XML 29 R18.htm IDEA: XBRL DOCUMENT v3.23.2
WARRANTS
 6 Months Ended
Jun. 30, 2023
WARRANTS [Abstract]  
WARRANTS
12)
WARRANTS



On March 6, 2022, the Company entered into a securities purchase agreement with an investor for a private placement of equity (the “March PIPE”), pursuant to which, the Company issued 275,000 shares of common stock, pre-funded warrants to purchase approximately 68,000 shares of common stock (the “Pre-Funded Warrants”) and warrants to purchase approximately 343,000 shares of common stock (the “Common Warrants”) for an aggregate gross purchase price of approximately $12.0 million. The transaction closed on March 9, 2022.

 

Each Pre-Funded Warrant had an exercise price of $0.10 per share of common stock, was immediately exercisable, could be exercised at any time, had no expiration date and was subject to customary adjustments. Each Common Warrant has an exercise price of $38.20 per share, became exercisable six months following the closing of the transaction, expires five-and-one-half years from the date of issuance and is subject to customary adjustments. The Common Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 4.99% immediately after exercise thereof, subject to increase to 9.99% at the option of the holder.

   

 The Common Warrants and Pre-Funded Warrants were accounted for as liabilities under ASC 815-40, as these warrants provide for a cashless settlement provision that does not meet the requirements of the indexation guidance under ASC 815-40.  These warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the statement of operations.  (See Note 4 for more information related to changes in fair value.) Upon exercise of the Common Warrants and Pre-Funded Warrants, the fair value on the exercise date is reclassified from warrant liabilities to equity.

The fair values of the Common Warrants and the Pre-Funded Warrants at the issuance date totaled $12.6 million in the aggregate, which was $0.6 million more than the Subscription Amount. The excess $0.6 million represents an inducement to the investor to enter into the transaction and was recorded in warrant liabilities expense in the accompanying condensed consolidated statement of operations for the six months ended June 30, 2022.



On July 12, 2022, the investor exercised its 68,000 Pre-Funded Warrants at an exercise price of $0.10 per share for an aggregate exercise price of approximately $7,000, in cash.  The Company issued 68,000 shares of common stock to the investor on July 14, 2022 upon receipt of the cash proceeds and reclassified approximately $0.7 million of the fair value of the exercised warrants as of the exercise date from warrant liabilities to equity.  Subsequent to the exercise, no Pre-Funded Warrants remained outstanding.


The Company incurred fees of approximately $1.0 million related to the transaction, which were allocated to the fair value of the Common Warrants and the Pre-Funded Warrants and recorded in other expense, net on the accompanying condensed consolidated statement of operations for the six months ended June 30, 2022.


As of June 30, 2023, the Company has the following warrants outstanding that were issued in connection with private placement discussed above as well as a private placement with other investors from November 2022:

Private Placement
  
Warrants
Outstanding
(in thousands)
    
Exercise
Price
  
Date
Exerciseable
  
Expiration
Date
  
Classification
March 2022 PIPE
    
343
    
$
38.20
  
September 9, 2022
  
September 9, 2027
  
Liability
November 2022 PIPE
    
4,370
    
$
3.28
  
June 2, 2023
  
June 2, 2028
  
Equity
     
4,713
          
 
  
 
  
            


As of June 30, 2023, the weighted average remaining contractual life of the warrants outstanding was 4.88 years and the weighted average exercise price was $5.82.



See Note 16 for warrants issued subsequent to June 30, 2023.