|9 Months Ended|
Sep. 30, 2019
Preferred Stock Conversion
From July through December of 2018, Series B Convertible Preferred shareholders of the Company converted 10,926 shares of Series B Convertible Preferred Stock into 569,966 shares of common stock.
During May 2018 and June 2018, Series B Convertible Preferred shareholders of the Company converted a total of 4,072 shares of Series B Convertible Preferred Stock into 102,886 shares of common stock.
During the nine months ended September 30, 2019, Series B Convertible Preferred shareholders of the Company converted 3,825 shares of Series B Convertible Preferred Stock into 1,143,784 shares of common stock.
August 2018 Warrant Exercise
During August 2018, pursuant to the cashless exercise provision contained in their warrant, L2 Capital exercised its warrants and was issued 8,069 shares of common stock. The L2 Capital warrant is no longer outstanding.
July 2018 Warrant Exercise
During May 2018, the Company closed on a public offering, consisting of both convertible preferred stock and warrants. During July 2018, 998 of the warrants were exercised and converted into 998 shares of common stock.
May 2018 Warrant Exercise (July 2016 Warrants)
During March 2018, the Company repriced 27,733 warrants dated July 8, 2016, from $360 to $63.75 (for further description see Warrant Reprice March 2018 below). During May 2018, an additional 4,861 of the repriced warrants were exercised resulting in gross proceeds to the Company of $0.3 million.
August 2019 Warrant Exercise (May 2018 Warrants)
During the nine months ended September 30, 2019, 35,874 warrants were exercised resulting in gross proceeds to the Company of approximately $0.1 million.
May 2018 Unit Offering
On May 14, 2018, the Company closed on an underwritten public offering of units (“the Units”), consisting of convertible preferred stock and warrants, for gross proceeds of $15.0 million, which excludes underwriting discounts and commissions and offering expenses payable by SINTX. The offering was priced at a public offering price of $1,000 per unit. Each unit consisted of one share of Series B Convertible Preferred Stock, with a stated value of $1,100, and warrants to purchase up to 25 shares of common stock (the “May 2018 Warrants”). The May 2018 Warrants are initially exercisable at an exercise price of $48 per share and expire 5 years from the date of issuance. The Series B Preferred Stock is convertible into shares of common stock by dividing the stated value of $1,100 by: (i) for the first 40 trading days following the closing of this offering, $43.54 (the “Conversion Price”), (ii) after 40 trading days but prior to the 81st trading day, the lesser of (a) the Conversion Price and (b) 87.5% of the lowest volume weighted average price for our Common Stock as reported at the close of trading on the market reporting trade prices for the Common Stock during the five trading days prior to the 41st trading day, and (iii) after 80 trading days, the lesser of (a) the Conversion Price and (b) 87.5% of the lowest volume weighted average price for our Common Stock as reported at the close of trading on the market reporting trade prices for the Common Stock during the five trading days prior to the date of the notice of conversion. In the case of (ii)(b) and (iii)(b) above, the share price shall not be less than $2.94 (the “Floor Price”). Each of the Conversion Price and Floor Price is subject to adjustment in certain circumstances.
The Company raised $15.0 million associated with the issuance of the Units, with $6.8 million, net of issuance costs of $0.6 million, allocated to the preferred stock and $6.9 million, net of issuance costs of $0.7 million, allocated to the warrants. In association with the warrants that were recorded as a derivative liability, the Company immediately expensed approximately $0.7 million of issuance costs. The 15,000 preferred shares were initially convertible into 378,997 shares of common stock and had an effective conversion rate of $43.50 per share based on the proceeds that were allocated to them. The conversion price was adjusted to $19.63, effective July 12, 2018, and was adjusted again on September 7, 2018 to $14.40. During the nine months ended September 30, 2019 the conversion price was adjusted down on several occasions and ultimately settled at $2.84 as of September 30, 2019.
Warrant Reprice March 2018
During the six months ended June 30, 2018 the Company entered into a warrant amendment agreement (the “Amendment Agreement”) with certain holders of previously issued Series E Common Stock Purchase Warrants (collectively, “Investors”). In connection with that certain Series E Common Stock Purchase Warrant between the Company and Investors dated July 8, 2016, the Company issued to Investors warrants to purchase up to 27,733 shares of common stock (the “Warrant Shares”) at an exercise price of $360.00 per share, (the “Investors Warrants”). Under the terms of the Amendment Agreement, in consideration of Investors exercising 22,279 of the Investors Warrants (the “Warrant Exercise”), the exercise price per share of the Investors Warrants was reduced to $63.75 per share. 22,278 of the Investors Warrants were exercised resulting in gross proceeds to the Company of $1.4 million before payment of placement agent fees and costs. In addition, and as further consideration, the Company issued to Investors new warrants to purchase up to the number of shares of common stock equal to 100% of the number of Warrant Shares issued pursuant to the Warrant Exercise at an exercise price per share equal to $60.00 per share.
2019 ATM Stock Offerings
During the nine months ended September 30, 2019, the Company entered into an ATM equity distribution agreement in which the Company may sell, from time to time, shares of common stock having an aggregate offering price of up to $2.5 million. The Company sold 457,878 shares during the nine months ended September 30, 2019, raising approximately $1.3 million net of issuance cost of $0.2 million. The Company is eligible to raise an additional $1.2 million under this offering.
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef