Stockholders' Equity

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Authorized, Issued, and Outstanding Common Shares

The Company’s common stock has a par value of $0.001 per share and consists of 125,000,000 authorized shares as of March 31, 2017, and December 31, 2016; 25,536,533 and 24,609,411 shares were issued and outstanding at March 31, 2017, and December 31, 2016, respectively. The following table summarizes common stock share activity for the three months ended March 31, 2017 (dollars in thousands):

	Shares of Common Stock	Common Stock		Additional Paid-in Capital		Accumulated Deficit			Total Stockholders' Equity
Balance, December 31, 2016	24,609,411	$	24	$	214,918	$	(180,123	)	$	34,819
Cumulative stock-based compensation forfeiture adjustment	—	—		67		(67		)	—
Net loss	—	—		—		(4,869		)	(4,869		)
Stock-based compensation expense	—	—		396		—			396
Common stock issued through employee stock purchase plan	7,667	—		17		—			17
Common stock issued under Shelf Registration, net of expenses	919,455	1		3,169		—			3,170
Balance, March 31, 2017	25,536,533	$	25	$	218,567	$	(185,059	)	$	33,533

Shares Reserved for Future Issuance

The Company had reserved shares of common stock for future issuance as follows:

	March 31, 2017	December 31, 2016
Outstanding stock options	2,770,029	1,819,444
Outstanding Series C-1 Preferred warrants	14,033	14,033
Warrants to purchase common stock associated with June 2016 Public Offering	4,218,750	4,218,750
Warrants to purchase common stock associated with Loan Agreement	122,435	122,435
For possible future issuance under 2014 Equity Incentive Plan (Note 9)	702,712	668,921
For possible future issuance under Employee Stock Purchase Plan (Note 9)	94,082	72,338
For possible future issuance under 2015 Inducement Plan (Note 9)	165,000	165,000
Total common shares reserved for future issuance	8,087,041	7,080,921

Warrants Associated with Convertible Preferred Stock Issuances

In July 2006, the Company issued warrants to purchase 196,923 shares of Series C-1 Preferred Stock, which converted into the right to purchase 14,033 shares of common stock in connection with our IPO, however, the Company refers to these warrants as its Series C-1 Preferred warrants. The Series C-1 Preferred warrants were issued in conjunction with a loan financing agreement with an original exercise price of $3.25 per share of Series C-1 Preferred, which converted into an exercise price of $45.61 per share of common stock in connection with the Company's IPO. These warrants remain outstanding as of March 31, 2017 and will expire on May 7, 2019, which is the five year anniversary of the Company's IPO. The fair value at the date of grant for these instruments was $0.5 million, which was recorded as a debt discount. The debt discount related to these warrants was fully amortized as of December 31, 2010. The Company determined that the warrants should be recorded as a derivative liability and stated at fair value at each reporting period. As of March 31, 2017 and December 31, 2016, the fair value of the warrant derivative liability was zero.

Warrants Associated with June 2016 Public Offering

On June 21, 2016, the Company completed the June 2016 Public Offering of its common stock and warrants pursuant to the Company's effective Shelf Registration (see Note 1). Each purchaser received a warrant to purchase 0.45 of a share for each share purchased in the June 2016 Public Offering. There is not expected to be any trading market for the warrants. Each warrant was exercisable immediately upon issuance, will expire five years from the date of issuance, and has an exercise price of $3.00 per share. The warrants contain a provision where the warrant holder has the option to receive cash, equal to the Black-Scholes fair value of the remaining unexercised portion of the warrant, as cash settlement in the event that there is a fundamental transaction (contractually defined to include various merger, acquisition or stock transfer activities). Due to this provision, ASC 480, Distinguishing Liabilities from Equity, requires that these warrants be classified as liabilities. The fair values of these warrants have been determined using the Black-Scholes valuation model, and the changes in the fair value are recorded in the accompanying statements of operations. During the three months ended March 31, 2017, the Company recorded a gain of $1.5 million due to the change in fair value of the warrant liability. As of March 31, 2017, the fair value of the warrant liability was $5.1 million.

Warrant Associated with Loan Agreement

Pursuant to the Loan Agreement, on the Closing Date the Company issued to Solar the Solar Warrant to purchase an aggregate of up to 122,435 shares of the Company’s common stock at an exercise price of $3.6754 per share. The Solar Warrant will expire five years from the date of the grant. The Solar Warrant was classified as equity and recorded at its relative fair value at issuance in the stockholders' equity section of the balance sheet.