Note 4 - Equity 

In April 2019, the Company sold 42.9 million shares of common stock at an offering price of $0.385 per share and warrants to purchase up to 42.9 million shares of common stock at an exercise price of $0.50 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.

During the nine months ended September 30, 2019, the Company sold 2.8 million common shares through its at-the-market program, resulting in net proceeds of $0.8 million.

During the nine months ended September 30, 2019, the Company issued 0.4 million shares of restricted common stock for consulting services, which all vested and issued during 2019. The shares had a total value of $0.1 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 nine months ended September 30, 2019, the Company elected to sell to Lincoln Park 0.4 million shares and received $0.1 million.

In March 2018, the Company sold an aggregate of 30.2 million units consisting of an aggregate of 30.2 million shares of common stock, 7.6 million series A warrants and 22.7 million series B warrants, with each series A warrant exercisable for one share of Common Stock at an exercise price of $0.60 per share and each series B warrant exercisable for one share of Common Stock at an exercise price of $0.70 per share, resulting in gross proceeds of approximately $15.1 million (each unit was sold at $0.50 per unit), and net proceeds of approximately $13.8 million after deducting expenses relating to dealer-manager fees and other offering expenses.

From January through March 2019, holders of March 2018 series A warrants exercised 2.5 million shares, resulting in the Company receiving $1.5 million. The remaining March 2018 series A warrants expired in March 2019.

Stock Options

The following is a summary of stock option activity for the nine months ended September 30, 2019:

During the nine months ended September 30, 2019, the Company granted its employees 5.7 million options to purchase the Company's common stock with an exercise price ranging from $0.223 to $0.58 per share, a term of 10 years, and a vesting period of 4 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 2.60% (2) expected life of 6 years, (3) expected volatility range from 78.5% to 80.6%, and (4) no expected dividends. During the nine months ended September 30, 2019, options to purchase 1.0 million shares were cancelled upon the termination of employment for several employees.

The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at September 30, 2019 was approximately $2.5 million related to unvested options, which is expected to be expensed over a weighted average of 3.4 years. During the nine months ended September 30, 2019 and 2018, the Company recorded compensation expense related to stock options of approximately $0.9 million and $1.3 million, respectively.

Warrants

Following is a summary of warrant activity for the nine months ended September 30, 2019:

In April 2019, the Company sold 42.9 million shares of common stock at an offering price of $0.385 per share and warrants to purchase up to 42.9 million shares of common stock at an exercise price of $0.50 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.

The Company has outstanding warrants to purchase 57,212 shares that include down-round protection. 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 result of the April 2019 offering, the exercise price of the warrant was reset from $1.25 per share to $0.88 per share. The down-round protection provision in the above warrants created a deemed dividend to common stockholders of $1,269, which is reflected in the accompanying consolidated statement of operations and consolidated statement of changes in stockholders' equity.