaction of specified conditions set forth in the Securities Purchase Agreement, an aggregate of 25,252,530 shares of common stock (or Pre-Funded Warrants), in each case subject to customary adjustments as provided in the Securities Purchase Agreement, Pre-Funded Warrant or Common Warrant, as applicable. Each Common Warrant has an exercise price of $3.00 per share and expires five years after issuance. The Pre-Funded Warrants are exercisable immediately and until exercised in full, with an exercise price of $0.001 per share. The Shares, the Warrants, and the shares of common stock issuable upon the exercise of the Warrants, have not been registered under the Securities Act of 1933, as amended, and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder. On May 5, 2023, the initial closing occurred and the Company received $35.0 million, or net proceeds of approximately $33.0 million after deducting offering costs, in exchange for 8,730,168 shares of common stock and Pre-Funded Warrants to purchase 6,421,350 shares of common stock. The Company may receive an additional $105.0 million upon sale of the shares to be issued in the second and third closings, subject to achieving specified clinical development milestones and volume weighted average share price levels and trading volume conditions, and an additional $45.5 million assuming the exercise of all Common Warrants issued in the initial closing of the Private Placement. In connection with the Private Placement, the Company filed on May 18, 2023, a registration statement on Form S-3 (“Registration Statement”) with the SEC to register for resale the Shares and the shares of common stock issuable upon the exercise of the Warrants. The Registration Statement became effective on June 2, 2023. 2023 Conversion Agreement of Non-Voting Convertible Preferred Stock On May 16, 2023, Cormorant Global Healthcare Master Fund LP provided notice to convert (i) 1,782 shares of Series X Non-Voting Convertible Preferred Stock for 99,000 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X Non-Voting Convertible Preferred Stock, and (ii) 7,883.586 shares of Series X 1 Non-Voting Convertible Preferred Stock for 437,977 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X 1 Non-Voting Convertible Preferred Stock. The conversion was completed on May 23, 2023. Common Stock Warrants As of June 30, 2023, there were 22,718,499 warrants exercisable into common stock (rounding for fractional shares and subject to beneficial ownership blockers).
|  | Roll Forward of Warrant Activity |
|  | Private placement warrants |  |  | Pre-funded warrants |  |  | Warrants exchanged for Series X 1 preferred stock |  |  | Total |
Balance as of December 31, 2022 |  |  | 337,822 |  |  |  | 509,117 |  |  |  | 298,692 |  |  |  | 1,145,631 |
Issued |  |  | 15,151,518 |  |  |  | 6,421,350 |  |  |  | — |  |  |  | 21,572,868 |
Exercised |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Cancelled/Expired |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Balance as of June 30, 2023 |  |  | 15,489,340 |  |  |  | 6,930,467 |  |  |  | 298,692 |  |  |  | 22,718,499 |
Preferred Stock Warrants As of June 30, 2023, there were 50,207.419 warrants exercisable into Series X 1 Preferred Stock, which are convertible into 2,789,301 shares of common stock (rounding for fractional shares and subject to beneficial ownership conversion blockers).
|  | Roll Forward of Series X 1 Convertible Preferred Warrant Activity |
|  | Total |
Balance as of December 31, 2022 |  |  | 50,207.419 |
Assumed and replaced |  |  | — |
Exercised |  |  | — |
Cancelled/Expired |  |  | — |
Balance as of June 30, 2023 |  |  | 50,207.419 |

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