7. Stockholders’ Equity

Common Stock

Common stockholders are entitled to dividends if and when declared by the board of directors. As of December 31, 2019, no dividends on common stock had been declared by the board of directors.

In February 2018, the Company completed a follow-on underwritten public offering of its common stock under its Registration Statement filed in November 2017 (File No. 333-221331), selling 3,772,447 shares of its common stock at an offering price of $7.00 per share for proceeds of $24.5 million, net of $1.9 million of underwriting discounts and commissions and other offering costs.

At-the-Market Sales Agreement

In August 2019, the Company entered into an Open Market Sale Agreement (the 2019 Sales Agreement) with Jefferies, LLC (Jefferies) for the offer and sale of shares of its common stock having an aggregate offering of up to $25.0 million from time to time through Jefferies, acting as the Company’s sales agent. The issuance and sale of these shares by the Company pursuant to the 2019 Sales Agreement are deemed an “at-the-market” offering under the Securities Act of 1933, as amended. Under the 2019 Sales Agreement, the Company agreed to pay Jefferies a commission of up to 3% of the gross proceeds of any sales made pursuant to the 2019 Sales Agreement. During the year ended December 31, 2019, the Company received net proceeds of $4.7 million after deducting commissions and expenses payable by the Company, from the sale of 888,987 shares of common stock pursuant to the 2019 Sales Agreement. As of December 31, 2019, the Company had an aggregate of $19.9 million available for future sales under the 2019 Sales Agreement.

Reserved Shares of Common Stock

The Company had reserved shares of common stock for future issuance as follows:


	December 31,
	2019	2018
Options issued and outstanding	1,931,903	1,475,299
Shares available for future option grants	638,227	764,145
RSUs subject to future vesting	211,962	93,560
Common stock warrants	27,836	27,836
Total	2,809,928	2,360,840

Warrants

In connection with a credit facility, Silicon Valley Bank held warrants to purchase 9,229 shares of the Company’s common stock at an exercise price of $26.00 per share. These warrants were cancelled when the Company entered into the Amended Credit Facility (see Note 6) and the Company subsequently issued a warrant to SVB for the purchase of 9,375 shares of the Company’s common stock at an exercise price of $8.91 per share. The warrant can be exercised at any time and expires five years after the date of issuance. The Company estimated the fair value of the warrant as $43,000 on the date of issuance using the Black-Scholes option pricing model. The warrant was recorded as a discount to the debt to be amortized into interest expense over the remaining term of the loan using the effective interest method.

In conjunction with entering into the 2019 Credit Facility, on August 5, 2019, the Company and SVB amended and restated the warrant issued to SVB in connection with the First Amendment, to add an option by SVB to put the warrant back to the Company for $50,000 upon expiration or a liquidity event, to be prorated if SVB exercises a portion of the warrant. The warrant expires on July 6, 2023. As of August 5, 2019, the warrant was classified as a liability and recorded at fair value within other liabilities in the Company’s balance sheet. Due to the put right, the warrant is subject to fair value remeasurement at each subsequent reporting date until the exercise or expiration of the warrant. The fair value of the warrant is estimated using a Black-Scholes valuation model. Any resulting change in the fair value of the warrant will be recorded as other income, net in the Company’s statement of operations and comprehensive loss. The fair value adjustment was not material in 2019.

In connection with the 2015 Credit Facility, Ares Venture Finance holds a warrant to purchase 18,461 shares of the Company’s common stock at an exercise price of $26.00 per share. The warrant can be exercised at any time and expires 10 years after the date of issuance.