XML 31 R19.htm IDEA: XBRL DOCUMENT v3.24.3
Note 13 - Capital Stock
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Equity [Text Block]

Note 13. Capital Stock

 

As of September 30, 2024 and December 31, 2023, our amended and restated certificate of incorporation authorized us to issue 600,000,000 and 300,000,000 shares of Common Stock par value $0.0001 per share, respectively; and 1,000,000 shares of Preferred Stock, par value $0.0001 per share. As of September 30, 2024 and December 31, 2023, we had 6,857,170 and 6,421,084 shares of Common Stock issued and outstanding, respectively, and no shares of Preferred Stock issued or outstanding.

 

Our common stockholders are entitled to one vote per share and to notice of any stockholders’ meeting. Voting, dividend, and liquidation rights of the holders of Common Stock are subject to the prior rights of holders of all classes of stock and are qualified by the rights, powers, preferences, and privileges of the holders of Preferred Stock. No distributions shall be made with respect to Common Stock until all declared dividends to Preferred Stock have been paid or set aside for payment. Common Stock is not redeemable at the option of the holder.

 

Common Stock Warrants

 

We have issued the following outstanding warrants to purchase shares of Common Stock:

 

             

Number of Shares Issuable

 
             

September 30,

  

December 31,

 

Date Exercisable

 

Exercise Price

   

Expiration

   

Classification

 

2024

  

2023

 

December 2020

 $230.00   

December 2025

 (1) 

Equity

  120,375   120,375 

December 2020

 $230.00   

December 2025

 (2) 

Equity

  1,229   1,229 

June 2023

 $4.6014 (3) 

June 2028

 (4) 

Liability

  150,000   150,000 

June 2023

 $22.00   

June 2026

 (5) 

Liability

  2,500,000   2,500,000 

June 2023

 $30.00   

June 2030

 (6) 

Equity

  2,500,000   2,500,000 

Total shares

             5,271,604   5,271,604 

(1)

Represents 120,375 shares of Common Stock underlying warrants to purchase one-fortieth (1/40) of one share of Common Stock, issued during Tottenham’s initial public offering. We may redeem the outstanding warrants at $0.01 per warrant if the last sales price of our Common Stock equals or exceeds $330.00 per share for any 20 trading days within a 30-trading day period. As of September 30, 2024 and December 31, 2023, no warrants had been exercised.

 

(2)

Represents 1,229 shares of Common Stock underlying warrants to purchase one-fortieth (1/40) of one share of Common Stock, issued to the financial advisor and lead underwriter of Tottenham’s initial public offering upon their exercise of a unit purchase option in July 2021. As of September 30, 2024 and December 31, 2023, no warrants had been exercised.

 

(3)

As of  December 31, 2023, the exercise price was $16.00 per share. As of September 30, 2024, the exercise price was reduced to $4.6014 per share pursuant to the Third Amendment.

 

(4)

Represents 150,000 shares of Common Stock underlying the 2023 Avenue Warrant, issued pursuant to the Second Amendment (see Note 8). As of September 30, 2024 and December 31, 2023, the warrant had not been exercised.

 

(5)

Represents 2,500,000 shares of Common Stock underlying the Tranche A Warrants to purchase one share of Common Stock, issued in our June 2023 public equity offering. As of September 30, 2024 and December 31, 2023, no warrants had been exercised.

 

(6)

Represents 2,500,000 shares of Common Stock underlying the Tranche B Warrants to purchase one share of Common Stock, issued in our June 2023 public equity offering. As of September 30, 2024 and December 31, 2023, no warrants had been exercised.

 

Public Offerings

 

In June 2023, we sold 2,500,000 units at a sale price of $16.00 per unit pursuant to an underwriting agreement with Canaccord Genuity LLC (“Canaccord”). Each unit consisted of (i) one share of Common Stock, (ii) one warrant to purchase one share of Common Stock at an exercise price of $22.00 per share (the “Tranche A Warrants”), and (iii) one warrant to purchase one share of Common Stock at an exercise price of $30.00 per share (the “Tranche B Warrants”). The aggregate gross proceeds were $40.0 million, excluding the proceeds, if any, from the exercise of the Tranche A and Tranche B Warrants, and we paid underwriting discounts and commissions of $2.4 million and offering expenses of $0.2 million. The Tranche A Warrants were exercisable immediately and expire on the earlier of (i) sixty (60) days following the date of our public announcement that an NDA for CNM-Au8 has been accepted by the FDA, or (ii) June 16, 2026. The Tranche B Warrants were exercisable immediately and expire on the earlier of (i) sixty (60) days following the date of our public announcement that an NDA for CNM-Au8 has been approved by the FDA, or (ii) June 16, 2030. If we enter into or become party to a fundamental transaction (which generally includes a merger or acquisition; the sale, lease, license, or transfer of all or substantially all of our assets; tender or exchange offers; or a reclassification, reorganization, or recapitalization of our Common Stock), then (i) we or our successor shall purchase all outstanding Tranche A Warrants by paying the holders an amount equal to the Black-Scholes value of the unexercised Tranche A Warrants, and (ii) upon any subsequent exercise of a Tranche B Warrant, the holder shall be entitled to receive, at the option of the holder, the number of shares of common stock of the successor or of the Company, if it is the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of Common Stock for which the warrant is exercisable immediately prior to such fundamental transaction. The offering was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the Securities and Exchange Commission (“SEC”) on April 26, 2022, a related registration statement pursuant to Rule 462(b) (file number 333-272692), filed with the SEC and effective on June 16, 2023, and a related prospectus supplement. The total fair value of the Common Stock, Tranche A Warrants, and Tranche B Warrants sold in the offering exceeded the offering proceeds by $14.8 million, therefore pursuant to ASC 815, we recognized this amount as a loss on the initial issuance of equity in the condensed consolidated statements of operations and comprehensive loss during the year ended December 31, 2023. The underwriting discounts and commissions and offering expenses were allocated to the Common Stock, Tranche A Warrants, and Tranche B Warrants sold in the offering based on their relative fair values, with the amount allocated to the liability-classified Tranche A Warrants recorded as an expense in the condensed consolidated statements of operations and comprehensive loss, and the amounts allocated to the Common Stock and Tranche B Warrants as a reduction to their initial carrying values.

 

Common Stock Sales Agreement

 

In April 2022, we entered into the ATM Agreement, which we amended in December 2022. Canaccord acts as placement agent and we may offer and sell shares of Common Stock from time to time through Canaccord. The issuance and sale of Common Stock by us under the ATM Agreement is made pursuant to our registration statement on Form S-3 (file number 333-264299), which was declared effective by the SEC on April 26, 2022. On September 30, 2024, we notified Canaccord that we were suspending the prospectus supplement related to the ATM Agreement. We will not make any sales of our common stock pursuant to the ATM Agreement, unless and until a new prospectus supplement is filed. Other than the termination of the prospectus supplement related to the ATM Agreement, the ATM Agreement remains in full force and effect.

 

Pursuant to the ATM Agreement, Canaccord is not required to sell any specific number or dollar amount of Common Stock but will act as our placement agent to sell, on our behalf, all of the Common Stock requested by us to be sold, consistent with Canaccord’s normal trading and sales practices, on terms mutually agreed between Canaccord and us. Canaccord is entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from each sale of Common Stock, if any. During the three and nine months ended September 30, 2024, we sold 394,453 and 394,453 shares of Common Stock, respectively, generated gross proceeds of $2.1 million and $2.1 million, respectively, and paid commissions of $0.1 million and $0.1 million, respectively. During the three and nine months ended September 30, 2023, we sold 0 and 144,755 shares of Common Stock, respectively; generated gross proceeds of $0 and $4.5 million, respectively; and paid commissions of $0 and $0.1 million, respectively.

 

Common Stock Purchase Agreement

 

On March 3, 2023, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $25.0 million of shares of Common Stock at our sole discretion, from time to time over a 36-month period commencing on March 7, 2023. The issuance and sale of Common Stock under the Purchase Agreement was made pursuant to our registration statement on Form S-3 (file number 333-264299), which was declared effective by the SEC on April 26, 2022. On June 16, 2023, we suspended and terminated the prospectus supplement related to the offering with respect to the unsold shares of Common Stock issuable pursuant to the Purchase Agreement. We will not make any further sales of our securities pursuant to the Purchase Agreement, unless and until a new prospectus supplement is filed. Other than the termination of the prospectus supplement related to the offering with respect to future sales by us, the Purchase Agreement remains in full force and effect.

 

Pursuant to the Purchase Agreement, we may direct Lincoln Park to purchase up to 3,750 shares of Common Stock (a “Regular Purchase”), which may be increased up to (i) 5,000 shares if the closing price of our Common Stock is not below $20.00, (ii) 7,500 shares if the closing price of our Common Stock is not below $40.00, and (iii) 10,000 shares if the closing price of our Common Stock is not below $80.00. The purchase price for a Regular Purchase is based on the market price of our Common Stock at the time of sale. We may sell shares in excess of a Regular Purchase (an “Accelerated Purchase”) on any day on which we have directed Lincoln Park to purchase the maximum amount allowed for such Regular Purchase, up to the lesser of (i) 300% of the number of shares purchased pursuant to such prior business day Regular Purchase or (ii) 30% of the aggregate shares of our Common Stock traded on Nasdaq on the trading day immediately following the purchase date for such Regular Purchase (subject to certain volume and market price limitations). Additionally, we may sell shares in excess of an Accelerated Purchase (an “Additional Accelerated Purchase”) on any day on which we have directed Lincoln Park to purchase the maximum amount allowed for such Accelerated Purchase, up to the lesser of (i) 300% of the number of shares purchased pursuant to such prior business day Regular Purchase or (ii) 30% of the aggregate shares of our Common Stock traded on Nasdaq during a certain period on the date of the Additional Accelerated Purchase (subject to certain volume and market price limitations). The purchase price for Accelerated Purchases and Additional Accelerated Purchases is equal to 97% of the lesser of (i) the VWAP of our Common Stock on Nasdaq during certain periods on the date of the Accelerated Purchase or Additional Accelerated Purchase or (ii) the closing price of our Common Stock on the date of the Accelerate Purchase or Additional Accelerated Purchase.

 

On the date of the Purchase Agreement, we issued 16,633 shares of Common Stock (the “Initial Commitment Shares”) to Lincoln Park as an initial fee for its commitment under the Purchase Agreement. We recorded the fair value of the Initial Commitment Shares on the date of issuance in other income (expense), net. We may further issue up to 8,317 additional shares of Common Stock (the “Additional Commitment Shares,” and, together with the Initial Commitment Shares, the “Commitment Shares”) on a pro rata basis upon each purchase by Lincoln Park under the Purchase Agreement. Under applicable Nasdaq listing rules, the total number of shares of Common Stock that we may sell to Lincoln Park is limited to 765,506 shares (including the Commitment Shares), representing 19.99% of the outstanding shares of our Common Stock immediately prior to the execution of the Purchase Agreement, unless we (i) first obtain stockholder approval in accordance with applicable Nasdaq listing rules or (ii) the average price paid by Lincoln Park for all shares of Common Stock issued by us under the Purchase Agreement is equal to or greater than $24.8080. The Purchase Agreement prohibits us from directing Lincoln Park to purchase any shares of Common Stock that would result in Lincoln Park having beneficial ownership of greater than 4.99% of our outstanding Common Stock, which Lincoln Park may, in its sole discretion, increase up to 9.99% of our outstanding Common Stock by delivering written notice thereof to us, which shall not be effective until the 61st day after such written notice is delivered to us. We may terminate the Purchase Agreement at any time, for any reason and without any payment or liability to us, by giving Lincoln Park a termination notice with effect one business date after the notice has been received by Lincoln Park.

 

We evaluated the Purchase Agreement under ASC 815-40 Derivatives and Hedging—Contracts on an Entity's Own Equity as it represents the right to require Lincoln Park to purchase shares of Common Stock in the future, similar to a put option. We concluded it represents a freestanding derivative instrument that does not qualify for equity classification and therefore requires fair value accounting. We analyzed the terms of the contract and concluded the derivative instrument has no value as of September 30, 2024 and  December 31, 2023. During the nine months ended September 30, 2023, we sold 20,000 shares of Common Stock under the Purchase Agreement, issued 145 Additional Commitment Shares, and generated proceeds of $0.4 million. We did not effect any sales during any of the other periods presented herein.