In September 2019, concurrently with the closing of an underwritten public offering, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors (the “Purchasers”), pursuant to which the Company sold to the Purchasers, in a private placement transaction, an aggregate of 5,411,687 pre-funded warrants to purchase up to an aggregate of 5,411,687 shares of our common stock (“Warrant Shares”), at a price of $0.64 per warrant (which $0.64 price relates to the pre-funded portion of the total $0.65 exercise price per share). Each pre-funded warrant has a remaining exercise price of $0.01 per share and became immediately exercisable upon issuance, subject to certain beneficial ownership limitations.

The exercise price of the pre-funded warrants will be subject to adjustment in the event of any stock dividends and splits, recapitalization, reorganization or similar transaction, as described in the pre-funded warrants. The pre-funded warrants are exercisable on a “cashless” basis in certain circumstances.

The pre-funded warrants and the Warrant Shares were not registered under the Securities Act and were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder. Pursuant to the Securities Purchase Agreement, the Company filed a registration statement on Form S-3 on October 11, 2019 to register the resale of the Warrant Shares, which registration statement was declared effective by the SEC on November 26, 2019. Each Purchaser was an “accredited investor” as defined in Rule 501(a) under the Securities Act.

Cantor Fitzgerald & Co. (the “Placement Agent”) acted as the sole placement agent in connection with the private placement of the warrants. Pursuant to a Placement Agency Agreement between the Company and the Placement Agent, the Company agreed to pay the Placement Agent a cash fee equal to 6% of the gross proceeds from the sale of the pre-funded warrants, and to provide reimbursement for certain out-of-pocket expenses. Upon closing, the Company received approximately $3.1 million in net proceeds from the sale of the pre-funded warrants in the private placement, which did not include proceeds subsequently received or that may be received upon exercise of the pre-funded warrants, after deducting the Placement Agent fee and other expenses. In March 2020, 3,176,762 of the pre-funded warrants were exercised for additional proceeds of $31,768.

In November 2019, the Company entered into a Controlled Equity Offering Sales Agreement (the “Cantor Sales Agreement”) with Cantor as the sales agent, pursuant to which the Company may offer and sell, from time to time, through Cantor, shares of its common stock, par value $0.001 per share, by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act (the “ATM Offering”). The shares are offered and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-229045).

During the nine months ended September 30, 2020, the Company sold 10,436,016 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $6.7 million. After deferred offering costs included as non-current assets in the condensed balance sheets as of December 31, 2019 of approximately $0.1 million and paying sales commissions owed in connection with the ATM Offering of approximately $0.2 million, the Company’s aggregate net proceeds for the nine months ended September 30, 2020 were approximately $6.4 million.

On February 25, 2020, the Company entered into an Exchange and Purchase Agreement (the “Exchange Agreement”) with certain accredited investors (the “Investors”) pursuant to which the Company agreed to (i) issue to the Investors an aggregate of 41,100 shares of its newly designated Series A Convertible Preferred Stock, par value $0.001 per share (“Series A Preferred”), in exchange for the Investors surrendering to the Company for cancellation an aggregate of 4,110,000 shares of its common stock (the “Exchange”) and (ii) sell and issue to the Investors an aggregate of 10,170 shares of Series A Preferred for an aggregate purchase price of $600,030, or $59.00 per share (the “Private Placement”).

Each share of Series A Preferred is convertible into 100 shares of the Company’s common stock, subject to proportional adjustment and beneficial ownership limitations. In June 2020, certain of the Investors elected to convert 27,500 shares of Series A Preferred to common stock in the aggregate, resulting in the issuance of 2,750,000 shares of the Company’s common stock. The remaining 23,770 Series A Preferred shares remain outstanding as of September 30, 2020. In the event of the Company’s liquidation, dissolution or winding up, holders of Series A Preferred will participate pari passu with any distribution of proceeds to holders of the Company’s common stock. Holders of Series A Preferred are entitled to receive dividends on shares of Series A Preferred equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on the Company’s common stock. Shares of Series A Preferred generally have no voting rights, except as required by law.

On March 24, 2020, the Company entered into a purchase agreement ("LP Purchase Agreement") with Lincoln Park Capital Fund, LLC ("Lincoln Park"), pursuant to which, upon the terms and subject to the conditions and limitations set forth therein, the Company has the right to sell to Lincoln Park up to $20.0 million of shares of its common stock (“Purchase Shares”) from time to time over the 36-month term of the LP Purchase Agreement. The purchase price of the Purchase Shares will be based on recent closing prices of the Company’s common stock at the time of sale. The Company issued Lincoln Park an aggregate of 615,384 shares of its common stock as consideration for their purchase commitment pursuant to the LP Purchase Agreement. The Company did not receive cash proceeds from the issuance of such shares. The value of this commitment consideration, as well as related transaction costs of approximately $0.1 million have been included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2020. No such expense was included in the accompanying condensed financial statements for the three and nine months ended September 30, 2019. No shares have been sold under the LP Purchase Agreement as of September 30, 2020.

In May 2015, 940,112 shares were reserved for issuance under the Company’s 2014 Equity Incentive Plan (the “2014 Plan”). There were no shares of the Company’s stock available for issuance under the 2014 Plan as of December 31, 2019, other than those reserved for inducement awards, as outlined below. On January 1, 2020, an additional 2,323,609 shares were registered for issuance under the 2014 Plan pursuant to an evergreen provision contained in the 2014 Plan.

In May 2019, 200,000 shares were reserved for issuance under the 2014 Plan pursuant to an amendment approved by the Company’s Board of Directors pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules, to be used exclusively for the grant of awards to individuals who were not previously employees or non-employee directors of the Company, as inducement material to the individuals’ entering into employment with the Company (“Inducement Awards”). No new Inducement Awards may be granted under the 2014 Plan.

In August 2020, the Company’s stockholders, upon the recommendation of the Company’s Board of Directors, approved the 2020 Equity Incentive Plan (the “2020 Plan”) as a successor to and continuation of the 2014 Plan. Upon approval of the 2020 Plan, 11,170,288 shares, including 1,028,292 remaining shares reserved for issuance under the 2014 Plan (excluding shares available for the granting of inducement awards under the 2014 Plan’s inducement share pool), were reserved for issuance under the 2020 Plan. No new awards may be granted under the 2014 Plan. The 2020 Plan does not contain an evergreen provision.

The Company’s Board of Directors determines the grant date for all awards granted under the 2020 Plan. The option exercise price of stock options granted is generally equal to the closing price of the Company’s common stock on the date of grant or on the employee’s hire date for new hire grants. All stock options granted have a ten-year term. The vesting period of stock options and RSUs is established by the Board of Directors but typically ranges between one and four years.

A summary of the Company’s stock option activity for the nine months ended September 30, 2020 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, 2019		2,904,898		$	2.37		8.0	$	781
Granted		5,766,000			0.52
Exercised		-			-			$	-
Forfeited		(1,102,897	)		1.01
Expired/Cancelled		(82,512	)		3.29
Balance at September 30, 2020		7,485,489		$	1.13		8.9	$	404
Exercisable at September 30, 2020		2,489,579		$	1.98		7.4	$	101

As of September 30, 2020, total unrecognized compensation cost related stock option awards was approximately $2.7 million, which is expected to be recognized over approximately 2.44 years.

The following table summarizes restricted stock unit (“RSU”) award activity for the nine months ended September 30, 2020:

	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Balance at December 31, 2019		223,745		$	2.91
Granted		105,000			0.52
Released		(97,819	)		2.43
Forfeited		(26,875	)		2.75
Balance at September 30, 2020		204,051		$	1.94
Vested and unissued at September 30, 2020		20,783		$	2.21

Vested and unissued awards at September 30, 2020 represents RSU awards for which the vesting date was September 30, 2020, but for which issuance of the awards occurred in October 2020. As of September 30, 2020, the total unrecognized compensation cost related to RSU awards was approximately $0.3 million, which is expected to be recognized over approximately 1.93 years.

Stock-based compensation expense recorded in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Selling, general and administrative	$	380,676	$	226,645	$	1,070,651	$	625,821
Research and development		884		74,652		81,374		181,336
Cost of product and product-related services revenue		5,389		15,258		11,717		37,976
	$	386,949	$	316,555	$	1,163,742	$	845,133