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Note 11 - Common Stock Warrants

3 Months Ended

Mar. 31, 2024

Stockholders' Equity Note, Warrants or Rights Disclosure [Text Block]

NOTE 11. COMMON STOCK WARRANTS

See Notes 2, “Summary of Significant Accounting Policies”; 3, “Fair Value Measurements”; 9, “Financing Activities”; and 12, “Stockholders’ Equity” for certain defined terms below and additional discussion of financing activities and related accounting policies and fair value estimates.

March 2024 Warrant

In March 2024, the Company executed the First Amendment and Subsidiary Guarantee Consent as part of the 2024 Subsidiary Guarantee Termination with holders of the Secured Convertible Notes (see Note 10, “Convertible Notes”) in order to close the DERMAdoctor Divestiture (see additional discussion in Note 9, “Financing Activities” and Note 17, “Divestiture and Discontinued Operations”). In exchange for the consent of each holder, the option, at the holder’s election, to receive upon the closing of the DERMAdoctor sale either, a new common stock warrant (the “ March 2024 Warrant”), or a new unsecured convertible note (see additional discussion in Note 17, “Divestiture and Discontinued Operations”). One holder elected the option to receive a March2024 Warrant exercisable for 1,000,000 shares of common stock for $0.14 per share.

Upon issuance, the March 2024 Warrant was subject to stockholder approval prior to exercise. Stockholder approval had not occurred as of March 31, 2024. This warrant was recorded as a liability at fair value upon issuance and will continue to be recorded as a liability at fair value at each reporting date until stockholder approval occurs.

December 2023 Warrants

In December 2023, in conjunction with the 2023 Warrant Reprice Transaction, the Company issued new common stock purchase warrants (the “ December 2023 Warrants”) exercisable for 2,528,848 shares of common stock for $0.25 per share through June 21, 2029. Upon issuance, the December 2023 Warrants were subject to stockholder approval prior to exercise. Stockholder approval had not occurred as of March 31, 2024. These warrants were recorded as a liability at fair value upon issuance and will continue to be recorded as a liability at fair value at each reporting date until stockholder approval occurs.

May 2023 Warrants

In May 2023, in conjunction with the 2023 Private Placement, the Company issued the following new common stock purchase warrants (collectively, the “ May 2023 Warrants”):

	●	May 2023 Series B-1 Warrants exercisable for 2,538,464 shares of common stock for $1.30 per share through June 9, 2028 (“ May 2023 B-1 Warrants”); and
	●	May 2023 Series B-2 Warrants exercisable for 2,538,464 shares of common stock for $1.30 per share through June 9, 2025 (“ May 2023 B-2 Warrants”).

In December 2023, in conjunction with the 2023 Warrant Reprice Transaction, the Company amended certain May 2023 Warrants to reduce their exercise prices to $0.25. Immediately after amendment, the following May 2023 Warrants were exercised (while any unexercised May 2023 Warrants maintained an exercise price of $1.30):

	●	May 2023 B-1 Warrants exercisable for 634,616 shares of common stock; and
	●	May 2023 B-2 Warrants exercisable for 1,894,232 shares of common stock.

For the amendment in December 2023, the Company recognized a $0.2 million loss on modification of common stock warrants related to the May 2023 Warrants.

November 2022 Warrants

In November 2022, in conjunction with the 2022 Private Placement, the Company issued the following common stock purchase warrants (collectively, the “ November 2022 Warrants”):

	●	November 2022 Series A-1 Warrants exercisable for 515,876 shares of common stock for $6.30 per share through November 20, 2024 (“ November 2022 A-1 Warrants”); and
	●	November 2022 Series A-2 Warrants exercisable for 515,876 shares of common stock for $6.30 per share through May 20, 2024 (“ November 2022 A-2 Warrants”).

In May 2023, in conjunction with the 2023 Private Placement, the Company amended certain November 2022 Warrants to reduce their exercise prices from $6.30 to $1.50 as follows:

	●	November 2022 A-1 Warrants exercisable for 436,510 shares of common stock; and
	●	November 2022 A-2 Warrants exercisable for 436,510 shares of common stock.

For the amendment in May 2023, the Company recognized a $0.1 million loss on modification of common stock warrants related to the November 2022 Warrants.

September 2022 Warrants

In September 2022, in conjunction with the warrant reprice transaction (the “2022 Warrant Reprice Transaction”), the Company issued new common stock purchase warrants (the “ September 2022 Warrants”) exercisable for 327,860 shares of common stock for $6.30 per share through September 11, 2028.

In May 2023, in conjunction with the 2023 Private Placement, the Company amended certain September 2022 Warrants exercisable for 238,574 shares of common stock to reduce their exercise prices from $6.30 to $1.50.

For the amendment in May 2023, the Company recognized a $46 thousand loss on modification of common stock warrants related to the September 2022 Warrants.

November 2021 Warrants

In November 2021, in conjunction with a private placement transaction, the Company issued the new common stock purchase warrants (the “ November 2021 Warrants”) exercisable for 1,071,434 shares of common stock for $18.55 per share through March 9, 2023.

In September 2022, in conjunction with the 2022 Warrant Reprice Transaction, the Company amended all November 2021 Warrants to reduce their exercise prices from $18.55 to $6.30 and extend their termination date to September 11, 2028. Immediately after amendment, November 2021 Warrants were exercised for 267,860 shares of common stock.

In May 2023, in conjunction with the 2023 Private Placement, the Company amended certain November 2021 Warrants exercisable for 535,716 shares of common stock to reduce their exercise prices from $6.30 to $1.50.

For the amendments in September 2022 and May 2023, the Company recognized a loss on modification of common stock warrants related to the November 2021 Warrants of $1.5 million and $0.1 million, respectively.

July 2020 Warrants

In July 2020, in conjunction with a private placement transaction, the Company issued the new common stock purchase warrants (the “ July 2020 Warrants”) exercisable for 197,105 shares of common stock for $57.75 per share through January 22, 2026.

In September 2022, in conjunction with the 2022 Warrant Reprice Transaction, the Company amended certain July 2020 Warrants exercisable for 137,145 shares of common stock to reduce their exercise prices from $57.75 to $6.30. Immediately after amendment, July 2020 Warrants were exercised for 60,000 shares of common stock.

In May 2023, in conjunction with the 2023 Private Placement, the Company amended certain July 2020 Warrants exercisable for 77,145 shares of common stock to reduce their exercise prices from $6.30 to $1.50.

For the amendments in September 2022 and May 2023, the Company recognized a loss on modification of common stock warrants related to the July 2020 Warrants of $0.4 million and $14 thousand, respectively.

Summary of Common Stock Warrant Activity and Outstanding

Activity related to common stock warrants outstanding during the three months ended March 31, 2024 and 2023 were as follows:

	Warrants		Weighted- Average Exercise Price
Outstanding at December 31, 2022		2,305,519	$	7.70
Warrants granted		—		—
Warrants exercised		—		—
Warrants expired		—		—
Outstanding at March 31, 2023		2,305,519		7.70

Outstanding at December 31, 2023		7,382,447	$	1.82
Warrants granted		1,000,000		0.14
Warrants exercised		—		—
Warrants expired		—		—
Outstanding at March 31, 2024		8,382,447		1.60

Common stock warrants outstanding as of March 31, 2024 were as follows:

Series	Exercise Price		Expiration Date	Warrants
2019 Ladenburg Warrants	$	34.65	August 8, 2024		4,799
July 2020 Warrants	$	57.75	January 22, 2026		59,960
July 2020 Warrants	$	1.50	January 22, 2026		77,145
TLF Warrants	$	23.51	January 15, 2026		429
November 2021 Warrants	$	6.30	September 11, 2028		267,858
November 2021 Warrants	$	1.50	September 11, 2028		535,716
September 2022 Warrants	$	6.30	September 11, 2028		89,286
September 2022 Warrants	$	1.50	September 11, 2028		238,574
November 2022 A-1 Warrants	$	6.30	November 20, 2028		79,366
November 2022 A-1 Warrants	$	1.50	November 20, 2028		436,510
November 2022 A-2 Warrants	$	6.30	May 20, 2024		79,366
November 2022 A-2 Warrants	$	1.50	May 20, 2024		436,510
May 2023 B-1 Warrants	$	1.30	June 9, 2028		1,903,848
May 2023 B-2 Warrants	$	1.30	June 9, 2025		644,232
December 2023 Warrants	$	0.25	June 21, 2029		2,528,848
March 2024 Warrant	$	0.14	To be determined ()*		1,000,000
Outstanding at March 31, 2024					8,382,447

*The March 2024 Warrant will be initially exercisable on the later of (A) the six (6) month anniversary of the date of issuance or (B) the date immediately following the date on which Company stockholders approve the exercise of the March 2024 Warrant into shares of Common Stock and have a term of exercise of five (5) years from the date that the March 2024 Warrant becomes exercisable.

Summary of Common Stock Warrant Liabilities

The following is a reconciliation of the beginning and ending balances for warrant liabilities measured at fair value on a recurring basis (in thousands). See additional information per Note 3, “Fair Value Measurements”, subheading “Black Scholes Valuation Model Assumptions.”

Warrant liabilities as of December 31, 2023		334
Decrease in fair value of December 2023 Warrants liability during period		(173	)
Fair value of March 2024 Warrant upon issuance		92
Decrease in fair value of March 2024 Warrant liability after issuance		(21	)
Warrant liabilities as of March 31, 2024	$	232