Stockholders’ Equity (Deficit) |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Equity [Abstract] | |
| Stockholders’ Equity (Deficit) |
Note 5 – Stockholders’ Equity (Deficit)
The Company’s authorized capital as of March 31, 2025 was shares of common stock, par value $ per share, and shares of preferred stock, par value $ per share.
Common Stock
2025 Warrant Inducement Transaction
On February 26, 2025, the Company received gross proceeds of $686,000 before deducting placement agent fees and other offering expenses of $70,000 in relation to a warrant exercise inducement agreement with certain holders of existing warrants. The existing warrants were exercisable into 302,069 shares of the Company’s common stock at $ per share. The holders agreed to exercise these existing warrants at a reduced exercise price of $2.27 per share in exchange for the Company’s agreement to issue the holders new warrants (the “Inducement Warrants”) exercisable for an aggregate of up to 604,138 shares of common stock.
The Inducement Warrants consist of i) new Series A Inducement Warrants, representing warrants to purchase up to 302,069 shares of Common Stock at $2.02 per share exercisable immediately upon issuance with a term of five years from the date of issuance, and ii) new Series B Inducement Warrants, representing warrants to purchase up to 302,069 shares of common stock at $2.02 per share exercisable immediately upon issuance with a term of eighteen months from the date of issuance. In addition, the Company issued warrants to the placement agent to purchase 21,145 shares of common stock at $2.8375 per share exercisable immediately upon issuance with a term of five years from the date of issuance.
The Company determined that under ASC 815, the 2025 inducement and placement agent warrants are considered indexed to the Company’s own stock and eligible for an exception from derivative accounting. Accordingly, the fair value of the 2025 inducement and placement agent warrants are classified as equity.
The Company recognized the aggregate effect of the modification of warrants and grant of inducement warrants of $1.1 million as an equity issuance cost and the accounting effect is recognized in the Statement of Stockholders’ Equity (Deficit).
Preferred Stock
Series C Preferred Stock
As of March 31, 2025, there were shares of series C preferred stock, par value $ per share (the “Series C Preferred Stock”) issued and outstanding.
As a result of numerous reverse stock-splits in previous years and the agreement terms for adjusting the rights of the related shares, the shares of Series C Preferred Stock are convertible into an infinitesimal amount of common stock, have no voting rights, and in the event of liquidation, the holders of the Series C Preferred Stock would not participate in any distribution of the assets or surplus funds of the Company. The holders of Series C Preferred Stock also are not currently entitled to any dividends if and when declared by the Board. No dividends to holders of the Series C Preferred Stock were declared or unpaid through March 31, 2025.
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