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Stockholders’ Equity
 9 Months Ended
Sep. 30, 2025
Stockholders’ Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 9 – STOCKHOLDERS’ EQUITY

 

Registered Direct Offerings

 

During June 2025, the Company entered into securities purchase agreements with investors whereby the Company sold 3,000,000 shares of the common stock in a registered direct offering in exchange for gross proceeds of $18.9 million (net proceeds of approximately $17.4 million).

 

During September 2024, the Company entered into securities purchase agreements with investors whereby the Company sold 2,341,260 shares of the Company’s common stock and warrants to purchase an additional 2,341,260 shares of the Company’s common stock in a registered direct offering in exchange for gross proceeds of $13.0 million (net proceeds of approximately $12.0 million). Directors and officers that participated in the offering paid a combined offering price of $6.50 per share and warrant, and other investors paid a combined offering price of $5.50 per share and warrant. The warrants are exercisable until March 16, 2030 and the exercise price is $6.40. The Company determined the warrants were equity classified. The fair value of the warrants was approximately $9.1 million and was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 3.41% based on the applicable US Treasury bill rate (2) expected life of 5.5 years, (3) expected volatility of approximately 92% based on the trading history of the Company, and (4) zero expected dividends.

 

During April 2024, the Company entered into a securities purchase agreement with an investor whereby the Company sold 986,000 shares of the Company’s common stock and warrants to purchase an additional 986,000 shares of the Company’s common stock in a registered direct offering in exchange for gross proceeds of approximately $9.7 million (net proceeds of approximately $8.9 million). The exercise price of the warrants is $9.84 and the warrants are exercisable until April 29, 2026. The Company determined that the warrants were equity classified. The fair value of the warrants was approximately $5.8 million and was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 4.97% based on the applicable US Treasury bill rate (2) expected life of 2.0 years, (3) expected volatility of approximately 77% based on the trading history of the Company, and (4) zero expected dividends.

 

During April 2024, the Company entered into securities purchase agreements with investors whereby the Company sold 571,592 shares of the Company’s common stock and warrants to purchase an additional 571,592 shares of the Company’s common stock in a registered direct offering in exchange for gross proceeds of approximately $4.8 million (net proceeds of approximately $4.5 million). Directors and officers that participated in the offering paid a combined offering price of $8.445 per share and warrant, and other investors paid $8.32 per share and warrant. The exercise price of the warrants is $9.152, and the warrants are exercisable for two years from the issuance dates. The Company determined the warrants were equity classified. The fair value of the warrants was approximately $3.0 million and was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 4.89% based on the applicable US Treasury bill rate (2) expected life of 2.0 years, (3) expected volatility of approximately 78% based on the trading history of the Company, and (4) zero expected dividends.

Common Stock – At the Market Offering

 

During March 2021, the Company entered into a sales agreement (“Sales Agreement”) with BTIG, LLC (“BTIG”), as sales agent, to establish an At-The-Market (“ATM”) offering program of up to $45 million of common stock, subject to certain limitations on the amount of common stock that may be offered and sold by the Company set forth in the sales agreement. During August 2023, the Company and BTIG entered into Amendment No. 1 to the Sales Agreement. The Company is required to pay BTIG a commission of 3% of the gross proceeds from the sale of shares. During the nine months ended September 30, 2024, the Company issued and sold 198,364 shares of common stock at an average price of $10.56 per share under the ATM program. The aggregate net proceeds were approximately $2.0 million after commission expenses.

 

During August 2024, the Company entered into an amended and restated at-the-market sales agreement with RBC Capital Markets LLC and BTIG (together, the “Sales Agents”) relating to the offer and sale of shares of our common stock with an aggregate offering price of up to $75.0 million. This amended and restated at-the-market sales agreement replaced the Sales Agreement entered into with BTIG in March 2021, as amended in August 2023. The Company is required to pay the Sales Agents a commission of 3% of the gross proceeds from the sale of shares. During the nine months ended September 30, 2024, the Company issued and sold 48,762 shares of common stock at an average price of $6.96 per share under the ATM program. The aggregate net proceeds were approximately $0.3 million after commission expenses. During the nine months ended September 30, 2025, the Company issued and sold 1,304,707 shares of common stock at an average price of $8.01 per share under the ATM program. The aggregate net proceeds were approximately $10.1 million after commission expenses. At September 30, 2025, the Company had $64.5 million of common stock available under the amended and restated at-the-market agreement.

 

During July 2023, the Company sold 75,697 shares of its common stock at an average price of $10.56 per share under the ATM program. The aggregate net proceeds were approximately $775,000 after offering expenses. These shares were inadvertently sold under a registration statement filed with the SEC that had in fact expired prior to the time the shares were sold.   The Company reclassified 75,697 shares, with an aggregate purchase price of $799,000 of its common stock as temporary equity presented outside stockholders’ equity as a result of potential rescission rights. As of September 30, 2024, the rescission rights for these shares lapsed and the shares were reclassified to permanent equity.

 

Stock options

 

During August 2025, the Company modified stock option awards held by its former Chief Executive Officer to extend the post-termination exercise period and provide that unvested stock options shall continue to vest pursuant to the severance agreement, which will result in additional stock-based compensation expense of up to $2.4 million to be expensed over the remaining original vesting term, if any, of the stock option awards.

 

The following table summarizes stock option activity during the nine months ended September 30, 2025:

 

(in thousands, except share and per share amounts)  Number of
Shares		   Weighted-
average
Exercise
Price		   Weighted-
average
Remaining
Contractual
Term
(years)		   Aggregate
Intrinsic
Value		 
Outstanding at January 1, 2025   7,203,307   $8.29    6.49   $1,218 
Options granted   100,000   $7.88    10.0    
-
 
Options exercised   
-
   $
-
    -    
-
 
Options cancelled   (107,965)  $7.50    -    
-
 
Outstanding at September 30, 2025   7,195,342   $8.29    5.80   $
-
 
Exercisable at September 30, 2025   5,379,014   $8.80    4.81   $
-
 

 

During the three and nine months ended September 30, 2025, the Company recognized stock-based compensation expense of approximately $3.0 million and $6.6 million, respectively, related to the vesting of stock options. During the three and nine months ended September 30, 2024, the Company recognized stock-based compensation expense of approximately $1.7 million and $5.8 million, respectively, related to the vesting of stock options. As of September 30, 2025, there was approximately $8.0 million of total unrecognized compensation cost related to non-vested stock options which is expected to be recognized over a weighted-average period of 2.63 years.

Warrants

 

The Company issued warrants to the Company’s lenders upon obtaining a loan in June 2021. The warrants have a 10-year term and an exercise price of $14.05. At September 30, 2025, 45,386 of these warrants are outstanding and the intrinsic value of these warrants is $0.

 

During April 2024, the Company issued 1,557,592 warrants to investors in connection with the sale of common stock. At September 30, 2025, 1,557,592 of these warrants are outstanding and are exercisable for cash at a weighted average price of $9.59 per share. The intrinsic value of these warrants was $0 as of September 30, 2025.

 

During September 2024, the Company issued 2,341,260 warrants to investors in connection with the sale of common stock. At September 30, 2025, 2,341,160 of these warrants are outstanding and are exercisable for cash at a weighted average price of $6.40 per share. The intrinsic value of these warrants was $0 as of September 30, 2025.

 

Stock-based Compensation by Class of Expense

 

The following summarizes the components of stock-based compensation expense in the consolidated statements of operations for the nine months ended September 30, 2025 and 2024 respectively:

 

(in thousands)  Three Months
Ended
September 30,
2025		   Three Months
Ended
September 30,
2024		   Nine Months
Ended
September 30,
2025		   Nine Months
Ended
September 30,
2024		 
Research and development  $1,363   $677   $2,820   $2,375 
General and administrative   1,621    1,042    3,774    3,473 
Total  $2,984   $1,719   $6,594   $5,848 

 

Shareholder Rights Agreement

 

On December 30, 2020, the Board of Directors (the “Board”) of the Company approved and adopted a Rights Agreement, dated as of December 30, 2020, by and between the Company and VStock Transfer, LLC, as rights agent, pursuant to which the Board declared a dividend of one preferred share purchase right (each, a “Right”) for each outstanding share of the Company’s common stock held by stockholders as of the close of business on January 11, 2021. When exercisable, each right initially would represent the right to purchase from the Company one one-thousandth of a share of a newly designated series of preferred stock, Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company, at an exercise price of $300.00 per one one-thousandth of a Series A Junior Participating Preferred Share, subject to adjustment. Subject to various exceptions, the Rights become exercisable in the event any person (excluding certain exempted or grandfathered persons) becomes the beneficial owner of twenty percent or more of the Company’s common stock without the approval of the Board. The Rights Agreement was amended in 2021, 2022, 2023 and 2024 to extend the expiration date and shall expire on December 30, 2025.