Annual report pursuant to Section 13 and 15(d)

Equity

v3.21.1
Equity
12 Months Ended
Dec. 31, 2020
Stockholders' Equity Note [Abstract]  
Equity

Note 6 - Equity


On April 24, 2020, the Company issued and sold 4.3 million shares of common stock and 2.8 million pre-funded warrants to purchase shares of common stock. The price to the public in this offering for each share of common stock was $4.50 and for each pre-funded warrant was $4.497. Each pre-funded warrant had an exercise price of $0.003 per share and was exercisable immediately upon issuance. Gross proceeds from this offering were $31.6 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company. Net proceeds from this offering were $29.1 million.


During the year ended December 31, 2020, holders of all of the 2.8 million pre-funded April 2020 warrants exercised their warrants at $0.003 per share and received 2.8 million shares of common stock.


On June 19, 2020, the Company issued and sold 1.9 million shares of common stock and 0.7 million pre-funded warrants to purchase shares of common stock. The price to the public in this offering for each share of common stock was $9.75 and for each pre-funded warrant was $9.747. Each pre-funded warrant had an exercise price of $0.003 per share and was exercisable immediately upon issuance. Gross proceeds from this offering were $25.0 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company. Net proceeds from this offering were $23.0 million.


During the year ended December 31, 2020, holders of all of the 0.7 million pre-funded June 2020 warrants exercised their warrants at $0.003 per share and received 0.7 million shares of common stock.


In August 2020, the Company entered into the Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC (“JonesTrading”), pursuant to which the Company may sell, from time to time, through or to JonesTrading, up to an aggregate of $200 million of its common stock. Shares of common stock are offered pursuant to the Company’s shelf registration statement on Form S-3 filed with the SEC on August 7, 2020. As of December 31, 2020, the Company has sold 2.1 million shares of common stock, resulting in gross proceeds of $22.6 million and net proceeds of $21.7 million.


In December 2018, the Company entered into the Amended and Restated At Market Issuance Sales Agreement with B. Riley FBR, Inc. and JonesTrading, pursuant to which the Company conducted its at-the market program. During the year ended December 31, 2020, the Company sold 0.3 million shares of common stock through its at-the-market program, resulting in net proceeds of $2.5 million.


In October 2018, the Company and Lincoln Park Capital Fund, LLC (“Lincoln Park”) entered into a purchase agreement and a registration rights agreement, pursuant to which the Company has the right to sell to Lincoln Park shares of the Company’s common stock having an aggregate value of up to $32.5 million, subject to certain limitations and conditions set forth in the agreement. During the year ended December 31, 2020, the Company elected to sell to Lincoln Park 27 thousand shares and received $0.2 million.


In April 2019, the Company sold 1.4 million shares of common stock at an offering price of $11.55 per share and warrants to purchase 1.4 million shares of common stock at an exercise price of $15.00 per share and with a term of 5 years, resulting in gross proceeds of $16.5 million and net proceeds of $15.1 million after deducting underwriting and other offering expenses.


For the year ended December 31, 2019, the Company sold 93 thousand shares of common stock through its at-the-market program with Jones Trading, resulting in net proceeds of $0.7 million. The Company elected to sell to Lincoln Park 13 thousand shares and received $0.1 million.


In March 2018, the Company sold an aggregate of 1.0 million units consisting of an aggregate of 1.0 million shares of common stock, 0.3 million series A warrants and 0.8 million series B warrants, with each series A warrant exercisable for one share of common stock at an exercise price of $18.00 per share and each series B warrant exercisable for one share of common stock at an exercise price of $21.00 per share. During the year ended December 31, 2019, holders of March 2018 series A warrants exercised 84 thousand shares, resulting in the Company receiving $1.5 million. The remaining March 2018 series A warrants expired in March 2019. The March 2018 Series B warrants expired in September 2020.


2019 Amended and Restated Stock Plan


In December 2019, the Company’s 2019 Stock Plan was established. The expiration date of the plan is October 18, 2029 and the total number of shares of the Company’s common stock available for grant to employees, directors and consultants of the Company was 333,333 shares. At the Company’s Annual Meeting of Stockholders held on November 18, 2020, its stockholders authorized an increase in the number of shares authorized under the plan, resulting in the number of shares authorized in the plan to be 3,083,333 shares


2013 Amended and Restated Stock Plan


In September 2013, the Company’s 2013 Stock Plan was established. The expiration date of the plan is September 9, 2023 and at the time of approval, the total number of shares of the Company’s common stock available for grant to employees, directors and consultants of the Company under the plan was 91,666 shares. After a number of amendments approved by stockholders, the number of shares authorized under the plan is 758,333 shares.


2013 Equity Incentive Plan


In September 2013, the Company’s 2013 Equity Incentive Plan was established. The expiration date of the plan is September 9, 2023 and the total number of shares of the Company’s common stock available for grant to employees, directors and consultants of the Company under the plan was 15,000 shares. In December 2013, the shareholders of the Company approved the plan and increased the number of shares authorized under the plan to 33,333 shares.


Stock Options


Following is a summary of stock option activity for the years ended December 31, 2020 and 2019:


(in thousands, except for per-share amount)   Number of
Options
    Weighted
Average
Exercise
Price
    Weighted
Average
Remaining
Contractual
Term
(in years)
    Aggregate
Intrinsic
Value
 
Outstanding, January 1, 2019     241       52.20       7.97       6,400  
Granted     195       8.10                  
Cancelled     (56 )     14.40                  
Outstanding, December 31, 2019     380       35.10       7.88       155  
Granted     458       9.99                  
Cancelled     (23 )     16.84                  
Outstanding, December 31, 2020     815       21.53       8.51       120  
                                 
Exercisable, December 31, 2020     254       45.98       6.74       41  

During 2020, the Company granted its employees and members of the Board of Directors options to purchase 458 thousand shares of common stock with an exercise price ranging from $6.63 to $12.41 per share, a term of 10 years, and a vesting period from 4 to 4.2 years. The options have an aggregated fair value of $3.2 million that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate range from 0.34% to 0.56% (2) expected life of 6 years, (3) expected volatility range from 83.6% to 85.5%, and (4) zero expected dividends.


During 2019, the Company granted its employees and members of the Board of Directors options to purchase 195 thousand shares of common stock with an exercise price ranging from $6.44 to $17.40 per share, a term of 10 years, and a vesting period from 4 to 4.2 years. The options have an aggregated fair value of $1.1 million that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate range from 1.38% to 2.6% (2) expected life of 6 years, (3) expected volatility range from 78.5% to 81.8%, and (4) zero expected dividends.


During the years ended December 31, 2020 and 2019, options to purchase 23 thousand and 56 thousand common shares were cancelled, respectively, upon the termination of employment. There were no exercises of options during 2020 and 2019.


The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at December 31, 2020 was $4.0 million related to unvested options, which is expected to be expensed over a weighted average of 3.3 years. During 2020 and 2019, the Company recorded total option expense of $1.2 million and $1.2 million, respectively.


Pre-funded Warrants


As part of the financings in April 2020 and June 2020, the Company issued pre-funded warrants. Each pre-funded warrant had an exercise price of $0.003 per share and was exercisable immediately upon issuance. The pre-funded warrants did not have an expiration date. During 2020 all the pre-funded warrants were exercised for shares of common stock.


Following is a summary of pre-funded warrant activity for the year ended December 31, 2020:


(in thousands, except for per-share amounts)   Number of Shares     Weighted
Average
Exercise
Price
    Aggregate
Intrinsic
Value
 
Outstanding, December 31, 2019     -     $ -     $ -  
Granted     3,459       0.003          
Exercised     (3,459 )     0.003          
Outstanding, December 31, 2020     -     $ -     $ -  

Warrants


Following is a summary of warrant activities for the years ended December 31, 2020 and 2019:


(in thousands, except for per-share amounts)   Number of
Warrants
    Weighted
Average
Exercise
Price
    Weighted
Average
Remaining
Contractual
Term
(in years)
    Aggregate
Intrinsic
Value
 
Outstanding, January 1, 2019     1,861       36.00       2.04       569  
Granted     1,430       15.00                  
Exercised     (85 )     17.70                  
Cancelled     (335 )     82.80                  
Outstanding, December 31, 2019     2,871       20.71       2.95       301  
Granted     -       -                  
Exercised     (2 )     15.00                  
Cancelled     (756 )     20.99                  
Outstanding, December 31, 2020     2,113       20.55       2.76       362  
                                 
Exercisable, December 31, 2020     2,111       20.56       2.76       362  

In April 2019, the Company sold 1.4 million shares of common stock at an offering price of $11.55 per share and warrants to purchase 1.4 million shares of common stock at an exercise price of $15.00 per share and with a term of 5 years. The transaction date relative fair value of the April 2019 warrants of $5.3 million was determined utilizing the Black-Scholes option pricing model and variables of (1) a discount rate of 2.35%, (2) expected term of 5 years, (3) expected volatility of 78% and (4) zero expected dividends.


In March 2018, the Company sold an aggregate of 1.0 million units consisting of an aggregate of 1.0 million shares of common stock, 0.3 million series A warrants and 0.8 million series B warrants, with each series A warrant exercisable for one share of common stock at an exercise price of $18.00 per share and each series B warrant exercisable for one share of common stock at an exercise price of $21.00 per share. During the year ended December 31, 2019, holders of March 2018 series A warrants exercised 84 thousand shares, resulting in the Company receiving $1.5 million. The remaining March 2018 series A warrants expired in March 2019. The March 2018 Series B warrants expired in September 2020.


The Company has an outstanding warrant to purchase 1,907 shares of common stock, issued on March 14, 2017 to Sandesh Seth, the Company’s Chairman and Chief Executive Officer. The warrant included down-round protection up until it was amended on August 11, 2020. For warrants with down-round protection, a deemed dividend is recorded for the change in fair value of the warrants when the down-round provision is triggered. As a result of the April 2019 offering, the exercise price of the warrant was reset from $37.50 per share to $26.40 per share. As a result of the April 2020 offering and June 2020 offering, the exercise price of the warrant was reset from $26.40 per share to $15.61515 per share. The down-round protection provision in the above warrants created a deemed dividend to common stockholders of $1 thousand in the years ended December 31, 2020 and 2019, which are reflected in the accompanying consolidated statement of operations and consolidated statement of changes in stockholders’ equity. On August 11, 2020, the Company and Mr. Seth agreed to amend the warrant to remove the anti-dilution provision that had been in the warrant. Accordingly, pursuant to the amendment, as of August 11, 2020, the exercise price of the warrant will no longer be subject to a proportional adjustment if and when the Company issues any shares of its common stock for a consideration less than the exercise price of the warrant. All other terms of the warrant remained the same.


During the years ended December 31, 2020 and 2019, the Company recorded stock-based compensation expense related to warrants of $13 thousand and $8 thousand, respectively.