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Stockholders' Equity | 9 Months Ended
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Sep. 30, 2023
Stockholders' Equity |
Stockholders' Equity | Note 9 - Stockholders’ Equity Reverse Stock Split On March 3, 2023, the Board of Directors of the Company (the “Board”) unanimously adopted resolutions to approve and recommend stockholder approval of a form amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued and outstanding Common Stock within a range of between 5-for-1 and 20-for-1 (with our Board being authorized to determine the exact ratio), with such reverse stock split to be effected at such time and date before January 31, 2024, if at all, as determined by the Board in its sole discretion (such reverse stock split, the “Reverse Stock Split” and such amendment, the “Amendment”). On March 3, 2023, the holders of a majority in voting power of issued and outstanding shares of our Common Stock and issued and outstanding shares of our Class A Preferred Stock, par value $0.0001 (together, the “Majority Holders”) approved the Amendment by written consent in lieu of a meeting (the “Written Consent”). On March 15, 2023, the Board selected the 15-for-1 reverse stock split ratio. Pursuant to rules adopted by the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, a Schedule 14C information statement was filed with the SEC and provided to the stockholders of the Company. The Reverse Stock Split became effective on April 3, 2023, or twenty (20) days from the mailing of the information statement to the common stockholders of record. All share and per share information has been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated. Proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock and warrants outstanding at April 3, 2023, which resulted in a proportional decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock and warrants, and, in the case of stock options and warrants, a proportional increase in the exercise price of all such stock options and warrants. No fractional shares were issued in connection with the Reverse Stock Split and stockholders who would otherwise be entitled to a fraction of one share received a proportional cash payment. Registration Statements On October 23, 2020, the Company filed a shelf registration statement No. 333-249657 on Form S-3 (the “2020 S-3”), which was declared effective on December 4, 2020. Under the 2020 S-3, the Company may sell up to a total of $100.0 million of its securities. As of September 30, 2023, approximately $7.8 million of the 2020 S-3 remained available for sales of securities. On April 23, 2021, the Company filed a shelf registration statement No. 333-255476 on Form S-3 (the “2021 S-3”), which was declared effective on May 24, 2021. Under the 2021 S-3, the Company may sell up to a total of $200.0 million of its securities. As of September 30, 2023, there have been no sales of securities under the 2021 S-3. On October 30, 2023, the Company closed a registered direct offering pursuant to which it issued and sold approximately $4.4 million of securities under the 2021 S-3, see Note 13. As of the filing of this Quarterly Report on Form 10-Q, the Company is subject to the general instructions on Form S-3 known as the “baby shelf rules,” which limit the amount of securities we can sell under our registration statements. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources,” and “Risk Factors – We will require substantial additional funding which may not be available to us on acceptable terms, or at all. If we fail to raise the necessary additional capital, we may be unable to complete the development and commercialization of our product candidates or continue our development programs.” At-the-Market Offering In July 2018, the Company entered into an At-the-Market Issuance Sales Agreement (the “Mustang ATM”) with B. Riley Securities, Inc. (formerly B. Riley FBR, Inc.), Cantor Fitzgerald & Co., National Securities Corporation (now B. Riley FBR, Inc.), and Oppenheimer & Co. Inc. (each an “Agent” and collectively, the “Agents”), relating to the sale of shares of common stock pursuant to the 2020 S-3. Under the Mustang ATM, the Company pays the Agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock. On December 31, 2020, the Mustang ATM was amended to add H.C. Wainwright & Co., LLC as an Agent. On April 14, 2023, the Mustang ATM was amended to add the limitations imposed by General Instruction I.B.6 to Form S-3 and remove Oppenheimer & Co., Inc. as an Agent. During the nine months ended September 30, 2023, the Company issued approximately 52,000 shares of common stock at an average price of $3.15 for gross proceeds of $0.2 million under the Mustang ATM. In connection with these sales, the Company paid aggregate fees of approximately $3,000. During the nine months ended September 30, 2022, the Company issued approximately 525,000 shares of common stock at an average price of $12.61 per share for gross proceeds of $6.6 million under the Mustang ATM. In connection with these sales, the Company paid aggregate fees of approximately $0.1 million. ​ Pursuant to the Founders Agreement, the Company issued zero shares of common stock to Fortress for the nine months ended September 30, 2023 and recorded 1,297 shares issuable to Fortress under the Mustang ATM. Pursuant to the Founders Agreement, Mustang issued 13,131 shares of common stock to Fortress at a weighted average price of $13.56 per share for the nine months ended September 30, 2022, under the Mustang ATM. ​ Equity Incentive Plan The Company has in effect the 2016 Incentive Plan (the “Incentive Plan”). The Incentive Plan was adopted in 2016 by our stockholders and the compensation committee of the Company’s board of directors and is authorized to grant stock-based awards to directors, officers, employees and consultants. The plan initially authorized grants to issue up to 133,333 shares of authorized but unissued common stock, expires 10 years from adoption, and limits the term of each option to no more than 10 years from the date of grant. In June 2018, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 200,000 shares, for a total of 333,333 shares. In June 2021, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 200,000 shares, for a total of 533,333 shares. In June 2022, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 200,000 shares, for a total of 733,333 shares. As of September 30, 2023, 287,606 shares are available for issuance under the Incentive Plan. Stock Options The following table summarizes stock option activities for the nine months ended September 30, 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​ |  | Weighted Average
​ | ​ | ​ | ​ | ​ | ​ | ​ | Remaining
​ | ​ | ​ | ​ | Weighted Average | ​ | Contractual Life (in
​ | ​ | Stock Options | ​ | Exercise Price | ​ | years)
Outstanding at December 31, 2022 |  | 76,112 | ​ | $ | 59.09 |  | 4.31
Outstanding at September 30, 2023 |  | 76,112 | ​ | $ | 59.09 |  | 3.56
Options vested and exercisable at September 30, 2023 |  | 47,570 | ​ | $ | 59.09 |  | 3.56
​ As of September 30, 2023, the Company had no unrecognized stock-based compensation expense related to options. The Company accounts for forfeited awards as they occur as permitted. Restricted Stock The following table summarizes restricted stock award activities for the nine months ended September 30, 2023: ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted Average
​ | ​ | ​ | ​ | Grant Date Fair
​ | ​ | Number of Shares | ​ | Value
Nonvested at December 31, 2022 |  | 34,016 | ​ | $ | 22.20
Granted |  | 36,230 | ​ |  | 6.90
Vested | ​ | (5,540) | ​ | ​ | 46.20
Nonvested at September 30, 2023 |  | 64,706 | ​ | $ | 11.59
​ As of September 30, 2023, the Company had unrecognized stock-based compensation expense related to restricted stock of $0.4 million, which is expected to be recognized over the remaining weighted average vesting period of approximately 2.4 years. Restricted Stock Units Certain employees and consultants have been awarded restricted stock units with time-based vesting. The following table summarizes restricted stock units’ activities for the nine months ended September 30, 2023: ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted Average
​ | ​ | ​ | ​ | Grant Date Fair
​ | ​ | Number of Units | ​ | Value
Nonvested at December 31, 2022 |  | 165,912 | ​ | $ | 27.60
Granted |  | 29,732 | ​ |  | 5.13
Forfeited | ​ | (46,172) | ​ | ​ | 27.93
Vested |  | (43,372) | ​ |  | 32.82
Nonvested at September 30, 2023 |  | 106,100 | ​ | $ | 19.03
​ As of September 30, 2023, the Company had unrecognized stock-based compensation expense related to restricted stock units of approximately $0.7 million, which is expected to be recognized over the remaining weighted average vesting period of approximately 2.4 years. The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended September 30, | ​ | For the nine months ended September 30,
​ |  | 2023 |  | 2022 |  | 2023 |  | 2022
General and administrative | ​ | $ | 119 | ​ | $ | 194 | ​ | $ | 381 | ​ | $ | 549
Research and development (1) | ​ |  | (19) | ​ |  | 302 | ​ |  | (1) | ​ |  | 1,261
Total stock-based compensation expense | ​ | $ | 100 | ​ | $ | 496 | ​ | $ | 380 | ​ | $ | 1,810
​ (1) The credit in research and development stock-based compensation expense reflects the reversal of expense related to Restricted Stock Unit forfeitures during the three and nine months ended September 30, 2023. ​ Employee Stock Purchase Plan ​ Eligible employees can purchase the Company’s Common Stock at the end of a predetermined offering period at 85% of the lower of the fair market value at the beginning or end of the offering period. The Employee Stock Purchase Plan (“ESPP”) is compensatory and results in stock-based compensation expense. The ESPP was initially authorized in 2019 to sell up to 26,667 shares of authorized but unissued common stock. In June 2021, the Company’s stockholders approved an amendment to the ESPP to increase the number of authorized shares issuable by 40,000 shares. In addition, in June 2023, the Company’s stockholders approved an amendment to the ESPP to increase the number of authorized shares issuable thereunder by 400,000 for a total of 466,667 shares. ​ As of September 30, 2023, 86,578 shares have been purchased and 380,089 shares are available for future sale under the Company’s ESPP. Warrants A summary of warrant activities for the nine months ended September 30, 2023, is presented below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​ |  | Weighted Average
​ | ​ | ​ | ​ | ​ | ​ | ​ | Remaining
​ | ​ | ​ | ​ | Weighted Average | ​ | Contractual Life (in
​ | ​ | Warrants | ​ | Exercise Price | ​ | years)
Outstanding as of December 31, 2022 |  | 70,195 | ​ | $ | 22.80 |  | 8.29
Exercised |  | (93) | ​ |  | — |  | —
Outstanding as of September 30, 2023 |  | 70,102 | ​ | $ | 22.80 |  | 7.55
​ Upon the cashless exercise of warrants, the Company will issue new shares of common stock. In connection with the Term Loan, on March 4, 2022, the Company issued a warrant to the Lender to purchase 49,869 shares of the Company’s common stock with an exercise price of $12.03, see Note 8.

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