Equity

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Equity

Equity 

(a)Common stock and pre-funded warrants

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.000001 as of March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, the total number of shares of common stock issued and outstanding was 42,493,971 and 42,457,471, respectively.

As of March 31, 2022, the Company had pre-funded warrants outstanding to purchase an aggregate of 12,663,010 shares of common stock. The pre-funded warrants are exercisable at any time for an exercise price of $0.000001, except that the pre-funded warrants cannot be exercised by the holders if, after giving effect thereto, the holders would beneficially own more than 9.99% of the outstanding common stock, subject to certain exceptions. However, any holder may increase or decrease such percentage to any other percentage (not in excess of 19.99%) upon at least 61 days’ prior notice from the holder to the Company. The holders of the pre-funded warrants will not have the right to vote on any matter except to the extent required by Delaware law.

On November 4, 2021, the Company entered into an ATM or “at-the-market” Equity Offering Sales Agreement (the “Sales Agreement”) with BofA Securities, Inc., as agent (“BofA”), pursuant to which the Company may offer and sell, from time to time through BofA, shares of the Company’s common stock, having an aggregate offering price of up to $40.0 million. The offer and sale of the shares will be made pursuant to a shelf registration statement on Form S-3 and the related prospectus filed on December 11, 2020, and declared effective by the SEC on December 21, 2020, as supplemented by a prospectus supplement dated November 4, 2021. The Company has no obligation to sell any such shares under the Sales Agreement. Through March 31, 2022, no sales of common stock have been made pursuant to the Sales Agreement.

(b)Stock-based compensation expense

Stock-based compensation expense is classified in the condensed statements of operations as follows:

(in thousands)	Three Months Ended March 31,
	2022		2021
Research and development expenses	$	1,264	$	1,018
General and administrative expenses	1,182		1,402
Total stock-based compensation expense	$	2,446	$	2,420

Total unrecognized compensation expense for all stock-based compensation plans was $25.8 million as of March 31, 2022. This expense is expected to be recognized over a weighted average remaining vesting period of 2.63 years.

The fair values of stock options granted are estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

	Three Months Ended March 31,
	2022		2021
Expected volatility	83.18	%	89.68	%
Expected dividends	0	%	0	%
Expected terms (years)	6.07		6.06
Risk free rate	1.95	%	0.61	%

(c)Stock options

A summary of the Company’s stock option activity and related information for the three months ended March 31, 2022 is as follows:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life  (in Years)	Aggregate Intrinsic Value (in Thousands)
Outstanding at December 31, 2021	8,963,945	$	7.20	8.32	$	6,912
Options granted	715,500	$	2.46
Options exercised	(36,500)	$	3.67
Options cancelled/forfeited	(1,345,024)	$	8.52
Outstanding at March 31, 2022	8,297,921	$	6.60	8.27	$	28
Exercisable as of March 31, 2022	3,341,197	$	5.71	7.38	$	—

During the three months ended March 31, 2022, 36,500 shares of common stock were issued upon exercise of options with an aggregate intrinsic value of $0.1 million. During the three months ended March 31, 2021, 91,737 shares of common stock were issued upon exercise of options with an aggregate intrinsic value of $1.0 million. The weighted-average grant date fair value of options granted during the three months ended March 31, 2022 and March 31, 2021 was $1.75 and $9.43 per share, respectively.

(d)Restricted stock units

A summary of the Company’s RSU activity and related information for the three months ended March 31, 2022 is as follows:

	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2021	132,000	$	9.97
Restricted stock units granted	700,000	$	3.69
Restricted stock units vested	—	$	—
Restricted stock units forfeited	(122,000)	$	4.95
Non-vested at March 31, 2022	710,000	$	4.64

(e)Employee stock purchase plan

The Company’s 2020 Employee Stock Purchase Plan (“2020 ESPP”) was adopted by the Company’s Board of Directors in March 2020 and approved by the Company’s stockholders in May 2020. A total of 759,936 shares of common stock have been reserved for issuance under the 2020 ESPP.

Subject to share and dollar limits as described in the plan, the 2020 ESPP allows eligible employees to contribute, through payroll deductions, up to 15% of their earnings for the purchase of shares of the Company’s common stock at the lower of 85% of the closing price of the Company’s common stock on the first trading day of the offering period or 85% of the closing price of the Company’s common stock on the last trading day of the offering period. There are two six-month offering periods during each fiscal year, ending on May 15 and November 15.  

As of March 31, 2022, $0.2 million of employee contributions are included in accounts payable and accrued liabilities in the accompanying condensed balance sheet.