| Equity | Note 12 – Equity Our certificate of incorporation, as amended and restated (the “ Charter On February 24, 2021 the Company held a Special Meeting of Stockholders (the “ Special Meeting one-for-five one-for-ten Reverse Split 1-for-10 On February 14, 2022 the Company held its Annual Meeting of Stockholders (the “ Annual Meeting Common Stock The Company had 14,855,848 and 3,115,030 shares of its Common Stock issued and outstanding at December 31, 2021 and 2020, respectively. Each holder of Common Stock is entitled to one
vote for each share of Common Stock held on all matters submitted to a vote of the stockholders. Our Charter and Amended and Restated Bylaws (the “ Bylaws In addition, the holders of our Common Stock will be entitled to receive ratably such dividends, if any, as may be declared by the Board out of legally available
funds; however, the current policy of our Board is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our Common Stock will be entitled to share ratably in all assets that are legally
available for distribution. Holders of our Common Stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions
applicable to the Common Stock. The rights, preferences and privileges of the holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate
and issue in the future. Preferred Stock The Board is authorized to divide the preferred stock into any number of series, fix the designation and number of each such series, and determine
or change the designation, relative rights, preferences, and limitations of any series of preferred stock. The Board of may increase or decrease the number of shares initially fixed for any series, but no decrease may reduce the number below the
shares then outstanding and duly reserved for issuance. On July 16, 2020, we authorized 5,194.805195 shares as Series B Preferred Stock and issued approximately 2,912.58
shares of Series B Preferred Stock, with approximately 2,282.22
shares of Series B Preferred Stock remaining authorized but undesignated and unissued. On January 5, 2021, we authorized 75,000 shares as Series
C Preferred Stock. Shares of Series C Preferred Stock converted into Common Stock (or Prefunded Warrants, as applicable) or redeemed shall be canceled and shall not be reissued. As of December 31, 2021, 0 shares of Series C Preferred Stock were issued and outstanding, with approximately 41,903 shares of Series C Preferred Stock remaining authorized but unissued. At December 31, 2021, the Company had approximately 662.25 shares of preferred stock issued and outstanding with approximately 9,999,337.75 shares of preferred stock remaining authorized but unissued. Series B Convertible Preferred Stock Pursuant to the Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “ Series
B Certificate of Designation Ranking The Series B Preferred Stock will rank senior to the Common Stock with respect to distributions of assets upon the liquidation, dissolution or
winding up of the Company. Stated Value Each share of Series B Preferred Stock has a stated value of $7,700, subject to adjustment for stock splits, combinations and similar events (the “ Series B Stated Value Dividends Each holder of shares of Series B Preferred Stock, in preference and priority to the holders of all other classes or series of stock of the
Company, is entitled to receive dividends, commencing from the date of issuance. Such dividends may be paid by the Company only when, as and if declared by the Board, out of assets legally available therefor, semiannually in arrears on the last day
of June and December in each year, commencing December 31, 2020, at the dividend rate of 9.0% per year, which is cumulative and
continues to accrue on a daily basis whether or not declared and whether or not the Company has assets legally available therefor. The Company may pay such dividends at its option either in cash or in kind in additional shares of Series B Preferred
Stock (rounded down to the nearest whole share), provided the Company must pay in cash the fair value of any such fractional shares in excess of $100.00.
During the year ended December 31, 2020, the Company issued a total of approximately 117.62 shares of Series B Preferred Stock for
payment of dividends amounting to approximately $906,000. During the year ended December 31, 2021, the Company accrued dividends
amounting to approximately $678,000, of which approximately $213,000 of accrued dividends were issued as shares of Common Stock in connection with holders of Series B Preferred Stock exercising the Series B Exchange Rights. Liquidation Preference; Liquidation Rights Under the Certificate of Designations, each share of Series B Preferred Stock carries a liquidation preference equal to the Series B Stated Value
(as adjusted thereunder) plus accrued and unpaid dividends thereon (the “ Liquidation Preference If the Company voluntarily or involuntarily liquidates, dissolves or winds up its affairs, each holder of the Series B Preferred Stock will be
entitled to receive out of the Company’s assets available for distribution to stockholders, after satisfaction of liabilities to creditors, if any, but before any distribution of assets is made on the Common Stock or any of the Company’s shares of
stock ranking junior as to such a distribution to the Series B Preferred Stock, a liquidating distribution in the amount of the Stated Value of all such holder’s Series B Preferred Stock plus all accrued and unpaid dividends thereon. At December
31, 2021 and 2020, the value of the liquidation preference of the Series B Preferred stocks aggregated to approximately $5.6 million and
$21.4 million, respectively.
Conversion Each share of Series B Preferred Stock will be convertible at the holder’s option at any time, into Common Stock at a conversion rate equal to the
quotient of (i) the Series B Stated Value divided by (ii) the initial conversion price of $7.70, subject to specified adjustments for
stock splits, cash or stock dividends, reorganizations, reclassifications other similar events as set forth in the Series B Certificate of Designations. In addition, at any time after the six month anniversary of the Series B Closing Date, if the closing sale price per share of Common Stock exceeds 250% of the initial conversion price, or $19.25, for 20 consecutive trading days, then all of the outstanding shares of Series B Preferred Stock will automatically convert (the “ Automatic Conversion Most Favored Nations Exchange Right In the event the Company effects any issuance by the Company or any of its subsidiaries of Common Stock or Common Stock equivalents for cash
consideration, or a combination of units thereof (a “ Subsequent Financing Exchange Amount Series B
Exchange Right As of March 28, 2022, (i) holders of approximately 1,846.80
shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $14.4 million had previously elected to exercise
their Series B Exchange Rights into Series C Preferred Stock, convertible into an aggregate of 1,921,645 shares of Common Stock (which
conversion the Company has elected to make in full), and additional Investor Warrants exercisable for up to an aggregate of 1,921,645
shares of Common Stock, (ii) holders of approximately 13.80 shares of Series B Preferred Stock with an aggregate Exchange Amount of
approximately $114,000 had previously elected to exercise their Series B Exchange Rights into 33,500 shares of Common Stock with no warrants, and (iii) holders of approximately 17.05
shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $145,000 had previously elected to exercise their
Series B Exchange Rights into 104,735 shares of Common Stock, and additional Series C Warrants exercisable for up to an aggregate of 104,735 shares of Common Stock. Voting The holders of the Series B Preferred Stock, voting as a separate class, will have customary consent rights with respect to certain corporate
actions of the Company. The Company may not take the following actions without the prior consent of the holders of at least a majority of the Series B Preferred Stock then outstanding: (a) authorize, create, designate, establish, issue or sell an
increased number of shares of Series B Preferred Stock or any other class or series of capital stock ranking senior to or on parity with the Series B Preferred Stock as to dividends or upon liquidation; (b) reclassify any shares of Common Stock or
any other class or series of capital stock into shares having any preference or priority as to dividends or upon liquidation superior to or on parity with any such preference or priority of Series B Preferred Stock; (c) amend, alter or repeal the
Certificate of Incorporation or Bylaws of the Company and the powers, preferences, privileges, relative, participating, optional and other special rights and qualifications, limitations and restrictions thereof, which would adversely affect any
right, preference, privilege or voting power of the Series B Preferred Stock; (d) issue any indebtedness or debt security, other than trade accounts payable, insurance premium financings and/or letters of credit, performance bonds or other similar
credit support incurred in the ordinary course of business, or amend, renew, increase, or otherwise alter in any material respect the terms of any such indebtedness existing as of the date of first issuance of shares of Series B Preferred Stock;
(e) redeem, purchase, or otherwise acquire or pay or declare any dividend or other distribution on (or pay into or set aside for a sinking fund for any such purpose) any capital stock of the Company; (f) declare bankruptcy, dissolve, liquidate, or
wind up the affairs of the Company; (g) effect, or enter into any agreement to effect, a Change of Control (as defined in the Certificate of Designations); or (h) materially modify or change the nature of the Company’s business. 2014 Equity Incentive Plan The Company’s Board and stockholders adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “ 2014 Plan The 2014 Plan allowed for the issuance of securities, including stock options to employees, Board members and consultants. The number of shares of Common Stock
reserved for issuance under the 2014 Plan could not exceed ten percent (10%) of the issued and outstanding shares of Common Stock on an
as converted basis (the “ As Converted Shares On July 16, 2020, the Board approved an amendment to the 2014 Plan. The amendment eliminates individual grant limits under the 2014 Plan that were
intended to comply with the exemption for “performance-based compensation” under Section 162(m) of the Internal Revenue Code, which section has been repealed. The Company issued an aggregate of 0 and 287,001 stock options, during the years ended December 31, 2021 and 2020, respectively, under the 2014 Plan (see Note 14). As of December 31, 2021,
there were an aggregate of 310,250 total shares available under the 2014 Plan, of which 271,550 are issued and outstanding, and 38,700 shares are
reserved subject to issuance of restricted stock and RSUs. Upon adoption of the 2020 Omnibus Equity Incentive Plan on September 11, 2020, the Company may longer make grants under the 2014 Plan. 2020 Equity Incentive Plan The Company’s Board and stockholders adopted and approved the 2020 Omnibus Equity Incentive Plan (the “ 2020 Plan initial number of shares of Common Stock available for
issuance under the 2020 Plan is 1,000,000 shares, which will, on January 1 of each calendar year, unless the Board decides otherwise,
automatically increase to equal ten percent (10%) of the total number of shares of Common Stock outstanding on December 31 of the
immediately preceding calendar year, calculated on an As Converted Basis. As Converted Shares include all outstanding shares of Common Stock and all shares of Common Stock issuable upon the conversion of outstanding preferred stock, warrants and
other convertible securities, but will not include any shares of Common Stock issuable upon the exercise of options and other convertible securities issued pursuant to either the 2014 Plan or the 2020 Plan. The number of shares permitted to be
issued as “incentive stock options” (“ ISOs ”) from is 1,500,000 under the 2020 Plan. The Company issued an aggregate of 175,246 and 1,000 stock options under the 2020 Plan during the year ended December 31, 2021 and 2020, respectively. As of December 31, 2021, 1,000,000 total shares
were available under the 2020 Plan, of which 176,246 were issued and outstanding and 823,754 shares were available for potential issuances. As of January 1, 2022, the number of shares of Common Stock available for issuance under the 2020 Plan automatically increased to 2,114,360. Equity Line with Lincoln Park In November 2019, the Company entered into a purchase agreement (the “ Equity Line Agreement Lincoln Park Registration Rights Agreement Equity Line Commitment Shares The remaining shares of our Common Stock that may be issued under the Equity Line Agreement may be sold by the Company to Lincoln Park at our discretion from
time-to-time over a 30-month period commencing after the satisfaction of certain conditions set forth in the Equity Line Agreement,
subject to the continued effectiveness of a registration statement covering such shares of Common Stock sold to Lincoln Park by the Company. The registration statement was filed with the SEC on December 31, 2019 and was declared effective on
January 14, 2020. U nder the Equity Line Agreement, on any business day over the term of the Equity Line Agreement, the Company has the right, in its sole discretion, to present Lincoln Park with a purchase notice (each, a “ Purchase Notice ”) directing Lincoln Park to purchase up to 15,000 shares of Common Stock per business day (the “ Regular Purchase ”). In each case, Lincoln Park’s maximum commitment in any single Regular Purchase may not exceed $1,000,000. The Equity Line Agreement provides for a purchase price per Purchase Share (the “ Purchase Price ”) equal to the lesser
of:
●
the lowest sale price of Common Stock on the purchase date; and;
●
the average of the three lowest closing sale prices for the Common Stock during the ten In addition, on any date on which the Company submits a Purchase Notice to Lincoln Park, the Company also has the right, in its sole discretion, to present Lincoln Park with an accelerated purchase
notice (each, an “ Accelerated Purchase Notice ”) directing Lincoln Park to purchase an amount of
stock (the “ Accelerated Purchase ”) equal to up to the lesser of (i) three times the number of shares purchased pursuant to such Regular Purchase; and (ii) 30%
of the aggregate shares of Common Stock traded during all or, if certain trading volume or market price thresholds specified in the Equity Line Agreement are crossed on the applicable Accelerated
Purchase date, the portion of the normal trading hours on the applicable Accelerated Purchase date prior to such time that any one of such thresholds is crossed (such period of time on the applicable Accelerated Purchase Date, the “ Accelerated Purchase Measurement Period ”), provided that Lincoln Park will not be required to buy shares
pursuant to an Accelerated Purchase Notice that was received by Lincoln Park on any business day on which the last closing trade price of Common Stock on the Nasdaq Capital Market (or alternative
national exchange) is below $2.50 per share. The purchase price per share for each such Accelerated Purchase will be equal to the
lesser of:
●
97% of the volume weighted average price of the Company’s common stock during the applicable
Accelerated Purchase Measurement Period on the applicable Accelerated Purchase date; and;
●
the closing sale price of Common Stock on the applicable Accelerated Purchase Date. The Company may also direct Lincoln Park on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder have been properly delivered to Lincoln Park in
accordance with the Equity Line Agreement, to purchase an amount of stock (the “ Additional Accelerated Purchase ”) equal to up to the lesser of (i) three times the number of shares purchased pursuant to such Regular Purchase; and (ii) 30% of the aggregate number of shares of Common Stock traded during a certain portion of the normal
trading hours on the applicable Additional Accelerated Purchase date as determined in accordance with the Equity Line Agreement (such period of time on the applicable Additional Accelerated Purchase date, the “ Additional Accelerated Purchase Measurement Period ”), provided that the closing price of the Company’s common stock on the business day immediately preceding such business
day is not below $2.50 per share. Additional Accelerated Purchases will be equal to the lower of:
●
97% of the volume weighted average price of the Company’s common stock during the applicable
Additional Accelerated Purchase Measurement Period on the applicable Additional Accelerated Purchase; and;
●
the closing sale price of Common Stock on the applicable Additional Accelerated Purchase.
Pursuant to the terms of the Equity Line Agreement, without first obtaining stockholder approval, the aggregate number of shares that the Company is permitted to sell
to Lincoln Park thereunder, when aggregated with certain other private offerings of Common Stock, as applicable, may not exceed 19.99%
of the Common Stock outstanding immediately prior to the execution of the Equity Line Agreement on November 13, 2019, unless the average price of all applicable sales thereunder exceeds $7.00 per share calculated by reference to the “Minimum Price” under Nasdaq Listing Rule 5635(d). On September 11, 2020, the Company received stockholder approval for the
issuances of the full $15 million available under the Equity Line Agreement. There is approximately $14.0 million of availability left for issuance pursuant to the Equity Line Agreement. The Company issued an aggregate of 0, and 149,520 shares of Common Stock, d uring the years ended December 31, 2021 and 2020, At The Market Agreement with H.C. Wainwright On May 26, 2021, the Company entered into the ATM Agreement with H.C. Wainwright & Co., LLC (“ Wainwright Securities Act Common Stock Issuances 2021 Issuances During the year ended December 31, 2021, the Company issued an aggregate of 122,230 shares of its Common Stock to consultants with a grant date fair value of approximately $1.3
million for investor relations services provided, which was recorded as stock-based compensation and included as part of general and administrative expense. During the year ended December 31, 2021, the Company issued an aggregate 7,500
shares of its Common Stock with a grant date fair value of approximately $94,000 in connection with the settlement with the Company’s
former investment bank, which was recorded as stock-based compensation and included as part of general and administrative expense. During the year ended December 31, 2021, the Company issued an aggregate of 3,125,460 shares of Common Stock upon the conversion of an aggregate of 33,097.10 shares of Series C
Preferred Stock with a stated value of approximately $24.7 million plus accrued dividends of approximately $198,000. During the year ended December 31, 2021, the Company issued an aggregate of 945,644 shares of Common Stock upon the exercise of an aggregate of 952,588 investor warrants,
including an aggregate of 399,187 pre-funded warrants (see Note 13). During the year ended December 31, 2021, the Company issued an aggregate of 258,278 shares of Common Stock upon the conversion of an aggregate of 258.08 shares of Series B
Preferred Stock with a stated value of approximately $2.0 million plus accrued dividends of approximately $3,000. During the year ended December 31, 2021, the Company issued an aggregate of 33,500 shares of Common Stock upon the exchange of 13.80 shares of Series B Preferred Stock with a
stated value of approximately $0.1 million plus accrued dividends of approximately $8,000 into shares of Common Stock at $3.40 per share. During the year ended December 31, 2021, the Company issued an aggregate of 1,625,454 shares of Common Stock in connection with the March 2021 Offering and July 2021 Offering, as detailed below. 2020 Issuances During the year ended December 31, 2020 , holders of shares of Series B Preferred Stock converted approximately 254.54 shares of Series B Preferred Stock into an aggregate of 256,581 shares of Common Stock at the stated conversion price of $7.70 per share. During the year ended December 31, 2020, the Company issued an aggregate of 18,284 approximately as
stock-based compensation and included as part of general and administrative expense. During the year ended December 31, 2020 , the Company issued 6,252 restricted shares of Common Stock to a consultant as payment of $135,000 of accounts payable for investor relations services. During the year ended December 31, 2020, the Company issued an aggregate of 10,594 shares of its Common Stock to outside Board members as payment of Board fees with an aggregate grant date fair value of approximately $131,000 Restricted Stock and Restricted Stock Units Restricted stock refers to shares of Common Stock subject to vesting based on certain service, performance, and market conditions. Restricted stock unit awards (“ RSUs During the year ended December 31, 2020 , an aggregate of 1,008 restricted shares of Common Stock, vested with a total grant date fair value of approximately $36,000 and was recorded as stock-based
compensation, included as part of general and administrative expense. During the year ended December 31, 2020 , an aggregate 400 unvested restricted shares of Common Stock As of December 31, 2021, and 2020, the Company had an aggregate unrecognized restricted Common Stock expense of approximately $393,000 and $393,000, respectively, which
will be recognized when vesting of certain milestones will be become probable. The Series B Private Placement and the Exchange On July 16, 2020 (the “ Series B Closing Date ”), the Company consummated a private placement offering (the “ Series B Private Placement ”) whereby the Company entered into a Convertible Preferred Stock and Warrant Securities Purchase Agreement (the “ Series B Purchase Agreement ”) with certain accredited and institutional investors (the “ Series B Investors ”). Pursuant to the Series B Purchase Agreement, the Company issued an
aggregate of 2,912.583005 shares of Series B Convertible Preferred Stock, par value $0.0001 per share (the “ Series B Preferred Stock ”), at a price of $7,700.00 per share, initially convertible into an aggregate of 2,912,576 shares of Common Stock at $7.70
per share, together with warrants (the “ Series B Warrants ”) to purchase an
aggregate of 1,456,283 shares of Common Stock at an exercise price of $8.50 per share. The amount of the Series B Warrants is equal to 50%
of the shares of Common Stock into which the Series B Preferred Stock is initially convertible. In connection with the Series B Private Placement, an aggregate of approximately 1,975.58 shares of Series B Preferred Stock initially convertible into 1,975,575 shares of Common Stock and related 987,784 Series B Warrants were issued for cash
consideration, resulting in aggregate gross proceeds of approximately $15.2 million and aggregate net proceeds to the Company of approximately $13.2
million after deducting placement agent compensation and offering expenses.
An aggregate of approximately 937.00
shares of Series B Preferred Stock initially convertible into 937,001 shares of Common Stock and related Series B Warrants to purchase 468,499 shares of Common Stock were issued to certain Series B Investors (the “ Exchange Investors Promissory Notes Exchange Exchange
Addendum Exchange Warrants Pursuant to the Series B Private Placement and the Series B Purchase Agreement, for purposes of
complying with Nasdaq Listing Rule 5635(c) and 5635(d), the Company was required to hold a meeting of its stockholders not later than 60 days following the Series B Closing Date to seek approval (the “ Stockholder Approval ”) for, among other things, the issuance of shares of Common Stock upon (i) full conversion of the
Series B Preferred Stock; and (ii) full exercise of the Series B Warrants and the Exchange Warrants. In the event the Stockholder Approval was not received on or prior to the 90th day following the Series B Closing Date, subject to extension upon
the prior written approval of the holders of at least a majority of the Series B Preferred Stock then outstanding, the Company would have been required to repurchase all of the then outstanding shares of Series B Preferred Stock at a price equal
to 150% of the stated value thereof plus
accrued and unpaid dividends thereon, in cash. On September 11, 2020, the Company received Stockholder Approval. The Company prepaid the remaining outstanding balance of $25,000
aggregate principal amount of Promissory Notes, together with accrued and unpaid interest thereon through the prepayment date of approximately $1,000,
held by those holders who did not participate in the Exchange. Following these transactions, no Promissory Notes remain outstanding. In connection with the Series B Private Placement, the Company paid the placement agent 9.0% of the gross cash proceeds received by the Company from investors introduced by the placement agent and 4.0%
of the gross cash proceeds received by the Company for all other investors, or approximately $1.3 million. The Company also paid the
placement agent a non-accountable cash fee equal to 1.0% of the gross cash proceeds and a cash financial advisory fee equal to 3.0% of the outstanding principal balance of the Promissory Notes that were submitted in the Exchange, or approximately $0.3 million in additional cash fees in the aggregate. In addition, the Company issued to the placement agent warrants to purchase up to 137,746 shares of Common Stock (the “ July Placement Agent Warrants Accounting for the Series B Private Placement Upon receiving Shareholder Approval on September 11, 2020, the Company classified the Series B Preferred Stock as permanent equity because no
features provide for redemption by the holders of the Series B Preferred Stock or conditional redemption, which is not solely within the Company’s control, and there are no unconditional obligations in that (1) the Company must or may settle in a
variable number of its equity shares and (2) the monetary value is predominantly fixed, varying with something other than the fair value of the Company’s equity shares or varying inversely in relation to the Company’s equity shares. Because the Series B Preferred Stock contain certain embedded features that could affect the ultimate settlement of the Series B Preferred Stock,
the Company analyzed the instrument for embedded derivatives that require bifurcation. The Company’s analysis began with determining whether the Series B Preferred Stock is more akin to equity or debt. The Company evaluated the following
criteria/features in this determination: redemption, voting rights, collateral requirements, covenant provisions, creditor and liquidation rights, dividends, conversion rights and exchange rights. The Company determined that the Series B Preferred
Stock was more akin to equity than to debt when evaluating the economic characteristics and risks of the entire Series B Preferred Stock, including the embedded features. The Company then evaluated the embedded features to determine whether their
economic characteristics and risks were clearly and closely related to the economic characteristics and risks of the Series B Preferred Stock. Since the Series B Preferred Stock was determined to be more akin to equity than debt, and the underlying
that causes the value of the embedded features to fluctuate would be the value of the Company’s common stock, the embedded features were considered clearly and closely related to the Series B Preferred Stock. As a result, the embedded features
would not need to be bifurcated from the Series B Preferred Stock. Any beneficial conversion features related to the exercise of the Most Favored Nation exchange right or the application of the Mandatory
Conversion provision will be recognized upon the occurrence of the contingent events based on its intrinsic value at the commitment date. The Company concluded the freestanding Series B Warrants did not contain any provision that would require liability classification and therefore
should be classified in stockholder’s equity, based on their relative fair value. The proceeds from the Series B Private Placement were allocated to the Series B Preferred Stock and
Series B Warrants based on their relative fair values. The total proceeds of approximately $22.4 million were allocated as follows: approximately $16.5 million to the
Series B Preferred Stock, and approximately $5.9 million to the Series B Warrants. After
allocation of the proceeds, the effective conversion price of the Series B Preferred Stock was determined to be beneficial and, as a result, the Company recorded a deemed dividend of approximately $8.2 million equal to the intrinsic value of the beneficial conversion feature and recognized on the
closing date and recorded as a reduction of income available to common stockholders in computing basic and diluted loss per share. The total offering costs of approximately $2.0 million were recognized in equity. January 2021 Offerings On December 31, 2020, the Company entered into a securities purchase agreement (the “ Series C Purchase Agreement January 2021 Registered Direct Offering Concurrently with the January 2021 Registered Direct Offering, in a private placement offering pursuant to the Series C Purchase Agreement (the “ January 2021 Private Placement January 2021 Offerings January 2021 Investor Warrants In connection with the January 2021 Private Placement, the Company entered into a registration rights agreement, dated as of December 31, 2020, pursuant to which the
Company filed a registration statement on Form S-1 (File No. 333-252087) to register the shares of Common Stock issuable upon the conversion of the Series C Preferred Stock sold in the January 2021 Private Placement and the exercise of the January
2021 Investor Warrants. The registration statement was declared effective by the SEC on January 21, 2021. On January 6, 2021, the January 2021 Offerings closed, and the Company received aggregate gross proceeds of approximately $8.0 million. The net proceeds to the Company from the January 2021 Offerings, after deducting the placement agent’s fees and expenses, was approximately $6.8 million. The Company used the net proceeds to fund the payment of cash consideration to FWB under the FWB License Agreement, and for other general
corporate purposes. The Company paid the placement agent a cash fee equal to 8.0%
and a management fee equal to 1.0% of the aggregate gross proceeds received by the Company in the January 2021 Offerings, or
approximately $700,000. The Company also agreed to issue to the placement agent or its designees warrants (the “ January 2021 Placement Agent Warrants Pursuant to the January 2021 Private Placement and the Series C Purchase Agreement, the Company was required to hold a meeting of its stockholders not later than March
31, 2021 to seek approval (the “ 2021 Stockholder Approval On February 24, 2021, the Company received the 2021 Stockholder Approval, and all outstanding shares of Series C Preferred Stock were converted to Common Stock. Accounting for the January 2021 Offerings Upon receiving the 2021 Stockholder Approval on February 24, 2021, the Company classified the Series C Preferred Stock as permanent equity because no features provide
for redemption by the holders of the Series C Preferred Stock or conditional redemption, which is not solely within the Company’s control, and there are no unconditional obligations in that (1) the Company must or may settle in a variable number of
its equity shares and (2) the monetary value is predominantly fixed, varying with something other than the fair value of the Company’s equity shares or varying inversely in relation to the Company’s equity shares. Because the Series C Preferred Stock contains certain embedded features that could affect the ultimate settlement of the Series |
