Stockholders' Equity

3 Months Ended

Sep. 30, 2022

Stockholders' Equity Note [Abstract]

7.	Stockholders’ Equity

July 2022 Public Offering of AGTC Equity Securities

On July 15, 2022, the Company closed an underwritten public offering of (i) 16,075,000 shares of the Company’s common stock, together with accompanying warrants to purchase up to 16,075,000 shares of its common stock, at a combined offering price of $0.60 per share and

(ii) pre-funded warrants

to purchase up to 591,667 shares of the Company’s common stock, with an exercise price for

each pre-funded warrant

of $0.001 per share, together with accompanying warrants to purchase up to 591,667 shares of its common stock, at a combined offering price of $0.599 per share. The warrants are: (i) immediately exercisable; (ii) legally detachable from the common stock and

pre-funded

warrants that were issued on July 15, 2022; and (iii) separately exercisable by the warrant holders.

Effective July 15, 2022, (i) the holder of the

pre-funded

warrants exercised its option and purchased the underlying common stock of the Company and (ii) the underwriter exercised its option to purchase additional warrants, at a purchase price of $0.001 per warrant, less underwriting discounts and commissions, to purchase up to 2.5 million shares of the Company’s common stock.

The abovementioned underwritten public offering, including the underwriter’s exercise of its option to purchase additional warrants, generated proceeds of $10.0 million, before deducting underwriting discounts, commissions and other offering expenses payable by the Company, which totaled $1.0 million.

As of September 30, 2022, there were 19,166,667 warrants outstanding from the abovementioned underwritten public offering and the underwriter’s exercise of its option to purchase additional warrants (other than the

pre-funded

warrants, no warrants have been exercised). The outstanding warrants have an initial exercise price of $0.60 per share (subject to certain adjustments) and expire on July 15, 2027. While the warrants are outstanding (but unexercised), the warrant holders will participate in any dividend or other distribution of the Company’s assets to its common stockholders by way of return of capital or otherwise.

In the event of a fundamental transaction, which generally includes: (i) any reorganization, recapitalization or reclassification of the Company’s common stock; (ii) the sale, transfer or other disposition of all or substantially all of the Company’s properties or assets;

(iii) the Company’s consolidation or merger with or into another person or group; (iv) the acquisition of more than

50% of the Company’s outstanding common stock; or (v) any person or group becoming the beneficial owner of 50% of the voting power represented by the Company’s outstanding common stock, the warrant holders will be entitled to receive upon exercise of such warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction.

Alternatively, in the event of a fundamental transaction, the warrant holders have an option to receive consideration in cash equal to the Black-Scholes value of the warrants determined according to a formula set forth in the underlying warrant, provided, however, that, if the fundamental transaction is not within the Company’s control, including not approved by its board of directors, then the holder shall only be entitled to receive the same type or form of consideration (and in the same proportion), at the Black-Scholes value, of the unexercised portion of the warrant, that is being offered and paid to the holders of the Company’s common stock in connection with the fundamental transaction.

The warrants that were issued on July 15, 2022 were evaluated based on the provisions of Topic 480 and Topic 815. Management concluded that the warrants met the definition of a derivative and required bifurcation on the date of warrant issuance and thereafter because they were not considered to be indexed to the Company’s common stock. Accordingly, such warrants are remeasured and recorded at fair value at the end of each reporting period with any adjustment recognized in the Company’s statement of operations. The Company classifies its derivative warrant liability as long-term on its balance sheet until it is probable that a triggering event will occur. The aggregate fair value of the warrants on July 15, 2022 was determined to be $3.4 million and was deducted from the gross proceeds from the underwritten public offering, with the residual amount recorded in stockholders’ equity. The Company also expensed $0.3 million of costs in connection with the issuance of the warrants. See Note 4 to these Notes to Unaudited Condensed Financial Statements for further information regarding the Company’s valuation methodologies and significant assumptions pertaining to its financial instruments.

March 2022 Public Offering of AGTC Equity Securities

On March 24, 2022, the Company closed an underwritten public offering of 7.5 million shares of its common stock, with Cantor Fitzgerald & Co. acting as the sole underwriter for the offering. The indicative public offering price of each share of common stock was $1.30, generating gross proceeds of $9.8 million, before deducting underwriting discounts, commissions and other offering expenses payable by the Company, which totaled $1.2 million. Issuance costs totaling $140,000 were unpaid on September 30, 2022 and June 30, 2022 and have been included in accrued and other liabilities on the Company’s balance sheets as of such dates.

Shares Issued to a Vendor

During the three months ended September 30, 2022, the Company issued 7,500 shares of its unregistered common stock to a vendor for services rendered.

shares were issued to any vendors during the three months ended September 30, 2021.

February 2021 Outstanding Warrants

On February 1, 2021, the Company closed an underwritten public offering of its common stock, together with accompanying warrants to purchase 8,370,786 shares of its common stock. The warrants have an initial exercise price of $6.00 per share (subject to certain adjustments), are immediately exercisable and expire on February 1, 2026. The warrants are legally detachable from the common stock that was issued on

February 1, 2021

and are separately exercisable by the warrant holders. While the warrants are outstanding (but unexercised), the warrant holders will participate in any dividend or other distribution of the Company’s assets to its common stockholders by way of return of capital or otherwise. As of September 30, 2022, none of the warrants have been exercised.

- Definition

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.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

APPLIED GENETIC TECHNOLOGIES CORP 10-Q