0001437749-23-031742 | 10-Q | XBRL Viewer | Acelrx Pharmaceuticals INC

Note 9 - Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development	$	210	$	139	$	383	$	466
Selling, general and administrative		168		519		1,016		1,545
Discontinued operations		—		43		19		226
Total	$	378	$	701	$	1,418	$	2,237

Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity [Table Text Block]

				Weighted
	Number of			*Average*
	*Restricted*			Grant Date
	Stock Units			Fair Value
Restricted stock units outstanding, January 1, 2023		82,778		$	16.97
Granted		44,091			1.76
Vested		(40,106	)		19.31
Forfeited		(2,926	)		13.91
Restricted stock units outstanding, September 30, 2023		83,837		$	7.96

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

	Number of Stock Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
								(in thousands)
Stock options outstanding, January 1, 2023		725,623		$	52.98
Granted		264,520			1.76
Forfeited		(9,003	)		12.09
Expired		(105,808	)		83.31
Stock options outstanding, September 30, 2023		875,332		$	34.26		6.5	$	—
Vested and exercisable options— September 30, 2023		478,246		$	54.66		4.5	$	—
Vested and expected to vest— September 30, 2023		875,332		$	34.26		6.5	$	—

Time-based Stock Option [Member]

Notes Tables

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Nine months ended September 30, 2023
Expected term (in years)		6.3
Risk-free interest rate		3.9	%
Expected volatility		94	%
Expected dividend rate		0	%

Note 8 - Warrants

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Warrants Disclosure [Text Block]

8. Warrants

The activity related to warrants during the nine months ended September 30, 2023, is summarized as follows:

	Common Stock from Warrants			Weighted-average Exercise Price (per share)
Outstanding at December 31, 2022		7,824,933		$	1.72
2023 Pre-Funded Warrants issued		2,012,356		$	0.001
Series A Common Stock Warrants issued		7,352,947		$	1.11
Series B Common Stock Warrants issued		7,352,947		$	1.11
Series A Common Stock Warrants issued to placement agent		183,824		$	1.70
Series B Common Stock Warrants issued to placement agent		183,823		$	1.70
2022 Pre-Funded Warrants exercised		(2,632,898	)	$	0.0001
2023 Pre-Funded Warrants exercised		(595,883	)	$	0.001
Outstanding at September 30, 2023		21,682,049		$	1.40
Exercisable at September 30, 2023		21,682,049		$	1.40

The pre-funded warrants issued in December 2022 to purchase 2,632,898 shares of common stock, or the 2022 Pre-Funded Warrants, were exercised in full in the three months ended March 31, 2023. The 2023 Pre-Funded Warrants were exercisable immediately following the closing date of the July 2023 Private Placement, or July 20, 2023, and have an unlimited term and an exercise price of $0.001 per share. In addition, 595,883 of the 2023 Pre-Funded Warrants were exercised in the three months ended September 30, 2023. The 2022 Pre-Funded Warrants and the 2023 Pre-Funded Warrants were determined to be common stock equivalents.

The common warrants issued in December 2022 to purchase an aggregate of 4,227,052 shares of common stock, or the 2022 Warrants, were accounted for by the Company as a liability. At September 30, 2023, the 2022 Warrants were valued at approximately $1.4 million, using the Black-Scholes option pricing model as follows: exercise price of $2.07 per share, stock price of $0.58 per share, expected life of 5.25 years, volatility of 94.73%, a risk-free rate of 4.60% and 0% expected dividend yield. See Note 2, “Investments and Fair Value Measurement” above. On April 25, 2023, the 2022 Warrants were amended to remove the full ratchet anti-dilutive adjustment rights in the event the Company issues shares of common stock or common stock equivalents in the future with a value less than the then effective exercise price of such common warrants subject to certain customary exceptions, and further subject to a minimum exercise price of $1.00 per share.

The Series A and Series B common stock warrants were exercisable immediately following the closing date of the July 2023 Private Placement and have a five-year term, unless certain milestone events are met which accelerate the expiration date to 45 days following such announcement, and have an exercise price of $1.11 per share. The Series A and Series B common stock warrants also include certain rights upon “fundamental transactions” as described in such warrants, including the right of the holders thereof to receive from AcelRx or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of common stock in such fundamental transaction in the amount of the Black Scholes value (as described in such warrants) of the unexercised portion of the applicable warrants on the date of the consummation of such fundamental transaction.

The Company evaluated the 2023 Pre-Funded Warrants, Series A and Series B common stock warrants under ASC 815-40 and determined that they did not require liability classification and met the requirements for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity. Accordingly, the proceeds were allocated between common stock and the 2023 Pre-Funded Warrants, Series A and Series B common stock warrants at their respective relative fair value basis to stockholders’ equity and as a component of additional paid-in capital on the condensed consolidated balance sheets. The fair value of the Series A and Series B common stock warrants was determined using a Black-Scholes option pricing model and the common stock based on the closing date share price and were recorded in additional paid-in capital within stockholders' equity on the condensed consolidated balance sheets.

The placement agent Series A and Series B common stock warrants have the same terms as the Series A and Series B common stock warrants to be issued to the purchasers, except such warrants do not have a Black Scholes provision in the event of a fundamental transaction and the exercise price of such warrants is $1.70 per share, which is 125% of the combined offering price per share. The Company concluded that the placement agent Series A and Series B common stock warrants are freestanding equity-linked derivative instruments that met the criteria for equity classification. The placement agent Series A and Series B common stock warrants were valued at approximately $0.3 million, using the Black-Scholes option pricing model as follows: exercise price of $1.70 per share, stock price of $1.07 per share, expected life of 5 years, volatility of 94.3%, a risk-free rate of 4.08% and 0% expected dividend yield.

In July 2023, the warrants issued to Lincoln Park Capital Fund, LLC, or the August 2022 LPC Warrant, to purchase up to an aggregate of 81,150 shares of common stock down round feature was triggered due to the price per share received from the issuance of common stock and warrants in connection with the July 2023 Private Placement. The Company calculated the value of the effect of the down round feature measured as the difference between the warrants’ fair value, using the Black-Scholes option-pricing model, before and after the down round feature was triggered using the then current exercise price, $2.07, and the new exercise price, $1.11. The difference in fair value of the effect of the Down Round Feature was immaterial and had no impact on net loss per share in the periods presented. This down round feature expired on August 3, 2023.

The Series A and Series B common stock warrants, the placement agent Series A and Series B common stock warrants, the 2022 Warrants and the financing warrants issued in November 2021 are participating securities which, by definition, entitle the holders thereof to participate in dividends and other distributions of assets by the Company to its holders of common shares as though the holder then held common shares.

Note 9 - Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock-based compensation expense	$ 378	$ 701	$ 1,418	$ 2,237
Research and Development Expense [Member]
Stock-based compensation expense	210	139	383	466
Selling, General and Administrative Expenses [Member]
Stock-based compensation expense	168	519	1,016	1,545
Discontinued Operation [Member]
Stock-based compensation expense	$ 0	$ 43	$ 19	$ 226

Note 7 - Stockholders' Equity	9 Months Ended
Sep. 30, 2023
Notes to Financial Statements
Equity [Text Block]	7. Stockholders’ Equity *Common Stock* July 2023 Private Placement On July 17, 2023, the Company entered into a securities purchase agreement, or the Purchase Agreement, with several institutional investors, or the Purchasers, relating to the issuance and sale to the Purchasers in a private placement of 5,340,591 shares of common stock, par value $0.001 per share, pre-funded warrants to purchase up to an aggregate of 2,012,356 shares of common stock at an exercise price of $0.001 per share, or the 2023 Pre-Funded Warrants; Series A common stock warrants to purchase up to an aggregate of 7,352,947 shares of common stock at an exercise price of $1.11 per share; and Series B common stock warrants to purchase up to an aggregate of 7,352,947 shares of common stock at an exercise price of $1.11 per share. See Note 8, “Warrants” for additional information regarding the 2023 Pre-Funded Warrants, and Series A and Series B common stock warrants. The private placement closed on July 20, 2023. The combined offering price was $1.36 per share of common stock and accompanying Series A common stock warrant and Series B common stock warrant, or in the case of 2023 Pre-Funded Warrants, $1.359 per pre-funded warrant and accompanying Series A common stock warrant and Series B common stock warrant (which is the purchase price per share of common stock and accompanying warrants less $0.001). The aggregate gross proceeds to AcelRx from the private placement were approximately $10.0 million, before deducting placement agent fees and other expenses payable by AcelRx of approximately $1.1 million, and excluding the proceeds, if any, from the exercise of the 2023 Pre-Funded Warrants and Series A and Series B common stock warrants issued in the private placement. The potential gross proceeds from the Series A common stock warrants and Series B common stock warrants, if fully exercised for cash, is approximately $16.3 million. In May 2023, AcelRx engaged H.C. Wainwright & Co., LLC to act as placement agent in the private placement. As compensation, AcelRx paid the placement agent a cash fee equal to 5.25% of the aggregate gross proceeds generated from the private placement and reimbursed certain expenses of the placement agent in connection with the private placement totaling $0.1 million. The placement agent will be entitled to an additional one-time payment of $200,000 upon the exercise of the Series A and Series B common stock warrants resulting in cumulative aggregate gross proceeds to AcelRx of at least $9.5 million in cash. As of September 30, 2023, no Series A or Series B common stock warrants were exercised. In addition, the Company issued to the placement agent fully vested Series A common stock warrants, or placement agent Series A common stock warrants, to purchase 183,824 shares of common stock and fully vested Series B common stock warrants, or placement agent Series B common stock warrants, to purchase 183,823 shares of common stock. See Note 8, “Warrants” for additional information regarding the placement agent Series A and Series B common stock warrants. ATM Agreement The Company has entered into the ATM Agreement with Cantor, as agent, pursuant to which the Company may offer and sell, from time to time through Cantor, shares of the Company’s common stock having an aggregate offering price of up to $80.0 million. The Company issued and sold approximately 0.04 million shares of common stock pursuant to the ATM Agreement and received net proceeds of $0.2 million, after deducting fees and expenses, during the three and nine months ended September 30, 2022. As of September 30, 2023, the Company did not have an effective shelf registration statement, and will be unable to make any further sales under the ATM Agreement until such time as the Company files a new shelf registration statement and it is declared effective by the SEC. In addition, the Company’s ability to sell such shares under any future shelf registration statement the Company may file with the SEC and the ATM Agreement will be limited until the Company is no longer subject to the SEC’s “baby shelf” limitations. *Stock Plan* Amended 2020 Equity Incentive Plan On October 10, 2023, at the 2023 Annual Meeting of Stockholders of the Company, upon the recommendation of the Company’s Board of Directors, the Company’s stockholders approved an amendment and restatement of the Company’s 2020 Equity Incentive Plan, or the Amended 2020 Plan, to increase the number of authorized shares reserved for issuance thereunder by 1,500,000 shares, subject to adjustment for certain changes in the Company’s capitalization. The aggregate number of shares of the Company’s common stock that may be issued under the Amended 2020 Plan will not exceed the sum of: (i) 1,990,000 shares, and (ii) up to 744,608 shares subject to outstanding awards granted under the 2011 Equity Incentive Plan that may become available for issuance under the Amended 2020 Plan, as such shares become available from time to time.

Note 7 - Stockholders' Equity

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Equity [Text Block]

7. Stockholders’ Equity

Common Stock

July 2023 Private Placement

On July 17, 2023, the Company entered into a securities purchase agreement, or the Purchase Agreement, with several institutional investors, or the Purchasers, relating to the issuance and sale to the Purchasers in a private placement of 5,340,591 shares of common stock, par value $0.001 per share, pre-funded warrants to purchase up to an aggregate of 2,012,356 shares of common stock at an exercise price of $0.001 per share, or the 2023 Pre-Funded Warrants; Series A common stock warrants to purchase up to an aggregate of 7,352,947 shares of common stock at an exercise price of $1.11 per share; and Series B common stock warrants to purchase up to an aggregate of 7,352,947 shares of common stock at an exercise price of $1.11 per share. See Note 8, “Warrants” for additional information regarding the 2023 Pre-Funded Warrants, and Series A and Series B common stock warrants. The private placement closed on July 20, 2023.

The combined offering price was $1.36 per share of common stock and accompanying Series A common stock warrant and Series B common stock warrant, or in the case of 2023 Pre-Funded Warrants, $1.359 per pre-funded warrant and accompanying Series A common stock warrant and Series B common stock warrant (which is the purchase price per share of common stock and accompanying warrants less $0.001). The aggregate gross proceeds to AcelRx from the private placement were approximately $10.0 million, before deducting placement agent fees and other expenses payable by AcelRx of approximately $1.1 million, and excluding the proceeds, if any, from the exercise of the 2023 Pre-Funded Warrants and Series A and Series B common stock warrants issued in the private placement. The potential gross proceeds from the Series A common stock warrants and Series B common stock warrants, if fully exercised for cash, is approximately $16.3 million.

In May 2023, AcelRx engaged H.C. Wainwright & Co., LLC to act as placement agent in the private placement. As compensation, AcelRx paid the placement agent a cash fee equal to 5.25% of the aggregate gross proceeds generated from the private placement and reimbursed certain expenses of the placement agent in connection with the private placement totaling $0.1 million. The placement agent will be entitled to an additional one-time payment of $200,000 upon the exercise of the Series A and Series B common stock warrants resulting in cumulative aggregate gross proceeds to AcelRx of at least $9.5 million in cash. As of September 30, 2023, no Series A or Series B common stock warrants were exercised. In addition, the Company issued to the placement agent fully vested Series A common stock warrants, or placement agent Series A common stock warrants, to purchase 183,824 shares of common stock and fully vested Series B common stock warrants, or placement agent Series B common stock warrants, to purchase 183,823 shares of common stock. See Note 8, “Warrants” for additional information regarding the placement agent Series A and Series B common stock warrants.

ATM Agreement

The Company has entered into the ATM Agreement with Cantor, as agent, pursuant to which the Company may offer and sell, from time to time through Cantor, shares of the Company’s common stock having an aggregate offering price of up to $80.0 million.

The Company issued and sold approximately 0.04 million shares of common stock pursuant to the ATM Agreement and received net proceeds of $0.2 million, after deducting fees and expenses, during the three and nine months ended September 30, 2022. As of September 30, 2023, the Company did not have an effective shelf registration statement, and will be unable to make any further sales under the ATM Agreement until such time as the Company files a new shelf registration statement and it is declared effective by the SEC. In addition, the Company’s ability to sell such shares under any future shelf registration statement the Company may file with the SEC and the ATM Agreement will be limited until the Company is no longer subject to the SEC’s “baby shelf” limitations.

Stock Plan

Amended 2020 Equity Incentive Plan

On October 10, 2023, at the 2023 Annual Meeting of Stockholders of the Company, upon the recommendation of the Company’s Board of Directors, the Company’s stockholders approved an amendment and restatement of the Company’s 2020 Equity Incentive Plan, or the Amended 2020 Plan, to increase the number of authorized shares reserved for issuance thereunder by 1,500,000 shares, subject to adjustment for certain changes in the Company’s capitalization. The aggregate number of shares of the Company’s common stock that may be issued under the Amended 2020 Plan will not exceed the sum of: (i) 1,990,000 shares, and (ii) up to 744,608 shares subject to outstanding awards granted under the 2011 Equity Incentive Plan that may become available for issuance under the Amended 2020 Plan, as such shares become available from time to time.

- Definition

The entire disclosure for equity.

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+ Details

Note 1 - Organization and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

1. Organization and Summary of Significant Accounting Policies

The Company

AcelRx Pharmaceuticals, Inc., or the Company, or AcelRx, was incorporated in Delaware on July 13, 2005 as SuRx, Inc. The Company subsequently changed its name to AcelRx Pharmaceuticals, Inc. The Company’s operations are based in San Mateo, California.

AcelRx is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for use in medically supervised settings.

On March 12, 2023, the Company entered into an Asset Purchase Agreement, or the DSUVIA Agreement, with Vertical Pharmaceuticals, LLC, a wholly owned subsidiary of Alora Pharmaceuticals, LLC, or Alora, pursuant to which Alora agreed to acquire certain assets and assume certain liabilities of AcelRx relating to its sufentanil sublingual tablet product referred to as DSUVIA or DZUVEO, or any other single-dose pharmaceutical product for use in medically supervised settings containing a sublingual tablet that includes sufentanil as the sole active ingredient, as a 30 mcg tablet or other dosage form or strength as reasonably necessary for lifecycle management, or the Product. The closing of the DSUVIA Agreement occurred on April 3, 2023 (see Note 3, “Discontinued Operations”).

On January 7, 2022, the Company acquired Lowell Therapeutics, Inc., or Lowell, a privately held company (see Note 4, “Asset Acquisition” to the consolidated financial statements in the Company’s 2022 Annual Report on Form 10-K for additional information) and, as a result acquired Niyad™, a regional anticoagulant for the dialysis circuit during continuous renal replacement therapy for acute kidney injury patients in the hospital, that the Company plans to study under an investigational device exemption, or IDE, and which has received Breakthrough Device Designation status from the FDA. While not approved for commercial use in the United States, the active drug component of Niyad, nafamostat, has been approved in Japan and South Korea as a regional anticoagulant for the dialysis circuit, disseminated intravascular coagulation, and acute pancreatitis. Niyad is a lyophilized formulation of nafamostat, a broad-spectrum, synthetic serine protease inhibitor, with anticoagulant, anti-inflammatory, and potential anti-viral activities. The second intended indication for Niyad is as a regional anticoagulant for the dialysis circuit for chronic kidney disease patients undergoing intermittent hemodialysis in dialysis centers. In addition, the Company acquired LTX-608, a proprietary nafamostat formulation for direct IV infusion that it intends to develop for the treatment of acute respiratory distress syndrome, or ARDS, and disseminated intravascular coagulation, or DIC.

On July 14, 2021, the Company entered into a License and Commercialization Agreement, or the PFS Agreement, with Laboratoire Aguettant, or Aguettant, pursuant to which the Company obtained the exclusive right to develop and, subject to FDA approval, commercialize in the United States an ephedrine pre-filled syringe, or PFS, containing 10 ml of a solution of 3 mg/ml ephedrine hydrochloride for injection, and (ii) a phenylephrine PFS containing 10 ml of a solution of 50 mcg/ml phenylephrine for injection. Aguettant will supply the Company with the products for use in commercialization, if they are approved in the U.S.

Liquidity and Going Concern

The unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023 were prepared on the basis of a going concern, which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. The Company has incurred recurring operating losses and negative cash flows from operating activities and expects to continue to incur operating losses and negative cash flows in the future. Although in July 2023 the Company closed the private placement of its common stock, pre-funded warrants and common warrants for aggregate gross proceeds to the Company of $10.0 million, before deducting the placement agent's fees and other offering expenses payable by the Company, with an additional potential $16.3 million upon the exercise of the common warrants, which include an acceleration feature should the Company achieve certain performance milestones (see Note 7, “Stockholders’ Equity”), considering the Company’s current cash resources and its current and expected levels of operating expenses for the next twelve months, management expects to need additional capital to fund its planned operations prior to the 12 month anniversary of the date this Quarterly Report on Form 10-Q is filed with the United States Securities and Exchange Commission, or the SEC. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management may seek to raise such additional capital through public or private equity offerings, including under the Controlled Equity Offering^SM Sales Agreement, or the ATM Agreement, with Cantor Fitzgerald & Co., or Cantor, debt securities, a new debt facility, monetizing or securitizing certain assets, entering into product development, license or distribution agreements with third parties, or divesting any of the Company’s remaining product candidates. While management believes its plans to raise additional funds will alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, these plans are not entirely within the Company’s control and cannot be assessed as being probable of occurring. Additional funds may not be available when the Company needs them on terms that are acceptable to the Company, or at all. If adequate funds are not available, the Company may be required to further reduce its workforce or delay the development of its regulatory filing plans for its product candidates in advance of the date on which the Company’s cash resources are exhausted to ensure that the Company has sufficient capital to meet its obligations and continue on a path designed to preserve stockholder value. In addition, if additional funds are raised through collaborations, strategic alliances or licensing arrangements with third parties, the Company may have to relinquish rights to its technologies, future revenue streams or product candidates, or to grant licenses on terms that may not be favorable to the Company.

Reverse Stock Split

On September 23, 2022, at a special meeting of stockholders, the Company's stockholders authorized the Company’s Board of Directors to effect a reverse stock split of all outstanding shares of common stock in a range of 1-for-10 to 1-for-30. The Board of Directors subsequently approved a reverse stock split with a ratio of 1-for-20, or the Reverse Stock Split. On October 25, 2022, following the filing of a certificate of amendment to the Company’s amended and restated certificate of incorporation, every 20 shares of the Company's common stock that were issued and outstanding automatically converted into one outstanding share of common stock. The Reverse Stock Split affected all shares of common stock outstanding immediately prior to the effective time of the Reverse Stock Split, as well as the number of shares of common stock available for issuance under the Company's equity incentive and employee stock purchase plans. Outstanding stock options, restricted stock units and warrants were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. The Reverse Stock Split affected all holders of common stock uniformly and did not affect any stockholder's percentage of ownership interest. The par value of the Company's common stock remained unchanged at $0.001 per share and the number of authorized shares of common stock remained the same after the Reverse Stock Split.

As the par value per share of the Company's common stock remained unchanged at $0.001 per share, the change in the common stock recorded at par value has been reclassified to additional paid-in-capital on a retroactive basis. All references to shares of common stock, stock options, restricted stock units and warrants and per share data for all periods presented in the accompanying unaudited condensed consolidated financial statements and notes thereto have been adjusted to reflect the Reverse Stock Split on a retroactive basis.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the United States. Securities and Exchange Commission, or SEC. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, or any future period. The unaudited condensed consolidated balance sheet as of December 31, 2022, was derived from the Company’s audited financial statements as of December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2023, which were recast to reflect discontinued operations and filed with the Company’s Current Report on Form 8-K on August 1, 2023. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which includes a broader discussion of the Company’s business and the risks inherent therein.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Management evaluates its estimates on an ongoing basis including critical accounting policies. Estimates are based on historical experience and on various other market-specific and other relevant assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board, or FASB, issued Topic 326, or the Credit Losses standard, which the Company adopted using a modified retrospective approach on January 1, 2023. Topic 326 requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. It also limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value. The adoption of this standard did not have a material impact on the Company’s financial statements or related disclosures.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

Significant Accounting Policies

The Company’s significant accounting policies are detailed in its Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes to the Company’s significant accounting policies during the three and nine months ended September 30, 2023, from those previously disclosed in its 2022 Annual Report on Form 10-K, except as follows:

Royalty Revenue

The Company recognizes revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606). The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

•

identify the contract with a customer;

•

identify the performance obligations in the contract;

•

determine the transaction price;

•

allocate the transaction price to performance obligations in the contract; and

•

recognize revenue as the performance obligation is satisfied.

The Company’s royalty revenue relates to the Company’s portion of net revenue earned on the sales of DSUVIA to the Department of Defense, or DoD, by Alora under the Marketing Agreement (as defined in Note 3). The Company’s performance obligation is to serve as the exclusive sales agent for selling DSUVIA to the DoD through the term of the Marketing Agreement. The non-creditable and non-refundable royalty revenues are variable consideration based on 75% of net sales of DSUVIA to the DoD during the period subject to certain adjustments. The Company evaluates if it is a principal or an agent in a transaction to determine whether revenue should be recorded on a gross or net basis depending on if it obtains control over the goods and services before they are transferred to customers. The Company is acting as an agent in relation to DSUVIA sales to the DoD.

The consideration in the Marketing Agreement reflects a variable amount, for which the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer by using the expected value method. The Company includes in the transaction price the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. Royalty revenues are recognized when the DoD obtains control of the product, at which time the Company has an unconditional right to receive payment for such royalty earned.

Discontinued Operations

In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. In the period in which the component meets held-for-sale or discontinued operations criteria the major current assets, non-current assets, current liabilities, and non-current liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes, shall be reported as components of net loss separate from the net income (loss) of continuing operations.

The Company’s DSUVIA business met the definition of a discontinued operation as of March 31, 2023. Accordingly, the Company has classified the results of the DSUVIA business as discontinued operations in its unaudited condensed consolidated statements of operations for all periods presented. All assets and liabilities associated with the DSUVIA business were classified as assets and liabilities of discontinued operations in the unaudited condensed consolidated balance sheets for the periods presented. All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted. (See Note 3, Discontinued Operations).

Note 11 - Subsequent Events	9 Months Ended
Sep. 30, 2023
Notes to Financial Statements
Subsequent Events [Text Block]	11. Subsequent Events The Company evaluates events or transactions that occur after the balance sheet date, but prior to the issuance of the financial statements, to identify matters that require recognition or disclosure. The Company concluded that no subsequent events have occurred, that would require recognition or disclosure in the condensed consolidated financial statements.

Note 11 - Subsequent Events

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

11. Subsequent Events

The Company evaluates events or transactions that occur after the balance sheet date, but prior to the issuance of the financial statements, to identify matters that require recognition or disclosure. The Company concluded that no subsequent events have occurred, that would require recognition or disclosure in the condensed consolidated financial statements.

Note 6 - Commitments and Contingencies (Details Textual)	Jun. 08, 2021
Purported Shareholder v. Company - Violation of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 [Member]
Loss Contingency, Number of Defendants	2

Note 5 - Long-term Debt

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Long-Term Debt [Text Block]

5. Long-Term Debt

Loan Agreement with Oxford

On May 30, 2019, the Company entered into the Loan Agreement with Oxford Finance LLC, or Oxford, as the Lender. Under the Loan Agreement, the Lender made a term loan to the Company in an aggregate principal amount of $25.0 million, or the Loan, which was funded on May 30, 2019.

As of September 30, 2023 and December 31, 2022, the accrued balance due under the Loan Agreement with Oxford was $0 and $5.4 million, respectively. Interest expense related to the Loan Agreement was immaterial for the three months ended September 30, 2023, and $0.1 million, $0.1 million of which represented amortization of the debt discount, for the nine months ended September 30, 2023. Interest expense related to the Loan Agreement was $0.2 million, $0.1 million of which represented amortization of the debt discount, and $0.9 million, $0.3 million of which represented amortization of the debt discount, for the three and nine months ended September 30, 2022, respectively.

In connection with the closing of the divestment of DSUVIA to Alora, on April 3, 2023, the Company paid Oxford the remaining amount due of approximately $3.4 million including accrued interest and fees under the Loan, and the Loan Agreement was terminated with no further obligations by either party.

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Cash flows from operating activities:

Net loss

$ (13,880)

$ 55,239

^[1]

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Non-cash interest income on liability related to royalty monetization

(1,136)

Depreciation and amortization

311

1,305

Non-cash interest expense related to debt financing

333

Non-cash issuance of Lowell holdback shares

(723)

Stock-based compensation

1,418

2,237

Non-cash gain on termination of liability related to royalty termination

(84,152)

Impairment of property and equipment

4,901

Revaluation of warrant liability

(5,718)

Impairment of net assets held for sale

6,853

Impairment of fixed assets

1,065

Gain on termination of lease liabilities

(1,098)

Gain on extinguishment of debt liability

(400)

Other

(15)

(47)

Changes in operating assets and liabilities:

Accounts receivable

(97)

(352)

Inventories

210

Prepaid expenses and other assets

1,294

375

Other assets

226

Accounts payable

(957)

Accrued liabilities

(1,761)

(1,456)

Operating lease liabilities

(146)

(357)

Deferred revenue

(29)

(43)

Net cash used in operating activities

(13,543)

(22,918)

Cash flows from investing activities:

Purchase of property and equipment

(100)

(316)

Purchase of investments

(7,369)

Sale of the DSUVIA assets

2,723

Cash paid for asset acquisition, net of cash acquired

(1,687)

Proceeds from maturities of investments

500

43,162

Net cash provided by investing activities

3,123

33,790

Cash flows from financing activities:

Payment of long-term debt

(5,416)

(6,250)

Net proceeds from issuance of Issuance of Series A Redeemable Convertible Preferred Stock and Warrants

239

Net proceeds from issuance of common stock in connection with equity financings

8,924

192

Net proceeds from issuance of common stock in connection with exercise of prefunded warrants

Net proceeds from issuance of common stock through equity plans

Payment of employee tax obligations related to vesting of restricted stock units

(22)

(58)

Net provided by (cash used in) financing activities

3,534

(5,803)

Net change in cash, cash equivalents and restricted cash

(6,886)

5,069

Cash, cash equivalents and restricted cash—Beginning of period

20,275

12,663

Cash, cash equivalents and restricted cash—End of period

13,389

17,732

NONCASH INVESTING AND FINANCING ACTIVITIES:

Purchases of property and equipment in accounts payable and accrued liabilities

1,327

Liability for hold back shares in connection with asset acquisition in other long-term liabilities

800

Issuance of common stock in connection with asset acquisition

5,511

Establishment of right-of-use asset and lease liability

Offering costs in accounts payable

Fair value of warrants issued to placement agent

$ 263

$ 0

[1]

The condensed consolidated statements of operations for the three and six months ended June 30, 2022 have been derived from the unaudited condensed consolidated financial statements for those periods included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, which were recast to reflect discontinued operations and filed with the Company’s Current Report on Form 8-K on August 1, 2023.

Note 1 - Organization and Summary of Significant Accounting Policies (Details Textual)
$ / shares in Units, $ in Millions

Jul. 17, 2023

USD ($)

Oct. 25, 2022

$ / shares

Sep. 23, 2022

Sep. 30, 2023

$ / shares

Apr. 03, 2023

Dec. 31, 2022

$ / shares

^[1]

Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares

$ 0.001

DSUVIA [Member] | Discontinued Operations [Member]

Disposal Group, Including Discontinued Operation, Percentage of Royalty on Commercial Sales

15.00%

DSUVIA [Member] | Department of Defense [Member] | Discontinued Operations [Member]

Disposal Group, Including Discontinued Operation, Percentage of Royalty on Commercial Sales

75.00%

Reverse Stock Split [Member]

Stockholders' Equity Note, Stock Split, Conversion Ratio

Reverse Stock Split [Member] | Minimum [Member]

Stockholders' Equity Note, Stock Split, Conversion Ratio

Reverse Stock Split [Member] | Maximum [Member]

Stockholders' Equity Note, Stock Split, Conversion Ratio

Common Stock and Series A and Series B Common Stock Warrants [Member]

Expected Aggregative Proceeds from Private Placement

$ 10.0

Expected Proceeds from Exercise of Warrants

$ 16.3

[1]

The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited financial statements as of that date included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which were recast to reflect discontinued operations and filed with the Company’s Current Report on Form 8-K on August 1, 2023.

Note 2 - Investments and Fair Value Measurement

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Investments and Fair Value Measurement Disclosure [Text Block]

2. Investments and Fair Value Measurement

Investments

The Company classifies its marketable securities as available for sale and records its investments at fair value. Available-for-sale securities are carried at estimated fair value based on quoted market prices or observable market inputs of almost identical assets, with the unrealized holding gains and losses included in accumulated other comprehensive income (loss).

As of September 30, 2023, and December 31, 2022, the contractual maturity of all investments held was less than one year.

The tables below summarize the Company’s cash, cash equivalents and short-term investments (in thousands):

	As of September 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash, cash equivalents and restricted cash:
Cash	$	1,656	$	—	$	—	$	1,656
Money market funds		3,264		—		—		3,264
U.S. government agency securities		7,572		—		—		7,572
Commercial paper		897		—		—		897
Total cash and cash equivalents	$	13,389	$	—	$	—	$	13,389

	As of December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash, cash equivalents and restricted cash:
Cash	$	13,275	$	—	$	—	$	13,275
Money market funds		321		—		—		321
U.S. government agency securities		2,444		—		—		2,444
Commercial paper		4,235		—		—		4,235
Total cash, cash equivalents and restricted cash		20,275		—		—		20,275

Short-term investments:
Commercial paper		495		—		—		495

Total short-term investments		495		—		—		495

Total cash, cash equivalents, restricted cash and short-term investments	$	20,770	$	—	$	—	$	20,770

At each reporting date, the Company performs an evaluation of impairment to determine if any unrealized losses are the result of credit losses. Impairment is assessed at the individual security level. Factors considered in determining whether a loss resulted from a credit loss or other factors include the Company’s intent and ability to hold the investment until the recovery of its amortized cost basis, the extent to which the fair value is less than the amortized cost basis, the length of time and extent to which fair value has been less than the cost basis, the financial condition of the issuer, any historical failure of the issuer to make scheduled interest or principal payments, any changes to the rating of the security by a rating agency, any adverse legal or regulatory events affecting the issuer or issuer’s industry, any significant deterioration in economic conditions. There were no material realized or unrealized gains or losses on marketable securities for the three and nine months ended September 30, 2023 or the twelve months ended December 31, 2022. As such, we did not record a credit allowance for the three and nine months ended September 30, 2023.

Fair Value Measurement

The Company’s financial instruments consist of Level I and II assets. Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments is readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy. For Level II instruments, the Company estimates fair value by utilizing third-party pricing services in developing fair value measurements where fair value is based on valuation methodologies such as models using observable market inputs, including benchmark yields, reported trades, broker/dealer quotes, bids, offers and other reference data. Such Level II instruments typically include U.S. Treasury, U.S. government agency securities and commercial paper. As of September 30, 2023 and December 31, 2022, the Company held, in addition to Level II assets, a warrant liability related to the 2022 Warrants (see Note 12, “Warrants” in the Company’s 2022 Annual Report on Form 10-K for further description). The fair value of the warrant liability was estimated using the Black Scholes Model which uses as inputs the following weighted average assumptions: dividend yield, expected term in years; equity volatility; and risk-free interest rate (see Note 8, “Warrants” below). The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The estimated fair value of the warrant liability represents a Level III measurement. Changes to the estimated fair value of these liabilities are recorded in interest income and other income, net in the unaudited condensed consolidated statements of operations.

The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy (in thousands):

	As of September 30, 2023
	Fair Value		Level I		Level II		Level III
Assets
Money market funds	$	3,264	$	3,264	$	—	$	—
U.S. government agency securities		7,572		—		7,572		—
Commercial paper		897		—		897		—
Total assets measured at fair value	$	11,733	$	3,264	$	8,469	$	—
Liabilities
Warrant liability	$	1,380	$	—	$	—	$	1,380
Total liabilities measured at fair value	$	1,380	$	—	$	—	$	1,380

	As of December 31, 2022
	Fair Value		Level I		Level II		Level III
Assets
Money market funds	$	321	$	321	$	—	$	—
U.S. government agency securities		2,444		—		2,444		—
Commercial paper		4,730		—		4,730		—
Total assets measured at fair value	$	7,495	$	321	$	7,174	$	—
Liabilities
Warrant liability	$	7,098	$	—	$	—	$	7,098
Total liabilities measured at fair value	$	7,098	$	—	$	—	$	7,098

The following table sets forth a summary of the changes in the fair value of the Company’s Level III warrant liability for the three and nine months ended September 30, 2023 (in thousands):

	Three Months Ended September 30, 2023			Nine Months Ended September 30, 2023
Fair value—beginning of period	$	3,086		$	7,098
Change in fair value of 2022 Warrants liability		(1,706	)		(5,718	)
Fair value—end of period	$	1,380		$	1,380

There was no such warrant liability for the three and nine months ended September 30, 2022.

There were no transfers between Level I, Level II or Level III of the fair value hierarchy during the three and nine months ended September 30, 2023 and the year ended December 31, 2022.

Note 9 - Stock-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Mar. 31, 2023	Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)		$ 1.39
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount		$ 1.1
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)		2 years 2 months 12 days
The 2020 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)		151,953
Amended ESPP [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)		169,667
Restricted Stock Units (RSUs) [Member]
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation (in shares)	12,906

Note 9 - Stock-based Compensation - Assumptions to Calculate Fair Value of Each Employee Stock Option (Details) - Weighted Average [Member] - Time-based Stock Option [Member]	9 Months Ended
	Sep. 30, 2023
Expected term (Year)	6 years 3 months 18 days
Risk-free interest rate	3.90%
Expected volatility	94.00%
Expected dividend rate	0.00%

Note 10 - Net Income (Loss) Per Share of Common Stock

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

10. Net Income (Loss) per Share of Common Stock

The Company applies the two-class method to compute basic net income (loss) per share by dividing the net income (loss) attributable to common shareholders by the weighted average number of shares of common stock outstanding for the period. The diluted net income (loss) per share of common stock is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the more dilutive of the 1) treasury stock method, if-converted method, or contingently issuable share method, as applicable, or 2) the two-class method. For purposes of this calculation, options to purchase common stock, RSUs, and warrants to purchase common stock were considered to be common stock equivalents.

During the nine months ended September 30, 2022, the Company presents diluted EPS using the two-class method as it was more dilutive. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses, therefore, net loss for the three and nine months ended September 30, 2023 was attributed entirely to common stockholders. In periods with a reported net loss, common stock equivalents are excluded from the calculation of diluted net loss per share of common stock if their effect is antidilutive. Potential common shares that are issuable for little or no cash consideration, such as the Company’s pre-funded warrants issued in December 2022 and July 2023 with a de minimis exercise price of $0.0001 per share, are considered outstanding common shares which are included in the calculation of basic and diluted net income (loss) per share in all circumstances.

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share of common stock during the three and nine months ended September 30, 2023 and 2022 (in thousands, except for share and per share amounts):

	Three Months Ended September 30,
	2023			2022
	(in thousands, except share and per share amounts)
Basic net loss per common share:
Net loss from continuing operations	$	(1,418	)	$	(4,639	)
Less: deemed dividend related to Series A Redeemable Convertible Preferred Stock		—			(186	)
Net loss from continuing operations attributable to common shareholders, basic		(1,418	)		(4,825	)
Net income from discontinued operations attributable to common shareholders, basic		61			(2,111	)
Net loss attributable to common shareholders, basic	$	(1,357	)	$	(6,936	)
Weighted average shares outstanding — basic		16,758,322			7,377,363
Loss from continuing operations, basic	$	(0.08	)	$	(0.65	)
Income from discontinued operations, basic	$	0.00		$	(0.29	)
Loss per share, basic	$	(0.08	)	$	(0.94	)
Diluted net loss per common share:
Net loss from continuing operations	$	(1,418	)	$	(4,639	)
Less: deemed dividend related to Series A Redeemable Convertible Preferred Stock		—			(186	)
Net loss from continuing operations attributable to common shareholders, diluted		(1,418	)		(4,825	)
Net income from discontinued operations attributable to common shareholders, diluted		61			(2,111	)
Net loss attributable to common shareholders, diluted	$	(1,357	)		(6,936	)
Weighted average shares outstanding — diluted		16,758,322			7,377,363
Loss from continuing operations, diluted	$	(0.08	)	$	(0.65	)
Income from discontinued operations, diluted	$	0.00		$	(0.29	)
Net loss per share, diluted	$	(0.08	)	$	(0.94	)

	Nine Months ended September 30,
	2023			2022
	(in thousands, except share and per share amounts)
Basic net income (loss) per common share:
Net income (loss) from continuing operations	$	(5,782	)	$	65,061
Less: deemed dividends related to Series A Redeemable Convertible Preferred Stock		—			(186	)
Less: income allocated to participating securities		—			(5,980	)
Net income (loss) from continuing operations attributable to common shareholders, basic		(5,782	)		58,895
Net loss from discontinued operations attributable to common shareholders, basic		(8,098	)		(9,822	)
Net income (loss) attributable to common shareholders, basic	$	(13,880	)	$	49,073
Weighted average shares outstanding — basic		12,880,338			7,338,853
Income (loss) from continuing operations, basic	$	(0.45	)	$	8.03
Loss from discontinued operations, basic	$	(0.63	)	$	(1.34	)
Net income (loss) per share, basic	$	(1.08	)	$	6.69
Diluted net income (loss) per common share:
Net income (loss) from continuing operations	$	(5,782	)	$	65,061
Less: deemed dividends related to Series A Redeemable Convertible Preferred Stock		—			(186	)
Less: income allocated to participating securities		—			(5,975	)
Net income (loss) from continuing operations attributable to common shareholders, diluted		(5,782	)	$	58,900
Net loss from discontinued operations attributable to common shareholders, diluted		(8,098	)	$	(9,822	)
Net income (loss) attributable to common shareholders, diluted	$	(13,880	)	$	49,078
Weighted average shares outstanding — basic		12,880,338			7,338,853
Dilutive effect of warrants		—			5,756
Dilutive effect of RSUs		—			1,345
Weighted average shares outstanding — diluted		12,880,338			7,345,954
Income (loss) from continuing operations, diluted	$	(0.45	)	$	8.02
Loss from discontinued operations, diluted	$	(0.63	)	$	(1.34	)
Net income (loss) per share, diluted	$	(1.08	)	$	6.68

The following outstanding shares of common stock equivalents were excluded from the computation of diluted net income (loss) per share of common stock for the periods presented because including them would have been antidilutive:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
RSUs, stock options and ESPP to purchase common stock		959,169		821,875		959,169		817,086
Common stock warrants		20,265,576		964,983		20,265,576		910,928

Note 3 - Discontinued Operations (Details Textual) - DSUVIA [Member] - Discontinued Operations [Member] $ in Millions	Apr. 03, 2023 USD ($)
Disposal Group, Including Discontinued Operation, Maximum Amount in Sales-based Milestone	$ 116.5
Disposal Group, Including Discontinued Operation, Percentage of Royalty on Commercial Sales	15.00%
Disposal Group, Including Discontinued operations, Percentage of Sales, Excluding Royalty Payments	20.00%
Department of Defense [Member]
Disposal Group, Including Discontinued Operation, Percentage of Royalty on Commercial Sales	75.00%

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($)
$ in Thousands

Preferred Stock [Member]