Under the Company’s amended and restated certificate of incorporation, the Company is authorized to issue 5,000,000 shares of preferred stock with a $0.0001 par value. No shares of preferred stock were outstanding as of December 31, 2021 or 2020.

As of December 31, 2021, there were 32,656,480 shares of common stock outstanding. Each share of common stock is entitled to one vote. The holders of the common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors of the Company. To date, no dividends have been declared.

In January 2021, the Company completed the sale of 5,750,000 shares of its common stock in an underwritten public offering led by Laidlaw & Company (UK) Ltd. The price to the public in this offering was $2.50 per share resulting in gross proceeds to the Company of approximately $14.4 million. After deducting underwriting discounts and commissions and offering expenses paid by the Company, the net proceeds to the Company raised from this offering were approximately $13.1 million.

In November 2017, the Company filed a shelf registration with the SEC on Form S-3. The shelf registration statement included a prospectus for the at-the-market offering to sell up to an aggregate of $16.0 million of shares of the Company’s common stock through B. Riley FBR, Inc. (“FBR”) as a sales agent (the “FBR Sales Agreement”). During the year ended December 31, 2020, the Company sold 1,490,813 shares of common stock at a weighted-average price per share of $2.46 pursuant to the FBR Sales Agreement and received proceeds of approximately $3.6 million, net of commissions and fees. Effective January 6, 2021, the Company terminated the FBR Sales Agreement. As a result, there were no shares sold under the FBR Sales Agreement during 2021.

In December 2020, the Company filed a new shelf registration statement with the SEC on Form S-3, or the replacement shelf registration statement. The replacement shelf registration statement replaced the registration statement on Form S-3 the Company originally filed with the SEC in November 2017, which registration statement expired in December 2020. The replacement shelf registration was declared effective by the SEC on January 6, 2021. In December 2020, the Company also entered into a new At Market Issuance Sales Agreement (the “ATM Sales Agreement”), with FBR and H.C. Wainwright & Co. (together with FBR, the “Sales Agents”), pursuant to which the Company may sell from time to time, at its option, up to an aggregate of $30 million worth of shares of the Company’s common stock through the Sales Agents. The ATM Sales Agreement provides, among other things, that sales under the ATM Sales Agreement will be made pursuant to the registration statement, including the base prospectus filed as part of such registration statement. During the year ended December 31, 2021, the Company sold 217,100 shares of common stock at a weighted-average price per share of $1.47 pursuant to the ATM Sales Agreement and received proceeds of approximately $313,000, net of commissions and fees.

From January 1, 2022 through February 28, 2022, the Company sold 261,421 shares of common stock at a weighted-average price per share of $0.67 pursuant to the ATM Sales Agreement and received proceeds of approximately $172,000, net of commissions and fees.

Future sales under the ATM Sales Agreement will depend on a variety of factors including, but not limited to, market conditions, the trading price of the Company’s common stock and the Company’s capital needs. There can be no assurance that the Sales Agents will be successful in consummating future sales based on prevailing market conditions or in the quantities or at the prices that the Company deems appropriate.

In addition, the Company will not be able to make future sales of common stock pursuant to the ATM Sales Agreement unless certain conditions are met, which include the accuracy of representations and warranties made to the Sales Agents under the ATM Sales Agreement. Furthermore, each of the Sales Agents is permitted to terminate the ATM Sales Agreement with respect to itself in its sole discretion upon ten days’ notice, or at any time in certain circumstances, including the occurrence of an event that would be reasonably likely to have a material adverse effect on the Company’s assets, business, operations, earnings, properties, condition (financial or otherwise), prospects, stockholders’ equity or results of operations. The Company has no obligation to sell the shares available for sale pursuant to the ATM Sales Agreement.

The Company has issued warrants to purchase common stock to banks that have previously loaned funds to the Company, as well as to representatives of the underwriters of the Company’s public offerings and certain of their affiliates.

For the year ended December 31, 2020, certain holders of warrants exercised their warrants to purchase 871,682 shares of the Company’s common stock by a “cashless” exercise and received 381,625 shares of the Company’s common stock. The warrants had a weighted average exercise price of $2.77 per share. The shares were issued, and the warrants were originally sold, in reliance upon the registration exemption set forth in Section 4(a)(2) of the Securities Act of 1933. There were no warrants exercised in 2021, and warrants to purchase 162,206 shares of common stock expired during 2021.

At December 31, 2021 and 2020, there were warrants outstanding to purchase 1,679,673 and 1,841,879 shares of the Company’s common stock with a weighted average exercise price of $2.90 and $2.98, respectively. At December 31, 2021, the weighted average remaining contractual term of the outstanding warrants is 0.08 years. From January 1, 2022 through February 28, 2022, warrants to purchase 1,667,673 shares of common stock have expired.

In August 2013, the Company adopted the 2013 Equity Incentive Award Plan (the “2013 Plan”). Under the 2013 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company. Since its adoption, the Company’s stockholders have amended and restated the 2013 Plan. As of April 2018, the Company’s stockholders increased the number of shares of common stock authorized for issuance under the 2013 Plan to an aggregate of 6,286,425 shares, and extended the term of the 2013 Plan to February 2028. In addition, the number of shares available for issuance is annually increased on the first day of each fiscal year by that number of shares equal to the least of (a) four percent of the outstanding shares of common stock on the last day of the immediately preceding calendar year, and (b) such other amount determined by the Company’s board of directors. Notwithstanding the foregoing, the number of shares of common stock that may be issued or transferred pursuant to incentive stock options under the Restated Plan may not exceed an aggregate of 8,000,000 shares.

As a result of the annual increases since the 2013 Plan originated, and the increase of stock options reserved under the restatements of the 2013 Plan approved by the Company’s stockholders through April 2018, the Company has increased the number shares reserved for issuance under the 2013 Plan by 6,115,681 shares. As of December 31, 2021, 1,463,685 options remain available for future grant under the 2013 Plan. On January 1, 2022, the Company further increased the number of shares reserved for issuance under the 2013 Plan by 1,306,259 shares, making 2,769,944 options available for future grant under the 2013 Plan.

Options granted under the 2013 Plan have ten-year terms from the date of grant and generally vest over a one to four year period. The Company granted options to purchase 1,682,000 and 1,172,000 shares of common stock in 2021 and 2020,

respectively. The exercise price of all options granted during the years ended December 31, 2021 and 2020 was equal to the market value per share of the Company’s common stock on the date of grant.

A summary of the Company’s stock option activity under the 2013 Plan is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2020		4,077,259		$	1.70		8.09	$	5,134,768
Granted		1,682,000		$	2.42		9.13	—
Exercised		(67,426	)	$	0.67		7.39	$	43,715
Expired/Forfeited/Exchanged		(678,374	)	$	2.85		6.54	$	3,923
Outstanding at December 31, 2021		5,013,459		$	1.80		7.85	—

Vested and expected to vest at December 31, 2021		5,024,473		$	1.80		7.85	—

Exercisable at December 31, 2021		2,580,048		$	1.83		7.27	—

The intrinsic values above represent the aggregate value of the total pre-tax intrinsic value based upon a common stock price of $0.55 and $2.58 at December 31, 2021 and 2020, respectively, and the contractual exercise price.

The weighted average grant date fair value per share of employee stock options granted during the years ended December 31, 2021 and 2020, was $1.93 and $1.23, respectively.

In June 2013, the Company’s board of directors adopted the ESPP, and the Company’s stockholders approved the ESPP on August 29, 2013. The ESPP became effective on the day prior to the effectiveness of the IPO. The ESPP permits participants to purchase the Company’s common stock at 85% of the fair market value through payroll deductions of up to 20% of their eligible compensation. A total of 30,000 shares of common stock were initially reserved for issuance under the ESPP. In addition, the number of shares of common stock available for issuance under the ESPP has been annually increased on the first day of each fiscal year during the term of the ESPP by an amount equal to the lesser of: (i) 30,000 shares; (ii) one percent of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the Company’s board of directors may determine.

In May 2017, the Company’s stockholders approved an amendment and restatement of the Company’s ESPP to increase the number of shares of common stock reserved under the ESPP by 100,000 shares (to an aggregate of 1,250,000 shares), to increase the annual evergreen provision from 30,000 shares to 100,000 shares, and to extend the term of the ESPP into 2027. The Company increased the number shares reserved for issuance under the ESPP by 620,000 shares since the inception of the ESPP. As of December 31, 2021, 344,574 shares remain available for future issuance under the ESPP. On January 1, 2022, the Company further increased the number of shares reserved for future issuance under the ESPP by 100,000 shares, making 444,574 shares available for future issuance under the ESPP after that increase.

Payroll withholdings from the Company’s employees of approximately $119,000 resulted in the issuance of 118,491 shares of common stock through its ESPP during the year ended December 31, 2020. No shares of common stock were issued through the ESPP during 2021.

Stock-based compensation expense includes charges related to employee stock purchases under the ESPP and stock option grants. The Company measures stock-based compensation expense based on the grant date fair value of any awards granted to its employees. Such expense is recognized over the period of time that employees provide service and earn rights to the awards.

The estimated fair value of each stock option award granted was determined on the date of grant using the Black Scholes option-pricing valuation model with the following assumptions for option grants during the years ended December 31, 2021 and 2020:

	Year Ended December 31,
	2021	2020
Risk free interest rate	0.57% - 1.08%	0.39% - 0.96%
Expected option term	5.5 - 6.0 years	5.5 - 6.0 years
Expected volatility of common stock	103.45% - 107.53%	99.73% - 103.99%
Expected dividend yield	0.0%	0.0%

The estimated fair value of the shares to be acquired under the ESPP was determined on the initiation date of each six-month purchase period using the Black-Scholes option-pricing valuation model with the following assumptions for ESPP shares to be purchased during the years ended December 31, 2021 and 2020 as follows:

	Year Ended December 31,
	2021	2020
Risk free interest rate	0.13%	0.13% - 1.11%
Expected term	0.5 years	0.5 years
Expected volatility of common stock	111.98%	69.72% - 111.98%
Expected dividend yield	0.0%	0.0%

The Company recognized stock-based compensation expense to employees and directors in its research and development and its general and administrative functions during the years ended December 31, 2021 and 2020 as follows:

	Year Ended December 31,
	2021	2020
Research and development	$ 101,754	$	316,892
Selling, general and administrative	1,777,200		1,311,666
Total stock-based compensation expense	$ 1,878,954	$	1,628,558

As of December 31, 2021, there was approximately $2.9 million of unrecognized compensation costs related to outstanding employee and board of director options, which are expected to be recognized over a weighted-average period of 1.32 years.

Common stock reserved for future issuance consists of the following at December 31, 2021 and 2020:

	December 31,
	2021		2020
Stock options issued and outstanding		5,013,459		4,077,259
Authorized for future option grants		1,463,685		1,402,433
Warrants to purchase common stock		1,679,673		1,841,879
Authorized for employee stock purchase plan		344,574		244,574
Total common stock reserved for future issuance		8,501,391		7,566,145