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SUBSEQUENT EVENTS
12 Months Ended
Dec. 31, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 17. SUBSEQUENT EVENTS

 

Termination of a Material Definitive Agreement

 

On January 3, 2025, the Company gave notice to terminate the At-The-Market Issuance Sales Agreement entered into with Ascendiant Capital Markets, LLC on September 24, 2024, effective immediately. See Note 13 – Stockholders’ Equity for details of and shares issued under the agreement.

 

Registered Direct Public Offerings

 

January 3, 2025

 

On January 3, 2025, the Company sold in a registered direct offering an aggregate of 3,380,276 shares (374 shares post-2025 Stock Splits) of its common stock at a price of $0.142 per share ($1,284.39 post-2025 Stock Splits). The net proceeds to the Company of this offering were $0.45 million.

 

January 30, 2025

 

On January 30, 2025, the Company sold in a registered direct offering an aggregate of 506,803 shares (18,770 shares post-Second 2025 Stock Split) of its common stock at a price of $9.25 per share ($249.75 post-March 2025 stock split). The net proceeds to the Company of this offering were $4.4 million.

 

 

Units Offering of Common Shares and Warrants

 

On January 15, 2025, the Company sold, in an underwritten public offering, an aggregate of (i) 100,000 shares (11 shares post-2025 Stock Splits) of the Company’s common stock, (ii) 143,900,000 pre-funded warrants (the “Pre-Funded Warrants) (15,909 pre-funded warrants post-2025 Stock Splits) to purchase up to an aggregate of 143,900,000 common shares (15,909 shares post-2025 Stock Splits), (iii) 144,000,000 Series A Common Warrants (the “Series A Common Warrants”) (15,920 warrants post-2025 Stock Splits), and (iv) 144,000,000 Series B Common Warrants (the “Series B Common Warrants” and, together with the Series A Common Warrants, the “Common Warrants”) Each share or Pre-Funded Warrant, as applicable, was sold together with one Series A Common Warrant to purchase one share of Common Stock and one Series B Common Warrant to purchase one share of Common Stock.

 

The public offering price for each Unit (consisting of a common share (or Pre-Funded Warrant in lieu thereof) and accompanying Common Warrants was $0.10 ($904.50 post-2025 Stock Splits). In addition, the Company granted Dawson James an option to purchase up to an additional 21,000,000 shares (2,322 shares post-2025 Stock Splits) of our common stock (or Pre-Funded Warrants in lieu of shares of Common Stock), at the public offering price, less underwriting discounts and commissions, and up to an additional 21,000,000 (2,322 shares post-2025 Stock Splits) Series A Common Warrants and up to an additional 21,000,000 (2,322 post-2025 Stock Splits) Series B Common Warrants at a nominal price within 45 days from January 15, 2025, to cover over-allotment sales. Dawson James exercised its option to purchase 21,000,000 (2,322 post-2025 Stock Splits) Series A Common Warrants and 21,000,000 (2,322 post-2025 Stock Splits) Series B Common Warrants.

 

Warrants

 

The Pre-Funded Warrants have an exercise price of $0.00001 ($.09 post-2025 Stock Splits) per share, are immediately exercisable and expire when exercised in full. Each Series A Common Warrant will have an exercise price per share of $0.20 ($1,809.00 post-2025 Stock Splits) and will be exercisable beginning on the first trading day following the date on which Stockholder Approval is received and deemed effective (the “Initial Exercise Date” or the “Stockholder Approval Date”). The Series A Common Warrants will expire on the five-year anniversary of the Initial Exercise Date. The Series B Common Warrants will have an exercise price per share of $0.20 ($1,809.00 post-2025 Stock Splits) and will be exercisable beginning on the Initial Exercise Date. The Series B Common Warrants will expire on the two and one-half anniversary of the Initial Exercise Date.

 

Use of Proceeds

 

The net proceeds of this offering were approximately $13.3 million. The Company intends to use the net proceeds from the Offering to redeem all outstanding shares of the Company’s Series B Preferred Stock at a redemption price per share equal to $1,000 plus all accrued but unpaid dividends, with the remaining net proceeds to be used to build out the product platform, expand the Company’s sales and marketing efforts, and for general and administration expenses and other general corporate purposes.

 

Approval of A and B Warrants Shares

 

On March 5, 2025, the Company convened its Special Meeting of Stockholders. Stockholders approved the full issuance of shares of common stock issuable by the Company upon exercise of the Series A Common Warrants and the Series B Common Warrants. Following March 5, 2025, holders of Series B warrants have exercised substantially all of our outstanding Series B warrants using the alternative cashless exercise ("ACE") feature included in those warrants. The Company has issued approximately 14.7 million common shares (544 thousand shares adjusted for the Second 2025 Stock Split) in such Series B warrant exercises. No Series A warrants have been exercised as of March 31, 2025.

 

Redemption of Series B Preferred Stock

 

On January 22, 2025, the Company redeemed all Series B Preferred Stock and related accrued dividends with a cash payment of $1,213,590.

 

2025 Reverse Stock Splits

 

On January 29, 2025, the Company effected a reverse stock split at a ratio of 1:335. As a result of the reverse stock split, the Company’s issued and outstanding shares of common stock decreased from approximately 170.5 million pre-split shares to approximately 509,000 post-split shares. The reverse stock split did not change the number of authorized shares of the Company’s common stock. The reverse stock split will apply to the Company’s outstanding warrants, stock options and restricted stock units.

 

On March 27, 2025, the Company effected a reverse stock split at a ratio of 1:27. As a result of the reverse stock split, the Company’s issued and outstanding shares of common stock decreased from approximately 15.7 million pre-split shares to approximately 582,000 post-split shares. The reverse stock split did not change the number of authorized shares of the Company’s common stock. The reverse stock split will apply to the Company’s outstanding warrants, stock options and restricted stock units.

 

Nasdaq Compliance

 

During 2024, the Company received notices from Nasdaq indicating that the Company was not in compliance with (i) Nasdaq Listing Rule 5550(b)(1), which requires companies listed on The Nasdaq Stock Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing or (ii) Nasdaq Listing Rule 5550(a)(2) which requires companies listed on The Nasdaq Stock Market to maintain a minimum of a $1.00 bid price for continued listing. The Company regained compliance with the bid price requirement after the completion of its January 2025 reverse stock split. The Company regained compliance with the stockholders’ equity requirement after the completion of the Company’s January 2025 public offering.