Common Stock

12 Months Ended

Dec. 31, 2019

Text Block [Abstract]

Common Stock

11. Common Stock

On September 26, 2018, the Company issued an aggregate of 286,633 shares of common stock at a purchase price of $17.02 per share to certain institutional investors in a registered direct offering (the “First Registered Direct Offering”). The net proceeds of the First Registered Direct Offering were $4,334,816, after deducting placement agent fees and offering expenses of $543,677.

On October 2, 2018, the Company issued a combined total of 2,400,000 common units and pre-funded units in a public offering (the “Unit Offering”). Each common unit in the Unit Offering was sold at a public offering price of $5.00 and consisted of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $6.00. Each warrant sold in the Unit Offering was exercisable immediately and expired five years from the date of issuance. Each pre-funded unit in the Unit Offering was sold at a public offering price of $4.99 and consisted of a pre-funded warrant to purchase one share of common stock at an exercise price of $0.01 per share and a warrant to purchase one share of common stock at an exercise price of $6.00. The pre-funded warrants were immediately exercisable and were able to be exercised at any time until all of the pre-funded warrants were exercised in full. All of the pre-funded warrants were exercised prior to December 31, 2018. The net proceeds of the Unit Offering were $10,667,506, after deducting the underwriting discount and estimated offering expenses payable by the Company. The entire amount of 2,400,000 common shares issued in connection with the Unit Offering are included in common shares outstanding.

The warrants issued in the Unit Offering are each subject to anti-dilution protection. Accordingly, to the extent the Company was to issue additional common stock or securities convertible into common stock at an issuance price lower than exercise price of the warrants, the exercise price of the warrants would be adjusted to the lower of (i) the issuance price or (ii) the lowest volume weighted average price of the Company’s common stock on the five trading days following the announcement of the new offering. 

On October 10, 2018, the Company issued a combined total of 4,629,630 common units and pre-funded units to certain institutional investors in a registered direct offering (the “Second Registered Direct Offering”). Each common unit in the Second Registered Direct Offering was sold at a price of $5.40 and consisted of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $5.40. Each warrant sold in the Second Registered Direct Offering was exercisable immediately and expired five years from the date of issuance. Each pre-funded unit in the Second Registered Direct Offering was sold at a public offering price of $5.39 and consisted of a pre-funded warrant to purchase one share of common stock at an exercise price of $0.01 per share and a warrant to purchase one share of common stock at an exercise price of $5.40. The pre-funded warrants were immediately exercisable and were able to be exercised at any time until all of the pre-funded warrants are exercised in full. All of the pre-funded warrants were exercised prior to December 31, 2018. The net proceeds of the Second Registered Direct Offering were $22,400,673, after deducting the underwriting discount and estimated offering expenses payable by the Company. The entire amount of 4,629,630 common shares issued in connection with the Unit Offering are included in common shares outstanding.

On March 12, 2019, the Company issued a combined total of 4,361,370 common units and pre-funded units to certain institutional investors in a registered direct offering (the “Third Registered Direct Offering”). Each common unit in the Third Registered Direct Offering was sold at a price of $3.21 and consisted of one share of common stock and 0.70 of a warrant to purchase one share of common stock at an exercise price of $3.21. Each warrant sold in the Third Registered Direct Offering was exercisable immediately and expired five years from the date of issuance. Each pre-funded unit in the Third Registered Direct Offering was sold at a public offering price of $3.20 and consisted of a pre-funded warrant to purchase one share of common stock at an exercise price of $0.01 per share and 0.70 of a warrant to purchase one share of common stock at an exercise price of $3.21. All of the pre-funded warrants were exercised prior to March 31, 2019. The net proceeds of the Third Registered Direct Offering were $12,668,784, after deducting the underwriting discount and estimated offering expenses payable by the Company.

The warrants issued in both the Unit Offering and the Second Registered Direct Offering were concluded to be equity classified freestanding financial instruments. The Second Registered Direct Offering triggered a down round adjustment to the exercise price of the warrants issued in the Unit Offering from $6.00 to $4.1798. The value of a down round feature is measured as the difference between the financial instrument’s fair value (without the down round feature) using the pre-trigger exercise price and the financial instrument’s fair value (without the down round feature) using the reduced exercise price. During the year ended December 31, 2018, the Company treated the value of the effect of the reduction in exercise price as a deemed dividend of $780,038 which reduced income available to common shareholders.

The warrants issued in the Third Registered Direct Offering were also concluded to be equity classified freestanding financial instruments. The Third Registered Direct Offering triggered an additional down round adjustment to the exercise price of the warrants issued in the Unit Offering from $4.1798 to $2.7568. During the year ended December 31, 2019, the Company treated the value of the effect of the reduction in exercise price as a deemed dividend of $452,925 which reduced income available to common shareholders.

On July 12, 2019, as discussed in Note 3, the Company issued 1,887,250 unregistered shares of its common stock as upfront consideration to certain former Spitfire Equityholders representing the closing consideration.