v3.25.1
EQUITY TRANSACTIONS
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
EQUITY TRANSACTIONS

12) EQUITY TRANSACTIONS

 

Private Placement

 

On March 31, 2025, the Company entered into a securities purchase agreement (the “SPA”) with certain accredited investors to sell in a private placement an aggregate of approximately 58.3 million shares of common stock at a purchase price of $0.1046 per share, and pre-funded warrants to purchase up to approximately 11.0 million shares of common stock, at a purchase price of $0.0996 per pre-funded warrant. The pre-funded warrants will be exercisable until exercised in full at a nominal exercise of $0.005 per share and may not be exercised to the extent such exercise would cause the holder to beneficially own more than 4.99% or 9.99%, as applicable, of the Company’s outstanding common stock.

 

The SPA represents a forward sale contract obligating the Company to sell a fixed number of shares of its common stock at a fixed price per share and contains an adjustment to the settlement amount based on shareholder approval, which is not an input into the pricing of a fixed-for-fixed forward on equity shares. The Company measured the fair value of the forward sale contract as the difference between (i) the fair value of the expected shares to be purchased by the investors as of the date the Company entered into the SPA and (ii) the discounted purchase price of the shares and recorded a liability of approximately $5.3 million as of March 31, 2025. The Company also recognized $5.3 million of expense for the forward sale contract for the three months ended March 31, 2025, because the fair value of the expected shares to be purchased by the investors exceeds the proceeds under the SPA.

 

On April 2, 2025, the Company held an initial closing (the “First Closing”) whereby it sold to the investors an aggregate of approximately 9.9 million shares of common stock and approximately 0.5 million pre-funded warrants for aggregate gross proceeds of approximately $1.1 million. The second closing under the SPA for the sale of approximately 48.3 million shares of common stock and 10.5 million pre-funded warrants for aggregate gross proceeds of $6.2 million will occur upon stockholder approval at the Company’s 2025 annual meeting of stockholders on June 2, 2025, subject to customary closing conditions.

 

 

Warrants

 

As of March 31, 2025, the Company had the following warrants outstanding:

 

  

Warrants Outstanding

(in thousands)

   Exercise
Price		   Expiration
Date		  Classification
Q1-22 Warrants   343   $38.20   09/09/27  Liability
December 2022 Warrants   142   $1.43   06/02/28  Equity
Prefunded warrants   1,124   $0.005   None  Equity
    1,609            

 

As of March 31, 2025, the weighted average remaining contractual life of the warrants outstanding was 2.66 years and the weighted average exercise price was $27.45, which does not include the prefunded warrants.

 

During the three months ended March 31, 2025, the Company had the following warrant activity (in thousands):

 

   Outstanding
January 1, 2025		   Exercised   Outstanding
March 31, 2025		 
Q1-22 Warrants   343    -    343 
December 2022 Warrants   142    -    142 
Prefunded warrants   1,879    755    1,124 
Total   2,364    755    1,609 

 

Standby Equity Purchase Agreement

 

On April 5, 2023, the Company entered into the SEPA with Lincoln Park, pursuant to which Lincoln Park committed to purchase up to $10.0 million of the Company’s common stock. The Company did not sell any shares of common stock under the SEPA during the three months ended March 31, 2025 or 2024 As of March 31, 2025, there were approximately 2,860,000 shares remaining to be sold under the SEPA, and on May 1, 2025, the SEPA expired in accordance with its terms.

 

Stock Repurchase Program

 

In November 2024, the Company’s Board of Directors authorized a stock repurchase program (the “Repurchase Program”) of up to $1.0 million of the Company’s outstanding common stock. Under the Repurchase Program, the repurchases may be made by the Company from time to time through open market purchases, privately negotiated transactions or other means in accordance with applicable securities laws. The timing and amount of repurchases will be determined by the Company, taking into consideration market conditions, stock price, and other factors. The Repurchase Program does not have a set expiration date and may be suspended, modified or discontinued at any time without prior notice. The Company did not repurchase any of its shares under the Repurchase Program during the three months ended March 31, 2025. There was no such repurchase program during the three months ended March 31, 2024.