Stockholders Deficit

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Stockholders' Deficit

Note 14. Stockholders’ Deficit

Reverse Stock Split

On November 20, 2020, the Company completed a reverse stock split of its outstanding shares of common stock pursuant to which every fifteen (15) shares of issued and outstanding common stock were exchanged for one share of its common stock. No fractional shares were issued in the reverse stock split. Instead, fractional shares that would have otherwise resulted from the stock split were purchased by us at the applicable percentage of $4.27 per share. All share and per share amounts included within these financial statements have been retrospectively adjusted to reflect the reverse stock split.

Equity Offerings

Securities Purchase Agreement

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, warrants to purchase up to an aggregate of 360,779 shares of its common stock (“Warrant Shares”), at a price of $9.60 per warrant (which $9.60 price relates to the pre-funded portion of the total $9.75 exercise price per share). Each pre-funded warrant has a remaining exercise price of $0.15 per share and became immediately exercisable upon issuance, subject to certain beneficial ownership limitations.

In March 2020, 211,784 of the pre-funded warrants were exercised for additional proceeds of $31,768. In June 2021, the remaining 148,995 pre-funded warrants were exercised on a cashless, net exercise basis, resulting in the issuance of 144,881 shares of the Company’s common stock.

ATM Offering

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, 2021, the Company sold 2,050,879 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $11.0 million. After paying sales commissions owed in connection with the ATM Offering of approximately $0.3 million, the Company’s aggregate net proceeds for the nine months ended September 30, 2021 were approximately $10.7 million.

Exchange and Private Placement

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 274,000 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 $0.6 million, or $59.00 per share (the “Private Placement”).

The common stock acquired in the Exchange was immediately retired.

Each share of Series A Preferred is convertible into 6.67 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 183,333 shares of the Company’s common stock. The remaining 23,770 Series A Preferred shares remain outstanding as of September 30, 2021. 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.

LP Purchase Agreement

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 is established by a formula based on the recent closing prices of the Company’s common stock leading up to the date of sale. The Company issued Lincoln Park an aggregate of 41,026 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 was included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations during the year ended December 31, 2020. During the nine months ended September 30, 2021, the Company sold 101,218 shares of common stock under the LP Purchase Agreement at a weighted average price of $5.93 per share for total gross proceeds of $0.6 million. Additional sales of shares of common stock to Lincoln Park under the LP Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, trading price of the Company’s common stock and determinations by the Company as to the appropriate sources of funding for the Company.

Stock-based Compensation

The Company incurs stock-based compensation expense relating to the grants of RSUs and stock options to employees, non-employee directors and consultants under its equity incentive plans and through stock purchase rights granted under the employee stock purchase plan. Stock-based compensation expense (including employee stock purchase plan expense) recorded in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Selling, general and administrative	$	293,916	$	383,679	$	934,446	$	1,079,754
Research and development		35,566		2,044		83,108		85,462
Cost of product and product-related services revenue		9,411		6,440		24,764		14,498
	$	338,893	$	392,163	$	1,042,318	$	1,179,714

Equity Compensation Plans

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, 744,685 shares of the Company’s common stock, including 68,552 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, including inducement awards, may be granted under the 2014 Plan. The 2020 Plan does not contain an evergreen provision.

There were 538,959 shares of the Company’s common stock available for issuance under the 2020 Plan (excluding shares available for granting of inducement awards under the 2021 Inducement Plan) as of September 30, 2021, in addition to shares that may become available from time to time as shares of the Company’s common stock subject to outstanding awards granted under the 2014 Plan (excluding inducement awards issued from the 2014 Plan’s inducement share pool), the 2011 Equity Incentive Plan or the 2001 Stock Option Plan (i) are not issued because such award or any portion thereof expires or otherwise terminates without all of the shares covered by such award having been issued; (ii) are not issued because such award or any portion thereof is settled in cash; or (iii) are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares.

In August 2021, the Company’s stockholders, upon the recommendation of the Company’s Board of Directors, approved the Amended and Restated 2014 Employee Stock Purchase Plan (the “Amended 2014 ESPP”). Upon approval of the Amended 2014 ESPP, 500,000 shares of the Company’s common stock were reserved for issuance under the Amended 2014 ESPP in addition to 24,285 shares of the Company’s common stock reserved for issuance under the original 2014 Employee Stock Purchase Plan. The Amended 2014 ESPP does not contain an evergreen provision.

In July 2021, the Company’s Board of Directors adopted the Company’s 2021 Inducement Plan (the “2021 Inducement Plan”), pursuant to which 300,000 shares were initially authorized and reserved for issuance 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”). There were 270,000 shares of the Company’s stock available for issuance under the 2021 Inducement Plan as of September 30, 2021, in addition to shares that may become available from time to time as shares of the Company’s common stock subject to outstanding awards granted under the 2021 Inducement Plan are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares.

A summary of the Company’s stock option activity for the nine months ended September 30, 2021 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, 2020		487,227		$	16.78		8.6	$	1,536
Granted		70,333			5.74
Exercised		(75	)		4.35			$	107
Forfeited		(45,006	)		12.76
Expired/Cancelled		(18,229	)		25.64
Balance at September 30, 2021		494,250		$	15.25		8.2	$	19,222
Exercisable at September 30, 2021		283,107		$	20.65		7.6	$	5,882

Stock option activity includes 30,000 Inducement Awards granted during the three and nine months ended September 30, 2021. As of September 30, 2021, total unrecognized compensation cost related stock option awards was approximately $1.3 million, which is expected to be recognized over approximately 2.18 years.

The following table summarizes restricted stock unit (“RSU”) award activity for the nine months ended September 30, 2021:

	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Balance at December 31, 2020		12,214		$	28.61
Released		(3,540	)		29.96
Forfeited		(2,373	)		51.00
Balance at September 30, 2021		6,301		$	19.40
Vested and unissued at September 30, 2021		989		$	26.14

Vested and unissued awards at September 30, 2021 represents RSU awards for which the vesting date was September 30, 2021, but for which issuance of the awards occurred in October 2021. As of September 30, 2021, the total unrecognized compensation cost related to RSU awards was approximately $0.1 million, which is expected to be recognized over approximately 1.29 years.