Note 4 - Capital Stock

Holders of the common stock are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefor. To date no dividends have been declared. Upon dissolution and liquidation of the Company, holders of the common stock are entitled to a ratable share of the net assets of the Company remaining after payments to creditors of the Company. The holders of shares of common stock are entitled to one vote per share for the election of each director nominated to the Board and one vote per share on all other matters submitted to a vote of stockholders.

The Company’s amended and restated certificate of incorporation authorizes the Company to issue 40,000,000 shares of common stock with a par value of $0.001 per share.

Reverse Stock Split

On August 5, 2024, the Company conducted its Annual Meeting of Stockholders in which the stockholders approved, among other items, a proposal to amend the Company’s Second Amended and Restated Certificate of Incorporation to effect a reverse stock split of the outstanding shares, providing the Board of Directors with the authority to effect a reverse split within a specified range of ratios. Subsequently, the Board of Directors approved a reverse stock split of 1 for 5 shares of the Company’s common stock in order to regain compliance with the Nasdaq’s continued listing requirements. The reverse stock split became effective at 5:00 pm on Monday August 12, 2024, and the Company's common stock commenced trading on a split-adjusted basis at the open of trading on Tuesday, August 13, 2024.

Furthermore, at the Annual Meeting of Stockholders, a proposal to amend the 2016 Stock Incentive Plan was approved. As a result, the total number of shares reserved for issuance under the Amended 2016 Plan would increase from 5,100,000 to 7,100,000 (pre-split). As a result of the above-mentioned reverse stock split, the total number of shares reserved for issuance after the Annual Meeting was adjusted to 1,420,000.

The reverse stock split reduced the number of shares of the Company’s common stock outstanding on August 12, 2024, from 17,601,827 to 3,520,427. Proportional adjustments were made to the Company’s outstanding stock options, and restricted stock units. No fractional shares were issued in connection with the reverse stock split. Stockholders who would otherwise have held a fractional share of common stock were rounded up and issued one whole share.

The par value of the Company’s common stock and the number of authorized shares of common stock remained unchanged at $0.001 per share and at 40,000,000 shares, respectively.

The reverse stock split did not modify the rights or preferences of the underlying common stock. The Company’s stockholders’ equity reflects the par value for all shares of common stock at $0.001 per share, with a corresponding increase in additional paid-in capital. All per-share amounts and numbers of shares in the accompanying financial statements and related notes have been retroactively adjusted to reflect the reverse stock split for all periods presented.

Sales of Common Stock

On April 20, 2022, the Company executed a new Capital on Demand™ Sales Agreement with Jones Trading, pursuant to which Monopar may offer and sell, from time to time, through or to JonesTrading, as sales agent or principal, shares of Monopar’s common stock. On April 20, 2022, the Company filed a prospectus supplement with the U.S. Securities and Exchange Commission relating to the offer and sale of its common stock from time to time pursuant to the agreement up to an aggregate amount of $4,870,000. Subsequently, the Company filed a new Form S-3, which included therein a prospectus to increase the aggregate amount offered under this agreement to $6,505,642. The Form S-3 was declared effective by the Securities and Exchange Commission on January 4, 2023, at which time the prospectus included therein replaced the prior prospectus supplement. Expenses related to these financing activities were recorded as offering costs (a reduction of additional paid in capital) on the Company’s consolidated statement of stockholders’ equity for the period. During the years ended December 31, 2024 and 2023, the Company sold 557,761 and 358,690 shares of its common stock at an average gross price per share of $7.73 and $6.05 for net proceeds of $4,202,245 and $2,116,435, after fees and commissions of $107,806 and $54,298, respectively. For the year ended December 31, 2023, the Company incurred legal, accounting and other fees totaling $43,932 for net proceeds after fees, commissions and expenses of $2,072,504.

On October 30, 2024, pursuant to a placement agent agreement with Rodman & Renshaw LLC, the Company sold 1,181,540 shares of its common stock at $16.25 per share in a public offering, yielding net proceeds of approximately $17.8 million, after deducting placement agent fees and other offering expenses. 

On December 23, 2024, pursuant to an underwriting agreement with Piper Sandler & Co., the Company sold 798,655 shares of its common stock at $23.79 per share in a public offering. Concurrent with that offering, we completed a private placement of pre-funded warrants to purchase 882,761 shares of common stock at a purchase price of $23.789 per pre-funded warrant to an institutional investor. The pre-funded warrants purchase price represents the per share public offering price of the shares in the registered offering at $23.79 less the $0.001 per share exercise price for each pre-funded warrant. The net proceeds of the shares sold and the pre-funded warrants were approximately $37.4 million after fees, commissions and other offering expenses.

As of December 31, 2024, the Company had 6,102,560 shares of common stock issued and outstanding.

On December 23, 2024, the Company closed a Securities Purchase Agreement in which a purchaser in a private placement purchased 882,761 pre-funded warrants to purchase 882,761 shares of Monopar's common stock at a purchase price of $23.789 per pre-funded warrant. Which represents the per share public offering price of the shares in the registered offering at $23.79 less the $0.001 per share exercise price for each pre-funded warrant. At closing of the transaction Monopar entered into a Registration Rights Agreement with the purchaser, which stipulates that Monopar will register the resale of the shares of common stock issuable upon the exercise of the 882,761 pre-funded warrants. 

The pre-funded warrants were classified as a component of stockholders’ equity within additional paid-in capital because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such pre-funded warrants do not provide any guarantee of value or return. The Company valued the pre-funded warrants at issuance concluding the purchase price approximated the fair value and allocated net proceeds from the purchase proportionately to the common stock. The value assigned to the pre-funded warrants was recorded as additional paid-in capital.

The pre-funded warrants are immediately exercisable and  may be exercised for a de-minimis exercise price of $0.001 per share subject to the limitation that a holder of a pre-funded warrant will not have the right to exercise any portion of the pre-funded warrant if the holder together with its affiliates and attribution parties (as such terms are defined in the pre-funded warrants) would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the pre-funded warrants. The pre-funded warrants do not expire. 

The total number of pre-funded warrants outstanding as of December 31, 2024, is 882,761.