Note 6 – Stockholders’ Equity

Common Stock

At the Company’s 2023 Annual Meeting of Stockholders held on June 12, 2023, its stockholders approved an amendment to its certificate of incorporation to increase the number of authorized shares of common stock available to issue by 30,000,000 to 80,000,000 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 June 14, 2023.

As of September 30, 2023 and December 31, 2022, there were 700,000 shares of Class A common stock held by 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.

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 connection with the November 2020 Form S-3, the Company entered into an ATM with Cantor Fitzgerald & Co., Ladenburg Thalmann & Co. Inc. and H.C. Wainwright & Co., LLC (each an “Agent” and collectively, the “Agents”) relating to the sale of shares of common stock. Under the ATM, the Company pays the Agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock.

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).

In February 2023, the Company closed on a 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. 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. 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. Net proceeds from the February 2023 Registered Direct Offering were $6.7 million after deducting commissions and other transactions. The 1,180,000 shares of common stock and 248,572 shares of common stock in the form of prefunded warrants were registered for sale under the November 2020 Form S-3. The February 2023 Common Stock Warrants met the criteria for equity classification.

In February 2023, the Pre-Funded Warrants from the February 2023 Registered Direct Offering were fully exercised. In March 2023, the Company filed a registration statement on Form S-3 to register the February 2023 Common Stock Warrants, which was declared effective May 5, 2023.

In April 2023, the Company closed on a 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. 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 total gross proceeds from the 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 1,700,000 shares of common stock were registered for sale under the November 2020 Form S-3. The Company filed a separate registration statement on Form S-3 to register the April 2023 Common Stock Warrants, which was declared effective May 5, 2023. The April 2023 Common Stock Warrants met the criteria for equity classification.

As of September 30, 2023, approximately $8.7 million of securities remain available for sale under the November 2020 Form S-3.

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 a 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 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. 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 total gross proceeds from the 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, Pre-Funded Warrants and May 2023 Common Stock Warrants were registered for sale under the March 2023 Form S-3. The May 2023 Common Stock 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 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. 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 total gross proceeds from the 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.

As of September 30, 2023, all the Pre-Funded Warrants from the May 2023 Registered Direct Offering and the July 2023 Registered Direct Offering were fully exercised.

As of September 30, 2023, approximately $91.7 million of securities remain available for sale under the March 2023 Form S-3.

Pursuant to the Founders Agreement, the Company issued to Fortress 2.5% of the aggregate number of shares of common stock issued in the registered direct offerings noted above. Accordingly, the Company issued 240,526 shares of common stock to Fortress and recorded expense of approximately $0.8 million related to this issuance, which is included in general and administrative expenses in the Company’s Condensed Statements of Operations for the nine months ended September 30, 2023.

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.

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. An amendment to the 2015 Incentive Plan was approved by stockholders in June 2023 to increase the shares available for issuance to 6,000,000 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.

As of September 30, 2023, 3,496,830 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 nine months ended September 30, 2023:

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As of September 30, 2023, there was $3.0 million of total unrecognized compensation cost related to non-vested restricted stock, which is expected to be recognized over a weighted-average period of 1.9 years. This amount does not include, as of September 30, 2023, 196,733 shares of restricted stock outstanding which are performance-based and vest upon achievement of certain corporate milestones. The expense for time-based vesting awards is recognized over the vesting period of the award. Stock-based compensation for milestone awards will be measured at grant date 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 nine months ended September 30, 2023:

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As of September 30, 2023, 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 nine months ended September 30, 2023:

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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. The table below summarizes the assumptions used:

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Warrants

A summary of warrant activities for the nine months ended September 30, 2023 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 nine months ended September 30, 2023 and 2022 ($ in thousands):

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