Shareholders' Equity

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Shareholders' Equity

Shareholders' Equity

Share Issuances

In February 2018, the Company commenced an at-the-market offering program, which allows it to sell and issue shares of its common stock from time to time. In 2021, the at-the-market offering program was amended to provide a total capacity of $500.0 million. As of June 30, 2022, the Company has remaining capacity to issue up to approximately $360.6 million of common stock under the at-the-market offering program.

On June 8, 2022, the Company completed a registered direct offering pursuant to a securities purchase agreement with certain institutional investors providing for the issuance and sale by the Company of an aggregate of 33,333,336 shares of the Company’s common stock at a price of $4.50 per share accompanied by 33,333,336 Series 2022-A warrants to purchase shares of the Company’s common stock (each, a “Series 2022-A Warrant”) (the “June 2022 Offering”). The Series 2022-A Warrants are exercisable for a term of five years from the date of issuance at an exercise price of $4.37 per Series 2022-A Warrant. As of June 30, 2022, none of the Series 2022-A Warrants had been exercised.

The net proceeds to the Company from the June 2022 Offering were $139.0 million, after deducting placement agent fees, advisory fees and other estimated offering expenses payable by the Company, and not including any future proceeds from the exercise of the Series 2022-A Warrants. The Company intends to use the net proceeds from the June 2022 Offering to fund future operations and capital projects.

Warrants

The Company evaluated the Series 2022-A Warrants for liability or equity classification and determined that equity treatment was appropriate because the Series 2022-A Warrants do not meet the definition of liability instruments.

The Series 2022-A Warrants are classified as component of permanent equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, and permit the holders to receive a fixed number of shares of common stock upon exercise. In addition, the Series 2022-A Warrants do not provide any guarantee of value or return. The Company valued the Series 2022-A Warrants at issuance using the Black-Scholes option pricing model and determined the fair value of the Series 2022-A Warrants to purchase the Company’s common stock at $92.9 million. The key inputs to the valuation model included a weighted average volatility of 151.1%, a risk-free rate of 2.86% and an expected term of five years.

While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

On February 17, 2022, the Series K warrants expired with 7,126 unexercised warrants.

The following table sets forth information pertaining to shares issued upon the exercise of warrants:

	Issuance Date	Expiration Date	Exercise Price as of June 30, 2022		Shares Underlying Warrants on Issuance Date	Shares Issued upon Warrant Exercises as of June 30, 2022		Shares Underlying Warrants Outstanding as of June 30, 2022
Series 2020-A Warrants (1)	7/6/2020	7/6/2025	$	0.60	30,000,000	29,914,069		85,931
Series 2022-A Warrants (1)	6/8/2022	6/7/2027	$	4.37	33,333,336	—		33,333,336
Total Warrants					63,333,336	29,914,069	—	33,419,267

(1) Equity-classified warrants.

During the six months ended June 30, 2022, common stock was issued as a result of the exercise of warrants as shown below (dollars in thousands):

	Common Stock Issued	Proceeds
Series 2020-A Warrants	4,677	$	3