Quarterly report pursuant to Section 13 or 15(d)

Capital Structure

v3.23.1
Capital Structure
 3 Months Ended
Mar. 31, 2023
Federal Home Loan Banks [Abstract]  
Capital Structure
9. Capital Structure
On February 10, 2023, the stockholders of the Company approved a reverse stock-split of the Company’s outstanding shares of common stock at a ratio ranging from any whole number between
1-for-10
and
1-for-80,
as determined by the Board of Directors in its discretion. The Board subsequently determined to implement a reverse stock split at a ratio of
1-for-80.
The stock split became effective on February 14, 2023. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect this reverse stock split. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately decreased and the respective per share value and exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities.
Common Stock
As of March 31, 2023, the Company was authorized to issue 125,000,000 shares of common stock.
Follow-on
Offerings
On May 27, 2020, the Company completed an underwritten public offering of
147,471
shares of its common stock and warrants to purchase an additional
110,603
shares of its common stock at an exercise price of $
392.00
per share. The public offering price was $
356.00
for one share of common stock and an accompanying warrant to purchase
0.75 shares of common stock, resulting in net proceeds to the Company of $48.9 million after underwriting discounts and commissions and offering expenses payable by the Company. The Company completed a concurrent private placement to Pfizer of 8,427 shares of common stock and an accompanying warrant to purchase an additional 6,320
shares of its common stock at an exercise price of 
$392.00 per share of common stock (the “Pfizer Warrant”), resulting in net proceeds to the Company of $3.0 million.
On March 22, 2021, the Company completed an underwritten public offering of 143,750 shares of its common stock, including shares sold pursuant to the fully exercised overallotment option granted to the underwriters in connection with the offering, at a public offering price of $400.00 per share, resulting in net proceeds to the Company of $53.8 million after underwriting discounts and commissions and offering expenses payable by the Company.
 
On December 15, 2022, the Company completed the 2022 Offering. All shares of common stock, the
2022
pre-funded
warrant, the Class A Warrant and the Class B Warrant were issued together to a single accredited investor purchaser for consideration equating to $10.32 share of common stock (or
2022
pre-funded
warrant to purchase one share of common stock, less a nominal exercise price), together with a Class A Warrant to purchase two shares of common stock and a Class B warrant to purchase one share of common stock, in the case of each of the Class A Warrant and Class B Warrant, for no additional consideration but each with an exercise price per share of $10.32, for aggregate net proceeds to the Company of $6.1 million after placement agent fees and offering expenses payable by the Company. As of March 31, 2023, 623,919 shares of common stock had been purchased through the full exercise of the
2022
pre-funded
warrant.
At issuance, the 2022 Warrants were not exercisable and only became exercisable following (i) stockholder approval of (and the effectiveness of) an amendment to the Company’s certificate of incorporation that either combines outstanding shares of common stock with such combination ratio as determined by the Company’s board of directors and/or authorizes additional shares of common stock to such number as determined by the Company’s board of directors, in each case, so as to enable the issuance of the number of shares of common stock underlying the 2022 Warrants (disregarding any limitations on the exercise thereof), and (ii) the issuance of all shares of common stock issued in, or issuable pursuant to the exercise of the 2022
pre-funded
warrant or 2022 Warrants issued in, the 2022 Offering as may have been required by the applicable rules and regulations of the Nasdaq Stock Market.
On February 10, 2023, the stockholders of the Company approved the issuance of all shares of common stock issued in, or issuable pursuant to the exercise of the
2022
pre-funded
warrant or 2022 Warrants issued in the 2022 Offering as may have been required by the applicable rules and regulations of the Nasdaq Stock Market, the approval of which, together with the approval and effectiveness of the
1-for-80
reverse stock-split effected on February 14, 2023, commenced the exercisability of the 2022 Warrants as of February 14, 2023. The resulting expiration dates of the 2022 Warrants have been reflected, where applicable, in the accompanying financial statements and notes thereto. On March 2, 2023, the exercise price of the 2022 Warrants
,
 which are subject to an anti-dilution adjustment, were adjusted to $4.00 per share as a result of the 2023 Offering.
On March 2, 2023, the Company completed the 2023 Offering. All securities in the 2023 Offering were issued to the same single accredited investor purchaser from the 2022 Offering for consideration equating to $4.00 per share of common stock (or
2023
pre-funded
warrant to purchase one share of common stock, less a nominal exercise price), together with a warrant to purchase two shares of common stock for no additional consideration but with an exercise price per share of $4.00, for aggregate net proceeds to the Company of $9.1 million after placement agent fees and offering expenses payable by the Company. As of March 31, 2023, 268,000 shares of common stock had been purchased through the partial exercise of the
 
2023
pre-funded
warrant.
The warrants issued by the Company in its 2022 and 2020 offerings of securities contain certain terms within the fundamental transaction provision that the Company determined requires classification as liabilities in accordance with ASC 815. At issuance, the Company determined the fair value of the 2022 Warrants and the 2020 Warrants to be $11.0 million and $31.4 million, respectively, and recorded these balances as warrant liabilities, and reducing the amount of net proceeds recorded as additional
paid-in-capital.
The fair value of the 2022 Warrants exceeded the proceeds received in the 2022 Offering and the excess of $4.0 million was expensed as other expense. The Company consummated the 2022 Offering on market terms available at the time of the transaction to provide additional funding to advance its product candidates. The fair value of these warrants is
re-measured
at each reporting period and changes in fair value are recognized in the consolidated statement of operations (see Note 4, “Fair Value Measurements”). Additionally, the Company allocated $0.9 million and $2.2 million of issuance costs to the 2022 Warrants and the 2020 Warrants, respectively, based on the proportion of the proceeds allocated to the fair value of the warrants.
The allocated issuance costs were expensed as other expense. The 2023 Warrant and the Pfizer Warrant do not contain the same fundamental transaction provisions and therefore the Company determined that the 2023 Warrant and the Pfizer Warrant should be classified as equity in the Company’s consolidated balance sheet. 
Voting
The holders of shares of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings.
Dividends
The holders of shares of common stock are entitled to receive dividends, if and when declared by the board of directors. As of March 31, 2023, no dividends have been declared or paid on the Company’s common stock since inception.
 
Reserved for Future Issuance
The Company has reserved for future issuance the following number of shares of common stock as of March 31, 2023 and December 31, 2022:
 
    
March 31,
2023
     
December 31,
2022
  
Outstanding
pre-funded
warrants to purchase common stock
      2,104,000        574,937  
Outstanding options to purchase common stock
      79,661        55,565  
Outstanding warrants to purchase common stock
      7,151,451        2,151,451  
For future issuance under the 2014 Omnibus Incentive Plan
      1,020        1,317  
For future issuance under the 2021 Employment Inducement Plan
      12,375        12,375  
    
 
 
     
 
 
  
       9,348,507        2,795,645