Quarterly report pursuant to Section 13 or 15(d)

Stockholders??? Equity

v3.24.3
Stockholders’ Equity
 9 Months Ended
Sep. 30, 2024
Stockholders' Equity Note [Abstract]  
Stockholders’ Equity Stockholders’ Equity
At-the-Market Offering
In the first half of 2024, the Company received net proceeds on sales of 32,163 shares of common stock under the at-the-market offering of approximately $0.6 million after deducting $28,000 in commissions and expenses. The weighted-average price of the common stock was $19.11 per share.
During the three months ended September 30, 2024, the Company received net proceeds on sales of 980,294 shares of common stock under the at-the-market offering of approximately $1.2 million after deducting $37,000 in commissions and expenses. The weighted-average price of the common stock was $1.24 per share.
Equity Line of Credit – Keystone Capital Partners, LLC
On July 20, 2023 (the “Execution Date”), the Company entered into an Equity Line of Credit ("ELOC") with a purchaser, Keystone Capital Partners, LLC (“Keystone”) whereby the Company has the right to sell up to an aggregate of $50.0 million of newly issued shares (the “Keystone ELOC Shares”) of the Company’s common stock. The aggregate number of shares that the Company can sell under the Keystone ELOC Purchase Agreement may not exceed 4.99% of the outstanding common stock, subject to certain exceptions set forth in the Keystone ELOC Purchase Agreement.
The purchase price of the shares of common stock that the Company elects to sell to the pursuant to the Keystone ELOC Purchase Agreement will be equal to 97.0% of the lower of (i) the lowest intraday sale price of the common stock on the Company’s current trading market on the applicable purchase date or (ii) the arithmetic average of the three lowest closing sale prices during the ten trading days immediately preceding the applicable purchase date. There is no upper limit on the price per share that Keystone could be obligated to pay for the common stock under the Keystone ELOC Purchase Agreement.
In the first half of 2024, the Company received net proceeds on sales of 1,740,027 shares of common stock of approximately $10.7 million, after deducting commissions and expenses of $1.3 million, at a weighted-average price of $6.93 per share.
During the three months ended September 30, 2024, the Company received net proceeds on sales of 1,493,000 shares of common stock of approximately $3.6 million, after deducting commissions and expenses of $0.1 million, at a weighted- average price of $2.42 per share. The amount available under this ELOC as of September 30, 2024 was approximately $30 million.
Equity Line of Credit - Liqueous, LP

On August 31, 2024 (the 'Execution Date"), the Company entered into a new ELOC with Liqueous, LP ("Liqueous"). The Company may sell up to an aggregate of $100 million in newly issued shares (the "Liqueous ELOC Shares") of its common stock during the Commitment Period. The Commitment Period in the agreement is defined as the period beginning on August 31, 2024 and ending either when the Company has sold shares up to $100 million or on the second anniversary of the Execution Date, whichever comes first.

Prior to August 31, 2024, stockholder approval was obtained to allow the Company the flexibility to issue more than 20% of its outstanding common stock, in connection with financing arrangements, including but not limited to the ELOC, on June 14, 2024. This approval provides the Company with the ability to issue shares in excess of this threshold under the ELOC or any additional financing arrangement that may require it.

The purchase price of the Liqueous ELOC Shares will be 97.0% of the lowest daily volume weighted-average price ("VWAP") of the Company's common stock during a 2-day valuation period following the applicable purchase date. There is no upper limit on the price per share that the Liqueous ELOC Purchaser could be obligated to pay for the Liqueous ELOC Shares under the agreement.
The Company's ELOC agreements contain put option features that allows the Company to sell shares of its common stock to the Keystone or Liqueous at specified discounts to the prevailing market price. These put options are classified as derivatives under ASC 815, Derivatives and Hedging. After a thorough assessment of the put option’s fair value, the Company has determined them to be insignificant. As a result, these derivatives have not been recognized in the condensed consolidated financial statements. The Company will continue to monitor the fair value of the put option in subsequent reporting periods and will recognize them in the condensed consolidated financial statements if their fair values become material.
Preferred Stock Conversions
On May 2024, the Company executed a Second Amended and Restated Certificate of Designations, Preferences and Rights of its Series A, Series B, and Series C preferred stock (collectively, the “May 2024 COD”) following the approval of the Company’s Board of Directors and the requisite numbers of Series A, Series B, and Series C preferred stockholders (collectively, the “Senior Preferred Stock”). Under the May 2024 COD, the Company revised the conversion price of its Senior Preferred Stock to $0.0462 to incentivize the holders to convert their shares into the Company’s common stock. The following table summarizes the number of common stock shares issued upon the conversion of the Senior Preferred Stock:
Series of Preferred Stock Number of Preferred Stock Shares Converted Number of Common Stock Shares Issued Upon Conversion
Series A 251 36,220
Series B 1,443 220,782
Series C 500,756 78,056
Total 502,450 335,058
The Company concluded that the conversion was an induced conversion and the fair value for the inducement was recognized as a deemed dividend. Due to the fact that the Company does not have any retained earnings, the Company recorded the corresponding entries to additional paid-in capital and the debit/credit had a net nil impact on stockholders’ equity during the period ended September 30, 2024.
On May 2024, the holders of Series F, F-1, and F-2 exercised their option to convert the shares into common stock utilizing the Alternate Conversion (defined below) feature. As part of the original terms of the Series F, the shares may be converted to common stock based on the Alternate Conversion Price (defined below) that is lower than the original conversion price of $0.1478 per share (“Alternate Conversion”) if certain events were to occur (“Triggering Event”). The Triggering Events that occurred that enabled an Alternate Conversion is the (i) failure of the applicable registration statement to be filed with the SEC on or prior to the date that is five (5) days after the applicable filing deadline, and (ii) failure to pay dividends. The
Alternate Conversion Price is the lowest of (i) the conversion price in effect on the conversion date of the applicable Alternate Conversion, (ii) the greater of (x) the floor price of $0.1478, and (y) 80% of the VWAP of the common stock on the trading day preceding delivery day of the conversion notice, (iii) 80% of the VWAP of common stock as of the trading day of the conversion notice delivery day, and (iv) the greater of (x) the floor price of $0.1478, and (y) 80% of the price of the quotient (I) sum of three lowest days of common stock VWAP over 15 days, divided by (II) three. The following table summarizes the number of shares of common stock issued upon the conversion:
Series of Preferred Stock Number of Preferred Stock Shares Converted Number of Common Stock Shares Issued through Conversion Number of Common Stock Shares Issued for Deemed Dividend in Connection with Conversion
Series F 4,448 648,441 38,799
Series F-1 653 113,576 —
Series F-2 1,153 140,264 10,990
Total 6,254 902,281 49,789
The Series F, F-1, and F-2 preferred stock were converted to common stock based on the triggering of the Alternative Conversion provisions. As such, the carrying value of the Series F, F-1, and F-2 preferred stock were derecognized. Additionally, the issued shares of common stock from the Series F conversion were recognized at par value and the triggered Alternative Conversion recognized as a deemed dividend. The Company recorded the corresponding entries to additional paid-in capital and the debit/credit had a net nil impact on stockholders’ equity during the period ended September 30, 2024.
During the nine months ended September 30, 2024, the Company recorded a reclassification adjustment of approximately $10,000 to additional paid-in capital and common stock par value related to the Senior Preferred Stock and Series F, F-1, and F-2 conversions.