Annual report pursuant to Section 13 and 15(d)

Stockholders??? Equity

v3.23.1
Stockholders’ Equity
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Stockholders’ Equity

Note 6 – Stockholders’ Equity

 

On January 1, 2022, we amended our Certificate of Incorporation to increase the number of authorized shares of our common stock from 30,000,000 to 50,000,000. We believe 50,000,000 authorized shares of common stock better aligns our capital structure with our future needs.

 

Preferred Stock

 

There were no issued or outstanding shares of preferred stock at either December 31, 2022 or 2021.

 

Common Stock

 

Subsequent to December 31, 2022, we raised gross proceeds of $7.0 million from the sale of 8,432,192 shares of our common stock through the Purchase Agreement with Lincoln Park, the Sales Agreement with Oppenheimer, and a registered direct offering, as follows:

 

● In January 2023, we sold 50,000 shares at an average price of $1.08 per share for an aggregate gross proceedings of $54,000 through the Purchase Agreement we entered into with Lincoln Park Capital in March 2022. We did not sell any shares to Lincoln Park under the Purchase Agreement during the year ended December 31, 2022.

 

● On February 3, 2023, we sold 569,648 shares at an average price of approximately $1.22 per share for an aggregate gross proceeds of approximately $693,000 (net proceeds of approximately $672,000) prior to deducting sales commissions, pursuant to our Sales Agreement with Oppenheimer & Co. Inc. under which we may issue and sell in a registered “at-the-market” offering shares of our common stock having an aggregate offering price of up to $30.0 million from time to time. On February 5, 2023, in connection with our Registered Direct Offering, we suspended the Sales Agreement with Oppenheimer & Co. Inc., but we expect to reinstate it during 2023.

 

● On February 14, 2023, we closed on a registered direct offering for the sale of 7,812,544 shares of our common stock at a purchase price of $0.80 per share to accredited investors for gross proceeds of $6.3 million. Net proceeds from the offering were $5.7 million.

 

During the year ended December 31, 2022, we had the following activity:

 

● On March 23, 2022, we entered into the Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park has committed to purchase up to $15.0 million of shares (the “Purchase Shares”) of our common stock, subject to the terms and conditions in the Purchase Agreement. We issued 123,609 shares of common stock (valued at $450,000) to Lincoln Park as a commitment fee in connection with entering into the Purchase Agreement and agreed to reimburse Lincoln Park $25,000 for fees incurred in connection with the Purchase Agreement. Concurrent with entering into the Purchase Agreement, we also entered into a registration rights agreement with Lincoln Park (the “Registration Rights Agreement”), pursuant to which we agreed to take certain actions relating to the registration under the Securities Act of 1933, as amended, of the offer and sale of the shares of common stock available for issuance under the Purchase Agreement.

 

We have the right to present Lincoln Park with a purchase notice (a “Regular Purchase Notice”), directing Lincoln Park to purchase up to 25,000 Purchase Shares (the “Regular Purchase Amount”) provided that the closing sale price of the common stock on the purchase date is not below a threshold price of $1.00, set forth in the Purchase Agreement (a “Regular Purchase”). The Regular Purchase Amount may be increased to up to 75,000 shares if the closing sale price of our common stock on the applicable purchase date equals or exceeds certain higher threshold prices set forth in the Purchase Agreement. We and Lincoln Park may mutually agree to increase the Regular Purchase Amount with respect to any Regular Purchase under the Purchase Agreement, provided that Lincoln Park’s maximum committed purchase obligation under any single Regular Purchase shall not exceed $1,250,000. The above-referenced share amount limitations and closing sale price thresholds are subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as provided in the Purchase Agreement. The purchase price per share for each Regular Purchase will be based on prevailing market prices of the common stock immediately preceding the time of sale as computed in accordance with the terms set forth in the Purchase Agreement. There are no upper limits on the price per share that Lincoln Park must pay for shares of common stock under the Purchase Agreement. Lincoln Park may not assign or transfer its rights and obligations under the Purchase Agreement.

 

 

The aggregate number of shares that we can issue to Lincoln Park under the Purchase Agreement may not exceed 3,142,430 shares (subject to proportional adjustments for stock splits, reverse stock splits and similar events as described above), which is equal to 19.99% of the outstanding shares of common stock immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”), unless (i) stockholder approval is obtained to issue shares of common stock in excess of the Exchange Cap, in which case the Exchange Cap will no longer apply, or (ii) the average price of all sales of Purchase Shares to Lincoln Park under the Purchase Agreement equals or exceeds the lower of (i) the Nasdaq official closing price immediately preceding the execution of the Purchase Agreement or (ii) the arithmetic average of the five Nasdaq official closing prices for the common stock immediately preceding the execution of the Purchase Agreement, plus an incremental amount to take into account the issuance of the commitment shares to Lincoln Park under the Purchase Agreement, such that the transactions contemplated by the Purchase Agreement are exempt from the Exchange Cap limitation under applicable Nasdaq rules. In all instances, we may not sell shares of our common stock to Lincoln Park under the Purchase Agreement if it would result in Lincoln Park beneficially owning more than 9.99% of the outstanding shares of common stock.

 

We may terminate the Purchase Agreement at any time, at our sole discretion, without any cost or penalty, by giving one business day notice to Lincoln Park to terminate the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the common stock.

 

There are no limitations on use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on our ability to enter into variable rate transactions described in the Purchase Agreement), rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. We may deliver Purchase Notices under the Purchase Agreement, subject to market conditions, and in light of our capital needs from time to time and under the limitations contained in the Purchase Agreement. Any proceeds that we receive under the Purchase Agreement are expected to be used for working capital and general corporate purposes.

 

  ● We issued 100,000 shares to Elion for the second milestone payment.
     
● Also, during the year ended December 31, 2022, 36,145 vested RSAs and RSUs were forfeited to pay for federal, state and local income taxes and an additional 18,208 unvested RSAs were forfeited when one of our directors did not seek reelection.

 

During the year ended December 31, 2021, we had the following activity:

 

● On February 24, 2021, we sold in a private placement 1,321,132 shares of our common stock to accredited and institutional investors for gross proceeds of $10.2 million. Net proceeds from the offering were $9.9 million. In connection with the placement, we issued warrants for the purchase of 79,268 shares of our common stock to our placement agent. These warrants are exercisable for cash at $9.30 per share and expire on February 16, 2023.

 

● On June 8, 2021, we granted 37,500 RSAs to an employee in accordance with their employment agreement.

 

● On June 16, 2021, we issued 44,689 shares of our common stock to Ocuphire Pharma, Inc. pursuant to the Ocuphire Agreement (see Note 9).

 

● On August 20, 2021, we entered into an equity distribution agreement (the “Sales Agreement”) with Oppenheimer & Co. Inc. (the “Sales Agent”) under which we may issue and sell in a registered “at-the-market” offering shares of our common stock having an aggregate offering price of up to $30.0 million from time to time through or to our Sales Agent (the “ATM Offering”). During year ended December 31, 2021, we sold 21,597 shares of our common stock under the “at-the-market” offering sales agreement at an average price of approximately $8.33 per share.

 

● On October 6, 2021, we also issued 100,000 shares of our common stock to Elion Oncology pursuant to the Elion License Agreement.

 

● We granted 17,800 shares of common stock, along with a combination of warrants and stock options for the purchase of 180,000 shares of common stock, to consultants in accordance with consulting agreements for services that will be provided in 2021 and 2022. Of the 17,800 shares granted, 14,300 were issued and outstanding at December 31, 2021.

 

● During the year ended December 31, 2021, 9,176 vested RSAs were forfeited to pay for federal, state and local income taxes and an additional 1,530 unvested RSAs were forfeited upon employment termination.

 

Treasury Stock - Repurchase of Shares from Aposense, Ltd.

 

On March 29, 2022, we purchased 100,000 shares of our common stock from Aposense Ltd. for $300,000 in a private transaction and are holding these shares as treasury stock until they are reissued or retired at the discretion of our Board of Directors.