4.   WARRANTS

The following is a summary of the Company’s warrant activity (number of common stock shares underlying the warrants) for the year ended December 31, 2025:

* In August 2024, 109,999 of these warrants were modified to reduce the exercise price from $82.50 per warrant share, to $15.93 per warrant share and to extend the expiration of these warrants from May 2026 to August 2029.

** In May 2024, 68,293 of these warrants were modified to reduce the exercise price from $100 per warrant share, to $29.10 per warrant share and to extend the expiration of these warrants from November 2028 to May 2029.

*** In August 2024, 126,830 of these warrants (separate from the May 2024 modification) were modified to reduce the exercise price from $100 per warrant share, to $15.93 per warrant share and to extend the expiration of these warrants from November 2028 to August 2029.

May 2024 Registered Direct Offering

On May 29, 2024, the Company completed a registered direct offering (the “May 2024 Offering”), priced at the market under Nasdaq rules, and the Company sold and issued an aggregate of (i) 94,937 shares of its common stock, and (ii) warrants (the “May 2024 Common Stock Warrants”) exercisable for an aggregate of up to 94,937 shares of its common stock. The public offering price for each share of common stock and accompanying May 2024 Warrants to purchase one share of common stock was $31.60. The May 2024 Common Stock Warrants have a term of 5 years and expire on May 29, 2029. The net proceeds to the Company from the May 2024 Offering were $2.8 million, after deducting placement offering costs, agent fees and expenses and other offering expenses payable by the Company, of $0.4 million.

The Company evaluated the May 2024 Common Stock Warrants in accordance with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging, and determined that they should be classified as equity instruments, with no recurring fair value measurement required. The May 2024 Common Stock Warrants are indexed to the Company’s common stock and are required to be settled through physical settlement, subject to certain conditions, or net share settlement, if exercised. Accordingly, the May 2024 Common Stock Warrants were recorded at their grant date fair value with no subsequent remeasurement.

The fair value of the May 2024 Common Stock Warrants was determined utilizing a Black-Scholes-Merton model, considering all relevant assumptions current at the date of issuance. Refer to Note 2, Summary of Significant Accounting Policies and Basis of Presentation, for further detail regarding how assumptions were determined. The grant date relative fair value of the May 2024 Common Stock Warrants was estimated to be approximately $1.1 million recognized to additional paid-in capital in the consolidated balance sheet as the May 2024 Common Stock Warrants were determined to be equity classified, with the corresponding debit as an issuance cost of the related equity offering.

The following assumptions and key inputs were used to value the May 2024 Common Stock Warrants at the date of issuance:

Accounting for Warrant Modification

In connection with the May 2024 Offering, on May 28, 2024, the Company entered into a warrant amendment agreement with the purchaser party to the Purchase Agreement, pursuant to which the Company agreed to amend the purchaser’s existing warrants to purchase 68,293 shares of common stock at an exercise price of $100 per share issued in November 2023 (the “May 2024 Existing Warrants”) in consideration for such purchaser party’s participation and purchase of approximately $3.0 million of securities in the May 2024 Offering and the payment of $0.2 million to (i) lower the exercise price of the May 2024 Existing Warrants to $29.10 per share and (ii) amend the expiration date of the May 2024 Existing Warrants to five years following the closing of the May 2024 Offering, effective upon the closing of the May 2024 Offering on May 29, 2024.

ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging ("ASC 815") require issuers to account for modifications or exchanges of freestanding equity-classified written call options (e.g., warrants) that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Pursuant to ASC 480 and ASC 815, the Company accounts for modifications of equity-classified warrant agreements by recording any increase in fair value of the modified equity-classified warrant as an equity issuance cost that reduces additional paid-in capital. The increase in the fair value of the modified May 2024 Existing Warrants was determined to be $0.2 million.

The following assumptions and key inputs were used to value the modification of the May 2024 Existing Warrants immediately before the modification and immediately after the modification:

August 2024 Underwritten Offering

On August 22, 2024, the Company completed an underwritten offering and the Company sold and issued (i) 163,813 shares of common stock, (ii) pre-funded warrants (the “August 2024 Pre-Funded Warrants”) exercisable for an aggregate of up to 74,282 shares of common stock, and (iii) warrants (the “August 2024 Common Stock Warrants”) exercisable for an aggregate of 238,095 shares of common stock (the “August 2024 Offering”). The public offering price for each share of common stock and accompanying August 2024 Common Stock Warrants to purchase one share of common stock (including the pricing for the warrant repricing described below) was $21, and the public offering price for each August 2024 Pre-Funded Warrants and accompanying August 2024 Common Stock Warrants to purchase one share of common stock was $20.998. The net proceeds to the Company from the August 2024 Offering were approximately $3.6 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company of approximately $1.4 million.

Upon the closing of the August 2024 Offering, the Company issued to the Underwriter warrants to purchase up to 11,905 shares of common stock (the “August 2024 Underwriter Warrants”). The August 2024 Underwriter Warrants are exercisable at an exercise price of $26.25 per share and are exercisable during the five-year period commencing six months after the closing date of the August 2024 Offering.

The Company evaluated the August 2024 Common Stock Warrants and August 2024 Pre-funded Warrants in accordance with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging, and determined that they should be classified as equity instruments, with no recurring fair value measurement required. The August 2024 Common Stock Warrants are indexed to the common stock and are required to be settled through physical settlement, subject to certain conditions, or net share settlement, if exercised. Accordingly, the August 2024 Common Stock Warrants were recorded at their grant date fair value with no subsequent remeasurement.

The Company evaluated the August 2024 Underwriter Warrants in accordance with the guidance at ASC 718, Compensation-Stock Compensation, and determined that they should be classified as equity instruments, with no recurring fair value measurement required. The August 2024 Underwriter Warrants are indexed to the common stock and are required to be settled through physical settlement, subject to certain conditions, or net share settlement, if exercised. Accordingly, the August 2024 Underwriter Warrants were recorded at their grant date fair value with no subsequent remeasurement. Further, the Company recognized the August 2024 Underwriter Warrants as a stock issuance costs as they are issued for services in connection with an offering, and therefore will account for these as a reduction of the proceeds in the August 2024 Offering.

The fair value of the August 2024 Common Stock Warrants, August 2024 Pre-funded Warrants, and August 2024 Underwriter Warrants were determined utilizing a Black-Scholes-Merton model, considering all relevant assumptions current at the date of issuance. Refer to Note 2, Summary of Significant Accounting Policies and Basis of Presentation, for further detail regarding how assumptions were determined. The grant date relative fair value of the August 2024 Common Stock Warrants, August 2024 Pre-funded Warrants and August 2024 Underwriter Warrants was estimated to be approximately $1.2 million, $0.5 million, and $0.2 million, respectively, and were recognized as additional paid-in capital in the consolidated balance sheet as the August 2024 Common Stock Warrants, August 2024 Pre-funded Warrants, and August 2024 Underwriter Warrants were determined to be equity classified, with the corresponding debit as an issuance cost of the related equity offering.

The following assumptions and key inputs were used to value the August 2024 Common Stock Warrants, August 2024 Pre-funded Warrants, and August 2024 Underwriter Warrants at the date of issuance:

Accounting for Warrant Modification

In connection with the August 2024 Offering, on August 20, 2024, the Company entered into a warrant amendment agreement (the “August 2024 Warrant Amendment Agreement”) with the purchaser of the August 2024 Pre-Funded Warrants, pursuant to which the Company agreed to amend the purchaser’s (i) warrants to purchase up to 126,829 shares of common stock at an exercise price of $100 per share issued in November 2023 and (ii) warrants to purchase up to 109,999 shares of common stock at an exercise price of $82.50 per share issued in June 2021 (together, the “August 2024 Existing Warrants”), in consideration for such investor’s participation in the August 2024 Underwritten Offering and the payment of $2.50 per August 2024 Existing Warrant (which amount is included in the $21 offering price above) to (i) lower the exercise price of the August 2024 Existing Warrants to $15.93 per share and (ii) amend the expiration date of the August 2024 Existing Warrants to five years following the closing of the August 2024 Offering, effective upon the closing of the August 2024 Offering on August 22, 2024.

ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging ("ASC 815") require issuers to account for modifications or exchanges of freestanding equity-classified written call options (e.g., warrants) that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Pursuant to ASC 480 and ASC 815, the Company accounts for modifications of equity-classified warrant agreements by recording any increase in fair value of the modified equity-classified warrant as an equity issuance cost that reduces additional paid-in capital. The increase in the fair value of the modified August 2024 Existing Warrants was determined to be $0.8 million.

The following assumptions and key inputs were used to value the modification of the warrants immediately before and immediately after the modification. Refer to Note 2, Summary of Significant Accounting Policies and Basis of Presentation, for details related to the determination of fair value for warrants:

December 2024 Underwritten Offering

On December 18, 2024, the Company completed an underwritten offering and the Company sold and issued (i) an aggregate of 600,000 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), (ii) Series A warrants exercisable for an aggregate of up to 300,000 shares of Common Stock (the “Series A Common Stock Warrants”) and (iii) Series B warrants exercisable for an aggregate of up to 600,000 shares of Common Stock (the “Series B Common Stock Warrants” and together with the Series A Common Stock Warrants, the “December 2024 Common Stock Warrants”), for aggregate net proceeds of $16.5 million (the “December 2024 Underwritten Offering”) after deducting placement offering costs, agent fees and expenses and other offering expenses payable by the Company of $1.5 million.

Each share of Common Stock was sold together with (i) a Series A Common Stock Warrant to purchase 0.5 of a share of Common Stock and (ii) a Series B Common Stock Warrant to purchase one share of Common Stock, at a combined public offering price of $30 per share of Common Stock and accompanying December 2024 Common Stock Warrants. The Series A Common Stock Warrants are exercisable immediately, expire six months from the date of issuance on June 18, 2025, and have an exercise price of $30 per whole share. The Series B Common Stock Warrants are exercisable immediately, expire 5 years from the date of issuance on December 18, 2029, and have an exercise price of $30 per share. The net proceeds to the Company from the December 2024 Underwritten Offering were approximately $16.5 million, after deducting placement offering costs, agent fees and expenses and other offering expenses payable by the Company.

The Company evaluated the December 2024 Common Stock Warrants in accordance with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging, and determined that they should be classified as equity instruments, with no recurring fair value measurement required. The warrants are indexed to the Company’s common stock and are required to be settled through physical settlement or net share settlement, if exercised. Accordingly, the warrants were recorded at their grant date fair value with no subsequent remeasurement.

The fair value of the December 2024 Common Stock Warrants was determined utilizing a Black-Scholes-Merton model considering all relevant assumptions current at the date of issuance. Refer to Note 2, Summary of Significant Accounting Policies and Basis of Presentation, for further detail regarding how assumptions were determined. The grant date relative fair value of the Series A and Series B Common Stock Warrants was estimated to be $1.3 million and $6.8 million, respectively and such warrants were recognized as additional paid-in capital in the consolidated balance sheet as they were determined to be equity classified.

The following assumptions and key inputs were used to value the December 2024 Common Warrants at the date of issuance:

June 2025 Public Offering

On June 26, 2025, the Company entered into a placement agency agreement (the “June 2025 Placement Agency Agreement”) with A.G.P./Alliance Global Partners, as the placement agent (the “Placement Agent”), pursuant to which the Company sold in a public offering (i) an aggregate of 1,000,000 shares of the Company’s common stock, (ii) Series C warrants exercisable for an aggregate of up to 1,000,000 shares of common stock (the “Series C Common Warrants”) and (iii) Series D warrants exercisable for an aggregate of up to 1,000,000 shares of common stock (the “Series D Common Warrants” and together with the Series C Common Warrants, the “June 2025 Warrants”), for aggregate gross proceeds of $10.0 million (the “June 2025 Public Offering”). Each share of common stock was sold together with (i) a Series C Common Warrant to purchase one share of common stock and (ii) a Series D Common Warrant to purchase one share of common stock, at a combined public offering price of $10 per share of common stock and accompanying June 2025 Warrants. The Series C Common Warrants are exercisable immediately upon issuance, have a term of five years from the date of issuance and have an exercise price of $10 per share. The Series D Common Warrants are exercisable immediately upon issuance, have a term of twelve months from the date of issuance and have an exercise price of $10 per share. The net proceeds to the Company from the June 2025 Public Offering were approximately $9.0 million, after deducting placement agent fees and expenses and other offering expenses payable by the Company.

The Company evaluated the June 2025 Warrants in accordance with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging, and determined that they should be classified as equity instruments, with no recurring fair value measurement required. The June 2025 Warrants are indexed to the Company’s common stock and are required to be settled through physical settlement or net share settlement, if exercised. Accordingly, the June 2025 Warrants were recorded at their grant date fair value with no subsequent remeasurement.

The fair value of the June 2025 Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance. Refer to Note 2, Summary of Significant Accounting Policies and Basis of Presentation, for further detail regarding how these assumptions were determined. The grant date relative fair value of the Series C and Series D Common Warrants was estimated to be $3.1 million and $2.0 million, respectively, recognized as additional paid-in capital in the consolidated balance sheet as they were determined to be equity classified and categorized as Level 3 within the fair value hierarchy.

The following assumptions and key inputs were used to value the June 2025 Warrants at the date of issuance:

September 2025 Public Offering

On September 18, 2025, the Company entered into a placement agency agreement (the “September 2025 Placement Agency Agreement”) with the Placement Agent, pursuant to which the Company sold in a public offering (i) an aggregate of 1,350,000 shares of the Company’s common stock, (ii) Series E warrants exercisable for an aggregate of up to 1,350,000 shares of common stock (the “Series E Common Warrants”) and (iii) Series F warrants exercisable for an aggregate of up to 1,350,000 shares of common stock (the “Series F Common Warrants” and together with the Series E Common Warrants, the “September 2025 Warrants”), for aggregate gross proceeds of $9.0 million (the “September 2025 Public Offering”). Each share of common stock was sold together with (i) a Series E Common Warrant to purchase one share of common stock and (ii) a Series F Common Warrant to purchase one share of common stock, at a combined public offering price of $134 per share of common stock and accompanying September 2025 Warrants. The Series F Common Warrants are exercisable immediately upon issuance, have a term of five years from the date of issuance and have an exercise price of $134 per share. The Series E Common Warrants are exercisable immediately upon issuance, have a term of twelve months from the date of issuance and have an exercise price of $134 per share. The net proceeds to the Company from the September 2025 Public Offering were approximately $8.1 million, after deducting placement agent fees and expenses and other offering expenses payable by the Company.

The Company evaluated the September 2025 Warrants in accordance with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging, and determined that they should be classified as equity instruments, with no recurring fair value measurement required. The September 2025 Warrants are indexed to the Company’s common stock and are required to be settled through physical settlement or net share settlement, if exercised. Accordingly, the September 2025 Warrants were recorded at their grant date fair value with no subsequent remeasurement.

The fair value of the September 2025 Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance. Refer to Note 2, Summary of Significant Accounting Policies and Basis of Presentation, for further detail regarding how these assumptions were determined. The grant date relative fair value of the Series E Common Warrants and Series F Common Warrants was estimated to be $2.9 million and $1.8 million, respectively, recognized as additional paid-in capital in the consolidated balance sheet as they were determined to be equity classified and categorized as Level 3 within the fair value hierarchy.

The following assumptions and key inputs were used to value the September 2025 Warrants at the date of issuance: