Note 13. Stockholders’ Deficit

Public Offerings

ATM Offering

In April 2017, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), as sales agent, pursuant to which the Company had the right to offer and sell, from time to time, through Cantor, shares of the Company’s common stock, par value $0.001 per share, by any method deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “ATM Offering”). In April 2017, the Company also filed a prospectus supplement (File No. 333-216977) with the SEC relating to the offer and sale of up to $20.0 million of common stock in the ATM Offering. In June 2017, the Company filed a first amendment to the prospectus supplement with the SEC to increase the amount of common stock that could be offered and sold in the ATM Offering under the Sales Agreement to $40.0 million in the aggregate, inclusive of the common stock previously sold in the ATM Offering prior to the date of the first amendment. In January 2018, the Company filed a second amendment to the prospectus supplement with the SEC to decrease the amount of common stock that could be offered and sold in the ATM Offering under the Sales Agreement to $23.0 million in the aggregate, inclusive of the common stock sold in the ATM Offering prior to the date of the second amendment. In February 2018, the Company and Cantor mutually agreed to terminate the Sales Agreement.

As of March 31, 2018, the Company has sold 5,733,314 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $21.1 million, including 0.3 million shares of common stock sold for gross proceeds of $0.6 million during the first quarter ended March 31, 2018. After $0.6 million of sales commissions and $0.2 million of other offering expenses paid by the Company in connection with the ATM Offering, the Company’s aggregate net proceeds through March 31, 2018 were approximately $20.2 million. Sales commissions and offering expenses have been recorded as a reduction of proceeds received in arriving at the amount recorded in additional paid-in capital in the accompanying interim unaudited condensed balance sheets as of March 31, 2018 and December 31, 2017.

Underwritten Public Offering

In January 2018, the Company completed an underwritten public offering of 13,915,000 shares of its common stock at a price of $2.90 per share, including 1,815,000 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Company sold its common stock through an underwriting agreement with Leerink Partners LLC and Cantor as representatives of the underwriters for the offering. The aggregate net proceeds to the Company from the offering were approximately $37.7 million, after deducting the underwriting discounts and commissions and offering expenses.

Stock-based Compensation

A summary of the Company’s stock option activity for the three months ended March 31, 2018 is as follows:

	Number of Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Balance at December 31, 2017		1,517,771		$	2.97		7.5	$	67,242
Granted		13,000			5.06
Exercised		(18,028	)		2.25			$	21,001
Forfeited		(22,440	)		3.61
Expired/Cancelled		(3,744	)		5.08
Balance at March 31, 2018		1,486,559		$	2.98		7.3	$	1,727,558
Exercisable at March 31, 2018		1,134,693		$	2.98		6.9	$	1,382,104

As of March 31, 2018, there was total unrecognized compensation expense of $584,806 related to unvested stock options, which the Company expects to recognize over a weighted-average period of approximately 1.83 years.

A summary of restricted stock unit (“RSU”) activity for the three months ended March 31, 2018 is as follows:

	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Balance at December 31, 2017		26,666		$	2.78
Granted		259,551			3.84
Vested		(269,551	)		3.76
Balance at March 31, 2018		16,666		$	3.40

Unrecognized compensation expense related to the remaining unvested RSUs was $44,943 at March 31, 2018, which the Company expects to recognize over a weighted-average remaining service period of 1.59 years.

Stock-based compensation expense recorded in the accompanying interim unaudited condensed statements of operations for the three months ended March 31, 2018 and 2017 was as follows:

	Three Months Ended March 31,
	2018		2017
Selling, general and administrative	$	1,101,992	$	279,583
Research and development		30,909		88,361
Cost of revenue		10,557		28,702
	$	1,143,458	$	396,646

Stock-based compensation expense for the three months ended March 31, 2018 included $1.0 million of selling, general and administrative compensation expense relating to the issuance of 259,551 shares under RSUs granted by the Company in January 2018 at a grant date fair value of $3.84 per share. The RSUs vested in full on January 29, 2018.