9. Shareholders’ Equity

Common Stock

Closing of Underwritten Public Offering

On March 25, 2019, the Company announced the closing of an underwritten public offering for gross proceeds of approximately $12.5 million, which included the partial exercise of the underwriter’s over-allotment option to purchase additional shares and warrants, prior to deducting underwriting discounts and commissions and offering expenses payable by the Company.

The offering was comprised of 16,666,668 shares of common stock, together with short-term warrants to purchase up to 8,333,334 shares of common stock, and long-term warrants to purchase up to 8,333,334 shares of common stock, at a price to the public of $0.75. The Company granted the underwriter a 30-day option to purchase up to 2,500,000 additional shares of common stock and/or short-term warrants to purchase 1,250,000 shares of common stock and long-term warrants to purchase 1,250,000 shares of common stock of the Company at the public offering price, less underwriting discounts and commissions. The underwriter did not exercise its option to purchase additional shares of common stock, however the underwriter exercised its option to purchase the short-term warrants to purchase 1,250,000 shares of common stock and long-term warrants to purchase 1,250,000 shares of common stock effective as of the closing.

Each short-term warrant has an exercise price of $0.75 per share of common stock, is immediately exercisable, and will expire on the earlier of (1) the eighteen-month anniversary of the date of issuance and (2) twenty-one trading days following the Company’s release of top-line data related to its Phase 2 double blind, placebo controlled clinical trial of AG013. Each long-term warrant has an exercise price of $0.90 per share of common stock, is immediately exercisable and will expire five years following the date of issuance.

The Company intends to use the net proceeds of the offering to fund its AG013 research, clinical trials, pre-clinical development of the lantibiotics program, and for working capital and general corporate purposes.

Other Share Issuance

On February 1, 2019, and May 1, 2019, respectively, the Company issued 12,500 shares of its common stock as partial consideration for the acquisition of certain services.

Preferred Stock

Series C Non-Voting, Non- Convertible Preferred Stock Financing Intrexon Debt Conversion

Each issued and outstanding share of Series C Preferred Stock entitled the holder of record, Intrexon, to receive dividends at the annual rate of twelve percent (12%) (the “Initial Rate”) of its Stated Value, payable by issuing additional shares of Series C Preferred Stock within thirty days after the end of each calendar year pro-rata for partial years. The Initial Rate was automatically increased to twenty percent (20%) after May 10, 2019. In January of 2019 we issued 12.208 shares of the Company’s Series C Preferred Stock as a dividend to Intrexon, as the holder of the Series C Preferred Stock.

Changes In Shareholders’ Equity

A summary of the changes in shareholders’ equity for the three and six months ended June 30, 2019 and 2018 is as follows: