Note 3 - Lincoln Park Financing

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Stock Purchase Agreement [Text Block]

Note

3.

Lincoln Park Financing

During the

three

months ended

March 31, 2020,

pursuant to our

August 2017

agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), we elected to sell to Lincoln Park

1,398,223

shares of our common stock for which we received

$295,000.

Additionally, we issued Lincoln Park

14,420

“additional commitment” shares.  We did

not

sell any shares to Lincoln Park during the

three

months ended

March 31, 2019. 

In conjunction with the signing of the

March 2020

agreement with Lincoln Park (see below), we recorded the remaining deferred offering costs totaling

$122,000

as additional paid in capital on our consolidated balance sheet.

On

March 30,

, 

2020,

we entered into a Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us at our request up to an aggregate of

$10,250,000

of our common stock (subject to certain limitations) from time to time over a period of

three

years. The agreement allows us, at our sole discretion, to direct Lincoln Park to purchase shares of our common stock, subject to limitations in both volume and dollar amount. The purchase price of the shares that

may

be sold to Lincoln Park under the Purchase Agreement is the lower of (i) the lowest sale price on the date of purchase, or (ii) the average of the

three

lowest closing prices in the prior

12

business days. There are

no

restrictions on future financings, rights of

first

refusal, participation rights, penalties or liquidated damages other than a prohibition on entering into a “Variable Rate Transaction,” as defined in the agreement. Lincoln Park

may

not

assign or transfer its rights and obligations under the Purchase Agreement. This agreement replaced the

August 2017

agreement with Lincoln Park. Concurrently with the Purchase Agreement, we entered into a Registration Rights Agreement, pursuant to which we filed a registration statement on Form S-

1

with the SEC on

April 10, 2020.

This registration statement was declared effective on

April 21, 2020,

and as of

April 29, 2020,

we commenced regular purchases under the agreement.

In the

March 30, 2020

agreement, we agreed to issue

2,928,571

shares to Lincoln Park as a commitment fee, valued at

$527,000

and recorded as additional paid in capital on our consolidated balance sheet as of

March 31, 2020. 

Additionally, the Purchase Agreement provided for an initial sale of

1,785,715

shares to Lincoln Park for

$250,000.

We received those funds and issued the shares on

March 31, 2020.