Note 3 - Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

3.

Stockholders’ Equity

Authorized Capital

As of

December 

31,

 

2019,

the authorized capital of the Company consists of

50,000,000

shares of capital stock,

$0.001

par value per share, of which

40,000,000

shares are designated as common stock and

10,000,000

shares are designated as preferred stock.

Preferred Stock

In

February 

2018,

the Company received proceeds of

$25.6

 million in exchange for the corresponding sale of Series D and related rights offering to new and existing investors. The applicable issue price per share for the Series D was

$0.59808,

subject to adjustment as provided in the certificate of incorporation. In addition, all outstanding convertible notes, plus accrued interest, totaling

$28.9

 million were converted into Series D at the same price per share without a discount. Outstanding warrants to purchase shares of Series C-

1

preferred stock,

$0.001

par value per share (“Series C-

1”

), were converted to warrants to purchase the equivalent number of shares of Series D. All references herein to these warrants refer to them as warrants to purchase Series D. In total,

91,147,482

shares of Series D were issued. Each share of Series D was convertible at any time into a share of common stock with such conversion ratio subject to future adjustment. Conversion was automatic upon a qualified financing, as defined in the certificate of incorporation. Each series of preferred stock had anti-dilution protection in the event of a dilutive issuance, as defined in the certificate of incorporation. The Series D was senior to all other series of preferred stock.

Common Stock

Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the holders of the common stock shall be entitled to receive that portion of the remaining funds to be distributed to the stockholders, subject to the liquidation preferences of any outstanding preferred stock, if any. Such funds shall be paid to the holders of common stock on the basis of the number of shares so held by each of them.

In the

third

quarter of

2018,

the Company closed the IPO of

4,833,099

shares of common stock, including the underwriters’ partial exercise of their over-allotment option in connection therewith, which resulted in aggregate net proceeds of

$47.3

million, after underwriting discounts and the payment of other offering expenses. In conjunction with the Company’s IPO, all outstanding shares of convertible preferred stock were converted into an aggregate of

9,948,207

shares of common stock and the Class B non-voting common stock,

$0.001

par value per share, was converted into shares of voting common stock.

In

March 2019,

the Company closed an underwritten follow-on offering of

3,000,000

shares of its common stock at a public offering price of

$11.50

per share. The gross proceeds from the offering were

$34.5

million and net proceeds were

$31.8

million, after deducting underwriting discounts and commissions and other offering expenses.

In

August 2019,

the Company entered into a sales agreement (the “ATM Agreement”) with Jefferies LLC (“Jefferies”) to issue and sell shares of the Company’s common stock, having an aggregate offering price of up to

$40.0

million, from time to time during the term of the ATM Agreement, through an “at-the-market” equity offering program at the Company’s sole discretion, under which Jefferies will act as the Company’s agent and/or principal. The Company will pay Jefferies a commission up to

3.0%

of the gross proceeds of any common stock sold through Jefferies under the ATM Agreement. During the year ended

December 31, 2019,

the Company sold

2,409,356

shares of common stock for gross proceeds of

$8.4

million and net proceeds were

$8.1

million, after deducting underwriting discounts and other offering expenses under the ATM Agreement.

On

December 23, 2019,

the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with certain institutional accredited investors (the “Purchasers”) for the sale by the Company in a private placement (the “Private Placement”) of an aggregate of

7,164,534

shares (the “Private Placement Shares”) of common stock, at a purchase price of

$3.13

per Private Placement Share. The closing of the Private Placement occurred on

December 27, 2019.

The Company granted the Purchasers indemnification rights with respect to its representations, warranties, covenants and agreements under the Purchase Agreement. The gross proceeds from the sale of the Private Placement Shares were

$22.4

million and net proceeds were

$21.0

million, after deducting placement agent fees and offering expenses.

Warrants

Pursuant to the terms of the warrants, upon the conversion of the preferred stock underlying the warrants into common stock, the warrants automatically become exercisable for common stock based upon the conversion ratio of the underlying preferred stock.

Upon closing of the Series D financing, the Company had warrants outstanding to purchase

3,698,128

shares of Series D. In conjunction with the IPO in the

third

quarter of

2018,

these warrants were automatically converted into warrants to purchase

219,761

 shares of common stock. During the years ended

December 

31,

 

2019

and

2018,

64,629

and

48,836

warrants to purchase shares of common stock were exercised, respectively. As of

December 

31,

 

2019,

there are outstanding warrants to purchase

106,274

shares of common stock with an exercise price of

$0.0168

per share. The warrants expire on

December 31, 2026.