|3 Months Ended|
Mar. 31, 2019
Authorized, Issued, and Outstanding Common Stock
The Company’s authorized common stock has a par value of $0.001 per share and consists of 125,000,000 shares as of March 31, 2019, and December 31, 2018; 50,232,429 and 47,971,989 shares were issued and outstanding at March 31, 2019, and December 31, 2018, respectively. The following table summarizes common stock share activity for the three months ended March 31, 2019 and 2018 (dollars in thousands):
Shares Reserved for Future Issuance
The Company had reserved shares of common stock for future issuance as follows:
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 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 unaudited balance sheet as the convertible debt and 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 and March 2018 Public Offerings
The outstanding warrants associated with the June 2016 and March 2018 public offerings 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 months ended March 31, 2019 and 2018, the Company recorded a loss of $6.5 million and a gain of $3.6 million, respectively, due to the change in fair value of the warrant liabilities. As of March 31, 2019, the fair value of the warrant liabilities was $7.5 million.
Warrant Associated with Solar Loan Agreement
Pursuant to the loan agreement, on the Closing Date the Company issued to Solar the 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.
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