Note 6 – Stockholders’ Equity

Common Stock

At the Company’s 2024 Annual Meeting of Stockholders held on May 13, 2024, its stockholders approved an amendment to its certificate of incorporation to increase the number of authorized shares of common stock available to issue by 95,000,000 to 175,000,000 with a par value of $0.0001 per share, of which 700,000 shares are designated as “Class A common stock.” The amendment was filed with the Secretary of State of the State of Delaware on May 13, 2024.

As of June 30, 2024 and December 31, 2023, there were 700,000 shares of Class A common stock issued and outstanding to Fortress. The holders of common stock are entitled to one vote per share of common stock held. The Class A common stockholders are entitled to a number of votes per share equal to 1.1 times a fraction, the numerator of which is the sum of the shares of outstanding common stock and the denominator of which is the number of shares of Class A common stock. Accordingly, the holder of shares of Class A common stock will be able to control or significantly influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions. Each share of Class A common stock is convertible, at the option of the holder thereof, into one (1) fully paid and non-assessable share of common stock subject to adjustment for stock splits and combinations.

Registered Direct Offerings

In November 2020, the Company filed a shelf registration statement on Form S-3 (the “November 2020 Form S-3”), which was declared effective in December 2020 (File No. 333-251005). Under the November 2020 Form S-3, the Company may sell up to a total of $100 million of its securities.

In February 2023, the Company closed on the February 2023 Registered Direct Offering for the issuance and sale of an aggregate of 1,180,000 shares of its common stock at a purchase price of $5.25 per share of common stock. In addition, the offering includes 248,572 shares of common stock in the form of pre-funded warrants at a price of $5.2499. The pre-funded warrants were funded in full at closing except for a nominal exercise price of $0.0001, are exercisable commencing on the closing date and will terminate when such pre-funded warrants are exercised in full. In a concurrent private placement, Checkpoint issued and sold Series A warrants to purchase up to 1,428,572 shares of common stock and Series B warrants to purchase up to 1,428,572 shares of common stock (collectively, the “February 2023 Common Stock Warrants”). The Series A and B warrants are exercisable immediately upon issuance with an exercise price of $5.00 per share. The Series A warrants will expire five years following the issuance date and the Series B warrants will expire eighteen months following the issuance date. The Company also issued the placement agent warrants to purchase up to 85,714 shares of common stock with an exercise price of $6.5625 per share. The total gross proceeds from the February 2023 Registered Direct Offering were approximately $7.5 million with net proceeds of approximately $6.7 million after deducting approximately $0.8 million in commissions and other transaction costs. The shares of common stock and the shares underlying the pre-funded warrants were registered for sale under the November 2020 S-3. In March 2023, the Company filed a registration statement on Form S-3 to register the February 2023 Common Stock Warrants and placement agent warrants, which was declared effective May 5, 2023 (File No. 333-270474). In February 2023, the pre-funded warrants from the February 2023 Registered Direct Offering were fully exercised. The February 2023 Common Stock Warrants and placement agent warrants met the criteria for equity classification.

In April 2023, the Company closed on the April 2023 Registered Direct Offering for the issuance and sale of an aggregate of 1,700,000 shares of its common stock at a purchase price of $3.60 per share of common stock. In a concurrent private placement, Checkpoint issued and sold Series A warrants to purchase up to 1,700,000 shares of common stock and Series B warrants to purchase up to 1,700,000 shares of common stock (collectively, the “April 2023 Common Stock Warrants”). The Series A and B warrants are exercisable immediately upon issuance with an exercise price of $3.35 per share. The Series A warrants will expire five years following the issuance date and the Series B warrants will expire eighteen months following the issuance date. The Company also issued the placement agent warrants to purchase up to 102,000 shares of common stock with an exercise price of $4.50 per share. The total gross proceeds from the April 2023 Registered Direct Offering were approximately $6.1 million with net proceeds of approximately $5.5 million after deducting approximately $0.6 million in commissions and other transaction costs. The shares of common stock were registered for sale under the November 2020 S-3. In April 2023, the Company filed a registration statement on Form S-3 to register the April 2023 Common Stock Warrants and placement agent warrants, which was declared effective May 5, 2023 (File No. 333-271171). The April 2023 Common Stock Warrants and placement agent warrants met the criteria for equity classification.

The November 2020 Form S-3 expired in December 2023.

In March 2023, the Company filed a shelf registration statement on Form S-3 (the “March 2023 Form S-3”), which was declared effective May 5, 2023 (File No. 333-270843). Under the March 2023 Form S-3, the Company may sell up to a total of $150 million of its securities.

In May 2023, the Company closed on the May 2023 Registered Direct Offering for the issuance and sale of an aggregate of 1,650,000 shares of its common stock at a purchase price of $3.071 per share of common stock. In addition, the offering includes 1,606,269 shares of common stock in the form of pre-funded warrants at a price of $3.0709. The pre-funded warrants were funded in full at closing except for a nominal exercise price of $0.0001, are exercisable commencing on the closing date and will terminate when such pre-funded warrants are exercised in full. The common stock and the pre-funded warrants were sold together with Series A warrants to purchase up to 3,256,269 shares of common stock and Series B warrants to purchase up to 3,256,269 shares of common stock (collectively, the “May 2023 Common Stock Warrants”). The Series A and B warrants are exercisable immediately upon issuance with an exercise price of $2.821 per share. The Series A warrants will expire five years following the issuance date and the Series B warrants will expire eighteen months following the issuance date. The Company also issued the placement agent warrants to purchase up to 195,376 shares of common stock with an exercise price of $3.8388 per share. The total gross proceeds from the May 2023 Registered Direct Offering were approximately $10.0 million with net proceeds of approximately $9.1 million after deducting approximately $0.9 million in commissions and other transaction costs. The shares of common stock and the shares underlying the pre-funded warrants, May 2023 Common Stock Warrants, and placement agent warrants were registered for sale under the March 2023 S-3. In August 2023, the pre-funded warrants from the May 2023 Registered Direct Offering were fully exercised. The May 2023 Common Stock Warrants and placement agent warrants met the criteria for equity classification.

In July 2023, the Company closed on the July 2023 Registered Direct Offering for the issuance and sale of an aggregate of 2,427,186 shares of its common stock at a purchase price of $3.09 per share of common stock in a registered direct offering. In addition, the offering includes 809,062 shares of common stock in the form of pre-funded warrants at a price of $3.0899. The pre-funded warrants were funded in full at closing except for a nominal exercise price of $0.0001, are exercisable commencing on the closing date and will terminate when such pre-funded warrants are exercised in full. The common stock and the pre-funded warrants were sold together with Series A warrants to purchase up to 3,236,248 shares of common stock and Series B warrants to purchase up to 3,236,248 shares of common stock (collectively, the “July 2023 Common Stock Warrants”). The Series A and B warrants are exercisable immediately upon issuance with an exercise price of $2.84 per share. The Series A warrants will expire five years following the issuance date and the Series B warrants will expire eighteen months following the issuance date. The Company also issued the placement agent warrants to purchase up to 194,175 shares of common stock with an exercise price of $3.8625 per share. The total gross proceeds from the July 2023 Registered Direct Offering were approximately $10.0 million with net proceeds of approximately $9.1 million after deducting approximately $0.9 million in commissions and other transaction costs. The shares of common stock and the shares underlying the pre-funded warrants, July 2023 Common Stock Warrants, and placement agent warrants were registered for sale under the March 2023 S-3. In September 2023, the pre-funded warrants from the July 2023 Registered Direct Offering were fully exercised. The July 2023 Common Stock Warrants and placement agent warrants met the criteria for equity classification.

In January 2024, the Company closed on the January 2024 Registered Direct Offering for the issuance and sale of an aggregate of 1,275,000 shares of its common stock at a purchase price of $1.805 per share of common stock. In addition, the offering includes 6,481,233 shares of common stock in the form of pre-funded warrants at a price of $1.8049. The pre-funded warrants were funded in full at closing except for a nominal exercise price of $0.0001, are exercisable commencing on the closing date and will terminate when such pre-funded warrants are exercised in full. In a concurrent private placement, Checkpoint issued and sold common warrants to purchase up to 7,756,233 shares of common stock (the “January 2024 Common Stock Warrants”). The January 2024 Common Stock Warrants are exercisable immediately upon issuance with an exercise price of $1.68 per share and will expire five years following the issuance date. The Company also issued the placement agent warrants to purchase up to 465,374 shares of common stock with an exercise price of $2.2563 per share. The total gross proceeds from the January 2024 Registered Direct Offering were approximately $14.0 million with net proceeds of approximately $12.6 million after deducting approximately $1.4 million in commissions and other transaction costs. The shares of common stock and the shares underlying the pre-funded warrants were registered for sale under the March 2023 S-3. In March 2024, the Company filed a registration statement on Form S-3 to register the January 2024 Common Stock Warrants and placement agent warrants, which was declared effective April 5, 2024 (File No. 333-278397). In July 2024, the pre-funded warrants from the January 2024 Registered Direct Offering were fully exercised. The January 2024 Common Stock Warrants and placement agent warrants met the criteria for equity classification.

As of June 30, 2024, approximately $77.7 million of securities remain available for sale under the March 2023 Form S-3.

The Company may offer the securities under the Form S-3’s from time to time in response to market conditions or other circumstances if it believes such a plan of financing is in the best interests of its stockholders.

Warrant Inducement

In October 2023, the Company entered into the October 2023 Inducement with a certain holder of its existing warrants to exercise for cash an aggregate of 6,325,354 shares of the Company’s common stock at a reduced exercise price of $1.76 per share. The exercised warrants included warrants issued in a December 2022 registered direct offering with an original exercise price of $4.075 per share and the February Common Stock Warrants issued in the February 2023 Registered Direct Offering with an original exercise price of $5.00 per share. As part of the October 2023 Inducement, the Company agreed to issue new unregistered Series A Warrants to purchase up to 6,325,354 shares of Common Stock and new unregistered Series B Warrants to purchase up to 6,325,354 shares of Common Stock (collectively, the “October 2023 Common Stock Warrants”). The Series A and B warrants are exercisable immediately upon issuance with an exercise price of $1.51 per share. The Series A warrants will expire five years following the issuance date and the Series B warrants will expire twenty-four months following the issuance date. The Company also issued the placement agent warrants to purchase up to 379,521 shares of common stock with an exercise price of $2.20 per share. The total gross proceeds from the October 2023 Inducement were approximately $11.1 million with net proceeds of approximately $10.0 million after deducting approximately $1.1 million in commissions and other transaction costs. In November 2023, the Company filed a registration statement on Form S-3 to register the October 2023 Common Stock Warrants and placement agent warrants, which was declared effective November 24, 2023 (File No. 333-275644). The October 2023 Common Stock Warrants and placement agent warrants met the criteria for equity classification.

Upon the close of the transaction, the Company issued the holder 110,000 of the 6,325,354 shares of common stock that were issuable upon exercise of the existing warrants. Due to the beneficial ownership limitation provisions in the inducement offer letter agreement, the remaining 6,215,354 shares were initially unissued, and held in abeyance for the benefit of the holder until notice from the holder that the shares may be issued in compliance with the agreement. In January 2024, the final shares held in abeyance were issued to the holder.

Shares Issued Under the Founders Agreement

Pursuant to the Founders Agreement, the Company issued 368,907 shares of common stock to Fortress for the Annual Equity Fee, representing 2.5% of the fully diluted outstanding equity of Checkpoint on January 1, 2023 (see Notes 2 and 4).

Pursuant to the Founders Agreement, the Company issued to Fortress 2.5% of the aggregate number of shares of common stock issued in the February, April, and May 2023 registered direct offerings noted above. Accordingly, the Company issued 159,620 shares of common stock to Fortress and recorded expense of approximately $0.6 million related to this grant, which is included in general and administrative expenses in the Company’s Condensed Statements of Operations for the six months ended June 30, 2023.

Pursuant to the Founders Agreement, the Company issued 1,492,915 shares of common stock to Fortress on May 16, 2024 for the Annual Equity Fee, representing 2.5% of the fully diluted outstanding equity of Checkpoint on January 1, 2024. The Company did not have enough unreserved authorized shares under its certificate of incorporation on January 1, 2024 to issue the shares for the Annual Equity Fee. Therefore, in December 2023, Fortress and Checkpoint mutually agreed to defer the issuance until such time as certificate of incorporation has been amended in order to increase the number of authorized that may be issued thereunder. At the Company’s 2024 Annual Meeting of Stockholders held on May 13, 2024, its stockholders approved an amendment to its certificate of incorporation to increase the number of authorized shares of common stock available to issue. Because the number of outstanding shares issuable to Fortress was determinable on January 1, 2024 prior to the issuance of the December 31, 2023 financial statements, the Company recorded approximately $3.4 million in research and development expense and a credit to Common shares issuable-Founders Agreement during the year ended December 31, 2023.

Pursuant to the Founders Agreement, the Company issued to Fortress 2.5% of the aggregate number of shares of common stock issued in the January 2024 Registered Direct Offering. Accordingly, the Company issued 193,905 shares of common stock to Fortress and recorded expense of approximately $396,000 related to this issuance, which is included in general and administrative expenses in the Company’s Condensed Statements of Operations for the six months ended June 30, 2024.

Equity Incentive Plan

The Company has in effect the Amended and Restated 2015 Incentive Plan (“2015 Incentive Plan”). The 2015 Incentive Plan was adopted in March 2015 by our stockholders. Under the 2015 Incentive Plan, the compensation committee of the Company’s board of directors is authorized to grant stock-based awards to directors, officers, employees and consultants. At the Company’s 2024 Annual Meeting of Stockholders held on May 13, 2024, its stockholders approved an amendment to the 2015 Incentive Plan to increase the shares available for issuance to 18,000,000 shares. The plan expires 10 years from the effective date of the amendment and limits the term of each option to no more than 10 years from the date of grant.

On May 24, 2024, the Company filed a registration statement on Form S-8 under the Securities Act registering the common stock issued, issuable or reserved for issuance under our 2015 Incentive Plan. The registration statement became effective immediately upon filing, and shares covered by the registration statement are eligible for sale in the public markets, subject to grant of the underlying awards, vesting provisions and Rule 144 imitations applicable to our affiliates.

As of June 30, 2024, 8,010,406 shares are available for issuance under the 2015 Incentive Plan.

Restricted Stock Awards

Certain employees, directors and consultants have been awarded restricted stock. The restricted stock vesting consists of milestone and time-based vesting. The following table summarizes restricted stock award activity for the six months ended June 30, 2024:

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As of June 30, 2024, there was $8.1 million of total unrecognized compensation cost related to non-vested restricted stock, which is expected to be recognized over a weighted-average period of 1.8 years. This amount does not include, as of June 30, 2024, 1,466,733 shares of restricted stock outstanding which are performance-based and vest upon achievement of certain corporate milestones. The expense is recognized over the vesting period of the award. Stock-based compensation for milestone awards will be measured and recorded if and when it is probable that the milestone will be achieved.

Restricted Stock Units

The following table summarizes restricted stock units activity for the six months ended June 30, 2024:

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As of June 30, 2024, all restricted stock units outstanding are performance-based and vest upon achievement of certain corporate milestones. The expense for milestone awards will be measured and recorded if and when it is probable that the milestone will be achieved.

Stock Options

The following table summarizes stock option award activity for the six months ended June 30, 2024:

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Upon the exercise of stock options, the Company will issue new shares of its common stock. The Company used the Black-Scholes Model for determining the estimated fair value of stock-based compensation related to stock options.

Warrants

A summary of warrant activities for the six months ended June 30, 2024 is presented below:

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Upon the exercise of warrants, the Company will issue new shares of its common stock.

Stock-Based Compensation

The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2024 and 2023 ($ in thousands):

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