Note 11 – Share-based compensation

The following table sets forth total non-cash share-based compensation for the issuance of common stock, options to purchase common stock, warrants to purchase common stock, and restricted stock unit awards by operating statement classification for the three and nine months ended September 30, 2023 and 2022:

Schedule of Stock-based Compensation

As of September 30, 2023, unamortized share-based compensation for stock options was $468, with a weighted-average recognition period of 1.20 years.

Stock option and warrant activity

A summary of the Company’s stock option and warrant activity is as follows:

Schedule of Stock Option and Warrants

As of September 30, 2023, there were 563 nonvested restricted stock unit awards at a weighted average grant date fair value of $80.63. As of December 31, 2022, there were 1,346 nonvested restricted stock unit awards at a weighted average grant date fair value of $277.57.

As of September 30, 2023, unamortized stock compensation for restricted stock units was $36, with a weighted-average recognition period of 0.60 years.

Issuance of Warrants to Purchase Common Stock

In February 2020, the Company entered into a services agreement whereby it agreed to issue warrants to purchase 400 shares of common stock of the Company. The warrants fully vested over a one-year period on a monthly basis and expire three years from the date of issuance and were exercisable at weighted average exercise price equal to $849.00 per share of common stock. In March 2022, the Company granted new warrants as a replacement to the vested warrants held by the service provider, for which all the share-based compensation expense had been recognized in prior fiscal periods. The issuance of new warrants concurrently with the cancellation of the existing warrants was treated as a modification. The Company agreed to issue replacement warrants to purchase 400 shares of common stock of the Company exercisable at a price equal to $150 per share of common stock. The replacement warrants immediately vested upon issuance and expire three years from the date of issuance. As a result, the Company recognized $0 and $26 of share-based compensation for the nine months ended September 30, 2023 and 2022 respectively, related to the incremental fair value which is equal to the excess of the fair value of the new stock options granted over the fair value of the original award on the cancellation date.

Private Placement Offering

On May 17, 2023, the Company entered into a securities purchase agreement with an accredited investor pursuant to which it agreed to issue and sell in a private placement an aggregate of (i) 35,000 shares of common stock, (ii) warrants to purchase up to 241,134 shares of common stock (the “Pre-Funded Warrants”) and (iii) warrants to purchase up to 276,134 shares of common stock (the “Common Warrants”). The purchase price was $12.675 for each share of common stock and $12.674 for each Pre-Funded Warrant, resulting in net proceeds of approximately $3.0 million, inclusive of issuance costs of $0.5 million and exclusive of warrant issuance costs of $0.2 million. The closing of the offering occurred on May 19, 2023. Each Common Warrant is exercisable for a period of five and one-half years from the issuance date at an exercise price of $10.80 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis. Each Pre-Funded Warrant is exercisable until exercised in full at an exercise price of $0.0001 per share and may be exercised on a cashless basis.

The measurement of fair value of the Pre-Funded Warrants was determined utilizing a Black-Scholes model. The relative fair value of these Pre-Funded Warrants was estimated to be $1.7 million on May 19, 2023, and is reflected within additional paid-in capital as of September 30, 2023 as the Pre-Funded Warrants were determined to be equity classified.

The measurement of fair value of the Common Warrants was determined utilizing a Black-Scholes model. The relative fair value of these Common Stock Warrants was estimated to be $1.5 million on May 19, 2023 and is reflected within additional paid-in capital as of September 30, 2023, as the Common Stock Warrants were determined to be equity classified.

In addition, pursuant to the terms of the offering, the Company issued the placement agent, H.C. Wainwright & Co., LLC., warrants to purchase up to 13,806 shares of the Company’s common stock (the “Placement Agent Warrants”). The Placement Agent Warrants are exercisable for a period of five and one-half years from the issuance date, at an exercise price of $15.845 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis. As these Placement Agent Warrants were issued for services provided in facilitating the private placement, the Company recorded the fair value of such Placement Agent Warrants as a cost of capital on the issuance date. The measurement of fair value was determined utilizing a Black-Scholes model. The relative fair value of these Placement Agent Warrants was estimated to be $0.1 million on May 19, 2023, and is reflected within additional paid-in capital as of September 30, 2023 as the Placement Agent Warrants were determined to be equity classified.

As of November 13, 2023, Pre-Funded Warrants for 241,134 shares of common stock were exercised.

Additionally, in connection with the Private Placement, the Company entered into a warrant amendment (the “Warrant Amendment”), dated May 17, 2023 with the holder named therein, pursuant to which the Company agreed to amend certain existing warrants to purchase up to an aggregate of 19,999 shares of Common Stock that were previously issued in January 2021 through February 2021 at an exercise price of $636.00 per share after the 1-to-20 reverse stock split, such that effective upon the closing of the Private Placement the amended warrants have a reduced exercise price of $10.80 per share, at an additional offering price of $1.875 per amended warrant. The Company calculated an incremental fair value of approximately $0.1 million by calculating the fair value of the warrants immediately before and immediately after the modification. The Company recognized the change in the fair value of the warrants as an equity issuance cost.

The Private Placement resulted in net proceeds of approximately $3.0 million, inclusive of issuance costs of $0.5 million and exclusive of warrant issuance costs of $0.2 million.