Common Stock

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Common Stock

COMMON STOCK

The authorized number of shares of common stock is 225 million. The holder of each share of common stock is entitled to one vote.

In 2014, we issued 5,750,000 shares of our common stock, par value $0.001 per share, at $11.00 per share. The resulting net proceeds were approximately $59.2 million, after we paid underwriter discounts and commissions and offering expenses. In 2016, we issued approximately 3,171.0 million shares for net sale proceeds of $4.8 million pursuant to our at the market offering.

During 2016, 2015 and 2014, we issued 9,022,954, zero and 2,743,475 new shares following the exchange of 2018 and 2019 Notes for common stock (see Note 10).

CONVERTIBLE PREFERRED STOCK

In March 2016, we issued 27,850 shares of Convertible Preferred Stock for cash proceeds of $27.0 million, net of issuance costs of $0.8 million. Shares of the Series A Preferred Stock are convertible at the option of the holders into shares of our common stock, at an initial conversion price of $2.00 per share, subject to customary adjustments in the event of stock splits and certain other changes to our capitalization. In 2016, two of the holders of preferred stock converted 1,100 shares of Convertible Preferred Stock into 550,000 shares of our common stock. This transaction resulted in an increase to common stock and additional paid in capital, and a decrease to convertible preferred stock of approximately $1.1 million. We have classified the convertible preferred stock as temporary equity in our consolidated balance sheet as of December 31, 2016 due to the existence of certain change in control provisions that are not solely within our control.       

The convertible preferred stock contains the following terms and conditions: 

• Dividends. The holders are entitled to participate equally and ratably with holders of our common stock in all dividends and distributions on an as-converted basis, subject to certain customary exceptions. The Preferred Stock ranks senior to our common stock.

• Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or certain change of control transactions, each holder will be entitled to receive a liquidation preference before any distribution or payment is made to holders of our common stock or any other security that ranks junior to the Preferred Stock.

• Voting Rights. Holders are entitled to vote together as a single class with the holders of our common stock on all matters submitted for a vote by holders of our common stock, with each such holder of Preferred Stock being entitled to cast a number of votes equal to the number of whole shares of our common stock issuable upon conversion of such Preferred Stock.

• Board Representation. For so long as the outstanding shares of Preferred Stock represent at least 5.0% of our outstanding voting power on an as-converted basis, the holders have the right to designate a nominee for election to our Board of Directors. As of December 31, 2016, our Board does not include any such nominee.

• Protective Provisions. For so long as at least 1,392 shares of Preferred Stock remain outstanding, we may not, without the approval of the holders of at least two-thirds of the then outstanding shares of Preferred Stock: (i) amend any provision of the Certificate of Designations or our Amended and Restated Certificate of Incorporation or bylaws so as to adversely affect the rights, preferences or privileges of the Preferred Stock; or (ii) declare or pay any divided on our common stock, subject to certain customary exceptions. In addition, for so long as at least 11,140 shares of Preferred Stock remain outstanding, we may not, without the approval of the holders of at least two-thirds of the then outstanding shares of Preferred Stock, create, authorize or issue any equity securities senior to the Preferred Stock.

• Mandatory Conversion. We can require the conversion of the outstanding shares of Preferred Stock if either the trading price per share of our common stock is greater than $6 before March 15, 2019 or $8 per share thereafter, subject to certain customary conditions.

• Transfer Restrictions. No holder of any shares of Preferred Stock may transfer such shares except to their affiliate or the Company. If the transfer is to an affiliate, such affiliate must become a party to the Registration Rights Agreements. In addition, if such affiliate would beneficially own 5% or more of our aggregate voting power after giving effect to the transfer, they must enter into a customary standstill agreement.