Stockholders' Equity

12 Months Ended

Dec. 31, 2018

Equity [Abstract]

Stockholders' Equity

NOTE 8 - STOCKHOLDERS’ EQUITY

Preferred Stock

Adhera has authorized 100,000 shares of preferred stock for issuance and has designated 1,000 shares as Series B Preferred Stock (“Series B Preferred”) and 90,000 shares as Series A Junior Participating Preferred Stock (“Series A Preferred”). No shares of Series B Preferred or Series A Preferred are outstanding. In March 2014, Adhera designated 1,200 shares as Series C Convertible Preferred Stock (“Series C Preferred”). In August 2015, Adhera designated 220 shares as Series D Convertible Preferred Stock (“Series D Preferred”). In April 2018, Adhera designated 3,500 shares of Series E Convertible Preferred Stock (“Series E Preferred”). In July 2018, Adhera designated 2,200 shares of Series F Convertible Preferred Stock (“Series F Preferred”).

Series C Preferred

Each share of Series C Preferred has a stated value of $5,000 per share, has a $5,100 liquidation preference per share, has voting rights of 666.67 votes per share, and is convertible into shares of common stock at a conversion price of $7.50 per share. In September 2017, an investor converted 270 shares of Series C Preferred stock into 180,000 shares of our common stock.

In June 2018, an investor converted 650 shares of Series C Preferred stock into 433,334 shares of our common stock.

As of December 31, 2018 and December 31, 2017, 100 and 750 shares, respectively, of Series C Preferred remained outstanding.

Series D Preferred

In August 2015, Adhera entered into a Securities Purchase Agreement with certain investors pursuant to which Adhera sold 220 shares of Series D Preferred and warrants to purchase up to 344,000 shares of Adhera’s common stock at an initial exercise price of $4.00 per share before August 2021, for an aggregate purchase price of $1.1 million. Each share of Series D Preferred has a stated value of $5,000 per share, has a liquidation preference of $300 per share, has voting rights of 1,250 votes per share and is convertible into shares of common stock at a conversion price of $4.00 per share. The Series D Preferred is initially convertible into an aggregate of 275,000 shares of Adhera’s common stock, subject to certain limitations and adjustments, has a 5% stated dividend rate, is not redeemable and has voting rights on an as-converted basis.

In May 2018, an investor converted 20 shares of Series D Preferred into 25,000 shares of common stock.

As of December 31, 2018 and December 31, 2017, 40 and 60 shares, respectively, of Series D Preferred remained outstanding.

Series E Convertible Preferred Stock Private Placement

In April and May 2018, we entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 2,812 shares of our Series E Preferred, at a purchase price of $5,000 per share of Series E Preferred. Each share of Series E Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5-year warrant (the “Warrants”, and collectively with the Series E Preferred, the “Securities”) to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series E Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. The Series E Preferred accrues 8% dividends per annum and are payable in cash or stock at the Company’s discretion. The Series E Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in April 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations.

We received net proceeds of approximately $12.2 million from the sale of the Series E Preferred, after deducting placement agent fees and estimated expenses payable by us of approximately $2.0 million associated with such closing. We intend to use the proceeds of the offering for funding our commercial operations to the sale and promotion of our Prestalia product, working capital needs, capital expenditures, the repayment of certain liabilities and other general corporate purposes. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 2,958,460 shares of our common stock.

In October 2018, an investor converted 2 shares of Series E Preferred into 20,000 shares of our common stock.

We accrued dividends on the Series E Preferred of $974,247 for the year ended December 31, 2018. No similar dividends were accrued in 2017.

Series F Convertible Preferred Share Private Placement

In July 2018, we entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 308 shares of our Series F Preferred, at a purchase price of $5,000 per share of Series F Preferred. Each share of Series F Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5-year warrant (the “Warrants”, and collectively with the Preferred Stock, the “Securities”) to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series F Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. The Series F Preferred accrues 8% dividends per annum and are payable in cash or stock at the Company’s discretion. The Series F Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in July 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations.

We received proceeds of approximately $1.4 million from the sale of the Securities, after deducting placement agent fees and estimated expenses payable by us of approximately $180,000 associated with such closing. We intend to use the proceeds of the offering for funding our commercial operations to the sale and promotion of our Prestalia product, working capital needs, capital expenditures, the repayment of certain liabilities and other general corporate purposes. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 308,000 shares of our common stock. The Warrant has a five-year term and an exercise price of $0.55 per share.

On November 9, 2018, we entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 73 shares of our Series F Preferred Stock, at a purchase price of $5,000 per share of Preferred Stock. Each share of Series F Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5-year warrant to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series F Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. We received total net proceeds of approximately $0.31 million from the issuance of the securities described above, after deducting placement agent fees and estimated expenses payable by us associated with such closing. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 73,000 shares of our common stock. The Warrant has a five-year term and an exercise price of $0.55 per share.

We accrued dividends on the Series F Preferred of $89,894 for the year ended December 31, 2018. No similar dividends were accrued in 2017.

Stock Option Grants

In July 2018, we granted our Chief Executive Officer, Robert Moscato, Jr., 1,500,000 stock options; Uli Hacksell, Ph. D., the Chairman of our Board, 1,000,000 stock options, Erik Emerson, our Chief Commercial Officer, 1,125,000 stock options, and Jay Schwartz, our SVP of Commercial Operations, 250,000 stock options.

In September 2018, we granted our Chief Financial Officer, Eric Teague, 450,000 stock options.

Subsequent to December 31, 2018, Mr. Moscato, Mr. Emerson, and Mr. Teague resigned (See Note 13 – Subsequent Events). All vested options held by Mr. Teague are set to expire 90 days after his resignation date and all vested options held by Mr. Moscato are set to expire 12 months after his resignation date.

During the three months ended December 31, 2018, we granted an aggregate of 260,000 stock options to employees.

Common Stock

Our common stock currently trades on the OTCQB tier of the OTC Markets under the symbol “ATRX”. We currently have 10,761,684 shares of our common stock outstanding.

Stock Issuances

In addition to the common stock and preferred stock issuances described above, we issued the following shares of common stock during the year ended December 31, 2018.

As discussed in Note 11, in May 2018, we issued to Novosom 51,988 shares of our common stock as additional consideration pursuant to the Asset Purchase Agreement, dated as of July 27, 2010, between our company and Novosom. Such shares were due to Novosom as a result of the receipt by our company of a license fee under the License Agreement that we entered into with Lipomedics Inc. in February 2017.

As discussed in Note 10 in April 2018, we entered into a Stipulation of Settlement with Vaya Pharma and issued a total of 210,084 shares of our common stock with a fair value of $250,000.

In May 2018, an investor converted 20 shares of Series D Preferred into 25,000 shares of common stock.

In June 2018, an investor converted 650 shares of Series C Preferred stock into 433,334 shares of our common stock.

In October 2018, an investor converted 2 shares of Series E convertible preferred stock into 20,000 shares of our common stock.

As discussed in Note 6, on October 1, 2018, we entered into a Settlement Agreement with Vuong Trieu, Ph.D., our former interim Chief Executive Officer, Executive Chairman and Chairman of our Board of Directors, which included the Company repurchasing 500,000 shares of our common stock from Dr. Trieu for $250,000.

Warrants

As of December 31, 2018, there were 36,267,329 warrants outstanding, with a weighted average exercise price of $0.79 per share, and annual expirations as follows:

Expiring in 2019	600,000
Expiring in 2020	1,189,079
Expiring in 2021	343,750
Expiring in 2022	66,667
Expiring in 2023	33,729,180
Expiring thereafter	338,653
	36,267,329

The above includes 29,135,560 warrants issued in April and May 2018 in connection with our Series E Preferred Stock offering with a fair value of $31,106,896 and 3,238,500 warrants issued with our Series F Preferred Stock offering with a fair value of $1,492,464 which are reflected in additional paid-in capital and additional paid in capital-warrants on the accompanying consolidated statement of stockholders’ equity. The warrants have a five-year term and an initial exercise price of $0.55. There was no expense related to these warrants.

Additionally, the above includes 1,345,040 warrants issued to Autotelic, Inc. in April 2018 to satisfy accrued and unpaid fees in the aggregate amount of approximately $739,772, and other liabilities, owed to Autotelic Inc. as of March 31, 2018. The warrants have a five-year term, an initial exercise price of $0.55, and have a fair value of $1,494,469 resulting in a loss on settlement of liability of $754,697.

The above includes price adjustable warrants totaling 1,895,013.

A total of 339,702 warrants expired during the year ended December 31, 2018.