Preferred and Common Stock Warrants

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Prior to the Merger (see Note 1), the Company issued warrants for the purchase of its preferred stock and had classified these preferred stock warrants as a liability on its consolidated balance sheet as the warrants were deemed to be freestanding financial instruments that may have required the Company to transfer assets upon exercise. The liability associated with each of these warrants was initially recorded at fair value upon the issuance date of each warrant and was subsequently remeasured to fair value as a component of other income (expense), net in the consolidated statement of operations and comprehensive loss. Upon the closing of the Merger, pursuant to the Merger Agreement, all of the outstanding X4 preferred stock was converted to Arsanis common stock and the X4 preferred stock warrants converted to warrants for the purchase of Arsanis common stock. The Company assessed the features of the warrants and determined that they qualify for classification as permanent equity upon the closing of the Merger. Accordingly, the Company remeasured the warrants to fair value upon the closing of the Merger, which was $5.2 million at March 13, 2019, with $288 thousand of expense recorded during the three months ended March 31, 2019. Upon the closing of the Merger, the warrant liability was reclassified to additional paid-in capital.

In connection with its issuance of common stock in public offerings that closed on April 16, 2019 and November 29, 2019, the Company issued 3,900,000 Class A warrants, which are exercisable for shares of the Company's common stock, and 5,416,667

Class B warrants, which are exercisable for shares of the Company's common stock or prefunded warrants to purchase shares of the Company's common. The Class A warrants have an exercise price of $13.20 per warrant, expire on April 15, 2024 and were immediately exercisable upon issuance. The Class B warrants were immediately exercisable upon issuance, have an exercise price of $15.00 per warrant and expire on a date that is the earlier of (a) the date that is 30 calendar days from the date on which the Company issues a press release announcing top-line data from its Phase 3 clinical trial of mavorixafor for the treatment of patients with WHIM syndrome (or, if such date is not a business day, the next business day) and (b) November 28, 2024. In addition, in connection with the April 16, 2019 and November 29, 2019 offerings, the Company issued 2,130,000 and 1,750,000 prefunded warrants, respectively, for proceeds of $10.999 and $11.999 per share, respectively. Each of the prefunded warrants is exercisable into one share of the Company's common stock, has a remaining exercise price of $0.001 per share and was immediately exercisable upon issuance.

The following table provides a roll forward of outstanding warrants for the twelve month period ended December 31, 2019:


	Number of warrants	Weighted Average Exercise Price		Weighted Average Contractual Term (Years)
Outstanding and exercisable warrants to purchase preferred shares as of December 31, 2018	5,146,400	$	—	4.23
Conversion of warrants to purchase preferred shares to warrants for the purchase of common stock and adjusted for the Exchange Ratio and Reverse Stock Split	(4,657,350)
Issuance of warrants for the purchase of common stock or prefunded warrants to purchase common stock	13,201,667	13.43
Exercised	(33,846)	13.20
Outstanding and exercisable as of December 31, 2019	13,656,871	$	13.68	4.59

As of December 31, 2019, the Company’s outstanding warrants to purchase shares of common stock consisted of the following:


Issuance Date	Number of Shares of Common Stock Issuable	Exercise Price		Classification	Expiration Date
August 14, 2015	81,228	$	21.78	Equity	August 14, 2020
August 21, 2015	69,603	$	21.78	Equity	August 21, 2020
October 25, 2016	5,155	$	19.78	Equity	October 24, 2026
November 1, 2017	130,609	$	19.78	Equity	October 31, 2020
November 17, 2017	8,442	$	19.78	Equity	November 16, 2020
December 4, 2017	5,661	$	19.78	Equity	December 3, 2020
December 28, 2017	6,925	$	19.78	Equity	December 27, 2020
December 28, 2017	115,916	$	19.78	Equity	December 28, 2027
September 12, 2018	25,275	$	19.78	Equity	September 12, 2021
September 12, 2018	20,220	$	19.78	Equity	September 12, 2028
October 19, 2018	20,016	$	19.78	Equity	October 19, 2028
March 13, 2019	5,000	$	19.80	Equity	March 12, 2029
April 16, 2019	3,866,154	$	13.20	Equity	April 15, 2024
April 16, 2019	2,130,000	$	11.00	Equity	n/a
November 29, 2019	5,416,667	$	15.00	Equity	November 28, 2024
November 29, 2019	1,750,000	$	12.00	Equity	n/a
	13,656,871

As of December 31, 2018, the Company’s outstanding warrants to purchase shares of preferred stock (which converted into warrants to purchase common stock upon close of the Merger) consisted of the following (not adjusted for the Reverse Stock Split or Exchange Ratio):


December 31, 2018
Issuance Date	Number of Shares of Preferred Stock Issuable	Exercise Price		Exercisable for	Classification	Expiration Date
August 14, 2015	854,785	$	2.07	Series A	Liability	August 14, 2020
August 21, 2015	732,453	$	2.07	Series A	Liability	August 21, 2020
October 25, 2016	54,256	$	1.88	Series A	Liability	October 24, 2026
November 1, 2017	1,374,435	$	1.88	Series B	Liability	October 31, 2020
November 17, 2017	88,845	$	1.88	Series B	Liability	November 16, 2020
December 4, 2017	59,576	$	1.88	Series B	Liability	December 3, 2020
December 28, 2017	72,875	$	1.88	Series B	Liability	December 27, 2020
December 28, 2017	1,219,815	$	1.88	Series B	Liability	December 28, 2027
September 12, 2018	265,957	$	1.88	Series B	Liability	September 12, 2021
September 12, 2018	212,765	$	1.88	Series B	Liability	September 12, 2028
October 19, 2018	210,638	$	1.88	Series B	Liability	October 19, 2028
	5,146,400