Quarterly report pursuant to Section 13 or 15(d)

Capital Stock

v3.20.2
Capital Stock
3 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Capital Stock

Common Stock Purchase Agreement with Lincoln Park Capital Fund

 

On March 24, 2020, we entered into a purchase agreement and a registration rights agreement with Lincoln Park Capital Fund (LPC) pursuant to which LPC committed to purchase up to $10,250,000 of our common stock at market-based prices over a period of 24 months (the LPC Agreement). On March 24, 2020, we sold 500,000 unregistered shares of our common stock (the Initial Purchase Shares) to LPC under the purchase agreement at a price of $0.50 per share for gross cash proceeds of $250,000 (the Initial Purchase) and we also issued 750,000 unregistered shares of our common stock to LPC under the terms of the LPC Agreement for its purchase commitments under the LPC Agreement (the Commitment Shares). To satisfy our obligations under the registration rights agreement associated with the LPC Agreement, we filed a Registration Statement on Form S-1 (the LPC Registration Statement) with the SEC on March 31, 2020 (Registration No. 333-237514), which the SEC declared effective on April 14, 2020 (the Commencement Date). The LPC Registration Statement included registration of the Initial Purchase Shares and the Commitment Shares. The fair value of the Commitment Shares, $284,400, determined based on the quoted closing market price of our common stock on March 24, 2020, is a component of deferred offering costs attributable to this offering, which costs are amortized ratably to additional paid-in capital as we sell shares of our common stock to LPC under the LPC Agreement. Subsequent to the Commencement Date and through June 30, 2020, we sold an additional 6,201,995 registered shares of our common stock to LPC and received aggregate gross cash proceeds of $2,840,200. At June 30, 2020, there were approximately 2.1 million registered shares of our common stock remaining available for sale under the LPC Agreement.

 

On any business day during the term of the LPC Agreement, we have the right, in our sole discretion, to direct LPC to purchase up to 100,000 shares on such business day (the “Regular Purchase”) (subject to adjustment under certain circumstances as provided in the LPC Agreement). The purchase price per share for each such Regular Purchase will be based on prevailing market prices of our common stock immediately preceding the time of sale as computed under the LPC Agreement. In each case, LPC’s maximum commitment in any single Regular Purchase may not exceed $1,000,000. In addition to Regular Purchases, provided that we present LPC with a purchase notice for the full amount allowed for a Regular Purchase, we may also direct LPC to make accelerated purchases and additional accelerated purchases as described in the LPC Agreement. Although LPC has no right to require us to sell any shares of our common stock to LPC, LPC is obligated to make purchases as we direct, subject to certain conditions. In all instances, we may not sell shares of our common stock to LPC under the LPC Agreement if such sales would result in LPC beneficially owning more than 9.99% of our common stock. There are no upper limits on the price per share that LPC must pay for shares of our common stock.  See Note 12, Subsequent Events, for disclosure regarding sales of our common stock under the LPC Agreement after June 30, 2020.

 

Sale of Common Stock and Warrants in the Spring 2020 Private Placement

 

In April 2020, in a self-directed private placement, we sold to an accredited investor units to purchase an aggregate of 125,000 unregistered shares of our common stock and four-year warrants to purchase 125,000 shares of our common stock at an exercise price of $0.50 per share and we received cash proceeds of $50,000 (the Spring 2020 Private Placement).

 

Registration Statement for shares underlying warrants issued in Private Placements

 

On May 1, 2020, we filed a registration statement on Form S-3 (Registration No. 333-237968) to register approximately 12.1 million shares of common stock underlying outstanding warrants that we had issued in earlier private placement offerings, including the Spring 2020 Private Placement, as well as common stock underlying warrants that had been previously issued to various consultants as full or partial compensation for their services. Included in the registration statement were shares of our common stock underlying approximately 5.8 million outstanding warrants to purchase shares of our common stock that had been modified in December 2019 to temporarily reduce, for a period of two years or, if sooner, until the expiration of the warrant, the exercise price of such warrants to $0.50 per share, in order to more closely align the exercise price of the warrants with the trading price of our common stock at that time (the Winter 2019 Warrant Modification). We also registered approximately 0.8 million shares of unregistered outstanding common stock held by former holders of warrants who had exercised such warrants subsequent to the Winter 2019 Warrant Modification. Further, we registered the 125,000 shares of common stock issued in the Spring 2020 Private Placement. The SEC declared the registration statement effective on May 13, 2020 (the Warrant Registration Statement). As a result of the effectiveness of this registration statement, the shares of common stock underlying essentially all of our outstanding warrants have been registered.

 

Warrants Outstanding

 

The following table summarizes warrants outstanding and exercisable as of June 30, 2020 subsequent to the issuance in the Spring 2020 Private Placement described above. The weighted average exercise price of outstanding and exercisable warrants at June 30, 2020 is $1.64 per share and $1.80 per share, respectively.

 

          Warrants     Warrants  
  Exercise       Outstanding at     Exercisable at  
  Price   Expiration   June 30,     June 30,  
  per Share  

Date

  2020     2020  
                   
  $ 0.50   3/25/2021 to 4/30/2024     8,151,312       8,026,312  
  $ 0.73   7/25/2025     3,870,077       -  
  $ 0.805   12/31/2022     80,431       80,431  
  $ 1.50   12/13/2022     9,596,200       9,596,200  
  $ 1.82   3/7/2023     1,388,931       1,388,931  
  $ 3.51   12/31/2021     50,000       50,000  
  $ 5.30   5/16/2021     2,705,883       2,705,883  
  $ 7.00   9/2/2020 to 3/3/2023     747,000       747,000  
            26,589,834        22,594,757   

 

At June 30, 2020, with the effectiveness of the Warrant Registration Statement in May 2020, the shares of common stock underlying essentially all of the outstanding warrants except those having an exercise price of $7.00 per share have been registered for resale by the warrant holders. The warrants exercisable at $0.73 per share become exercisable on July 25, 2020. Additionally, no outstanding warrant is subject to any down round anti-dilution protection features and all of the outstanding warrants are exercisable by the holders only by payment in cash of the stated exercise price per share.