|9 Months Ended|
Sep. 30, 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 250,000,000 shares as of September 30, 2019, and 125,000,000 as of December 31, 2018; 57,362,453 and 47,971,989 shares were issued and outstanding at September 30, 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. The following table summarizes common stock share activity for the three and nine months ended September 30, 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. The derivative liability will be remeasured at each reporting period using the binomial lattice model with changes in fair value recorded in the statements of operations in other (income) expense. For the three and nine months ended September 30, 2019, the Company recorded gains of $2.3 million and $0.2 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 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 September 30, 2019 and 2018, the Company recorded gains of $1.8 million and $6.9 million, respectively, due to the change in fair value of the warrant liabilities. For the nine months ended September 30, 2019 and 2018, the Company recorded a loss of $2.6 million and a gain of $7.6 million, respectively, due to the change in fair value of the warrant liabilities. As of September 30, 2019, the fair value of the warrant liabilities was $3.6 million.
Warrant Associated with Solar Loan Agreement
On the closing date of the Company’s previous loan agreement with Solar, pursuant to the loan agreement 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