8. Preferred Stock 

Series A Preferred Stock and Common Stock Purchase Warrants

As of January 1, 2024, the Company had 1,417 shares of Series A Convertible Preferred Stock outstanding, each with a stated value of $1,080.  During 2024, the Company amended the conversion terms of the Series A Preferred Stock in connection with financing arrangements entered into with 3i, LP. The Company also held Exchange Warrants originally issued to 3i, LP in April 2023 as part of an exchange transaction in which 3i surrendered previously issued warrants in return for new warrants reflecting revised exercise prices and share quantities under amended financing terms.

On January 14, 2024, pursuant to the terms of a bridge loan with 3i, LP, the Company reduced the conversion price of the Series A Preferred Stock and Exchange Warrants from $600.00 to $268.50. The company filed the Fifth Certificate of Amendment to Amended and Restated Certificate of Designations to reflect the revised Series A conversion price. At that price, the 1,417 outstanding Series A Preferred shares became convertible into 5,699 shares of common stock.

On February 13, 2024, following a subsequent bridge loan with 3i, LP, the Company reduced the conversion price of the Series A Preferred Stock to $243.00 with the Sixth Certificate of Amendment filed to effect the change.  After this modification, 1,296 remaining Series A Preferred shares were convertible into 5,760 shares of common stock.

On March 14, 2024, in connection with the issuance of a Third Note, the conversion price of the Series A Preferred Stock was increased to $4,210.00, and the Company filed a Seventh Certificate of Amendment accordingly. At this conversion price, 1,215 Series A Preferred shares were converted into 17,843 shares of common stock. The Company recognized a $0.1 million gain on extinguishment upon remeasurement using the Black-Scholes option pricing model. 

Between April 1, 2024 and  May 2, 2024, the Company further amended the conversion prices of the Series A Preferred Stock, as well as the the Exchange Warrants and the 2024 Notes, to equal the Company's last sale price of its common stock of $34.50 as of May 1, 2024.

Accounting

Series A Preferred Stock

The Series A Preferred Stock continues to be classified as equity, consistent with the Company's assessment following the Amended and Restated Certificate of Designations filed in 2023, which eliminated redemption features and dividends other than for limited exceptions. As of the date of these financial statements, no additional Series A transaction occurred in 2025.

Deemed Dividends

As a result of fair value adjustments during the twelve months ended December 31, 2024, the Company recognized a deemed dividend of $0.3 million on the Series A Preferred Stock. Inputs used in the Black-Scholes valuation models utilized to fair value the modification to the Series A Preferred Stock during the year ended December 31, 2024, are as follows:

3i Warrants

The 3i Warrants were identified as a freestanding financial instrument and meet the criteria for derivative liability classification, initially measured at fair value. Subsequent changes in fair value are recognized through earnings for as long as the contracts continue to be classified as a liability. The measurement of fair value is determined utilizing an appropriate valuation model considering all relevant assumptions current at the date of issuance and at each reporting period (i.e., share price, exercise price, term, volatility, risk-free rate and expected dividend rate).

Series A Preferred Stock Conversions

During the year ended December 31, 2024, 3i exercised its option to convert 202 shares of Series A Preferred Stock for 904 shares of common stock at the fair value of $0.3 million. 3i exercised its option to convert 1,215 shares of Series A Preferred Stock for 15,072 shares of common stock at the fair value of $1.5 million. As of the years ended December 31, 2025 and 2024, there were no shares of Series A Preferred Stock issued and outstanding.

August 2024 Series A Convertible Redeemable Preferred Stock

On  August 19, 2024 (the "August Closing Date"), the Company entered into a Securities Purchase Agreement (the  “August 2024 SPA”) with certain purchasers (the  “August 2024 Purchasers”), pursuant to which the Company issued and sold, in a private placement (the  “August 2024 Offering”), 35,000 shares of the Company’s Convertible Redeemable Series A Preferred Stock, par value $0.0001 per share (the  “August 2024 Preferred Stock”), for net proceeds of approximately $2.9 million, after the deduction of discounts, fees and offering expenses. In connection with the  August 2024 Offering, the Company paid $0.2 million to Ascendiant Capital Markets, LLC, the Company’s placement agent. 

On the August Closing Date, the Company filed a certificate of designation (the  “August 2024 COD”) with the Secretary of the State of Delaware designating the rights, preferences and limitations of the  August 2024 Preferred Stock. Under the  August 2024 COD, for purposes of determining the presence of a quorum at any meeting of the stockholders of the Company at which the  August 2024 Preferred Stock were entitled to vote and the voting power of the  August 2024 Preferred Stock, each holder of the  August 2024 Preferred Stock was entitled to a number of votes equal to shares of the Company’s common stock into which such  August 2024 Preferred Stock are then convertible, disregarding, for such purposes, any limitations on conversion. The  August 2024 Preferred Stock were entitled to vote on each matter submitted to a vote of the stockholders generally and shall vote together with the common stock and any other class or series of capital stock entitled to vote thereon as a single class and on an as converted to the common stock basis.

The holders of the  August 2024 Preferred Stock were entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on the common stock. The  August 2024 Preferred Stock was convertible, at the option of the holders and, in certain circumstances, by the Company, into common stock, as determined by dividing the net purchase price of $90 per share by the conversion price of $5.10, at the option of the holders.

On the August Closing Date, the Company and the  August 2024 Purchasers also entered into a Registration Rights Agreement (the  “August 2024 RRA”), pursuant to which the Company agreed to file a registration statement with the SEC, to register for resale the common stock issuable upon the conversion of the  August 2024 Preferred Stock. The registration statement was filed with the SEC on  August 30, 2024.

All of the  August 2024 Preferred Stock was redeemed in  September 2024. As a result of the redemption of the  August 2024 Preferred Stock, the Company recognized a deemed dividend of $0.6 million.  There was no deemed dividend for the year ended December 31, 2025.