Quarterly report pursuant to Section 13 or 15(d)

Stockholders??? Deficit

v3.24.3
Stockholders’ Deficit
 9 Months Ended
Sep. 30, 2024
Stockholders’ Deficit [Abstract]  
Stockholders’ Deficit

9. Stockholders’ Deficit

 

Authorized Common Stock

 

The Company is authorized to issue up to 400,000,000 shares of common stock at par value of $0.001 per share.

 

Issuance of Common Stock and Warrants from Initial Public Offering

 

During July 2021, as a result of its initial public offering, the Company issued 5,000,000 shares of common stock and 4,000,000 warrants to investors in exchange for cash at $5.00 per unit, consisting of $4.99 per share of common stock and $.0125 per four fifths of a warrant. The warrants have a 5-year term and an exercise price of $6.00 per warrant. The underwriters exercised their option to purchase an additional 600,000 warrants, and the Company received $7,500 in proceeds.

 

As a result of the initial public offering, the Company’s outstanding convertible notes and unpaid accrued interest were converted into 736,773 shares of common stock. Additionally, in accordance with the original terms of the warrant agreements convertible noteholders were granted a total of 184,193 common stock warrants with a 5-year term and with an exercise price of $6.00 per warrant.

 

The warrants from the initial public offering are equity classified. The following table summarizes activity for the Company’s IPO warrants for the nine months ended September 30, 2024:

 

                Weighted-        
    Number of           Average        
    Shares     Weighted-     Remaining     Aggregate  
    Underlying     Average     Contractual     Intrinsic  
    Outstanding     Exercise     Term     Value  
    Warrants     Price     (in Years)     (in thousands)  
Outstanding, December 31, 2023     4,784,193       6.00       2.54      
    -
  
Warrants granted    
-
      
-
       -      
-
  
Warrants exercised    
-
      
-
       -      
-
  
Outstanding, September 30, 2024     4,784,193       6.00       1.79      
-
  

 

See Note 12 for information on preferred stock warrants associated with our sale in March of Series A-1 Preferred Stock.

 

Issuance of Common Stock Upon Conversion of Series A-1 Preferred Stock

 

On June 26, 2023, the Company held its annual shareholder meeting and, as a result, shareholder approval for the issuance of common shares upon the conversion of the Series A-1 Preferred Stock was obtained (see Notes 10 and 11). On July 11, 2023, pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Voting Preferred Stock (the “Series A Certificate of Designation”), the Company issued a total of 19,516,205 shares of common stock and 43,649 Series A-2 Preferred Stock in settlement of the auto-conversion of the Series A-1 Preferred Stock.

 

Voting Rights of Common Stock

 

Each holder of shares of common stock shall be entitled to one vote for each share thereof held.