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STOCKHOLDERS’ EQUITY
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 4 – STOCKHOLDERS’ EQUITY

 

Common stock

 

The common stock confers upon the holders the right to receive notice to participate and vote in general meetings of the Company, and the right to receive dividends, if declared, and to participate in the distribution of the surplus assets and funds of the Company in the event of liquidation, dissolution or winding up of the Company.

 

Reverse stock split

 

On February 8, 2023, the Company effected a reverse stock split of its common stock at a ratio of 1 post-split share for every 20 pre-split shares. The Company’s common stock begin trading on a split-adjusted basis when the market opened on February 9, 2023 (the “Reverse Stock Split”).

 

At the effective time of the Reverse Stock Split, every 20 shares of the Company’s issued and outstanding common stock were converted automatically into one issued and outstanding share of common stock without any change in the par value per share. Stockholders holding shares through a brokerage account had their shares automatically adjusted to reflect the 1-for-20 Reverse Stock Split. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the Reverse Stock Split resulted in a stockholder owning a fractional share. Any fractional share of a stockholder resulting from the Reverse Stock Split was rounded up to the nearest whole number of shares. Proportional adjustments were made to the number of shares of the Company’s common stock issuable upon exercise or conversion of the Company’s equity awards, warrants and other convertible securities, as well as the applicable exercise or conversion price thereof. On February 16, 2023, the Company rounded up fractional shares to its nearest whole number of 15,726 shares.

 

All references in this Report to number of shares, price per share and weighted average number of shares of common stock outstanding prior to the Reverse Stock Split have been adjusted to reflect the Reverse Stock Split on a retroactive basis, unless otherwise noted.

 

Issuance of common stock for cash through private placement

 

On August 30, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor for the issuance and sale in a private placement (the “Private Placement”) of 180,000 shares (the “Common Shares”) of common stock, par value $0.001 per share (the “Common Stock”), pre-funded warrants (“Pre-Funded Warrants”) to purchase up to 2,726,977 shares of common stock, with an exercise price of $0.0001 per share, A-1 Warrants (the “A-1 Warrants”) to purchase up to 2,906,977 shares of Common Stock, with an exercise price of $1.47 per share, and A-2 Warrants (the “A-2 Warrants” and together with the A-1 Warrants, the “Warrants” ) to purchase up to 2,906,977 shares of Common Stock with an exercise price of $1.47 per share. The A-1 Warrants are exercisable immediately upon issuance and expire March 1, 2029. The A-2 Warrants are exercisable immediately upon issuance and expire October 1, 2024. The combined purchase price for one Common Share and the accompanying Warrants was $1.72, and the combined purchase price for one Pre-Funded Warrant and the accompanying Warrants was $1.7199.

 

The net proceeds to the Company from the Private Placement are approximately $4,215,000, after deducting placement agent fees and expenses and estimated offering expenses payable by the Company. The Company intends to use the net proceeds received from the Private Placement for general corporate purposes, including funding of our development programs, commercial planning and sales and marketing expenses, potential strategic acquisitions, general and administrative expenses and working capital.

 

H.C. Wainwright & Co., LLC (“Wainwright”) served as the Company’s exclusive placement agent in connection with the Private Placement, pursuant to that certain engagement letter, dated as of July 5, 2023, as amended, between us and Wainwright (the “Engagement Letter”). As part of Wainwright’s compensation, we issued to Wainwright or its designees warrants (the “Placement Agent Warrants”) to purchase up to an aggregate of 218,023 shares of Common Stock at an exercise price equal to $2.15 per share. The Placement Agent Warrants are exercisable immediately upon issuance and expire March 1, 2029.

 

Stock-based compensation and Options

 

During the three and nine-month period ended September 30, 2023, 0 and 5,459 employee options were exercised respectively. During the three and nine-month period ended September 30, 2022, no employee options were exercised. During the three and nine-month period ended September 30, 2023, no employee options were granted. During the three and nine-month period ended September 30, 2022, 0 and 6,000 employee options were granted, respectively. During the three and nine-month period ended September 30, 2023, 0 and 3,000 employee options expired. During the three and nine-month period ended September 30, 2022, no employee options expired.

 

 

The options granted to employees and board members were recorded at a fair value and vested over three years. During the three and nine-month period ended September 30, 2023, stock-based compensation expense of $36 and $169 was recorded for options that vested, respectively. During the three and nine-month period ended September 30, 2022, stock-based compensation expense of $116 and $285 was recorded for options that vested, respectively.

 

   

Shares Under

Options

    

Weighted

Average

Exercise Price

per Share

    

Weighted

Average

Remaining

Life (Years)

  
Outstanding – December 31, 2021     127,000     $ 31.86       7.77  
Granted     6,000       15.56       9.89  
Exercised     -       -       -  
Outstanding – March 31, 2022     133,000     $ 26.00       7.63  
Granted     -       -       -  
Exercised     -       -       -  
Outstanding – June 30, 2022     133,000     $ 26.00       7.63  
Granted     -       -       -  
Exercised     -       -       -  
Outstanding – September 30, 2022     133,000     $ 26.00       7.63  
                         
Outstanding – December 31, 2022     147,619     $ 24.42       7.24  
Granted     -       -       -  
Expired     (3,000 )     39.20       0.51  
Exercised     (5,459 )     1.40       0.51  
Outstanding – March 31, 2023     139,160     $ 25.01       6.91  
Granted     -       -       -  
Expired     -       -       -  
Exercised     -       -       -  
Outstanding – June 30, 2023     139,160     $ 25.01       6.91  
Granted     -       -       -  
Expired     -       -       -  
Exercised     -       -       -  
Outstanding – September 30, 2023     139,160     $ 25.01       6.91  

 

 

The total stock-based expense recognized in the financial statements for services received from employees and non-employees is shown in the following table.

 

   2023   2022   2023   2022 
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2023   2022   2023   2022 
                 
Research and development   1    2    5    5 
Selling and marketing   6    6    18    18 
General and administrative   29    108    146    264 
                     
Total  $36   $116   $169   $287 

 

As of September 30, 2023, the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that date was $159, which is expected to be recognized over a weighted average period of approximately 1.19 years.

 

Warrants

 

On August 30, 2023, the Company granted (a) Pre-Funded Warrants to purchase up to 2,906,977 shares of Common Stock with an exercise price of $0.0001 per share, (b) A-1 Warrants to purchase up to 2,906,977 shares of Common Stock with an exercise price of $1.47 per share and (c) A-2 Warrants to purchase up to 2,906,977 shares of Common Stock with an exercise price of $1.47 per share, or a total of 8,540,931 warrants, in conjunction with the Private Placement disclosed above. The A-1 Warrants and A-2 Warrants are exercisable immediately upon issuance and expire on March 1, 2029 and October 1, 2024, respectively.

 

For the same Private Placement, the Company granted Placement Agent Warrants to Wainwright, or its designees, to purchase up to an aggregate of 218,023 shares of Common Stock at an exercise price equal to $2.15 per share. The Placement Agent Warrants are exercisable immediately upon issuance and expire March 1, 2029.

 

For the nine months ended September 30, 2023 and 2022, there were 8,758,954 and 12,500 warrants granted, respectively. For the nine months ended September 30, 2023 and 2022, there were 0 and 12,500 warrants exercised and/ or cancelled.

 

   Warrants 
Outstanding – December 31, 2021   115,467 
Granted   12,500 
Exercised   - 
Cancelled   (12,500)
Outstanding – September 30, 2022   115,467 
      
Outstanding – December 31, 2022   78,252 
Granted   8,758,954 
Exercised   - 
Cancelled   - 
Outstanding – September 30, 2023   8,837,206