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Shareholders' (Deficit) Equity
12 Months Ended
Dec. 31, 2023
Stockholders' Equity Note [Abstract]  
Shareholders' (Deficit) Equity

Note 5. Shareholders’ (Deficit) Equity

Ordinary Shares

On June 30, 2023, the Company’s shareholders approved an increase to the number of authorized ordinary shares the Company can issue by 35,000,000,000 ordinary shares in addition to the number of shares outstanding on June 30, 2023. Accordingly, following June 30, 2023 and as of December 31, 2023, the Company was authorized to issue up to 45,122,321,523 ordinary shares. As of December 31, 2022, the Company was authorized to issue up to 15,000,000,000 ordinary shares.

December 2023 Private Placement

In December 2023, the Company entered into purchase agreements to sell in a private placement to existing investors, Dr. Prudo, the Company’s Chairman, and Dr. Patel, director, (the “December 2023 Private Placement”) an aggregate of 947,868 ADSs at $2.11 per ADS, for aggregate gross proceeds of approximately $2.0 million. Net proceeds from the December 2023 Private Placement was approximately $1.8 million after deducting placement agent fees and other expenses.

September 2023 Private Placement

In September 2023, the Company entered into purchase agreements to sell in a private placement to existing investors, including Dr. Ray Prudo, the Company’s Chairman, and Ms. Rachelle Jacques, the Company’s President and CEO (the “September 2023 Private Placement”) an aggregate of 551,816 ADSs at $3.30 per ADS, and pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 48,387 ADSs at a purchase price per Pre-Funded Warrant of $3.10, for aggregate gross proceeds of approximately $2.0 million. The Pre-Funded Warrants are exercisable at an exercise price of $0.20 per ADS and will not expire until exercised in full. The September 2023 Private Placement closed in October 2023 resulting in net proceeds of approximately $1.7 million after deducting placement agent fees and other expenses.

At close of the September 2023 Private Placement, the Company issued to Paulson Investment Company, LLC ("Paulson"), as placement agent for the September 2023 Private Placement, warrants to purchase 42,550 ADSs at an exercise price of $4.13 per ADS (representing 125% of the price per ADS in the September 2023 Private Placement) and a term expiring on October 6, 2028 (the “October 2023 Placement Agent Warrants”). The estimated fair value of the October 2023 Placement Agent Warrants on the issuance date was approximately $0.1 million.

The Company determined that the Pre-Funded Warrants and October 2023 Placement Agent Warrants met all of the criteria for equity classification. Accordingly, upon closing of the September 2023 Private Placement, each of the Pre-Funded Warrants and October 2023 Placement Agent Warrants were recorded as a component of additional paid-in capital.

 

March 2023 Registered Direct Offering

On March 31, 2023, the Company entered into securities purchase agreements with certain accredited and institutional investors, including Dr. Ray Prudo, the Company’s Chairman, (the “March Registered Direct Offering”) providing for the issuance of an aggregate of 1,333,333 ADSs in a registered direct offering at $3.00 per ADS, resulting in gross proceeds of approximately $4.0 million. Net proceeds from the March Registered Direct Offering was approximately $3.5 million after deducting placement agent fees and expenses.

September 2022 Registered Direct Offering

On September 14, 2022, the Company sold to certain accredited and institutional investors, led by existing investors of the Company, including Dr. Ray Prudo, the Company’s Chairman, an aggregate of 755,000 ADSs in a registered direct offering (“September 2022 Registered Direct Offering”) at $17.00 per ADS for aggregate gross proceeds of approximately $12.8 million. In connection with the sale of the ADSs in the September 2022 Registered Direct Offering, the Company issued to the investors registered Series A warrants (“Series A Warrants”) to purchase an aggregate of 755,000 ADSs at $17.00 per ADS and registered Series B warrants (“Series B Warrants”) to purchase an aggregate of 755,000 ADSs at $17.00 per ADS (collectively, the “September 2022 Warrants”).

The Company determined that the September 2022 Warrants are not indexed to the Company’s own stock in the manner contemplated by ASC 815-40-15, Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock. Accordingly, the Company classifies the September 2022 Warrants as derivative liabilities in its consolidated balance sheets. The grant date fair value of the September 2022 Warrants totaled $14.8 million, which exceeded the $12.8 million proceeds received from the sale of ADSs. The Company concluded that the September 2022 Registered Direct Offering was conducted on an arm’s length basis recorded the excess in fair value of the September 2022 Warrants over the proceeds received of $2.0 million on the issuance date, which is classified as a non-operating expense in the Company's consolidated statement of operations and comprehensive loss.

The Company measures the fair value of the September 2022 warrants at the end of each reporting period and recognizes changes in the fair value of the September 2022 warrants as a non-operating expense in the Company's consolidated statement of operations and comprehensive loss. See Note 3 for discussion of fair value measurement of the warrant liabilities.

March 2022 Registered Direct Offering

On March 10, 2022, the Company sold to certain accredited and institutional investors, led by existing investors of the Company, including Dr. Ray Prudo, the Company’s Chairman, an aggregate of 372,042 ADSs in a registered direct offering (“March 2022 Registered Direct Offering”) at $24.00 per ADS for aggregate gross proceeds of approximately $8.9 million. In connection with the sale of the ADSs in the March 2022 Registered Direct Offering, the Company issued to the investors registered warrants to purchase an aggregate of 186,020 ADSs at $28.00 per ADS (the “March 2022 Investor Warrants”). The March 2022 Investor Warrants are immediately exercisable and will expire five years from issuance, subject to adjustment as set forth therein. In connection with the offering, the Company paid Paulson, as placement agent, approximately $0.8 million in placement agent fees and expenses and issued registered warrants to Paulson to purchase an aggregate of 14,882 ADS (the “March 2022 Placement Agent Warrants”) on the same terms as the March 2022 Investor Warrants, except that the March 2022 Placement Agent Warrants are exercisable at $30.00 per ADS.

The Company determined that the March 2022 Investor Warrants and March 2022 Placement Agent Warrants met all of the criteria for equity classification. Accordingly, upon closing of the March 2022 Registered Direct Offering, each of the March 2022 Investor Warrants and March 2022 Placement Agent Warrants were recorded as a component of additional paid-in capital.

 

2021 Registered Offering

In December 2021, The Company sold to certain accredited and institutional investors, led by existing investors, including Dr. Ray Prudo, the Company's Chairman, an aggregate of 215,550 ADSs in a registered direct offering (the “2021 Registered Offering”) at 28.00 per ADS for aggregate gross proceeds of approximately $6.0 million, which closed on January 5, 2022. As of December 31, 2021, the Company had received approximately $1.1 million of gross proceeds which were classified as current liabilities on its balance sheet until closing in January 2022, which at that time the remaining $4.9 million in gross proceeds were received. In connection with the offering, the Company issued to the investors and Paulson, as placement agent for the 2021 Registered Offering, registered warrants to purchase 107,775 ADSs at $33.00 per ADS and 8,622 ADSs at $35.00 per ADS, respectively. Net proceeds after deducting placement agent fees and other expenses were approximately $5.4 million, of which $4.3 million was received in 2022.

 

Warrants

In connection with various financing transactions, the Company has issued warrants to purchase the Company’s ordinary shares represented by ADSs. The Company accounts for such warrants as equity instruments or liabilities, depending on the specific terms of the warrant agreement. See Note 2 for further details on accounting policies related to the Company’s warrants.

The following table summarizes the Company’s outstanding warrants as of December 31, 2023 and 2022:

 

 

 

Number of Warrant ADSs

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

Weighted-Average

 

 

 

 

 

 

2023

 

 

2022

 

 

Exercise Price

 

 

Expiration Date

 

Equity-classified Warrants

 

 

 

 

 

 

 

 

 

 

 

 

2019 Investor Warrants

 

 

59,211

 

 

 

59,211

 

 

$

60.00

 

 

7/1/2024

 

2019 Placement Warrants

 

 

8,881

 

 

 

8,881

 

 

$

57.00

 

 

6/28/2024

 

2020 Investor Warrants

 

 

139,882

 

 

 

139,882

 

 

$

44.00

 

 

Feb-Mar 2025

 

2020 Placement Warrants

 

 

22,481

 

 

 

22,481

 

 

$

51.00

 

 

Feb-Mar 2025

 

July 2021 Placement Agent Warrants

 

 

19,919

 

 

 

19,919

 

 

$

46.40

 

 

7/7/2026

 

December 2021 Investor Warrants

 

 

107,775

 

 

 

107,775

 

 

$

33.00

 

 

1/4/2027

 

December 2021 Placement Agent
   Warrants

 

 

8,622

 

 

 

8,622

 

 

$

35.00

 

 

12/29/2026

 

March 2022 Investor Warrants

 

 

186,020

 

 

 

186,020

 

 

$

28.00

 

 

3/10/2027

 

March 2022 Placement Agent Warrants

 

 

14,882

 

 

 

14,882

 

 

$

30.00

 

 

3/10/2027

 

October 2023 Investor Prefunded
   Warrants

 

 

48,387

 

 

 

 

 

$

0.20

 

 

 

 

October 2023 Placement Agent Warrants

 

 

42,550

 

 

 

 

 

$

4.13

 

 

10/6/2028

 

 

 

658,610

 

 

 

567,673

 

 

 

 

 

 

 

Liability-classified Warrants

 

 

 

 

 

 

 

 

 

 

 

 

September 2022 Series A Investor
   Warrants

 

 

755,000

 

 

 

755,000

 

 

$

17.00

 

 

9/14/2024

 

September 2022 Series B Investor
   Warrants

 

 

755,000

 

 

 

755,000

 

 

$

17.00

 

 

9/14/2029

 

 

 

1,510,000

 

 

 

1,510,000

 

 

 

 

 

 

 

Total outstanding

 

 

2,168,610

 

 

 

2,077,673

 

 

 

 

 

 

 

 

 

The following table summarizes the Company’s warrants activity for the year ended December 31, 2023:

 

 

 

Number of

 

 

Weighted-Average

 

($ in thousands, except per share data)

 

Warrants

 

 

Exercise Price

 

Outstanding at December 31, 2022

 

 

2,077,673

 

 

$

22.85

 

Issued

 

 

90,937

 

 

 

2.04

 

Exercised

 

 

 

 

 

 

Expired

 

 

 

 

 

 

Outstanding at December 31, 2023

 

 

2,168,610

 

 

$

21.97