7. Shareholders’ Equity

Common Stock

Other Share Issuances

Pursuant to the Company’s effective registration statement on Form S-3 (File No. 333-269225) and a related prospectus and prospectus supplement, in each case filed with the Securities and Exchange Commission; on March 1, 2024, through an underwriting agreement (the “Underwriting Agreement”) with ThinkEquity, LLC as representative (the “Representative”) of the underwriters (collectively, the “Underwriters”), the Company sold 1,400,000 shares of common stock at a price of $1.50 per share to the public. According to the terms of the Underwriting Agreement, the Underwriters agreed to purchase the common shares at a price of $1.395 per share. The Company also granted the Underwriters an option exercisable for 45 days from the date of the Underwriting Agreement to purchase up to an additional 210,000 shares of common stock solely for the purpose of covering over-allotments (the “Over-allotment Options”). No Over-allotment Options were exercised. The Company also agreed to issue warrants to the designees of the Representative exercisable one hundred eighty (180) days after February 27, 2024 and expiring on February 27, 2029, to purchase up to 5% of the shares sold through the Underwriting Agreement at an exercise price of $1.875 per share. The gross proceeds from the sale of the shares were $2.1 million before underwriting discounts and commissions and other expenses payable by the Company were deducted.

The Underwriting Agreement contains customary representations, warranties and agreements by the Company, conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions.

On June 25, 2024 the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with Dawson James Securities Inc. (“Dawson James” or the “Placement Agent”) pursuant to which the Company engaged Dawson James as the placement agent for a registered public offering (the “Offering”) of an aggregate of 1,100,000 shares of the Company’s common stock, par value $0.001 (“Common Stock”). The Offering was undertaken pursuant to the Company’s effective registration statement on Form S-3 (File No. 333-269225) and a related prospectus and prospectus supplement filed with the Securities and Exchange Commission. The offering price per share of Common Stock was $1.00. The Company agreed to pay the Placement Agent a placement agent fee in cash equal to 7.00% of the gross proceeds from the Offering, and to reimburse for certain out of pocket expenses, including legal fees not to exceed $75,000. In addition, the Company agreed to issue to the Placement Agent warrants to purchase up to five percent 5% of the aggregate number of securities sold in the Offering (“Dawson James Warrants”) with an exercise price of 125% of the offering price of the Common Stock in the Offering and exercisable for five years from the date of the closing of the Offering and are initially exercisable six months from the closing of the Offering.

The Offering resulted in gross proceeds to the Company of $1.1 million before underwriting discounts and commissions and other expenses payable by the Company were deducted.

The Placement Agency Agreement contains customary representations, warranties and agreements, conditions to closing, indemnification obligations of the Company, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties, and termination provisions.

On September 4, 2024, the Company entered into a second placement agency agreement (the “ Second Placement Agency Agreement”) with Dawson James Securities Inc. (“Dawson James” or the “Placement Agent”) pursuant to which the Company engaged Dawson James as the placement agent for a registered public offering by the Company (the “Offering”) of an aggregate of (i) 8,106,584 shares of its common stock, par value $0.001 per share (“Common Stock”), or pre-funded warrants to purchase shares of Common Stock (“Pre-Funded Warrants”) in lieu thereof (the “Offering”). In connection with the Offering, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor to purchase Common Stock and Pre-Funded Warrants. The Purchase Agreement contains customary representations, warranties and agreements of the Company and the purchaser and customary indemnification rights and obligations of the parties.

The Offering Price was $0.55 per share of Common Stock. The Pre-Funded Warrants were priced at an offering price of $0.549 per Pre-Funded Warrant, which is equal to the offering price per share of Common Stock less the $0.001 per share exercise price of each such Pre-Funded Warrant. The Pre-Funded Warrants are immediately exercisable and terminate when exercised in full.

The Offering closed on September 5, 2024. Upon the closing of the Offering, the Company issued and sold 3,078,378 shares of Common Stock and Pre-Funded Warrants to purchase 5,028,206 shares of Common Stock.

Immediately after the Offering, the Company had 8,659,071 shares of Common Stock issued and outstanding and 5,028,206 Pre-Funded Warrants outstanding to acquire 5,028,206 shares of common stock. As of November 13, 2024 a total of 3,888,501 Pre-Funded Warrants were exercised for the same number of common shares and 1,139,705 Pre-Funded Warrants remain unexercised.

The Placement Agent agreed to use its reasonable best efforts to arrange for the sale of the Common Stock and Pre-Funded Warrants. The Company agreed to pay the Placement Agent a placement agent fee in cash equal to 7.00% of the gross proceeds from the sale of the Common Stock and Pre-Funded Warrants in this Offering. The Company also agreed to reimburse the Placement Agent for all reasonable travel and other out-of-pocket expenses, including the reasonable fees of legal counsel, not to exceed $125,000. In addition, the Company agreed to issue to the Placement Agent warrants to purchase up to five percent 5% of the aggregate number of securities sold in the Offering (the “Placement Agent Warrants”) with an exercise price 125% of the offering price of the Common Stock in the Offering and exercisable commencing six months from the closing of the Offering and for five years thereafter.

The Offering resulted in gross proceeds to the Company of approximately $4.45 million before deducting placement agent fees and other estimated offering expenses payable by the Company. The Company intends to use the net proceeds of approximately $3.79 million from the offering to fund the continued development of its ONP-002 product candidate and for general corporate purposes and working capital.

The Placement Agency Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties, and termination provisions.

The Offering was made pursuant to a registration statement on Form S-1 (File No. 333-281618), which was declared effective by the Securities and Exchange Commission on September 3, 2024.

The Company also entered into a warrant agency agreement with its transfer agent, Continental Stock Transfer & Trust Company, who will act as warrant agent for the Company, setting forth the terms and conditions of the Pre-Funded Warrants sold in the Offering (the “Warrant Agency Agreement”).