NOte 7 - Stockholders' Equity

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

7.         Stockholders’ Equity

Common Stock

On March 15, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Investor”) pursuant to which the Company agreed to issue and sell to the Investor in a private placement (the “Offering”) (i) 125,000 shares of its common stock, $0.001 par value (the “Common Shares”), (ii) 946,429 pre-funded warrants to purchase Common Shares at a purchase price of $2.80, and (iii) common stock warrants to purchase up to an aggregate 1,071,429 Common Shares were issued (the “Underlying Shares”). The common stock warrants have an exercise price of $2.65 per share and are exercisable immediately upon issuance and expire five and one-half years following the issuance. The Offering resulted in a total net proceeds of approximately $2.6 million, excluding legal and other transaction fees of $360,000. The Offering closed on March 20, 2023. All 946,429 pre-funded warrants were exercised in the quarter ended June 30, 2023.

In connection with the Offering, the Company entered into a Warrant Amendment Agreement (the "Warrant Amendment Agreement”), dated March 15, 2023, with the Investor, whereby the Company agreed to amend existing warrants, held by the Investor, to purchase up to an aggregate of 158,731 shares of common stock that were previously issued in October 2022. These warrants had an exercise price of $6.30 per share and pursuant to the Warrant Amendment Agreement have been amended to reduce the exercise price to $2.65 per share effective upon the closing of the Offering. During the six months ended June 30, 2023, 158,731 common warrants were exercised. The Company received approximately $421,000 from the exercises of the warrants.

The warrant repricing resulted in an immediate and incremental increase of approximately $50,000 in the estimated fair value of the common warrants issued in the Company’s October 2022 public offering. The common warrants were valued on the date of the warrant repricing using the Black-Scholes option pricing model based on the following assumptions:

	March 2023
Conversion price before	$	6.30
Conversion price after	$	2.65
Term (years)		4.9
Volatility		123	%
Dividend rate		0	%
Risk free rate		4.20	%

On February 3, 2022, the Company entered into Amendment No. 2 to the At the Market Offering Agreement (the “Offering Agreement”) with H.C. Wainwright & Co., LLC to further increase the maximum aggregate offering price of shares of Common Stock that may be offered and sold from time to time under the Offering Agreement from $15,280,000 to $19,555,000, which enables the Company to sell an additional $4,275,000 of shares after taking into account prior sales under the Offering Agreement (the “Additional Shares”). In March 2022, the total offering price was updated to $18,573,000 based on the shares that were currently available on Company’s existing Form S-3. The terms and conditions of the Offering Agreement otherwise remain unchanged. For the six months ended June 30, 2022, the Company sold a total of 20,407 shares of common stock under the Offering Agreement for aggregate gross proceeds of $681,000 at an average selling price of $33.30 per share, resulting in net proceeds of approximately $594,000 after deducting commissions and other transaction costs of approximately $87,000.

Net Loss Per Share

Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding plus the pre-funded warrants. For the purpose of calculating basic net loss per share, the additional shares of common stock that are issuable upon exercise of the pre-funded warrants have been included since the shares are issuable for a negligible consideration and have no vesting or other contingencies associated with them. As of June 30, 2023, all pre-funded warrants previously issued have been exercised and none are outstanding. The calculation of the basic and diluted earnings per share is the same for all periods presented, as the effect of the potential common stock equivalents noted below is anti-dilutive due to the Company’s net loss position for all periods presented. Anti-dilutive securities consisted of the following at June 30:

	2023		2022
Common stock equivalents of convertible promissory notes and accrued interest		3,108,264		649,667
Warrants		1,239,547		14,518
Stock options		6,400		6,526
Total		4,354,211		670,711

Warrants

A summary of warrant activity for the six months ended June 30, 2023 is as follows:

	Number of Shares			Weighted-Average Exercise Price Per Share		Weighted- Average Remaining Contract Term
Balance at December 31, 2022		340,689		$	19.40		1.90
Warrants granted		1,071,429
Warrants expired		(13,840	)
Pre-funded warrants granted		946,429
Pre-funded warrants exercised		(946,429	)
Warrants exercised		(158,731	)
Exercisable and Outstanding at June 30, 2023		1,239,547		$	3.80		4.24