Note 5 - Stockholders' Equity

9 Months Ended

Sep. 30, 2025

5. Stockholders’ Equity

Financings

May 2024 Financing

On May 16, 2024, the Company entered into a purchase agreement (the “Purchase Agreement”) with Triton Funds LP (“Triton”), pursuant to which the Company agreed to sell, and Triton agreed to purchase, upon the Company’s request in one or more transactions, up to 95,833 shares of Common Stock at a purchase price of $6.48 per share (the “Purchase Price”), for aggregate gross proceeds of up to $621,000. The Company recorded expense of approximately $100,000, primarily related to legal fees, in connection with the execution of the Purchase Agreement with Triton. On July 3, 2024, the Company terminated the Purchase Agreement with Triton effective immediately. No shares of Common Stock were sold by the Company pursuant to the Purchase Agreement prior to termination.

July 2024 Financing

On July 11, 2024, the Company entered into inducement letter agreements (the “ July 2024 Inducement Letter Agreements”) with certain holders of certain of the Company’s existing warrants to purchase up to an aggregate of 545,286 shares of Common Stock. The existing warrants were originally issued in February 2020 through December 2023, having exercise prices between $324.00 and $9.72 per share. Pursuant to the July 2024 Inducement Letter Agreements, these warrants were exercised for cash at a reduced exercise of $5.45 per share in consideration of the Company’s agreement to issue new unregistered five and one-half year term Series C warrants to purchase up to 583,098 shares of Common Stock at an exercise price of $5.45 and new unregistered eighteen month term Series D warrants to purchase up to 507,474 shares of Common Stock at an exercise price of $5.45, both issued and sold at a price of $0.125 per warrant share (the “ July 2024 Financing”). In addition, the Company issued warrants to H.C. Wainwright & Co., LLC (the “Placement Agent”) to purchase a total of 40,896 shares of Common Stock at an exercise price of $6.8125 per share. The net proceeds to the Company from the July 2024 Financing were approximately $2,646,000, after deducting placement agent fees and offering expenses. The Company incurred non-cash equity issuance costs of approximately $2.4 million for the incremental fair value of the outstanding equity classified warrants and approximately $0.2 million for placement agent warrants.

Pursuant to the terms of the July 2024 Inducement Letter Agreements, in the event that the exercise of the existing warrants in the July 2024 Financing would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the existing warrant, the Company issued the number of shares that would not cause a holder to exceed such beneficial ownership limitation and agreed to hold such balance of shares of Common Stock in abeyance. Accordingly, an aggregate of 328,758 shares of Common Stock were held in abeyance (the “ July 2024 Abeyance Shares”) with such July 2024 Abeyance Shares evidenced through the holder’s existing warrants and which are deemed to be prepaid. The July 2024 Abeyance Shares were held until notice was received by the holder that the balance of the shares of Common Stock could be issued in compliance with such beneficial ownership limitations and were exercised pursuant to a notice of exercise from the holder. Until such time, the Abeyance Shares were evidenced through the holder’s existing warrants and have been included in the Company’s table of outstanding warrants below. During the year ended December 31, 2024, all of the July 2024 Abeyance Shares were released.

December 19, 2024 Concurrent Registered Direct Offering and Private Placement

On December 19, 2024, the Company entered into a securities purchase agreement (the “ December 19, 2024 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct offering (the “ December 19, 2024 Registered Direct Offering”) and concurrent private placement (the “ December 19, 2024 Private Placement” and, together with the December 19, 2024 Registered Direct Offering, the “ December 19, 2024 Offerings”). The December 19, 2024 Offerings closed on December 20, 2024. The net proceeds to the Company from the December 19, 2024 Offerings were approximately $900,000, after deducting placement agent fees and offering expenses.

Pursuant to the December 19, 2024 Securities Purchase Agreement, the Company offered and sold in the December 19, 2024 Registered Direct Offering 437,192 shares of Common Stock at a purchase price of $2.635 per share. In the December 19, 2024 Private Placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase up to 437,192 shares of Common Stock (the “Series E Warrants”). Under the terms of the December 19, 2024 Securities Purchase Agreement, for each share of Common Stock issued in the December 19, 2024 Registered Direct Offering, an accompanying Series E Warrant was issued to the purchaser thereof. Each Series E Warrant is exercisable for one share of Common Stock at an exercise price of $2.51 per share and will expire on December 20, 2029. The Series E Warrants were offered and sold at a purchase price of $0.125 per Series E Warrant, which purchase price is included in the offering price per share of Common Stock issued in the December 19, 2024 Registered Direct Offering.

December 23, 2024 Concurrent Registered Direct Offering and Private Placement

On December 23, 2024, the Company entered into a securities purchase agreement (the “ December 23, 2024 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct public offering (the “ December 23, 2024 Registered Direct Offering”) and concurrent private placement (the “ December 23, 2024 Private Placement” and, together with the December 23, 2024 Registered Direct Offering, the “ December 23, 2024 Offerings” and, together with the December 19,2024 Offerings, the “ December 2024 Offerings”). The December 23, 2024 Offerings closed on December 24, 2024. The net proceeds to the Company from the December 23, 2024 Offerings were approximately $480,000, after deducting placement agent fees and offering expenses.

Pursuant to the December 23, 2024 Securities Purchase Agreement, the Company offered and sold in the December 23, 2024 Registered Direct Offering 240,000 shares of Common Stock at a purchase price of $2.00 per share. In the December 23, 2024 Private Placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase up to 240,000 shares of Common Stock (the “Series F Warrants”). Under the terms of the December 23, 2024 Securities Purchase Agreement, for each share of Common Stock issued in the December 23, 2024 Registered Direct Offering, an accompanying Series F Warrant was issued to the purchaser thereof. Each Series F Warrant is exercisable for one share of Common Stock at an exercise price of $2.00 per share and will expire on December 24, 2029. The Series F Warrants were offered and sold at a purchase price of $0.125 per Series F Warrant, which purchase price is included in the offering price per share of Common Stock issued in the December 23, 2024 Registered Direct Offering.

In connection with the December 2024 Offerings, the Company agreed to issue to the Placement Agent, or its designees, warrants to purchase up to an aggregate of 50,789 shares of Common Stock (the “Placement Agent Warrants”), which represent 7.5% of the aggregate number of shares of Common Stock sold in the December 19, 2024 Registered Direct Offering and the December 23, 2024 Registered Direct Offering. The Placement Agent Warrants have substantially the same terms as the Series E Warrants and the Series F Warrants, except that (i) 32,789 of the Placement Agent Warrants have an exercise price equal to $3.2938, or 125% of the offering price per share of Common Stock sold in the December 19, 2024 Registered Direct Offering, and are exercisable until December 19, 2029, and (ii) 18,000 of the Placement Agent Warrants have an exercise price equal to $2.50, or 125% of the offering price per share of Common Stock sold in the December 23, 2024 Registered Direct Offering, and are exercisable until December 23, 2029.

January 13, 2025 Concurrent Registered Direct Offering and Private Placement

On January 13, 2025, the Company entered into a securities purchase agreement (the “ January 13, 2025 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct public offering (the “ January 13, 2025 Registered Direct Offering”) and concurrent private placement (the “ January 13, 2025 Private Placement” and, together with the January 13, 2025 Registered Direct Offering, the “ January 13, 2025 Offerings”). The January 13, 2025 Offerings closed on January 14, 2025. In addition, the Company issued warrants to the Placement Agent to purchase a total of 79,775 shares of Common Stock at an exercise price of $3.75 per share. The net proceeds to the Company from the January 13, 2025 Registered Direct Offerings and the January 13, 2025 Private Placement were approximately $2.9 million, after deducting fees and estimated offering expenses.

Pursuant to the January 13, 2025 Securities Purchase Agreement, the Company offered and sold in the January 13, 2025 Registered Direct Offering 1,063,670 shares of Common Stock at a purchase price of $3.00 per share. In the January 13, 2025 Private Placement, the Company also issued to certain institutional and accredited investors unregistered warrants to purchase up to 2,127,340 shares of Common Stock (the “Series G Warrants”). Under the terms of the January 13, 2025 Securities Purchase Agreement, for each share of Common Stock issued in the January 13, 2025 Registered Direct Offering, two accompanying Series G Warrants were issued to the purchaser thereof. Each Series G Warrant is exercisable for one share of Common Stock at an exercise price of $3.00 per share and will expire on January 14, 2027.

January 14, 2025 Concurrent Registered Direct Offering and Private Placement

On January 14, 2025, the Company entered into a securities purchase agreement (the “ January 14, 2025 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct public offering (the “ January 14, 2025 Registered Direct Offering”) and concurrent private placement (the “ January 14, 2025 Private Placement” and together with the January 14, 2025 Registered Direct Offering, the “ January 14, 2025 Offerings”). The January 14, 2025 Offerings closed on January 15, 2025. In addition, the Company issued warrants to the Placement Agent to purchase a total of 62,500 shares of Common Stock at an exercise price of $3.75 per share. The net proceeds to the Company from the January 14, 2025 Registered Direct Offering and the January 14, 2025 Private Placement were approximately $2.2 million, after deducting fees and estimated offering expenses.

Pursuant to the January 14, 2025 Securities Purchase Agreement, the Company offered and sold in the January 14, 2025 Registered Direct Offering 833,335 shares of Common Stock at a purchase price of $3.00 per share. In the January 14, 2025 Private Placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase up to 1,666,670 shares of Common Stock (the “Series H Warrants”). Under the terms of the January 14, 2025 Securities Purchase Agreement, for each share of Common Stock issued in the January 14, 2025 Registered Direct Offering, two accompanying Series H Warrants were issued to the purchaser thereof. Each Series H Warrant is exercisable for one share of Common Stock at an exercise price of $3.00 per share and will expire on January 15, 2027.

January 16, 2025 Concurrent Registered Direct Offering and Private Placement

On January 16, 2025, the Company entered into a securities purchase agreement (the “ January 16, 2025 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct public offering (the “ January 16, 2025 Registered Direct Offering”) and concurrent private placement (the “ January 16, 2025 Private Placement” and, together with the January 16, 2025 Registered Direct Offering, the “ January 16, 2025 Offerings” and the January 16, 2025 Offerings, together with the January 13, 2025 Offerings and the January 14, 2025 Offerings, the “ January 2025 Offerings”). The January 16, 2025 Offerings closed on January 17, 2025. In addition, the Company issued warrants to the Placement Agent to purchase a total of 45,750 shares of Common Stock at an exercise price of $3.75 per share The net proceeds to the Company from the January 16, 2025 Registered Direct Offering and the January 16, 2025 Private Placement were approximately $1.6 million, after deducting fees and estimated offering expenses.

Pursuant to the January 16, 2025 Securities Purchase Agreement, the Company offered and sold in the January 16, 2025 Registered Direct Offering 610,000 shares of Common Stock at a purchase price of $3.00 per share. In the January 16, 2025 Private Placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase up to 1,220,000 shares of Common Stock (the “Series I Warrants”). Under the terms of the January 16, 2025 Securities Purchase Agreement, for each share of Common Stock issued in the January 16, 2025 Registered Direct Offering, two accompanying Series I Warrants were issued to the purchaser thereof. Each Series I Warrant is exercisable for one share of Common Stock at an exercise price of $3.00 per share and will expire on January 19, 2027.

July 2025 Financing

On July 25, 2025, the Company entered into inducement letter agreements (the “ July 2025 Inducement Letter Agreements”) with certain holders of certain of the Company’s existing warrants to purchase an aggregate of 928,596 shares of the Company’s common stock. Pursuant to the July 2025 Inducement Letter Agreements, the existing warrants were originally issued in December 2024 and January 2025, having exercise prices between $2.00 and $3.00 per share. Warrants to purchase 100,000 shares of common stock at the existing exercise price of $2.00 per share were exercised at their existing exercise price of $2.00 per share, and warrants to purchase 828,596 shares of common stock were exercised at a reduced exercise price of $2.485 per share. In consideration for the immediate exercise of such warrants for cash and the payment of an additional $0.125 per New Warrant (as defined below), or an aggregate of $232,149 for all New Warrants, the Company agreed to issue new unregistered five-year term Series J warrants (the “Series J Warrants”) to purchase an aggregate of up to 318,596 shares of common stock at an exercise price of $2.485 and new unregistered 24-month term Series K warrants (the “Series K Warrants” and, together with the Series J Warrants, the “New Warrants”) to purchase an aggregate of up to 1,538,596 shares of common stock at an exercise price of $2.485 (the “ July 2025 Financing”).

In addition, the Company issued warrants to the placement agent, H.C. Wainwright & Co., LLC, to purchase up to 69,645 shares of common stock (the “Placement Agent Warrants”). 7,500 of the Placement Agent Warrants issued have an exercise price of $2.8125 per share of Common Stock and a term of five years, 16,395 of the Placement Agent Warrants issued have an exercise price of $3.4188 per share of Common Stock and a term of five years, and 45,750 of the Placement Agent Warrants issued have an exercise price of $3.4188 per share of Common Stock and a term of twenty-four months. The net proceeds to the Company from the July 2025 Financing were approximately $2.1 million, after deducting placement agent fees and offering expenses.

Warrants

The Company first assesses warrants that are issued by the Company under the FASB ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) to determine whether the warrants are within the scope of ASC 480. If there are no instances outside of the Company’s control that could require cash settlement, the Company then applies and follows the applicable accounting guidance in the FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Financial instruments are accounted for as either derivative liabilities or equity instruments depending on the specific terms of the agreement. Based on the assessment of the warrants issued by the Company under the guidance in ASC 480 and ASC 815, the warrants issued by the Company have been classified within stockholder’s equity.

During the three months ended September 30, 2025 and 2024, there were 928,596 and 448,292 warrants exercised, respectively. During the nine months ended September 30, 2025 and 2024, there were 1,486,028 and 540,112 warrants exercised, respectively.

During the three and nine months ended September 30, 2025, there were no abeyance shares released and issued. During the three months ended September 30, 2024, 231,758 of the July 2024 Abeyance Shares were released and issued and during the nine months ended September 30, 2024, all of the shares held in abeyance in connection with the Company's December 2023 financing transaction were released and issued, and 231,758 of the July 2024 Abeyance Shares were released and issued.

The following table summarizes the Company’s outstanding warrants, all of which are classified as equity instruments, at September 30, 2025:

	2025					2024
				Weighted-					Weighted-
				Average					Average
	*Number*			*Exercise Price*		*Number*			*Exercise Price*
	*of Shares*			*Per Share*		*of Shares*			*Per Share*
Outstanding at January 1,		1,925,867		$	12.66		703,530		$	35.99
Issued		7,170,679			2.91		1,131,468			5.50
Exercised		(1,486,028	)		3.73		(540,112	)		6.56
Expired		(10,186	)		482.89		-			-
Outstanding at September 30,		7,600,332		$	4.57		1,294,886		$	21.62

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Phio Pharmaceuticals Corp. 10-Q