|9 Months Ended|
Sep. 30, 2018
Authorized, Issued, and Outstanding Common Stock
The Company’s common stock has a par value of $0.001 per share and consists of 125,000,000 authorized shares as of September 30, 2018, and December 31, 2017; 47,193,062 and 28,971,651 shares were issued and outstanding at September 30, 2018, and December 31, 2017, respectively. The following table summarizes common stock share activity for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands):
Shares Reserved for Future Issuance
The Company had reserved shares of common stock for future issuance as follows:
Warrants Associated with June 2016 and March 2018 Public Offerings
On June 21, 2016, the Company completed the June 2016 public offering of its common stock and warrants pursuant to the Company's previously effective shelf registration (the “June 2016 Public Offering”). 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 have 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 three months ended September 30, 2018, there were 115,550 of the Series 1 warrants exercised for total proceeds of $0.2 million.
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 statements of operations. During the three and nine months ended September 30, 2018, the Company recorded a gain of $6.9 million and a gain of $7.6 million, respectively, due to the change in fair value of the warrant liabilities. As of September 30, 2018, the fair value of the warrant liabilities was $5.2 million.
Warrant Associated with Loan Agreement
Pursuant to the Loan Agreement, on the Closing Date the Company issued to Solar the Solar 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 Solar Warrant will expire five years from the date of the grant. The Solar Warrant was classified as equity and recorded at its relative fair value at issuance in the stockholders' equity section of the balance sheet.
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef