8. WARRANTS

Warrants Issued with June 2022 Offering

On June 27, 2022, in connection with the sale and issuance common stock as part of the June Offering, the Company issued 10,000,000 Pre-Funded Warrants at an exercise price of $0.0001 per share, and 30,000,000 accompanying Common Warrants at an exercise price of $1.00 per share. Each share of common stock and accompanying Common Warrant was sold at a public offering price of $1.00, less underwriting discounts and commissions, and each Pre-Funded Warrant and accompanying Common Warrant was sold at a public offering price of $0.9999, less underwriting discounts and commissions, as described in the prospectus supplement, dated June 22, 2022, filed with the Securities and Exchange Commission on June 24, 2022.

The June 2022 Pre-Funded Warrants were initially recorded at fair value as a liability as the Company could be required to settle the Pre-Funded Warrants in cash in the event of an acquisition of the Company under certain circumstances. In December 2022, the Company amended the Pre-Funded Warrants to remove the potential requirement that they could be settled in cash under certain circumstances. Beginning December 31, 2022, the Pre-Funded Warrants are recorded as equity, using their fair value as of the amendment date.

As of June 30, 2025, warrant holders had exercised 8,500,000 Pre-Funded Warrants on a cash basis and received 8,500,000 shares of common stock. The Company received $850 in cash proceeds for the exercise of these Pre-Funded Warrants.

As of June 30, 2025, the Company had 1,500,000 Pre-Funded Warrants from the June 2022 offering outstanding with a weighted average exercise price of $0.0001 per share and an average contractual life of 5 years.

The Common Warrants were accounted for as liabilities under ASC 815-40, as these warrants provide for a settlement provision that does not meet the requirements of the indexation guidance under ASC 815-40. These warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the statements of operations. The Common Warrants were remeasured using a Black-Scholes option pricing model with a range of assumptions as of June 30, 2025 and December 31, 2024 (See Note 3).

As of June 30, 2025, warrant holders had exercised 19,275,000 Common Warrants on a cash basis and received 19,275,000 shares of common stock. The Company received $19.3 million in cash proceeds for the exercise of these Common Warrants.

As of June 30, 2025, the Company had 10,725,000 Common Warrants outstanding with a weighted average exercise price of $1.00 per share and an average contractual life of 5 years.

Warrants Issued with March 2024 Private Placement

On March 1, 2024, in connection with the sale and issuance of common stock as part of the March 2024 Private Placement, the Company issued 2,000,000 Pre-Funded Warrants at an exercise price of $0.001 per share. Each share of common stock was sold at a public offering price of $7.00, less underwriting discounts and commissions, and each Pre-Funded Warrant was sold at a public offering price of $6.999, less underwriting discounts and commissions, pursuant to a Securities Purchase Agreement, dated as of February 27, 2024, by and between the Company and the Purchasers.

As of June 30, 2025, the Company had 2,000,000 Pre-Funded Warrants from the March 2024 private placement outstanding with a weighted average exercise price of $0.001 per share. The Pre-Funded Warrants do not have an expiration date.

A summary of the Company’s outstanding warrants as of June 30, 2025 is as follows:


	Equity Classified			Liability Classified		Total
	Warrants			Warrants		Warrants
Outstanding as of December 31, 2024		7,326,863			10,725,000		18,051,863
Warrants granted and issued		—			—		—
Warrants exercised		(3,701,245	)		—		(3,701,245	)
Outstanding as of June 30, 2025		3,625,618			10,725,000		14,350,618

Applied Therapeutics, Inc. 10-Q