Stockholders' Equity |
12 Months Ended | ||||||||||||||||||
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| Stockholders’ Equity [Abstract] | |||||||||||||||||||
| Stockholders' Equity | 7. Stockholders’
Equity At December 31, 2025,
the Company had 150,000,000 shares of common stock and 20,000,000 undesignated
shares authorized. As of December 31, 2024, 1,742,500 shares have been
designated for Series A 12% Convertible Preferred Stock, 900,000 shares have
been designated for Series B-1 Convertible Preferred Stock, 2,100,000 shares
have been designated for Series B-2 Convertible Preferred Stock, 1,000 shares
have been designated for Series C Super Dividend Convertible Preferred Stock,
2,508,000 shares have been designated for Series B-3 Convertible Preferred
Stock, 12,748,500 have been designated as common stock and no shares remain
undesignated. All issued and outstanding shares of Series B-1, Series B-2 and
Series B-3 Preferred Stock were converted into Common Stock on January 19, 2019. 2020 At Market Issuance
of Common Stock On May 11, 2020, the
Company entered into an At Market Issuance Sales Agreement (the “2020 At Market
Agreement”) with a sales agent under which the Company may issue and sell
shares of its common stock having an aggregate offering price of up to $40.0 million
from time to time through the sales agent. Sales of the Company’s common stock
through the sales agent, if any, will be made by any method that is deemed an
“at the market” offering as defined by the U.S. Securities and Exchange
Commission. The Company will pay to the sales agent a commission rate equal to
3.0% of the gross proceeds from the sale of any shares of common stock sold
through the sales agent under the 2020 At Market Agreement. During the year
ended December 31, 2025, 792,537 shares of common stock were issued under the
2020 At Market Agreement for net proceeds of approximately $3,235,000. There
were no issuances of common stock under the 2020 At Market Agreement during the
year ended December 31, 2024. Series A 12%
Convertible Preferred Stock — February 4, 2008 Private Placement On February 4, 2008, the
Company closed a private placement begun in October 2007 of its Series A 12%
Convertible Preferred Stock (“Series A”) and related warrants. In this
transaction, the Company sold units of securities at $6.00 per unit, each unit
comprised of (i) one share of Series A Preferred, (ii) a warrant to purchase
one share of common stock for $9.00, and (iii) a warrant to purchase one share
of common stock for $12.00. Each share of the Series A is entitled to dividends
at the rate of 12% per annum payable at the Company’s option in cash or shares
of common stock valued at the higher of $6.00 per share or 100% of the value
weighted average price of the Company’s share price for the 20 consecutive
trading days prior to the applicable dividend payment date. Dividends are
payable semi-annually on March 30 and September 30. The dividend paid on the
initial dividend payment date is calculated from the date the Company deposited
each subscription advance. The shares of Series A
are entitled to vote as a class with the Company’s common stock and each share
of Series A is convertible at any time to one-sixth of a share of common stock,
subject to adjustment in the event of a stock dividend, stock split or combination,
reclassification or similar event. The Company has the right to require
conversion if the closing price of the common stock exceeds $18.00 for 15
consecutive trading days and a registration statement covering the resale of
the shares of common stock issuable upon conversion of the Series A is then in
effect. Each warrant is exercisable solely for cash beginning August 3, 2008
and expired on February 4, 2012. The exercise price of each warrant is
adjustable in the event of a stock split or stock combination, capital
reorganization, merger or similar event. In 2025, 25,000 shares
of Series A were converted into 4,167 shares of common stock. Prior to 2025, a
total of 532,500 shares of Series A had been converted into 85,409 shares of
common stock. Series C 6% Super
Dividend Redeemable Convertible Preferred Stock On December 29, 2010,
the Company designated and authorized the sale and issuance of up to 1,000
shares of Series C Super Dividend Redeemable Convertible Preferred Stock
(“Series C”) with a par value of $0.01 and a stated value equal to $10,000 (the
“Stated Value”). On December 30, 2010,
the Company sold and issued 212 shares of Series C at a price of $10,000 per
share for gross proceeds of $2,120,000. The Company incurred $47,000 of cash
transaction costs resulting in net cash proceeds of $2,073,000. In addition, the
Company issued 500 warrants exercisable at $7.20 to a placement agent which had
a de minimis value. Additionally, in January 2011, the Company sold and issued
13 shares of Series C at a price of $10,000 per share for gross proceeds of
$130,000. The terms of the Series
C are as follows: Conversion Rights.
Each holder of Series C may convert all, but not less than all, of his Series C
shares plus accrued and unpaid dividends into Common Stock at the price of
$6.00 per share of Common Stock (“Conversion Price”), such that approximately
1,667 shares of Common Stock will be issued per each converted share of Series
C (accrued and unpaid dividends will be issued as additional shares). At
December 31, 2025 and 2024, the 176 outstanding shares of Series C were
convertible into a total of approximately 293,340 shares of Common Stock. Subject to the
continuing obligation to pay post conversion dividends, the Company may convert
all, but not less than all, of the Series C (plus all accrued and unpaid
dividends) into Common Stock, at the Conversion Price, upon such time that the
closing price of the Common Stock is no less than $18.00 per share for 15
consecutive trading days. Dividends.
Holders of Series C shall be entitled to receive cumulative non-compounding
dividends at the rate per share of Series C equal to the greater of (i) 6% per
annum of the Stated Value (also defined as the “Floor”) or (ii) 2.5% of net
sales until the total dividends paid is equal to the initial investment and
1.25% of net sales thereafter. The maximum amount each Series C shareholder
will receive in dividend payments is equal to $100,000 (the “Maximum Payout”).
For purposes of this dividend calculation, net sales shall mean gross revenues
actually received by the Company, from the sale or licensing of the product
DAVANAT®
(GM-CT-01), less chargebacks, returns, expenses attributable to product
recalls, duties, customs, sales tax, freight, insurance, shipping expenses,
allowances and other customary deductions. The dividend shall be
payable in arrears semiannually on March 31 and September 30, beginning with
the first such date after the original issue date; provided, however, that all
dividends and all other distributions shall cease, and no further dividends or
other distributions shall be paid, in respect of each share of Series C from
and after such time that the Maximum Payout has been paid in respect of such
share of Series C. Such dividends shall be payable at the Company’s option
either in cash or in duly authorized, fully paid and non-assessable shares of
Common Stock valued at the higher of (i) $3.00 per share or (ii) the average of
the Common Stock trading price for the ten (10) consecutive trading days ending
on the trading day that is immediately prior to the dividend payment date. Series C Post Conversion
Dividend Right. In the event that any share of Series C is
converted into Common Stock before the Maximum Payout is paid in respect of
such converted share of Series C, then the holder shall have the right to
continue to receive dividends in respect of such converted share of Series C
equal to the remaining payout (the “Series C Preferred Stock Post Conversion
Dividend Right”) which shall be equal to the Maximum Payout less the cumulative
dividends received through the conversion date. One share of Series C Preferred
Stock Post Conversion Dividend Right shall be issued for each such converted
share of Series C. The holder of each Series C Preferred Stock Post Conversion
Dividend Right shall receive the remaining payout on an equal basis and in
conjunction with the then outstanding shares of Series C and all the other then
outstanding Series C Post Conversion Dividend Rights, in the same manner and
subject to the same terms and conditions as applicable to the payment of
dividends on each share of Series C, except that for purposes of calculating
the dividend the Floor shall not apply. The Series C Preferred Stock Post
Conversion Dividend Right shall have no stated value, liquidation preference or
right to any dividends or distributions other than the remaining payout. The Series
C Preferred Stock Post Conversion Right is subject to redemption in the same
manner as outstanding Series C shares. At the date of issuance,
the Series C have an embedded dividend right to continue to receive dividend
payments after conversion to common stock (the Series C Post Conversion
Dividend Right) which requires bifurcation. The value of this post conversion
dividend right on the date of issuance was determined to be de minimis due to
the fact that the payment of a dividend stream other than the 6% dividend and
conversion of Series C prior to the Company achieving sales of GM-CT-01 was
deemed improbable at that time. Upon a conversion of the Series C, the Company
will be required to record a liability and the related expense during the
period of conversion. In July 2011, 5 shares
of Series C were converted into 8,334 shares of common stock and 5 Series C
Post Conversion Dividend Rights (Dividend Rights) were issued. In 2013, 24
shares of Series C were converted into 40,193 shares of common stock and 24
Dividend Rights were issued. In 2014, 20 shares of Series C were converted into
33,756 shares of common stock and 20 Dividend Rights were issued. Per the terms
of the Series C, these Dividend Rights shall continue to participate in
dividends, however the Floor shall not apply. At December 31, 2016 and 2015,
these Dividend Rights were determined to have a de minimis value, as the
payment of a dividend is considered improbable at this time. The Company will
continue to evaluate and assess the Series C Post Conversion Dividend Right for
each reporting period. Liquidation Rights.
In the event of any liquidation, dissolution or winding up of the Company,
either voluntarily or involuntarily, the holders of Series C will receive
$10,000 per share plus accrued and unpaid dividends, payable prior and in
preference to any distributions to the holders of Common Stock but after and
subordinate to the Series A 12% Convertible Preferred Stock (“Series A”),
Series B-1 and Series B-2, subject to the Maximum Payout. Redemption.
Upon a sale of the Company, the Company shall redeem all of the then
outstanding shares of Series C and Series C Preferred Stock Post Conversion
Rights within thirty (30) days after the transaction constituting the sale of
the Company is closed and such closing is fully funded. The price to redeem a
share of Series C and each redeemed Series C Preferred Stock Post Conversion
Redemption Right shall be equal to (i) (A) the applicable return on investment
(“ROI”) percentage, multiplied by (B) $10,000, minus (ii) the cumulative
dividends received through the redemption date. The redemption price shall be
payable at the Company’s option either in cash or in shares of common stock
valued at the higher of (i) $3.00 per share or (ii) the average market price
for the ten consecutive trading days ending immediately prior to the date of
redemption. The ROI Percentage shall mean the percentage that applies as of the
redemption date, as follows: ROI Percentage
Due to the redemption
feature, the Company has presented the Series C outside of permanent equity, in
the mezzanine of the consolidated balance sheets at December 31, 2025 and 2024.
At December 31, 2025, the Series C redemption value was $7,966,000. Voting Rights.
The Series C shares have no voting rights.
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