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Subsequent Events
12 Months Ended
Dec. 31, 2019
Subsequent Events [Abstract]  
Subsequent Events

Note 13 — Subsequent Events

 

Amended Certificate of Incorporation and Reverse Stock Split

 

On January 30, 2020, the Company filed with the State of Delaware an amendment to its Eighth Amended and Restated Certificate of Incorporation for a one-for-thirty reverse split of the Company’s common stock. All share and per share information has been restated retroactively, giving effect to the reverse stock split for all periods presented. There was no change to reported net loss in any period presented.

Underwritten Public Offering

 

On February 13, 2020, the Company completed an underwritten public offering (the “February Offering”) in which the Company sold 1,660,000 shares of its common stock at a price of $7.00 per share and 483,000 pre-funded warrants at a price of $6.9999 per share. The pre-funded warrants had a nominal exercise price of $0.0001 per share.  Investors also received 2,143,000 warrants (“Investor Warrants”), each entitling the holder to purchase one share of the Company’s common stock at an exercise price of $7.50 per share. The Investor Warrants expire on February 13, 2025.  The underwriters in the February Offering are entitled to an over-allotment option to purchase to up to 321,450 shares of common stock at $6.99 per share, and 321,450 Investor Warrants at a price of $0.01 per share. The underwriters exercised their option to purchase the additional Investor Warrants concurrent with the closing of the transaction.  The February Offering was conducted pursuant to a registration statement on Form S-1 (Registration No. 333-235538) as amended, which the SEC declared effective on February 10, 2020. The gross proceeds to the Company were approximately $15.0 million. After deducting the underwriting discount and other offering expenses, net proceeds are estimated to be approximately $13.7 million.    

On February 13, 2020, the Company issued to the underwriters warrants (the “Underwriter Warrants”) to purchase 214,300 shares of common stock. The Underwriter Warrants have an exercise price $7.00 per share. The Underwriter Warrants expire on February 13, 2025.   

As of the issuance date of these financial statements, investors have exercised all of the pre-funded warrants.

A director, certain officers and a board advisor of the Company purchased 63,000 shares of the Company’s common stock and 63,000 Investor Warrants in the February Offering, at a combined price of $7.00 per share.  

The Company issued warrants (the “2017 Warrants”) in its December 2017 public offering.  As of December 31, 2019, 118,696 of these warrants remain outstanding.  Pursuant to the terms of the warrants, the sale and issuance in this underwritten public offering of common stock and Investor Warrants at a combined public offering price of $7.00 per share triggered an adjustment to the exercise price of the outstanding 2017 Warrants. The exercise price of such warrants was reduced from $42.00 per share to $0.0001 per share, pursuant to the terms of the 2017 Warrants.  As of the filing date of this Annual Report on Form 10-K, 74,670 warrants have been subsequently exercised.

Under the terms of the MIT License, MIT is entitled to receive an additional 265 shares of common stock upon completion of the offering.

As a result of the February Offering, the Company experienced an ownership change within the meaning of Section 382.  As a result of this change, the Company’s ability to utilize NOL’s generated from the date of its last ownership change in December 2017 to the date of the February Offering will be additionally limited by approximately $281,000.  Including the prior annual limitation, the cumulative annual limitation will be approximately $1,840,000 during the carryforward period.  An additional $437,000 of NOL’s will expire unutilized.  

Prepayment of Term Loan

Under the terms of the Term Loan, should the Company complete an equity offering, 50% of the outstanding balance of the Term Loan must be repaid to CVP, plus a 15% prepayment fee.  On February 14, 2020, the Company paid CVP approximately $1,959,100, representing a payment against the outstanding balance of approximately $1,703,600 and the prepayment fee of approximately $255,500