SALE AND PURCHASE OF COMMON STOCK |
9 Months Ended |
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Sep. 30, 2024 | |
Sale And Purchase Of Common Stock | |
SALE AND PURCHASE OF COMMON STOCK |
NOTE 14 – SALE AND PURCHASE OF COMMON STOCK
July 2024 Financing
On July 9, 2024, the Company entered into a securities purchase agreement with certain institutional and retail investors, pursuant to which the Company sold shares of common stock and pre-funded warrants to purchase up to shares of common stock. The offering price per share of common stock was $ , and the offering price per share of pre-funded warrant was $ .
The offering closed on July 10, 2024. The Company incurred offering expenses of approximately $0.5 million, including placement agent fees of approximately $0.3 million. The Company received net proceeds of approximately $3.5 million, after deducting the underwriting discount and other offering expenses.
June 2024 Financings
On June 12, 2024, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company sold shares of common stock and pre-funded warrants to purchase up to shares of common stock. The offering price per share of common stock was $ , and the offering price per share of pre-funded warrant was $ .
The offering closed on June 13, 2024. The Company incurred offering expenses of approximately $0.5 million, including placement agent fees of approximately $0.3 million. The Company received net proceeds of approximately $3.5 million, after deducting the underwriting discount and other offering expenses.
On June 27, 2024, the Company entered into a securities purchase agreement with certain institutional and retail investors, pursuant to which the Company sold shares of common stock and pre-funded warrants to purchase up to shares of common stock. The offering price per share of common stock was $ , and the offering price per share of pre-funded warrant was $ .
The offering closed on June 28, 2024. The Company incurred offering expenses of approximately $0.5 million, including placement agent fees of approximately $0.3 million. The Company received net proceeds of approximately $3.5 million, after deducting the underwriting discount and other offering expenses.
March 2024 Financing
On March 28, 2024, the Company entered into an agreement to sell shares of common stock, pre-funded warrants to purchase up to shares of common stock, and accompanying Series E warrants to purchase up to shares of common stock with an exercise price of $10.56 per share and expiring from date of issuance in a public offering, which closed on April 1, 2024. The offering price per share of common stock was $, and the offering price per share of pre-funded warrants was $.
The Company incurred offering expenses of approximately $0.5 million, including placement agent fees of approximately $0.3 million. The Company received net proceeds of approximately $3.9 million, after deducting the underwriting discount and other offering expenses.
Additionally, with the closing of the financing on April 1, 2024, the Company entered into warrant amendments (collectively, the “Warrant Amendments”) with certain holders of its common warrants (referred to herein as the “Existing Warrants”). The Company agreed to amend the exercise price of each Existing Warrant to $10.56 upon approval by the Company’s stockholders of a proposal to allow the Existing Warrants to become exercisable in accordance with Nasdaq Listing Rule 5635 or, if stockholder approval is not obtained by October 1, 2024, the Company agreed to automatically amend the exercise price of the Existing Warrants to the Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) of the Company’s common stock on October 1, 2024, if and only if the Minimum Price is below the then current exercise price. Upon stockholder approval, the termination date for the warrants issued August 2023 (the “August Warrants”) to purchase up to an aggregate of shares was amended to April 1, 2029; the termination date for Series A Warrants to purchase up to an aggregate of approximately shares is April 1, 2029; the termination date for Series B Warrants to purchase up to an aggregate of approximately shares is April 1, 2025; the termination date for Series C Warrants to purchase up to an aggregate of approximately shares is the earlier of (i) April 1, 2026 and (ii) 10 trading days following notice by the Company to the Series C Warrant holders of the Company’s public announcement of the FDA’s acknowledgement and acceptance of the Company’s NDA relating to TNX-102 SL in patients with Fibromyalgia; the termination date for Series D Warrants to purchase up to an aggregate of approximately shares is April 1, 2029. The other terms of the Existing Warrants remained unchanged.
The Company evaluated the Warrant Amendments as of April 1, 2024, and determined that the potential adjustment to the exercise price that is contingent on stockholder approval precluded the Existing Warrants from being indexed to the Company’s own stock, and as a result, did not meet the criteria for equity classification under ASC 815-40. The Company accounted for the Warrant Amendments as a direct and incremental cost of the March 2024 financing and recognized the incremental fair value resulting from the modified terms of approximately $3.0 million as an offset to the proceeds received. As all of the Existing Warrants were equity-classified prior to the Warrant Amendments, the net impact to the condensed consolidated statement of stockholders’ equity was zero. The Company then reclassified the Existing Warrants from equity to liabilities at post-modification fair value on April 1, 2024.
On May 22, 2024, at the annual meeting of the Company’s stockholders, the Company’s stockholders approved the proposal to amend the exercise prices of the Existing Warrants to $10.56 per share and extend the expiration dates. The Company determined the Existing Warrants met all of the criteria for equity classification as of the approval date. The Existing Warrants were adjusted to fair value through May 22, 2024, when the warrants were reclassified to equity. Changes in the fair value of the liability-classified warrants were recognized as a separate component in the consolidated statement of operations.
December 2023 Financing
On December 20, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors, pursuant to which the Company sold and issued (i) 30.0 million, before deducting offering expenses of $2.3 million payable by the Company. At the closing of the offering, Pre-Funded Warrants were immediately exercised into shares of common stock for nominal proceeds. shares of the Company’s common stock, (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to shares of common stock and (iii) Series C warrants to purchase up to shares of common stock (the “Series C Warrants”), and (iv) Series D warrants to purchase up to shares of common stock (the “Series D Warrants” and, together with the Series C Warrants, the “Common Warrants”). The securities sold in the offering were sold in fixed combinations as units. The offering price per share of common stock and accompanying Common Warrants was $ , and the offering price per Pre-Funded Warrant and accompanying Common Warrants was $ . The offering closed on December 22, 2023, generating gross proceeds of approximately $
The Pre-Funded Warrants have an exercise price of $0.0001 per share, are immediately exercisable subject to certain ownership limitations, and can be exercised at any time until exercised in full. The Series C Warrants have an exercise price of $17.76 per share, and are exercisable on the later of approval by the Company’s stockholders of (i) a proposal to approve the filing of an amendment to the Company’s Articles of Incorporation, increasing the number of authorized shares of common stock from to and (ii) a proposal to allow the Warrants to become exercisable in accordance with Nasdaq Listing Rule 5635 (the later of such events, the “Approval Date”) and will expire on the later of (a) 10 trading days following the Approval Date and (b) the earlier of (x) the two year anniversary of the Approval Date and (y) 10 trading days following the public announcement of the U.S. Food and Drug Administration’s (“FDA”) acknowledgement and acceptance of the New Drug Application (“NDA”) relating to the Company’s TNX-102 SL product candidate in patients with fibromyalgia. The Series D Warrants have an exercise price of $27.20 per share and are exercisable beginning on the Approval Date through the anniversary of the Approval Date.
Upon the closing of the offering, the Company determined that certain of the Common Warrants did not meet the criteria for equity classification due to the lack of sufficient authorized and unissued shares to settle the instruments. The Company has adopted a sequencing approach under ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity to determine the classification of its contracts at issuance and at each subsequent reporting date, whereby shares are allocated based on the earliest issuance date of potentially dilutive instruments, with the earliest issuance date receiving the first allocation of shares. In the event of identical issuance dates, shares are then allocated beginning with instruments with the latest maturity date first. Pursuant to this sequencing approach, the Company’s authorized and unissued shares were applied to the Pre-Funded Warrants and the Common Warrants in the following order: (i) the Pre-Funded Warrants, (ii) the Series D Warrants, and (iii) the Series C Warrants. Based on this analysis, the Company determined that the authorized shares are sufficient to settle the remaining Pre-Funded Warrants and Series D Warrants and were therefore classified in equity. The remaining Series D Warrants and the Series C Warrants associated with the deficit shares were classified as liabilities and are accounted for at fair value.
The $30.0 million in gross proceeds received by the Company were first allocated to the Series C Warrants and the liability-classified Series D Warrants at their respective fair values of approximately $14.4 million and $8.1 million, respectively. The residual proceeds of approximately $7.5 million were allocated to the shares of common stock, the Pre-Funded Warrants, and the equity-classified Series D Warrants on a relative fair value basis. The issuance costs totaling $2.3 million were allocated between the equity and liability-classified instruments on a relative fair value basis. Issuance costs of $1.4 million allocated to the shares, the Pre-Funded Warrants, and the equity-classified Series D Warrants were recognized as a discount to the proceeds allocated to the equity-classified instruments. Issuance costs of $0.9 million were allocated to the liability-classified Series D Warrants and the Series C Warrants and expensed within Selling, general and administrative expense on the consolidated statements of operations.
On January 25, 2024, the Company’s stockholders approved the proposal to file an amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from to .
The liability-classified Series D Warrants and all of the Series C Warrants were presented within non-current liabilities on the consolidated balance sheets as of December 31, 2023, and were adjusted to fair value through January 25, 2024, when the warrants were reclassified to equity. Changes in the fair value of the liability-classified warrants were recognized as a separate component in the consolidated statement of operations.
September 2023 Financing
On September 28, 2023, the Company sold 16.00 per share and expiring five years from date of issuance, and Series B warrants to purchase up to shares of common stock with an exercise price of $16.00 per share and expiring one year from date of issuance in a public offering, which closed on October 3, 2023. The offering price per share of common stock and accompanying warrants was $ , and the offering price per share of pre-funded warrant and accompanying warrants was $ . shares of common stock; pre-funded warrants to purchase up to shares of common stock, and accompanying Series A warrants to purchase up to shares of common stock with an exercise price of $
The Company incurred offering expenses of approximately $0.5 million, including placement agent fees of approximately $0.3 million. The Company received net proceeds of approximately $4.0 million, after deducting the underwriting discount and other offering expenses.
July 2023 Financing
On July 27, 2023, the Company sold 32.00 per share in a public offering that closed on August 1, 2023. The offering price per share of common stock and accompanying common warrant was $ , and the offering price per share of pre-funded warrant and accompanying common warrant was $ . shares of common stock; pre-funded warrants to purchase up to shares of common stock and accompanying common warrants to purchase up to shares of common stock with an exercise price of $
The Company incurred offering expenses of approximately $0.7 million, including placement agent fees of approximately $0.5 million. The Company received net proceeds of approximately $6.3 million, after deducting the underwriting discount and other offering expenses.
2022 Lincoln Park Transaction
On August 16, 2022, the Company entered into a purchase agreement (the “2022 Purchase Agreement”) and a registration rights agreement (the “2022 Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Pursuant to the terms of the 2022 Purchase Agreement, Lincoln Park has agreed to purchase from the Company up to $ of the Company’s common stock (subject to certain limitations) from time to time during the term of the 2022 Purchase Agreement. Pursuant to the terms of the 2022 Registration Rights Agreement, the Company filed with the SEC a registration statement to register for resale under the Securities Act the shares that have been or may be issued to Lincoln Park under the 2022 Purchase Agreement.
Pursuant to the terms of the 2022 Purchase Agreement, at the time the Company signed the 2022 Purchase Agreement and the 2022 Registration Rights Agreement, the Company issued 1,000,000 and recorded as an addition to equity for the issuance of the common stock and treated as a reduction to equity as a cost of capital to be raised under the 2022 Purchase Agreement. shares of common stock to Lincoln Park as consideration for its commitment to purchase shares of the Company’s common stock under the 2022 Purchase Agreement. The commitment shares were valued at $
During the three and nine months ended September 30, 2023, the Company sold 0 and $0.4 million, respectively. No shares were sold during 2024 under the 2022 Purchase Agreement. and shares, respectively, of common stock under the 2022 Purchase Agreement, for net proceeds of approximately $
At-the-Market Offerings
On July 30, 2024, the Company entered into a Sales Agreement ( the “2024 Sales Agreement”), with AGP pursuant to which the Company may issue and sell, from time to time, shares of the Company’s common stock having an aggregate offering price of up to $150.0 million in ATM sales. AGP will act as sales agent and will be paid a 3% commission on each sale under the 2024 Sales Agreement. The Company’s common stock will be sold at prevailing market prices at the time of the sale, and, as a result, prices will vary. During the three months ended September 30, 2024, the Company sold approximately million shares of common stock under the Sales Agreement, as defined below, for net proceeds of approximately $41.8 million. Subsequent to September 30, 2024, the Company has sold million shares of common stock under the Sales Agreement, for net proceeds of approximately $5.1 million.
On April 8, 2020, the Company entered into a sales agreement (the “Sales Agreement”) with AGP pursuant to which the Company may issue and sell, from time to time, shares of the Company’s common stock having an aggregate offering price of up to $320.0 million in at-the-market offerings (“ATM”) sales. AGP will act as sales agent and will be paid a 3% commission on each sale under the Sales Agreement. The Company’s common stock will be sold at prevailing market prices at the time of the sale, and, as a result, prices will vary. There were no sales under the Sales Agreement during the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2023, the Company sold approximately and shares, respectively, of common stock under the Sales Agreement, for net proceeds of approximately $0 million and $3.0 million, respectively. There will be no more sales under the 2020 ATM.
Stock repurchases
In September 2024, the Board of Directors approved a 2024 share repurchase program pursuant to which the Company may repurchase up to $ .0 million in value of its outstanding common stock from time to time on the open market and in privately negotiated transactions subject to market conditions, share price and other factors. No repurchases occurred during the three and nine months ended September 30, 2024.
During the quarter ended March 31, 2023, the Company repurchased per share for a gross aggregate cost of approximately $ million. of its shares of common stock outstanding under its 2022 share repurchase program for $ million at prices ranging from $ to $
In January 2023, the Board of Directors approved a new 2023 share repurchase program pursuant to which the Company may repurchase up to $ million in value of its outstanding common stock from time to time on the open market and in privately negotiated transactions subject to market conditions, share price and other factors. During the quarter ended March 31, 2023, the Company repurchased of its shares of common stock outstanding under the new 2023 share repurchase program at $ per share for a gross aggregate cost of $ million.
The timing and amount of any shares repurchased will be determined based on the Company’s evaluation of market conditions and other factors and the New Share Repurchase Program may be discontinued or suspended at any time. Repurchases will be made in accordance with the rules and regulations promulgated by the Securities and Exchange Commission and certain other legal requirements to which the Company may be subject. Repurchases may be made, in part, under a Rule 10b5-1 plan, which allows stock repurchases when the Company might otherwise be precluded from doing so. |