Quarterly report pursuant to Section 13 or 15(d)

Common Stock, Stock Options and Warrants

v3.21.1
Common Stock, Stock Options and Warrants
6 Months Ended
Mar. 31, 2021
Stockholders' Equity Note [Abstract]  
COMMON STOCK, STOCK OPTIONS AND WARRANTS

5. COMMON STOCK, STOCK OPTIONS AND WARRANTS

 

Common Stock Offerings

 

On May 18, 2020, the Company closed a registered direct offering with several institutional and accredited investors for the sale of 7,058,824 shares of common stock at $1.0625 per share for gross proceeds of $7,500,001. The Company also agreed to issue 3,529,412 unregistered immediately exercisable warrants to the investors with an exercise price of $1.00 per share and a term of five and one-half years. The Company paid the placement agent for the offering a fee of 7% of the gross proceeds totaling $525,000 and issued the placement agent 494,118 immediately exercisable warrants with an exercise price of $1.3281 per share and a term of five years. The Company also reimbursed the placement agent for $85,000 in expenses and incurred $12,901 in other expenses. Net proceeds from the offering were $6,877,100. The estimated fair value of the 3,529,412 warrants issued to the investors was $2,138,998 and the estimated fair value of the 494,118 warrants issued to the placement agent was $275,724.

 

On August 10, 2020, the Company closed an underwritten public offering of 9,159,524 shares of common stock at a price of $1.05 per share for gross proceeds of $9,617,500. The Company paid the underwriter a fee of 7% of the gross proceeds totaling $673,225 and issued the underwriters 641,166 immediately exercisable warrants with an exercise price of $1.3125 per share and a term of five years. The Company also reimbursed the placement agent for $135,000 in expenses and incurred $109,074 in other expenses. Net proceeds from the offering were $8,700,201. The estimated fair value of the 641,166 warrants issued to the underwriter was $569,426.

 

On January 27, 2021, the Company closed a private placement for 15,455,960 shares of its common stock and warrants to purchase up to 7,727,980 shares of common stock, at a purchase price of $1.294 per share of common stock and accompanying warrant, for gross proceeds of $20,000,012. The 7,727,980 warrants are immediately exercisable at $1.231 per share for a term of five and one-half years. The Company paid the placement agent a fee of 7% of the gross proceeds totaling $1,400,001 and issued the placement agent 1,081,917 warrants for common stock that are immediately exercisable at $1.6175 per share for a term of five and one-half years. The Company also reimbursed the placement agent for $85,000 in expenses and incurred $64,601 in other expenses. Net proceeds from the offering were $18,450,410. The estimated fair value of the 7,727,980 warrants issued to the investors was approximately $7,582,000 and the estimated fair value of the 1,081,917 warrants issued to the placement agent was approximately $1,025,000.

 

On February 19, 2021, the Company closed a registered direct offering for 50,830,566 shares of its common stock and warrants to purchase up to 25,415,283 shares of common stock, at a purchase price of $1.505 per share of common stock and accompanying warrant, for gross proceeds of $76,500,002. The 25,415,283 warrants are immediately exercisable at $1.70 per share for a term of five years. The Company paid the placement agent a fee of 7% of the gross proceeds totaling $5,355,000 and issued the placement agent 3,558,140 warrants for common stock that are immediately exercisable at $1.881 per share for a term of five years. The Company also reimbursed the placement agent for $85,000 in expenses and incurred $80,160 in other expenses. Net proceeds from the offering were $70,979,842. The estimated fair value of the 25,415,283 warrants issued to the investors was approximately $42,322,000 and the estimated fair value of the 3,558,140 warrants issued to the placement agent was approximately $5,850,000.

 

Common Stock Issued for Services

 

On November 4, 2019, the Company issued 186,566 shares of common stock for strategic consulting and corporate development services and expensed the $100,000 fair value of the common stock issued.

 

On February 10, 2020, the Company issued 150,000 shares of common stock for investor relations services and 136,000 shares of common stock for general advisory and business development advisory services. The Company expensed the $306,020 fair value of the common stock issued.

 

On April 6, 2020, the Company issued 50,000 shares of common stock for strategic consulting and corporate development services and expensed the $22,750 fair value of the common stock issued.

 

On September 8, 2020, the Company issued 101,174 shares of common stock for investor relations services and expensed the $100,000 fair value of the common stock issued.

 

On February 12, 2021, the Company issued 50,000 shares of common stock for investor relations services and expensed the $68,000 fair value of the common stock issued.

 

Stock Option Plans

 

Pursuant to its 2014 Stock Incentive Plan (the "2014 Plan") the Company reserved 866,667 shares of common stock for issuance to employees, directors and consultants. As of March 31, 2021, there were options to purchase an aggregate of 855,171 shares of common stock outstanding under the 2014 Plan, options to purchase 4,829 shares were exercised, options to purchase 6,667 shares expired and no shares remain available for future grants.

 

On February 7, 2018, our stockholders approved the 2018 Omnibus Stock Incentive Plan (the "2018 Plan") and the Company reserved 2,000,000 shares of common stock for issuance to employees, directors and consultants. As of March 31, 2021, there were options to purchase an aggregate of 1,890,000 shares of common stock outstanding under the 2018 Plan and no shares available for future grants.

 

On February 10, 2020, the Company's stockholders approved the 2020 Omnibus Stock Incentive Plan ("2020 Stock Plan"). The 2020 Stock Plan authorizes a maximum of 3,110,000 shares. The 2020 Stock Plan provides incentives to employees, directors, and consultants of the Company in form of granting an option, SAR, dividend equivalent right, restricted stock, restricted stock unit, or other right or benefit under the 2020 Stock Plan. As of March 31, 2021, there were options to purchase 1,870,000 shares outstanding under the 2020 Plan and 1,240,000 shares available for future grants.

 

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. The expected term of stock options granted, all of which qualify as "plain vanilla," is based on the average of the contractual term (generally 10 years) and the vesting period. For non-employee options, the expected term is the contractual term.

 

A summary of option activity under the Company's stock option plans (excluding the NoveCite Stock Plan) is presented below:

 

    Option
Shares
    Weighted-
Average
Exercise
Price
    Weighted-
Average
Remaining
Contractual
Term
    Aggregate
Intrinsic
Value
 
Outstanding at October 1, 2020     3,390,171     $ 2.51     8.0 years     $ 440,336  
Granted     1,225,000       1.08                
Exercised                          
Forfeited or expired                          
Outstanding at March 31, 2021     4,615,171     $ 2.13     8.1 years     $ 2,659,010  
                               
Exercisable at March 31, 2021     1,968,804     $ 3.56     6.6 years     $ 787,968  

 

On October 6, 2020, the Board of Directors granted stock options to purchase 800,000 shares to employees, 175,000 shares to directors and 125,000 shares to consultants at $1.01 per share. On February 16, 2021, the Board of Directors granted stock options to purchase a total of 125,000 shares to directors at $1.69 per share. All of these options vest over terms of 12 to 36 months and have a term of 10 years.

 

Stock-based compensation expense for the three months ended March 31, 2021 and 2020 was $342,962 (including $18,833 for the NoveCite Stock Plan) and $158,833, respectively. Stock-based compensation expense for the six months ended March 31, 2021 and 2020 was $619,544 (including $31,389 for the NoveCite Stock Plan) and $379,217, respectively.

 

At March 31, 2021, unrecognized total compensation cost related to unvested awards under the 2014 Plan, 2018 Plan and 2020 Stock Plan of $1,669,737 is expected to be recognized over a weighted average period of 1.8 years.

 

On November 5, 2020, the stockholders of our majority-owned subsidiary, NoveCite, Inc., approved NoveCite's 2020 Omnibus Stock Incentive Plan ("NoveCite Stock Plan"). The NoveCite Stock Plan authorizes a maximum of 2,000,000 shares of NoveCite common stock. The NoveCite Stock Plan provides incentives to employees, directors, and consultants of NoveCite through grants of options, SARs, dividend equivalent rights, restricted stock, restricted stock units, or other rights or benefits under the NoveCite Stock Plan. As of March 31, 2021, there were options outstanding to purchase 1,130,000 shares of NoveCite common stock under the NoveCite Stock Plan and 870,000 shares of NoveCite common stock available for future grants.

 

On November 5, 2020, NoveCite granted stock options to purchase 1,130,000 shares of NoveCite common stock to employees at a weighted average exercise price of $0.24 per share, of which, none are exercisable as of March 31, 2021. The weighted average remaining contractual term of options outstanding under the NoveCite Stock Plan is 9.61 years. At March 31, 2021, unrecognized total compensation cost related to unvested awards under the NoveCite Stock Plan of $194,611 is expected to be recognized over a weighted average period of 2.6 years.

 

Warrants

 

As of March 31, 2021, the Company has reserved shares of common stock for the exercise of outstanding warrants. The following table summarizes the warrants outstanding:

 

    Exercise
price
    Number     Expiration Dates
Investor Warrants   $ 9.00       126,669     April 15, 2021 – April 25, 2021
LMB Warrants     7.50       53,110     March 24, 2022 – April 29, 2022
Financial Advisor Warrants     3.00       25,833     August 15, 2021
2016 Offering Warrants     4.13       140,819     November 23, 2021 – February 27, 2022
2017 Public Offering Investors     4.13       1,622,989     August 2, 2022
2017 Public Offering Underwriter     4.54       65,940     February 2, 2023
December 2017 Registered Direct/Private Placement Offering Investors     4.63       640,180     June 19, 2023
December 2017 Registered Direct/Private Placement Offering Placement Agent     5.87       89,625     December 19, 2022
March 2018 Registered Direct/Private Placement Offering Investors     2.86       218,972     October 2, 2023
March 2018 Registered Direct/Private Placement Offering Placement Agent     3.73       46,866     March 28, 2023
August 2018 Offering Investors     1.15       3,921,569     August 14, 2023
August 2018 Offering Agent     1.59       549,020     August 8, 2023
April 2019 Registered Direct/Private Placement Offering Investors     1.42       1,294,498     April 5, 2021
April 2019 Registered Direct/Private Placement Offering Placement Agent     1.93       240,130     April 5, 2021
September 2019 Offering Investors     0.77       2,793,297     September 27, 2024
September 2019 Offering Underwriter     1.12       194,358     September 27, 2024
February 2020 Exercise Agreement Placement Agent     1.28       143,295     August 19, 2025
May 2020 Registered Direct Offering Investors     1.00       2,400,000     November 18, 2025
May 2020 Registered Direct Offering Placement Agent     1.33       494,118     May 14, 2025
August 2020 Underwriter     1.31       641,166     August 10, 2025
January 2021 Registered Direct Offering Investors     1.23       6,182,384     July 27, 2026
January 2021 Registered Direct Offering Agent     1.62       1,081,917     July 27, 2026
February 2021 Offering Investors     1.70       25,044,164     February 19, 2026
February 2021 Offering Agent     1.88       3,558,140     February 19, 2026
              51,569,059      

 

At March 31, 2021, the weighted average remaining life of the outstanding warrants is 4.3 years, all warrants are exercisable, and the aggregate intrinsic value of the warrants outstanding was $14,029,462.

 

Common Stock Reserved

 

A summary of common stock reserved for future issuances as of March 31, 2021 is as follows:

 

Stock plan options outstanding     4,615,171  
Stock plan shares available for future grants     1,240,000  
Warrants outstanding     51,569,059  
Total     57,424,230