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Preferred Stock and Stockholders' Equity | 9 Months Ended
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Sep. 30, 2025
Equity [Abstract] |
Preferred Stock and Stockholders' Equity | Note 8. Preferred Stock and Stockholders’ Equity Convertible Preferred Stock The Company has 5,000,000 authorized shares of preferred stock with a par value of $0.001 per share: • Series X 1 non-voting convertible preferred stock, 515,000 shares designated; 110,086 shares issued and outstanding, respectively, at each of September 30, 2025 and December 31, 2024; and • Series X non-voting convertible preferred stock, 10,000 shares designated; 4,422 shares issued and outstanding, respectively, at each of September 30, 2025 and December 31, 2024. Each share of the Preferred Stock is convertible into 55.5556 shares of common stock, at the option of the holder at any time, subject to certain limitations, including, that the holder will be prohibited from converting the Preferred Stock into common stock if, as a result of such conversion, the holder, together with its affiliates, would beneficially own a number of shares of common stock above a conversion blocker, which is initially set at 9.99% or 9.9% of the total common stock then issued and outstanding immediately following the conversion of such shares of Series X Preferred Stock or Series X 1 Preferred Stock, respectively. The holder of the Preferred Stock is entitled to receive dividends on shares of the Preferred Stock equal (on an as-if-converted-to-common-stock basis and without regard to any beneficial ownership limitations) to and in the same form as dividends actually paid on shares of the common stock. No other dividends will be paid on shares of the Preferred Stock. In the event of any liquidation, dissolution or winding up, the holder of the Preferred Stock will be entitled to receive out of the assets, whether capital or surplus, the same amount that a holder of common stock would receive if the Preferred Stock were fully converted to common stock, which amounts shall be paid pari passu with all holders of common stock. Shares of the Preferred Stock will generally have no voting rights, except as required by law and except that the consent of a majority of the holders of either series of outstanding Preferred Stock will be required to amend the terms of such series. The Preferred Stock includes a provision that, in the event of a tender or exchange offer by a third party in which more than 50% of the common stockholders receive cash or other assets, allows holders of Preferred Stock, upon any subsequent conversion, to redeem their shares for the same form of consideration. Because this redemption right may be triggered by an event outside the Company’s control and could result in settlement in cash, the Preferred Stock is classified as temporary equity. As of the current reporting date, a tender offer is not probable, and the preferred stock is not deemed probable of becoming redeemable. Because redemption is not considered probable, the Preferred Stock is not subsequently remeasured to its redemption value. Common Stock On June 10, 2025, the Company held its 2025 Annual Meeting of Stockholders (the “2025 Annual Meeting”). At the 2025 Annual Meeting, the Company’s stockholders approved an amendment (the “Authorized Share Increase Amendment”) to the Company’s Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to increase the number of authorized shares of common stock from 200,000,000 to 300,000,000 shares. 2023 Securities Purchase Agreement On April 28, 2023, the Company entered into a Securities Purchase Agreement (the “2023 Securities Purchase Agreement”) with certain investors, pursuant to which the Company agreed to issue and sell to the investors in a private placement (the “2023 Private Placement”) (i) in an initial closing, (a) an aggregate of 15,151,518 shares (the “Shares”) of common stock, 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 (the “Second Closing”), upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 20,202,024 shares of common stock (or Pre-Funded Warrants); and (iii) in a third closing (the “Third Closing”), upon the satisfaction or waiver of specified conditions set forth in the 2023 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 2023 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 Pre-Funded Warrants and Common Warrants are subject to specified beneficial ownership limitations, which are generally set at 9.99% of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99% unless otherwise permitted. 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. On July 8, 2024, the Second Closing occurred and the Company received gross proceeds of $2.1 million, or net proceeds of approximately $2.0 million after deducting offering costs, in exchange for 909,088 shares of common stock. On September 30, 2024 and October 1, 2024, the Third Closing occurred and the Company received gross proceeds of $4.0 million, or net proceeds of approximately $3.8 million after deducting offering costs, in exchange for 1,727,400 shares of common stock. In connection with the 2023 Private Placement, the Company filed on May 18, 2023, a registration statement on Form S-3 (the “2023 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 2023 Registration Statement became effective on June 2, 2023. In August 2024, the Company concluded that the Common Warrants, and the potential issuance of Pre-Funded Warrants in lieu of additional shares of common stock in the Second Closing and Third Closing (the “Subsequent Closing Warrants”) do not meet the conditions to be classified as equity instruments under ASC 815-40 and must instead be recorded as liabilities on the Company’s consolidated balance sheets at their fair value and remeasured at fair value for each subsequent reporting period. As of October 2024, the Subsequent Closing Warrants either expired or were settled in connection with the Second Closing and Third Closing. Accordingly, the Company's condensed consolidated balance sheets no longer include any fair value associated with the Subsequent Closing Warrants. The valuation of the Common Warrants is adjusted to fair value (Level 3) at each balance sheet date until the Common Warrants are settled or expired. The following table presents the assumptions used in the Black-Scholes option pricing model to determine the fair value of the Common Warrants as of September 30, 2025 and December 31, 2024 as follows:
|  | September 30, 2025 |  |  | December 31, 2024 |
Risk-free interest rate |  | 3.6% |  |  | 4.4% |
Expected stock price volatility |  | 95.1% |  |  | 96.4% |
Expected term (in years) |  | 2.8 |  |  | 3.5 |
Share price |  | $ | 2.59 |  |  | $ | 4.14 |
2024 Securities Purchase Agreement On May 6, 2024, the Company entered into a Securities Purchase Agreement (the “2024 Securities Purchase Agreement”) with certain institutional and accredited investors, pursuant to which the Company agreed to issue and sell to the investors in a private placement (the “2024 Private Placement”) an aggregate of 13,110,484 shares (the “2024 Shares”) of the Company’s common stock at a price of $2.37 per share, and pre-funded warrants (the “2024 Pre-Funded Warrants”) at a price of $2.369 per underlying share, which are exercisable to purchase 7,989,516 shar es of common stock at an exercise price of $0.001 per share. The 2024 Pre-Funded Warrants were issued in lieu of shares of common stock and are exercisable immediately and until exercised in full. The 2024 Pre-Funded Warrants are subject to specified beneficial ownership limitations (equal to 4.99% or 9.99% as determined by the holders of each such warrant) of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99% unless otherwise permitted. The 2024 Shares, the 2024 Pre-Funded Warrants, and the shares of common stock issuable upon the exercise of the 2024 Pre-Funded 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. The 2024 Pre-Funded Warrants were classified as a component of permanent stockholders’ equity within additional paid-in-capital. The 2024 Pre-Funded Warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of common shares upon exercise, are indexed to the Company’s common stock and meet the equity classification criteria. In addition, the 2024 Pre-Funded Warrants do not provide any guarantee of value or return. The 2024 Private Placement resulted in gross proceeds to the Company of $50.0 million, or net proceeds of approximately $48.1 million after deducting offering costs. The Company is using the net proceeds from the 2024 Private Placement to fund pre-commercial activities for its products and general corporate purposes. In connection with the 2024 Private Placement, the Company filed on May 24, 2024, a registration statement on Form S-3 (the “2024 Registration Statement”) with the SEC to register for resale the 2024 Shares and the shares of common stock issuable upon the exercise of the 2024 Pre-Warrants. The 2024 Registration Statement became effective on June 5, 2024. 2024 Equity Distribution Agreement On September 20, 2024, the Company entered into an Open Market Sale Agreement (the “Sales Agreement”) with Guggenheim Securities, LLC (“Guggenheim Securities”) to sell shares of the Company’s common stock, having aggregate sales proceeds of up to $75.0 million, from time to time, through an “at the market” equity offering program (the “ATM Program”) under which Guggenheim Securities will act as sales agent. In connection with the Sales Agreement, the Company filed on September 20, 2024 a registration statement on Form S-3 containing a prospectus and prospectus supplement (the “Shelf Registration Statement”) with the SEC. The Shelf Registration Statement became effective on October 2, 2024. As of September 30, 2025, the Company has not sold any shares under the Sales Agreement. 2024 Underwritten Offering On October 29, 2024, the Company entered into an underwriting agreement with Leerink Partners, LLC, as representative of the several underwriters named therein (the “Underwriters”) in connection with the underwritten offering, issuance and sale by the Company (the “2024 Underwritten Offering”) of 18,356,173 shares of the Company’s common stock, at an offering price of $3.65 per share, and pre-funded warrants at a price of $3.649 per pre-funded warrant, which are exercisable to purchase 4,931,507 shares of the Company’s common stock at an exercise price of $0.001 per share (the “Offering Pre-Funded Warrants”). The Offering Pre-Funded Warrants were classified as a component of permanent stockholders’ equity within additional paid-in-capital. The Offering Pre-Funded Warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of common shares upon exercise, are indexed to the Company’s common stock and meet the equity classification criteria. In addition, the Offering Pre-Funded Warrants do not provide any guarantee of value or return. The 2024 Underwritten Offering closed on October 30, 2024 and resulted in gross proceeds of $85 million, or net proceeds of approximately $79.5 million after deducting underwriting discounts and commissions and offering expenses. The 2024 Underwritten Offering was made pursuant to the Shelf Registration Statement and a prospectus supplement relating to the 2024 Underwritten Offering dated October 29, 2024. A holder of the Offering Pre-Funded Warrants (together with its affiliates) may not exercise any portion of an Offering Pre-Funded Warrant to the extent that, after giving effect to such exercise, the holder (together with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% (or, at the holder’s option upon issuance, 9.99%) of the number of shares of the Company's common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of such Offering Pre-Funded Warrant. Exercise of Pre-Funded Warrants from 2023 Securities Purchase Agreement On July 10, 2023, Armistice Capital Master Fund Ltd. (the “Exercising Stockholder”) exercised Pre-Funded Warrants to purchase 501,197 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On July 14, 2023, the Company issued 501,197 shares of common stock to the Exercising Stockholder in accordance with such exercise. On November 2, 2023, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 653,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On November 6, 2023, the Company issued 653,000 shares of common stock to the Exercising Stockholder in accordance with such exercise. On January 30, 2024, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 600,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On January 30, 2024, the Company issued 600,000 shares of common stock to the Exercising Stockholder in accordance with such exercise. On May 7, 2024, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 583,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On May 9, 2024, the Company issued 583,000 shares of common stock to the Exercising Stockholder in accordance with such exercise. On July 11, 2024, the Exercising Stockholder exercised their remaining Pre-Funded Warrants to purchase 240,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On July 11, 2024, the Company issued 240,000 shares of common stock to the Exercising Stockholder in accordance with such exercise. Common Stock Warrants and Pre-Funded Warrants As of September 30, 2025, there were 32,425,811 warrants and pre-funded warrants exercisable into common stock. The Company has issued both common stock warrants and pre-funded warrants. The pre-funded warrants are exercisable for shares of common stock at a nominal exercise price and were fully paid for at issuance, except for the nominal exercise amount. The pre-funded warrants are intended to be economically equivalent to the Company’s common stock. The following table shows the warrants to purchase common stock activity:
|  | Roll-Forward of Warrant Activity |
|  | Common Stock Warrants |  |  | Pre-Funded Warrants |  |  | Total |
Balance as of December 31, 2024 |  |  | 15,778,451 |  |  |  | 17,274,293 |  |  |  | 33,052,744 |
Issued |  |  | — |  |  |  | — |  |  |  | — |
Exercised |  |  | — |  |  |  | — |  |  |  | — |
Cancelled/Expired |  |  | (626,933 | ) |  |  | — |  |  |  | (626,933 | )
Balance as of September 30, 2025 |  |  | 15,151,518 |  |  |  | 17,274,293 |  |  |  | 32,425,811 |
The following table summarizes the outstanding warrants as of September 30, 2025:
Date Issued |  | Number of Shares of Common Stock Issuable |  |  | Exercise Price |  |  | Expiration Date
2023 Securities Purchase Agreement common warrants |  |  | 15,151,518 |  |  | $ | 3.00 |  |  | May 5, 2028
January 2021 pre-funded warrants |  |  | 509,117 |  |  | $ | 0.001 |  |  | December 31, 2030
2023 Securities Purchase Agreement pre-funded warrants |  |  | 3,844,153 |  |  | $ | 0.001 |  |  | N/A
2024 Securities Purchase Agreement pre-funded warrants |  |  | 7,989,516 |  |  | $ | 0.001 |  |  | N/A
2024 Underwritten Offering pre-funded warrants |  |  | 4,931,507 |  |  | $ | 0.001 |  |  | N/A
Balance as of September 30, 2025 |  |  | 32,425,811 |  |  |  |  |  |
Preferred Stock Warrants As of September 30, 2025, all warrants exercisable for shares of Series X 1 Preferred Stock expired in accordance with their original terms.
|  | Roll-Forward of Series X 1 Non-Voting Convertible Preferred Warrant Activity |
|  | Total |
Balance as of December 31, 2024 |  |  | 50,207.419 |
Issued |  |  | — |
Exercised |  |  | — |
Cancelled/Expired |  |  | (50,207.419 | )
Balance as of September 30, 2025 |  |  | — |

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