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Note 12 - Stockholders' Equity | 9 Months Ended
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Sep. 30, 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. Reverse Stock Split Effective May 30, 2024, the Company amended its Certificate of Incorporation to effect a 1-for-35 reverse split of its outstanding common stock. The Reverse Stock Split was approved by the Company’s stockholders on May 28, 2024. As a result of the Reverse Stock Split, every 35 shares of the Company’s pre-reverse split outstanding common stock were combined and reclassified into 1 share of common stock. Proportionate voting rights and other rights of common stockholders were not affected by the reverse stock split. Any fractional shares of common stock resulting from the Reverse Stock Split were rounded up to the nearest whole share. All stock options outstanding, common stock reserved for issuance under the Company’s equity incentive plans, common stock reserved for issuance under the Series B Preferred Stock and outstanding warrants were adjusted by dividing the number of affected shares of common stock by 35 and, as applicable, multiplying the exercise/conversion price by 35. Except as otherwise specifically noted, all share numbers, share prices, exercise prices and per share amounts have been adjusted, on a retroactive basis, to reflect this 1-for-35 reverse stock split. Preferred Stock There were two series of preferred stock of the Company outstanding during the three and nine months ended September 30, 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 the expiration of such term (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 September 30, 2024 and 2023, 131 and 6,150 shares of Series B Preferred Stock remained outstanding, respectively. As of September 30, 2024 and 2023, outstanding shares of Series B Preferred Stock were convertible into 527,275 shares of common stock (15,065 shares post-Reverse Stock Split) and 4,735,500 shares of common stock (135,300 shares post-Reverse Stock Split) at a conversion price of $0.25 ($8.75 post-Reverse Stock Split) and $1.30 ($45.50 post-Reverse Stock Split), 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 ($490.00 post-Reverse Stock Split) to $6.30 ($220.50 post-Reverse Stock Split), as a result of the 2022 Warrant Reprice Transaction, resulting in a $5.7 million deemed dividend.
| ● | In April 2023, from $6.30 ($220.50 post-Reverse Stock Split) to $1.30 ($45.50 post-Reverse Stock Split), as a result of the 2023 Private Placement, resulting in a $1.8 million deemed dividend.
| ● | In December 2023, from $1.30 ($45.50 post-Reverse Stock Split) to $0.25 ($8.75 post-Reverse Stock Split), 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 ($8.75 post-Reverse Stock Split) until all remaining Series B Preferred Stock has been converted. Series C Preferred Stock The Company 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 September 30, 2024 and 2023, zero and 1,097 shares of Series C Preferred Stock remained outstanding, respectively. As of September 30, 2023, outstanding shares of Series C Preferred Stock were convertible into 844,690 shares of common stock (24,134 shares post-Reverse Stock Split) at a conversion price of $1.30 ($45.50 post-Reverse Stock Split). In accordance with the Ratchet, the Series C Preferred Stock conversion price was reduced as follows (see also Notes 2, “Summary of Significant Accounting Policies” and 3, “Fair Value Measurements”):
| ● | In April 2023, from $6.30 ($220.50 post-Reverse Stock Split) to $1.30 ($45.50 post-Reverse Stock Split), as a result of the 2023 Private Placement, resulting in a $194 thousand deemed dividend.
| ● | In December 2023, from $1.30 ($45.50 post-Reverse Stock Split) to $0.25 ($8.75 post-Reverse Stock Split), as a result of the 2023 Warrant Reprice Transaction, resulting in a $0.5 million deemed dividend.
| ● | In March 2024, from $0.25 ($8.75 post-Reverse Stock Split) to $0.14 ($4.90 post-Reverse Stock Split), 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. 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 and nine months ended September 30, 2024 and 2023.

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