Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.20.1
Stockholders' Equity
12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
Stockholders' Equity

9.

Stockholders' Equity

Authorized, Issued, and Outstanding Common Shares

The Company’s authorized common stock has a par value of $0.001 per share and consists of 250,000,000 shares as of December 31, 2019, and 125,000,000 as of December 31, 2018; 97,413,721 and 47,971,989 shares were issued and outstanding at December 31, 2019, and December 31, 2018, respectively.  On June 18, 2019, the Company's stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the total number of authorized shares of common stock from 125,000,000 to 250,000,000.

Shares Reserved for Future Issuance

The Company had reserved shares of common stock for future issuance as follows:

 

 

December 31,

 

 

 

2019

 

 

2018

 

Outstanding stock options

 

 

5,261,860

 

 

 

4,052,913

 

Outstanding restricted stock units

 

 

966,394

 

 

 

111,891

 

Outstanding Series C-1 Preferred warrants

 

 

 

 

 

14,033

 

Warrants to purchase common stock associated with June 2016 public offering

 

 

4,218,750

 

 

 

4,218,750

 

Warrants to purchase common stock associated with March 2018 Public Offering - Series 1

 

 

 

 

 

13,198,075

 

Warrants to purchase common stock associated with March 2018 Public Offering - Series 2

 

 

7,988,175

 

 

 

7,988,175

 

Warrants to purchase common stock associated with December 2019 Public Offering

 

 

44,722,222

 

 

 

 

Option to purchase common stock associated with December 2019 Public Offering

 

 

5,833,333

 

 

 

 

Common stock associated with 6% convertible senior notes

 

 

11,382,000

 

 

 

 

Warrants to purchase common stock associated with Solar loan agreement

 

 

122,435

 

 

 

122,435

 

For possible future issuance under 2014 Plan (Note 11)

 

 

554,774

 

 

 

612,018

 

For possible future issuance under 2014 ESPP (Note 11)

 

 

74,231

 

 

 

81,667

 

For possible future issuance under 2015 Plan (Note 11)

 

 

315,500

 

 

 

5,000

 

Total common shares reserved for future issuance

 

 

81,439,674

 

 

 

30,404,957

 

 

 

Liquidation Rights

In the event of any liquidation or dissolution of the Company, the holders of the common stock are entitled to the remaining assets of the Company legally available for distribution.

Dividends and Voting Rights

The holders of the common stock are entitled to receive dividends if and when declared by the Company.  

Preferred Stock

On May 7, 2014, the Company amended and restated its articles of incorporation relating to its approved capital structure. The Company's board of directors has authorized the Company, subject to limitations prescribed by Delaware law, to issue up to 5,000,000 shares of preferred stock with a par value of $0.001 per share in one or more series, to establish from time to time the number of shares to be included in each series and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions. The Company's board of directors can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding, without any further vote or action by the stockholders. The Company's board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. There were no shares of preferred stock issued and outstanding as of December 31, 2019 and 2018.

Convertible Debt and Derivative Liability

In connection with the Company’s issuance of its Notes, the Company bifurcated the embedded conversion option, inclusive of the interest make-whole provision and make-whole fundamental change provision, and recorded the embedded conversion option as a long-term derivative liability in the Company’s consolidated balance sheet in accordance with ASC 815, Derivatives and Hedging.  The convertible debt and derivative liability associated with the Notes are presented in total on the accompanying consolidated balance sheet as the convertible debt and derivative liability.  The derivative liability will be remeasured at each reporting period using the binomial lattice model with changes in fair value recorded in the consolidated statements of operations in other (income) expense.  For the year ended December 31, 2019, the Company recorded a gain of $1.6 million due to the change in fair value of the derivative liability.  In April 2019, Puissance converted $2.0 million of the Notes for 1,626,000 shares of common stock.

Warrants Associated with June 2016, March 2018, and December 2019 Public Offerings

On June 21, 2016, the Company completed the June 2016 Public Offering and sold 9,375,000 shares of its common stock and warrants to purchase up to 4,218,750 shares of the Company’s common stock.  Each purchaser received a warrant to purchase 0.45 of a share for each share purchased in the June 2016 Public Offering. There is not expected to be any trading market for the warrants. Each warrant was exercisable immediately upon issuance, will expire five years from the date of issuance, and has an exercise price of $3.00 per share.  

On March 8, 2018, the Company completed the March 2018 Public Offering and sold 17,751,500 shares of its common stock and warrants to purchase up to 21,301,800 shares of the Company’s common stock.  Each purchaser received a warrant to purchase 0.75 of a share of common stock (the “Series 1 warrants”) and 0.45 of a share of common stock (the “Series 2 warrants”) for each share purchased in the March 2018 Public Offering.  The Series 1 warrants to purchase in the aggregate up to 13,313,625 shares of common stock had a 53-week term and an exercise price of $1.85 per share, and the Series 2 warrants to purchase in the aggregate up to 7,988,175 shares of common stock have a five-year term and an exercise price of $2.00 per share.  There is not expected to be any market for the warrants and each warrant is exercisable immediately upon issuance, subject to certain limitations on beneficial ownership.  During the year ended December 31, 2018, there were 115,550 of the Series 1 warrants exercised for total proceeds of $0.2 million and the Series 1 warrants expired on March 14, 2019.

On December 12, 2019, the Company completed the December 2019 Public Offering and sold 38,888,889 shares of the its common stock and warrants to purchase up to 38,888,889 shares of the Company’s common stock.  The warrants to purchase shares of common stock are immediately exercisable and expire on the earlier of (i) such date that is six months after the Company publicly announces the approval from the U.S. Food and Drug Administration for ibrexafungerp for the treatment of vulvovaginal candidiasis and (ii) June 12, 2023, and have an exercise price of $1.10 per share. There is not expected to be any trading market for the warrants. Each warrant is exercisable immediately upon issuance, subject to certain limitations on beneficial ownership.  In addition, the Company granted to the underwriters an option to purchase up to 5,833,333 additional shares of common stock and/or warrants to purchase up to an aggregate of an additional 5,833,333 shares of common stock, in each case at the public offering price, less underwriting discounts and commissions. The underwriters exercised their option to purchase 5,833,333 warrants in December 2019.  The option to purchase up to 5,833,333 additional shares of common stock was not exercised by the underwriters and the option expired in January 2020.

The warrants contain a provision where the warrant holder has the option to receive cash, equal to the Black-Scholes fair value of the remaining unexercised portion of the warrant, as cash settlement in the event that there is a fundamental transaction (contractually defined to include various merger, acquisition or stock transfer activities). Due to this provision, ASC 480, Distinguishing Liabilities from Equity, requires that these warrants be classified as liabilities. The fair values of these warrants have been determined using the Black-Scholes valuation model, and the changes in the fair value are recorded in the accompanying consolidated statements of operations. During the year ended December 31, 2019, the Company recorded a loss of $4.5 million due to the change in fair value of the warrant liability.  Issuance costs of $1.0 million initially allocated to the December 2019 Public Offering warrant liability were written off upon settlement and were recognized in the loss on the fair value adjustment for the warrant liability for the year ended December 31, 2019.  As of December 31, 2019, the fair value of the warrant liabilities was $18.4 million.

Warrant Associated with Solar Loan Agreement

Pursuant to a loan agreement, the Company issued to Solar a warrant to purchase an aggregate of up to 122,435 shares of the Company’s common stock at an exercise price of $3.6754 per share. The warrant will expire five years from the date of the grant. The warrant was classified as equity and recorded at its relative fair value at issuance in the stockholders' equity section of the balance sheet.