9. COMMON STOCK

In May 2018, the Company’s stockholders approved an amendment to the Company’s Articles of Incorporation to increase the number of shares of authorized Common Stock from 4,000,000 to 25,000,000 shares of Common Stock (giving effect to the 2018 Reverse Stock Split but not the 2020 Reverse Stock Split). In January 2020, the Company’s stockholders approved an amendment to the Company’s Articles of Incorporation to increase the number of shares of authorized Common Stock from 25,000,000 to 500,000,000 (without giving effect to the 2020 Reverse Stock Split). On February 11, 2020, the Company effected the 2020 Reverse Stock Split and the number of shares of authorized Common Stock was reduced to 16,666,667. As of December 31, 2019 and 2018, 550,736 and 310,330 shares were issued and outstanding respectively.

In November 2019, the Company closed a public offering of an aggregate of 233,341 shares of its Common Stock, at an offering price of $3.60 per share (the offering, the “2019 Offering”). The net proceeds to the Company after deducting placement agent fees and other offering expenses, were $367 thousand. In connection with the 2019 Offering, the Company agreed to issue, and in January 2020 issued, to designees of H.C. Wainwright & Co., LLC (“Wainwright”), the placement agent for the Offering, warrants (the “Placement Agent Warrants”) to purchase an aggregate of 15,168 shares of the Company’s Common Stock. The Placement Agent Warrants have an exercise price of $4.50 per share, are immediately exercisable and expire in November 2024.

In June 2018, the Company closed an underwritten public offering of an aggregate of 45,950 Common Units, at an offering price of $60.00 each, each comprised of 1 share of the Company’s Common Stock and 1 Series A warrant to purchase 1 share of Common Stock. The public offering also included 208,096 pre-funded units at an offering price of $59.70 each, each comprised of 1 pre-funded Series B Warrant and 1 Series A warrant to purchase 1 share of Common Stock. At the time the Company closed on the offering, each Series A warrant had an exercise price of $60.00 per share, was exercisable immediately and expired 5 years from the date of issuance. Each Series B warrant had an exercise price of $0.30 per share, was exercisable immediately and would have expired 20 years from the date of issuance. The net proceeds to the Company, after deducting the underwriting discounts and commissions and other offering expenses, were $13.5 million. In September 2018, the Company entered into an Amendment to the Warrant Agency Agreement and Warrants (the “Ladenburg Warrant Amendment”) with Continental Stock Transfer & Trust Company (“Continental”) that amended the Warrant Agency Agreement, by and between the Company and Continental, as Warrant Agent, dated June 25, 2018, and the Series A Common Stock Purchase Warrant, and the Series B Pre-Funded Common Stock Purchase Warrant both dated June 25, 2018 (the Series A and Series B Warrant, collectively the “2018 Warrants”). The Ladenburg Warrant Amendment added a provision to each of the warrants that allowed the Company or a successor entity whose stock is not listed on a trading market to, in connection with a Fundamental Transaction (as such term is defined in the 2018 Warrants) that is not within the Company’s control, purchase the warrant from the holder, at the holder’s option, by paying the same form of consideration in the same proportion that is offered to the holders of the Company’s Common Stock in connection with the Fundamental Transaction, including cash, stock, any combination thereof and any choice of consideration thereof, in an amount equal to the Black-Scholes Value of the remaining unexercised portion of the Warrant on the consummation date of the Fundamental Transaction. The 2018 Warrants were initially classified as liabilities, as a result of the amendment, the Company reassessed the warrant classification and concluded that the warrants qualified for equity classification. The fair value of the amended 2018 Warrants was re-measured immediately prior to the date of the Ladenburg Warrant Amendment with changes in fair value recorded as a loss of $764 thousand in the Company’s consolidated statement of operations and $14.7 million was reclassified to equity. In November 2019, the Company entered into a Second Amendment to Warrant Agency Agreement and Warrants, (“the Second Ladenburg Warrant Amendment”), by and between the Company and Continental, as Warrant Agent, that amended the Series A warrants to reflect a reduced exercise price per share of $6.98 from $60.00. The fair value of the amended Series A warrants was re-measured immediately prior to the date of the Second Ladenburg Warrant Amendment with changes in fair value recorded as incremental expense of $666 thousand in the Company’s consolidated statement of operations. During the year ended December 31, 2018, the Company issued an aggregate of 208,096 and 1,150 shares of Common Stock upon the exercise of Series B and Series A warrants respectively, for aggregate proceeds of $131 thousand. The Company reclassified $10.6 million from derivative warrant liability to additional paid-in capital and recorded a derivative loss of $1.2 million in connection with the warrant exercises. During the year ended December 31, 2019, the Company did not issue any shares as a result of warrant exercise activity. There were no outstanding Series B warrants as of either December 31, 2019 or 2018.

In January 2018, the Company entered into a purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “RRA”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), under which it had the right to sell up to $15 million, in shares of its common stock, $0.00001 par value per share of Common Stock, to Lincoln Park over a 24 month period, subject to certain limitations and conditions set forth in the Purchase Agreement and RRA. On May 30, 2018, the Company’s stockholders approved to increase the issuance and sale by the Company to Lincoln Park, including the Company’s prior issuances and sales of shares of Common Stock to Lincoln Park since January 2018, of up to 40,000 shares of Common Stock. In accordance with the terms of the Purchase Agreement, at the time the Company signed the Purchase Agreement and the RRA, it issued 574 shares to Lincoln Park as consideration for its commitment to purchase shares of the Company’s Common Stock and recorded $627 thousand in deferred offering costs of which the full amount was capitalized into additional paid-in capital as of December 31, 2018. During the year ended December 31, 2018, the Company sold an aggregate of 8,561 shares to Lincoln Park, for aggregate proceeds of $3.1 million net of issuance costs. During the year ended December 31, 2019, the Company did not sell any shares to Lincoln Park. In May 2019, the Company terminated the Purchase Agreement with Lincoln Park.

In May 2018, the Company’s Board of Directors approved to increase the number of shares of Common Stock reserved under the 401(k) Plan by 134 shares, bringing the aggregate number of shares of Common Stock eligible for distribution pursuant to the 401(k) Plan as of that date to 137 shares. In the second quarter of 2018, the Company revised its 401(k) matching policy to move from share matching to cash-based matching. During the year ended December 31, 2018, the Company issued an aggregate of 17 shares of Common Stock with a fair value of $6 thousand to the Company’s 401(k) plan as a matching contribution and also contributed $44 thousand in matching cash contributions to employee 401(k) accounts. During the year ended December 31, 2019, the Company contributed $55 thousand in matching cash contributions to employee 401(k) accounts.

During the year ended December 31, 2018, the Company issued an aggregate of 48 shares of Common Stock under the Company’s Employee Stock Purchase Plan (the “ESPP”) and received cash proceeds of $4 thousand. In January 2019, 36 shares that were purchased in the offering period commencing on July 1, 2018 and ending on December 31, 2018 were issued under the ESPP.

During the year ended December 31, 2018, as part of the adjustment to reflect the Company’s 2018 Reverse Stock Split, the Company issued 92 shares of Common Stock to account for the fractional roundup of shareholders.

During the year ended December 31, 2018, the Company issued an aggregate of 143 shares of Common Stock upon vesting of restricted stock units. During the year ended December 31, 2019, the Company issued an aggregate of 143 shares of Common Stock upon vesting of restricted stock units.

During the year ended December 31, 2019, the Company issued an aggregate 6,886 restricted stock awards (“RSAs”) to its employees under the 2015 Equity Incentive Plan. These awards are considered issued and outstanding based on the dividend payment rights and the conveyance of voting rights that was granted to the grant holders.

Common Stock Reserves

As of December 31, 2019, the Company had the following reserves established for the future issuance of Common Stock as follows:


		At December 31, 2019
Reserves for the exercise of warrants		270,940
Reserves for the exercise of stock options		4,187
Reserves for the vesting of RSUs		200
Reserves for the vesting of RSAs		6,886
Total Reserves		282,213