XML 39 R19.htm IDEA: XBRL DOCUMENT v3.25.1
Note 11 - Equity
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Equity [Text Block]

11. Equity

 

Common stock

 

Effective at 6:00 p.m. Eastern Time on  April 11, 2024, the Company effected the Reverse Stock Split pursuant to a certificate of amendment to the Company's Certificate of Incorporation, as amended, filed with the Secretary of State of the State of Delaware on  April 11, 2024. As a result of the Reverse Stock Split, every six shares of common stock issued and outstanding or held by the Company in treasury stock were combined and reclassified into one share of common stock. No fractional shares were issued as a result of the Reverse Stock Split. Stockholders who were otherwise entitled to receive a fractional share received an additional fraction of a share of common stock to round up to the next whole share. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder's percentage ownership interest or any stockholder's proportionate voting power, except for immaterial adjustments that resulted from the treatment of fractional shares. The Reverse Stock Split did not change the number of authorized shares of common stock or the par value per share of the common stock.

 

The Reverse Stock Split reduced the number of issued and outstanding shares of common stock from 81,571,864 shares to 13,660,598 shares and reduced the issued shares of common stock held by the Company in treasury stock from 4,611,569 shares to 768,595 shares.

 

The common stock began trading on a reverse split-adjusted basis at the opening of trading on The Nasdaq Capital Market on  April 12, 2024, under the same symbol (FLNT) with a new CUSIP number (34380C 201).

 

As of the effective time of the Reverse Stock Split, the number of shares available for issuance under the Company's equity incentive plans and the number of shares issuable pursuant to each outstanding equity award immediately prior to the Reverse Stock Split were reduced proportionately at the Reverse Stock Split Ratio, and the exercise price for each outstanding stock option was increased in inverse proportion to the Reverse Stock Split Ratio.

 

As of December 31, 2024 and 2023, the number of issued shares of common stock were 20,791,431 and 14,384,936, respectively, which included shares of treasury stock of 768,595 and 768,595, respectively.

 

For the year ended  December 31, 2024, the increase in the number of issued shares of common stock was the result of the exercise of 3,602,976 shares related to the warrants, as described below, 2,483,586 shares related to the direct offering, as described below, and 319,933 shares of common stock issued upon vesting of RSUs, in which no shares of common stock were withheld to cover statutory taxes upon such vesting.

 

For the year ended December 31, 2023, the increase in the number of issued shares of common stock was the result of the exercise of 255,406 shares of common stock issued upon vesting of RSUs, in which 51,903 shares of common stock were withheld to cover statutory taxes upon such vesting, which are reflected as additions to treasury stock in the consolidated statements of changes in shareholders' equity.

 

Direct Offering:

 

On November 29, 2024, the Company entered into securities purchase agreements (the "Registered Direct Purchase Agreements") with certain pre-existing institutional investors (the "Registered Direct Investors"), pursuant to which the Company agreed to sell to such investors an aggregate of 2,483,586 shares of common stock of the Company, par value $0.0005 per share (the "Registered Direct Offering"). The offering by the Company was made pursuant to its shelf registration statement on Form S-3, which was effective September 9, 2024.

 

In connection with the Registered Direct Offering, the Company entered into a placement agency agreement (the "Placement Agency Agreement") with ThinkEquity LLC, as the placement agent (the "Placement Agent"), for the sale of 1,943,676 shares of common stock under the Registered Direct Investor. Pursuant to the Placement Agency Agreement, the Company, among other things, agreed to pay the Placement Agent a cash fee equal to 4% of the gross proceeds raised in the Registered Direct Offering by an investor making an investment of $4,500.

 

On December 2, 2024, the Registered Direct Offering was closed and the gross proceeds totaled $5,750, before deducting offering expenses payable by the Company of $562 that includes the Placement Agent fee. The Company intends to use the net proceeds from the Registered Direct Offering for general corporate purposes, which may include capital expenditures, working capital and general and administrative expenses.

 

Pre-Funded Warrants

 

On  May 13, 2024, the Company entered into securities purchase agreements (the "May Purchase Agreements") with certain accredited investors (the "May Purchasers"), all of whom were related parties, pursuant to which the Company sold pre-funded warrants (the "May Pre-Funded Warrants") to purchase up to 2,955,084 shares of the Company's common stock, at a purchase price of $3.384 per Pre-Funded Warrant (the "May Private Placement"). The May Purchasers included three officers and a principal stockholder of the Company. No underwriting discounts or commissions were paid with respect to the May Private Placement.

 

The aggregate gross proceeds for the May Private Placement totaled $10,000, before deducting offering expenses payable by the Company of $100. The May Pre-Funded Warrants, which terminated when exercised in full, had an exercise price of $0.0005 per share of common stock and became immediately exercisable upon stockholder approval of the Private Placement. In connection with the Private Placement, the Company entered into Support Agreements with three of the May Purchasers, the Company's largest stockholders, who agreed to vote all of their beneficially owned shares of the Company's common stock in favor of the corporate actions required for stockholder approval. Stockholder approval of the Private Placement was obtained on  July 2, 2024, at a special meeting of the Company's stockholders. 

 

On November 29, 2024, the Company entered into securities purchase agreements (the "December Purchase Agreements") with accredited investors (the "December Purchasers"), all of whom were related parties, pursuant to which the Company agreed to sell to the December Purchasers unregistered pre-funded warrants (the "December Pre-Funded Warrants") to purchase up to 1,187,802 shares of Company’s common stock, at a purchase price of $2.3147 per December Pre-Funded Warrant. The December Purchasers consisted of three officers and a principal stockholder of the Company. No underwriting discounts or commissions were paid with respect to the Private Placement.

 

On December 2, 2024, the December Pre-Funded Warrants closed and the aggregate gross proceeds totaled $2,750, before deducting offering expenses payable by the Company of $22. The principal stockholder exercised his warrant on December 9, 2024. The December Pre-Funded Warrants purchased by the three officers of the Company will be immediately exercisable after stockholder approval of the December Purchase Agreement and will terminate when exercised in full.

 

The Company is obligated to use its reasonable best efforts to obtain such stockholder approval of the exercise of the officers' December Pre-Funded Warrants at the 2025 Annual Meeting of Stockholders. The Company entered into Support Agreements with the Registered Direct Investors and the December Purchasers. Pursuant to Support Agreements entered into by the Company with the Registered Direct Investors and the December Purchasers, the Registered Direct Investors, and the December Purchasers agreed to vote their shares of the Company's common stock beneficially owned by them in favor of certain actions subject to Stockholder Approval (as defined in the Support Agreements) at any meeting of stockholders of the Company.

 

As of  December 31, 2024, all of the May Pre-Funded Warrants and 647,892 of the December Pre-Funded Warrants had been exercised. The issuance of the shares upon exercise of the Pre-Funded Warrants was made in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

 

The settlement of the May Pre-Funded Warrants was reflected in the Company's stockholder's equity within common stock and additional paid-in-capital as of  December 31, 2024. The issuance of the December Pre-Funded Warrants was reflected in the Company’s stockholder's equity within additional paid-in-capital, with those exercised adjusted for within common stock. In accordance with ASC 815-40, Derivatives and Hedging, a contract is classified as an equity agreement if it is both indexed to its own stock and classified in stockholder's equity in its financial position. Both the May and December Pre-Funded Warrants met the requirements of being classified as equity because (i) they had a fixed share limit and the Company had sufficient authorized and unissued shares, (ii) they required physical or net share settlement, and (iii) no cash payments or settlement top-off was required by the Company.

 

Treasury stock

 

As of  December 31, 2024 and 2023, the Company held 768,595 and 768,595 shares in treasury, with a cost of $11,407 and $11,407, respectively.

 

The Company's share-based incentive plans allow employees the option to either make cash payment or forfeit shares of common stock upon vesting to satisfy federal and state statutory tax withholding obligations associated with equity awards. The forfeited shares of common stock may be taken into treasury stock by the Company or sold on the open market. 

 

For the year ended December 31, 2024 and 2023, 0 and 51,903 shares, respectively, were withheld to cover withholding taxes owed by certain employees, all of which were taken into treasury stock. 

 

Preferred stock

 

As of December 31, 2024 and 2023, the Company had 10 million shares of blank-check preferred stock with par value of $0.0001 per share authorized. No shares of preferred stock have been issued or are outstanding.