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Note 12 - Stockholders' Equity
 3 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Equity [Text Block]

NOTE 12. STOCKHOLDERS’ EQUITY

 

Authorized Share Capital

 

Under the Company’s Amended and Restated Certificate of Incorporation, as amended, the Company is authorized to issue up to 150,000,000 shares of common stock and up to 5,000,000 shares of preferred stock with rights and preferences as may be approved by the Company’s Board of Directors.

 

Preferred Stock

 

There were two series of preferred stock of the Company outstanding during the three months ended March 31, 2024 and 2023 – the Series B Non-Voting Convertible Preferred Stock (“Series B Preferred Stock”) and the Series C Non-Voting Convertible Preferred Stock (“Series C Preferred Stock”) (and combined, the “Preferred Stock”). The rights and preferences of the Series B Preferred Stock and Series C Preferred Stock are nearly identical. The Preferred Stock does not have any preemptive rights or a preference upon any liquidation, dissolution or winding-up of the Company. Each share of Preferred Stock is convertible into $1,000 of common stock at the conversion price per share applicable at the time of conversion. Until its expiration (as described in more detail below), the Preferred Stock had anti-dilution protection (the “Ratchet”) in the event that the Company sold or granted any of its common stock or any other securities, subject to certain limited exceptions, that would entitle the holder thereof to acquire common stock at an effective price per share that is lower than the then applicable conversion price of the Preferred Stock.

 

Series B Preferred Stock

 

The Company issued 15,000 shares of Series B Preferred Stock in November 2021 in connection with a private placement transaction. As of March 31, 2024 and 2023, 904 and 11,620 shares of Series B Preferred Stock remained outstanding, respectively. As of March 31, 2024 and 2023, outstanding shares of Series B Preferred Stock were convertible into 3,616,000 and 1,847,580 shares of common stock at a conversion price of $0.25 and $6.30, respectively.

 

In accordance with the Ratchet, the Series B Preferred Stock conversion price was reduced as follows (see also Notes 2, “Summary of Significant Accounting Policies” and 3, “Fair Value Measurements”):

 

 

●

In September 2022, from $14.00 to $6.30, as a result of the 2022 Warrant Reprice Transaction, resulting in a $5.7 million deemed dividend.

 

●

In April 2023, from $6.30 to $1.30, as a result of the 2023 Private Placement, resulting in a $1.8 million deemed dividend.

 

●

In December 2023, from $1.30 to $0.25, as a result of the 2023 Warrant Reprice Transaction, resulting in a $4.5 million deemed dividend.

 

On January 29, 2024, the Ratchet of the Series B Preferred Stock expired with no further impact because greater than 75% of the originally issued 15,000 Series B Preferred Stock had been converted into common stock. The Series B Preferred Stock conversion price will remain at $0.25 until all remaining Series B Preferred Stock has been converted.

 

Series C Preferred Stock

 

We issued 3,250 shares of Series C Preferred Stock in November 2022 in connection with the 2022 Private Placement (see Note 9, “Financing Activities”). As of March 31, 2024 and 2023, 727 and 2,250 shares of Series C Preferred Stock remained outstanding, respectively. As of March 31, 2024 and 2023, outstanding shares of Series C Preferred Stock were convertible into 5,192,961 and 357,750 shares of common stock at a conversion price of $0.14 and $6.30, respectively.

 

In accordance with the Ratchet, the Series C Preferred Stock conversion price was reduced as follows during the three months ended March 31, 2024 and 2023 (see also Notes 2, “Summary of Significant Accounting Policies” and 3, “Fair Value Measurements”):

 

 

●

In April 2023, from $6.30 to $1.30, as a result of the 2023 Private Placement, resulting in a $194 thousand deemed dividend.

 

●

In December 2023, from $1.30 to $0.25, as a result of the 2023 Warrant Reprice Transaction, resulting in a $0.5 million deemed dividend.

 ●In March 2024, from $0.25 to $0.14, as a result of the 2024 First Amendment and the Subsidiary Guarantee Consent, resulting in a $0.4 million deemed dividend.

 

On March 27, 2024, the Ratchet of the Series C Preferred Stock expired with no further impact because greater than 75% of the originally issued 3,250 Series C Preferred Stock had been converted into common stock. The Series C Preferred Stock conversion price will remain at $0.14 until all remaining Series C Preferred Stock has been converted.

 

Common Stock

 

See Note 9, “Financing Activities” and Note 11, “Common Stock Warrants” for a description of common stock and common stock warrant-related transactions during the three months ended March 31, 2024 and 2023.