Stockholders' Deficit

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Stockholders' Deficit

Note 14. Stockholders’ Deficit

Equity Offerings

March 2022 Purchase Agreement

In March 2022, the Company entered into a Securities Purchase Agreement (the “March 2022 Purchase Agreement”) with a single investor pursuant to which it agreed to issue to the investor 3,244,987 units at a price of $2.312 per unit (less $0.001 for each pre-funded warrant purchased in lieu of a share of common stock) for gross proceeds, before deducting the placement agent fees and other estimated fees and expenses, of approximately $7.5 million. Each unit consists of one share of common stock (or one pre-funded warrant in lieu thereof), a common warrant to purchase one share of common stock with a term of 24 months from the issuance date, and a common warrant to purchase one share of common stock with a term of 66 months from the issuance date. Each of the common warrants is exercisable commencing on September 21, 2022 and has an exercise price of $2.062 per share. Each pre-funded warrant has an exercise price of $0.001 per share and does not expire until exercised in full. The pre-funded warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 9.99% immediately after exercise thereof.

The common warrants issued in this transaction may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 4.99% immediately after exercise thereof, which ownership cap may be increased by the holder up to 9.99% upon 61 days’ prior notice.

Cantor Fitzgerald & Co. (“Cantor”) served as the placement agent in connection with the March 2022 Purchase Agreement. The Company has paid Cantor a fee of approximately $0.3 million plus reimbursement for certain out-of-pocket expenses for its role as placement agent and has incurred approximately $0.1 million of additional transaction costs.

The securities issued to the investor under the March 2022 Purchase Agreement were offered in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder. The Company relied on this exemption from registration based in part on representations made by the investor, including that the investor is an “accredited investor”, as defined in Rule 501(a) promulgated under the Securities Act. The securities sold pursuant to the March 2022 Purchase Agreement were subsequently registered for resale on a Form S-3 registration statement, filed with the SEC on April 8, 2022, which was declared effective by the SEC on April 19, 2022.

Series A Preferred

In March 2022, the remaining 23,770 shares of Series A convertible preferred stock (“Series A Preferred”) were converted by the holders into an aggregate of 158,466 shares of common stock. Accordingly, no shares of Series A Preferred are outstanding as of March 31, 2022. All of the previously designated Series A Preferred have resumed the status of authorized, unissued and undesignated preferred stock, which may be designated from time to time by the Company’s Board of Directors.

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 months ended March 31, 2022 and 2021 was as follows:

	Three Months Ended March 31,
	2022		2021
Selling, general and administrative	$	192,903	$	319,849
Research and development		66,904		23,234
Cost of product and product-related services revenue		7,998		7,856
	$	267,805	$	350,939

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 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 580,735 shares of common stock available for issuance under the 2020 Plan (excluding shares available for granting of inducement awards under the 2021 Inducement Plan) as of March 31, 2022, 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 (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 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 160,000 shares of common stock available for issuance under the 2021 Inducement Plan as of March 31, 2022, in addition to shares that may become available from time to time as shares of 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 (including inducement award activity) for the three months ended March 31, 2022 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, 2021		559,336		$	13.93		8.2	$	30,267
Granted		29,500			3.74
Exercised		-			-
Forfeited		(17,494	)		5.89
Expired/Cancelled		(33,876	)		34.94
Balance at March 31, 2022		537,466		$	12.31		8.2	$	-
Exercisable at March 31, 2022		283,983		$	17.79		7.4	$	-

As of March 31, 2022, total unrecognized compensation cost related to stock option awards was approximately $1.1 million, which is expected to be recognized over approximately 2.47 years.

The following table summarizes restricted stock unit (“RSU”) award activity for the three months ended March 31, 2022:

	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Balance at December 31, 2021		31,177		$	6.93
Granted		-			-
Released		(4,148	)		9.60
Forfeited		-			-
Balance at March 31, 2022		27,029			6.52
Vested and unissued at March 31, 2022		4,148		$	9.60

Vested and unissued awards at March 31, 2022 represents RSU awards for which the vesting date was March 31, 2022, but for which issuance of the awards occurred in April 2022. As of March 31, 2022, the total unrecognized compensation cost related to RSU awards was approximately $0.1 million, which is expected to be recognized over approximately 1.32 years.