Item 2. Unregistered Sales of Equity Securities
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On August 19, 2025, the Company entered into securities purchase agreements (the "August 2025 Purchase Agreements") with certain officers and/or directors of the Company or others for whom they have or share beneficial ownership (the "August 2025 Inside Investors"), the Company’s largest stockholder, and other accredited investors (collectively, the "August 2025 Purchasers"), pursuant to which the Company sold (1) 3,542,856 unregistered shares of common stock, (2) pre-funded warrants to purchase up to 2,328,571 shares of common stock (the “August 2025 PFWs”), and (3) common stock warrants to purchase up to 5,871,427 shares of common stock (the “August 2025 Common Stock Warrants”).
Each share and accompanying common stock warrant were sold together at a purchase price of $1.75, and each pre-funded warrant and accompanying common stock warrant were sold together at a purchase price of $1.7495, for aggregate gross proceeds of approximately $10.3 million before deducting estimated offering expenses of approximately $0.7 million payable by the Company.
The August 2025 PFWs have an exercise price of $0.0005 per share and were immediately exercisable upon issuance for all purchasers other than the Company’s officers and/or directors. The August 2025 PFWs issued to the Company’s officers and/or directors will be exercisable after stockholder approval and will terminate when exercised in full. The August 2025 Common Stock Warrants are exercisable beginning six months and one day from the date of issuance at an exercise price of $2.21 per share and expire five and one-half years from issuance.
The Benchmark Company, LLC, a StoneX Company (“Benchmark”), acted as sole placement agent in connection with the offering. The Kestrel Merchant Partners group at Benchmark was responsible for sourcing and executing the offering.
Substantially all of the August 2025 Purchasers (other than the August 2025 Inside Investors) exercised their August 2025 PFWs during the month of September 2025, for an aggregate of 1,657,143 shares of common stock, leaving August 2025 PFWs to purchase 671,428 shares unexercised, 585,714 shares of which are represented by August 2025 Inside Investors and are not exercisable until stockholder approval is obtained.
The sale and issuance of these securities were made in reliance upon exemptions from registration afforded in Section 4(a)(2) of the Securities Act.
Item 3. Defaults Upon Senior Securities.
None.
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