Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.22.2.2
Stockholders' Equity
6 Months Ended
Jun. 30, 2022
Equity [Abstract]  
Stockholders' Equity

8.

Stockholders’ Equity

Authorized, Issued, and Outstanding Common Stock

The Company’s authorized common stock has a par value of $0.001 per share and consists of 100,000,000 shares as of June 30, 2022, and December 31, 2021; 32,596,403 and 28,705,334 shares were issued and outstanding at June 30, 2022, and December 31, 2021, respectively.

The following table summarizes common stock share activity for the three and six months ended June 30, 2022 and 2021 (dollars in thousands):

 

 

 

Three Months Ended June 30, 2022

 

 

 

Shares of

Common Stock

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Total

Stockholders’

Equity

 

Balance, March 31, 2022

 

 

29,221,158

 

 

$

32

 

 

$

403,825

 

 

$

(364,930

)

 

$

38,927

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(13,345

)

 

 

(13,345

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,100

 

 

 

 

 

 

1,100

 

Common stock issued, net of expenses

 

 

3,358,333

 

 

 

4

 

 

 

18,794

 

 

 

 

 

 

18,798

 

Common stock issued for vested restricted stock units

 

 

16,912

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2022

 

 

32,596,403

 

 

$

36

 

 

$

423,719

 

 

$

(378,275

)

 

$

45,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2021

 

 

 

Shares of

Common Stock

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Total

Stockholders’

Equity

 

Balance, March 31, 2021

 

 

20,625,637

 

 

$

21

 

 

$

357,192

 

 

$

(331,289

)

 

$

25,924

 

Net income

 

 

 

 

 

 

 

 

 

 

 

1,658

 

 

 

1,658

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

542

 

 

 

 

 

 

542

 

Common stock issued, net of expenses

 

 

2,516,802

 

 

 

5

 

 

 

3,410

 

 

 

 

 

 

3,415

 

Common stock issued for vested restricted stock units

 

 

5,113

 

 

 

 

 

 

15

 

 

 

 

 

 

15

 

Vested Loan Agreement warrants

 

 

 

 

 

 

 

 

766

 

 

 

 

 

 

766

 

Balance, June 30, 2021

 

 

23,147,552

 

 

$

26

 

 

$

361,925

 

 

$

(329,631

)

 

$

32,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2022

 

 

 

Shares of

Common Stock

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Total

Stockholders’

Equity

 

Balance, December 31, 2021

 

 

28,705,334

 

 

$

32

 

 

$

400,705

 

 

$

(359,479

)

 

$

41,258

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(18,796

)

 

 

(18,796

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,022

 

 

 

 

 

 

2,022

 

Common stock issued through employee stock purchase plan

 

 

3,120

 

 

 

 

 

 

10

 

 

 

 

 

 

10

 

Common stock issued, net of expesnes

 

 

3,845,943

 

 

 

4

 

 

 

20,911

 

 

 

 

 

 

20,915

 

Common stock issued for vested restricted stock units

 

 

42,006

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested Loan Agreement warrants

 

 

 

 

 

 

 

 

71

 

 

 

 

 

 

71

 

Balance, June 30, 2022

 

 

32,596,403

 

 

$

36

 

 

$

423,719

 

 

$

(378,275

)

 

$

45,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2021

 

 

 

Shares of

Common Stock

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Total

Stockholders’

Equity

 

Balance, December 31, 2020

 

 

19,663,698

 

 

$

20

 

 

$

349,351

 

 

$

(326,613

)

 

$

22,758

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(3,018

)

 

 

(3,018

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

940

 

 

 

 

 

 

940

 

Common stock issued through employee stock purchase plan

 

 

2,184

 

 

 

 

 

 

9

 

 

 

 

 

 

9

 

Common stock issued, net of expenses

 

 

2,516,802

 

 

 

5

 

 

 

3,407

 

 

 

 

 

 

3,412

 

Common stock issued for conversion of April 2020 Notes

 

 

959,080

 

 

 

1

 

 

 

7,452

 

 

 

 

 

 

7,453

 

Common stock issued for vested restricted stock units

 

 

5,788

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested Loan Agreement warrants

 

 

 

 

 

 

 

 

766

 

 

 

 

 

 

766

 

Balance, June 30, 2021

 

 

23,147,552

 

 

$

26

 

 

$

361,925

 

 

$

(329,631

)

 

$

32,320

 

 

Shares Reserved for Future Issuance

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

 

 

 

June 30, 2022

 

 

December 31, 2021

 

Outstanding stock options

 

 

2,129,002

 

 

 

1,542,126

 

Outstanding restricted stock units

 

 

1,024,929

 

 

 

133,834

 

Warrants to purchase common stock associated with March 2018 public offering – Series 2

 

 

798,810

 

 

 

798,810

 

Warrants to purchase common stock associated with December 2020 public offering - Series 2

 

 

6,800,000

 

 

 

6,800,000

 

Prefunded warrants to purchase common stock associated with December 2020 public offering

 

 

3,200,000

 

 

 

3,200,000

 

Warrants to purchase common stock associated with April 2022 Public Offering

 

 

15,000,000

 

 

 

 

Prefunded warrants to purchase common stock associated with April 2022 Public Offering

 

 

11,666,667

 

 

 

 

Warrants to purchase common stock associated with Loan Agreement

 

 

198,819

 

 

 

170,410

 

Warrant to purchase common stock associated with Danforth

 

 

50,000

 

 

 

50,000

 

For possible future issuance for the conversion of the March 2019 Notes

 

 

1,138,200

 

 

 

1,138,200

 

For possible future issuance under 2014 Plan (Note 9)

 

 

34,206

 

 

 

295,220

 

For possible future issuance under employee stock purchase plan

 

 

3,714

 

 

 

3,893

 

For possible future issuance under 2015 Plan (Note 9)

 

 

124,250

 

 

 

235,000

 

Total common shares reserved for future issuance

 

 

42,168,597

 

 

 

14,367,493

 

 

 

April 2022 Public Offering

On April 22, 2022, the Company entered into an Equity Underwriting Agreement (the “Underwriting Agreement”) with Guggenheim Securities, LLC, as representative of the several underwriters (the “Underwriters”), relating to the offering, issuance and sale (the “April 2022 Public Offering”) of (a) 3,333,333 shares of the Company’s common stock, par value $0.001 per share, (b) pre-funded warrants, in lieu of common stock, to purchase 11,666,667 shares of the Company’s common stock, par value $0.001 per share, and (c) warrants, which will accompany the common stock or pre-funded warrants, to purchase up to an aggregate of 15,000,000 shares of the Company’s common stock. The pre-funded warrants entitle the holders to purchase up to 11,666,667 shares of common stock and have an unlimited term and an exercise price of $0.001 per share. The warrants entitle the holders to purchase up to an aggregate of 15,000,000 shares of common stock and have a seven-year term and an exercise price of $3.45 per share. The warrants that accompany the pre-funded warrants have an additional provision entitling the holder thereof to purchase a pre-funded warrant rather than a share of common stock at the warrant exercise price less the exercise price of the pre-funded warrant purchased. Each warrant is exercisable immediately upon issuance, subject to certain limitations on beneficial ownership. The price to the public in the April 2022 Public Offering was $3.00 per share of common stock and accompanying warrants, or in the case of pre-funded warrants, $2.999 per pre-funded warrant and accompanying warrants, which resulted in $41.8 million of net proceeds to the Company after deducting the underwriting discount and offering expenses.  

The prefunded warrants are classified as equity in accordance with ASC 815, Derivatives and Hedging given the prefunded warrants are indexed to the Company’s own shares of common stock and meet the requirements to be classified in equity.  The prefunded warrants were recorded at their relative fair value at issuance in the stockholders’ equity section of the balance sheet and the prefunded warrants are considered outstanding shares in the basic earnings per share calculation for the three and six months ended June 30, 2022 given their nominal exercise price. 

Common Stock Purchase Agreement and Sales Agreement

On April 10, 2020, the Company entered into the Common Stock Purchase Agreement with Aspire Capital (the “Common Stock Purchase Agreement”) pursuant to which the Company has the right to sell to Aspire Capital from time to time in its sole discretion up to $20.0 million in shares of the Company’s common stock over the next 30 months, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement.  During the three and six months ended June 30, 2022, the Company sold zero and 375,000 of its common stock under the Common Stock Purchase Agreement for gross proceeds of zero and $1.5 million, respectively, and the Company did not sell any shares of common stock under the Common Stock Purchase Agreement in the comparable prior year periods.  

During the three and six months ended June 30, 2022, the Company sold zero and 137,610 shares of its common stock and received net proceeds of zero and $0.7 million, respectively, under the Controlled Equity OfferingSM Sales Agreement with Cantor Fitzgerald & Co. and Ladenburg Thalmann & Co. Inc. (the “Sales Agreement”).  During the three and six months ended June 30, 2021, the Company sold 96,668 shares of its common stock and received net proceeds of $0.8 million under the Sales Agreement.  

Warrants Associated with the March 2018, December 2020 and April 2022 Public Offerings

The outstanding warrants associated with the March 2018 and December 2020 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 unaudited condensed consolidated statements of operations.  The outstanding warrants associated with the April 2022 public offering meet the definition of a derivative pursuant to ASC 815, Derivatives and Hedging, and do not meet the derivative scope exception given the warrants do not qualify under the indexation guidance.  As a result, the April 2022 public offering warrants were initially recognized as liabilities and measured at fair value using the Black-Scholes valuation model.  Issuance costs of $1.7 million initially allocated to the April 2022 public offering warrants were written off and recognized in the warrant liabilities fair value adjustment in the three and six months ended June 30, 2022.  During the three months ended June 30, 2022 and 2021, the Company recognized gains of $9.7 million and $15.3 million on the warrant liabilities fair value adjustment.  During the six months ended June 30, 2022 and 2021, the Company recognized gains of $19.7 million and $16.6 million on the warrant liabilities fair value adjustment.  As of June 30, 2022 and December 31, 2021, the fair value of the warrant liabilities was $21.2 million and $18.1 million, respectively.

Warrants Associated with Loan Agreement

In connection with the entry into the Loan Agreement, the Company issued to each of Hercules and SVB a warrant (collectively, the “Warrants”) to purchase shares of the Company’s common stock, par value $0.001 per share (the “Shares”).  

The amount of shares that may be purchased for the Warrants, collectively between Hercules and SVB, will not exceed 0.04 multiplied by the aggregate amount of the term loan advances, divided by the exercise price of the Warrants.  At the closing of the Loan Agreement, the Company issued 113,607 warrants to purchase shares of the Company’s common stock and recognized the initial warrants at their relative fair value in shareholder's equity.  Upon the funding of the $10.0 million and $5.0 million for the second and third tranches in June 2021 and March 2022, respectively, the associated warrant liabilities of $0.3 million and $0.1 million, respectively, were reclassed to additional paid in capital at settlement. In June 2021 and March 2022, 56,803 and 28,409 warrants to purchase shares of the Company’s common stock were issued upon vesting of the second and third tranches, respectively.