Quarterly report pursuant to Section 13 or 15(d)

Equity

v3.22.2.2
Equity
 9 Months Ended
Sep. 30, 2022
Stockholders' Equity Note [Abstract]  
Equity

Note 5 - Equity 

 

In August 2020 the Company entered into the Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC, or 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 a shelf registration statement on Form S-3 filed with the SEC on August 7, 2020. As of December 31, 2021, the Company had sold 6.7 million shares of common stock, resulting in gross proceeds of $59.1 million and net proceeds of $57.0 million. For the nine months ended September 30, 2022, the Company sold 3.0 million shares of common stock, resulting in gross proceeds of $18.9 million and net proceeds of $18.3 million. For the nine months ended September 30, 2021, the Company sold 4.5 million shares of common stock, resulting in gross proceeds of $35.6 million and net proceeds of $34.5 million.

 

On June 28, 2022, the Company entered into an Amendment and Restated Capital on Demand™ Sales Agreement (the “A&R Sales Agreement”) with JonesTrading and B. Riley Securities, Inc. (“B. Riley Securities”). The A&R Sales Agreement modifies the original Capital on Demand™ Sales Agreement to include B. Riley Securities as an additional sales agent thereunder.

 

Stock Options

 

The following is a summary of stock option activity for the nine months ended September 30, 2022:

 

(amounts in thousands, except for per-share amounts)   Number of
Shares		     Weighted
Average
Exercise
Price		     Weighted
Average
Remaining
Contractual
Term
(in years)		     Aggregate
Intrinsic
Value		  
Outstanding, January 1, 2022     1,362     $ 12.45       8.69     $
-
  
Granted     1,885       4.99                  
Cancelled     (55 )     11.06                  
Outstanding, September 30, 2022     3,192       8.06       9.03       5,377  
                                 
Exercisable, September 30, 2022     638       17.94       7.43       397  

   

During the nine months ended September 30, 2022, the Company granted options to purchase 1.9 million shares of common stock with an exercise price ranging from $4.96 to $8.46 per share, a term of 10 years, and a vesting period of 4 years. The options have an aggregated fair value of $6.6 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 1.52% to 3.45% (2) expected life of 6 years, (3) expected volatility range from 78.8% to 80.2%, and (4) zero expected dividends.

 

The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at September 30, 2022 was $9.7 million related to unvested options, which is expected to be expensed over a weighted average of 3.5 years. During the nine months ended September 30, 2022 and 2021, the Company recorded compensation expense related to stock options of $1.6 million and $1.0 million, respectively.  

 

Restricted Stock Units

 

The Company issued 300 thousand restricted stock units (“RSUs”) in August 2022 to an employee. These RSUs were immediately vested on the date of the grant, however, shares under the RSUs will not be issued until the earlier of a change of control event, the termination of the recipient’s continuous service status for any reason other than by the Company for cause, or the third anniversary of the date of the grant. The fair value of the RSUs, $1.8 million, was determined based on the stock price of $5.85 on the date of the grant and is being recognized over three years. The unrecognized compensation expense at September 30, 2022 of $1.7 million is expected to be expensed over 2.9 years. During the three months and nine months ended September 30, 2022, the Company recorded compensation expense related to RSUs of $0.1 million.

 

Warrants

 

Following is a summary of warrant activity for the nine months ended September 30, 2022:

 

(in thousands, except for per-share amounts)   Number of Shares     Weighted
Average
Exercise
Price		     Weighted
Average
Remaining
Contractual
Term
(in years)		     Aggregate
Intrinsic
Value		  
Outstanding, January 1, 2022     2,112     $ 20.52       1.76     $ 276  
Granted    
-
      
-
                  
Exercised    
-
      
-
                  
Cancelled/Expired     (669 )     29.01                  
Outstanding, September 30, 2022     1,443     $ 16.58       1.58     $
-
  
                                 
Exercisable, September 30, 2022     1,440     $ 15.95       1.58     $
-
  

  

On August 2, 2022, warrants to purchase an aggregate of 0.6 million shares of common stock expired. These warrants were issued on August 2, 2017, when the Company completed an underwritten offering of 0.7 million shares of common stock and warrants to purchase 0.6 million shares of common stock at a price of $22.50 per share and related warrant. The warrants were exercisable for a period of 5 years at an exercise price of $31.50 per share.