Common Stock, Redeemable Common Stock and Convertible Preferred Stock (converted to Common Stock)

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

COMMON STOCK, REDEEMABLE COMMON STOCK AND PREFERRED STOCK

COMMON STOCK AND REDEEMABLE COMMON STOCK

Common Stock— As of December 31, 2022, the Company’s Certificate of Incorporation, as amended and restated, authorizes the Company to issue 500 million shares of $0.001 par value common stock. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the preferred stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any. No cash dividends have been declared or paid to date.

ATM Sales Agreement

On August 7, 2020, the Company entered into a Controlled Equity OfferingSM Sales Agreement (the “ATM Sales Agreement”) with B. Riley Securities, Inc., Cantor Fitzgerald & Co., and Stifel, Nicolaus & Company, Incorporated (collectively the “Sales Agents”), pursuant to which the Company may offer and sell, at the Company’s sole discretion through one or more of the Sales Agents, shares of its common stock having an aggregate offering price of up to $50.0 million. To date, the Company has sold approximately $14.3 million, net of offering costs, of common stock under the ATM Sales Agreement.

Q1 2021 Private Placement

On March 18, 2021, the Company entered into a securities purchase agreement with several institutional and accredited investors pursuant to which the Company agreed to issue and sell in a private placement (the “Private Placement”) an aggregate of 6,271,836 shares of common stock, 229,885 shares of redeemable common stock and, to certain investors, in lieu of common stock, pre-funded warrants to purchase an aggregate of 50,000 shares of common stock at a price of $8.70 per share of common stock (or $8.69 per pre-funded warrant). The Private Placement closed on March 23, 2021 and the Company received gross proceeds of $55.0 million, before deducting offering expenses payable by the Company.

In August 2021, the investor who purchased the redeemable common stock exercised its option to sell its 229,885 shares of redeemable common stock back to the Company at the original purchase price of $8.70 per share for an aggregate of $2.0 million. The Company adjusted the carrying amount of the redeemable common stock to its redemption value and subsequently retired these shares.

Lincoln Park Capital Fund Purchase Agreement

On January 14, 2022, the Company and Lincoln Park Capital Fund, LLC (“Lincoln Park”) entered into a securities purchase agreement (the “LPC Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company has the right to sell shares of common stock to Lincoln Park, having an aggregate value of up to $50.0 million, subject to certain limitations and conditions set forth in the LPC Purchase Agreement, at the Company’s request from time to time during the 36-month term of the LPC Purchase Agreement. In consideration for entering into the LPC Purchase Agreement, the Company issued 230,414 shares of common stock to Lincoln Park as an initial commitment fee. Upon execution of the LPC Purchase Agreement and the Registration Rights Agreement on January 14, 2022, the Company sold to Lincoln Park, as an initial purchase under the LPC Purchase Agreement, a total of 1,382,488 shares of common stock, at a per share price of $2.17 per share, for aggregate consideration of approximately $3.0 million.

Q1 2022 PIPE

On March 3, 2022, the Company entered into a securities purchase agreement pursuant to which it agreed to issue and sell to an investor, in a private placement (the “Q1 2022 PIPE”), 900,000 shares of common stock at a price of $1.80 per share, which represents the volume weighted average price per share of the Company’s common stock as quoted on the Nasdaq Stock Market for the thirty (30) consecutive-day trading day period ending on March 2, 2022, and pre-funded warrants to purchase 766,666 shares of common stock at a purchase price of $1.79 per pre-funded warrant (representing the price of $1.80 per share minus the $0.01 per share exercise price of each such prefunded warrant). The pre-funded warrants are exercisable at any time after their original issuance date and will have no expiration date. The Q1 2022 PIPE closed on March 7, 2022 and the Company received gross proceeds of $3.0 million, before deducting offering expenses payable by the Company. In accordance with an associated registration rights agreement, the Company filed a registration statement covering the resale of these securities in April 2022.

Q2 2022 PIPE

On June 30, 2022, the Company entered into a securities purchase agreement with several institutional and accredited investors pursuant to which the Company agreed to issue in a private placement (the “Q2 2022 PIPE”) an aggregate of 37,649,086 shares of common stock and, to certain investors, in lieu of common stock, pre-funded warrants to purchase an aggregate of 13,276,279 shares of common stock at a price of $1.095 per share of common stock (or $1.094 per pre-funded warrant) and 50,925,365 warrants (the “Warrants”) for the purchase of shares of common stock. Each Warrant has an exercise price equal to $1.095 per share and will expire on the date that is 60 months from their original issue date. The price per pre-funded warrant represents the price of $1.095 per share sold in the Q2 2022 PIPE, minus the $0.001 per share exercise price of each such pre-funded warrant. The pre-funded warrants are exercisable, subject to certain beneficial ownership restrictions, at any time after their original issuance and will not expire. The Q2 2022 PIPE closed on July 6, 2022 and the Company received gross proceeds of $55.7 million, before deducting offering expenses paid by the Company.

The exercise of any Warrant was conditioned upon the Company increasing its authorized shares. Accordingly, the Company convened a special meeting of its stockholders on September 1, 2022, during which the stockholders approved an increase in the number of authorized shares of common stock from 125 million to 500 million pursuant to an amendment to the Company’s Certificate of Incorporation. As of July 6, 2022, due to the shortfall in authorized and available common shares, the Warrants did not meet the criteria required for permanent equity accounting. As a result, the Company allocated $41.2 million of the gross proceeds from the offering to the fair value of the Warrants, which was recorded as a warrant liability, and the remaining $13.5 million was allocated to the common shares and pre-funded warrants and recorded as permanent equity. The fair value of the warrant liability was calculated using the Black-Scholes option valuation model. The Company also allocated a portion of the transaction fees, including commissions and legal fees, to the warrant liability and expensed within other expense, net, approximately $2.9 million of these fees upon the closing of the Q2 2022 PIPE. Upon shareholder approval of the increase to the Company’s authorized shares, the Warrants met all criteria required for permanent equity accounting and, accordingly, the Company remeasured the fair value of the warrant liability through earnings, which resulted in approximately $2.5 million of income included within other income (expense) and reclassified the fair value of the warrant liability to additional paid-in capital.

Also on June 30, 2022, the Company entered into a registration rights agreement, pursuant to which the Company agreed to register for resale the common shares issued in the Q2 2022 PIPE and the issuance of the shares of common stock underlying the Pre-Funded Warrants and the Warrants sold in the offering. Such registration statement was filed on July 29, 2022 and was declared effective by the SEC on August 5, 2022.

Q4 2022 Public Offering

On December 7, 2022, the Company sold 52,300,000 shares of common stock and, in lieu of common stock, prefunded warrants to purchase 6,800,000 shares of common stock, and accompanying Class C warrants to purchase 32,762,947 shares of its common

stock. The common stock was issued at a price to the public of $1.10 per share and the accompanying Class C warrants and prefunded warrants were issued at a price of $1.099 per prefunded warrant and accompanying Class C warrant. The Class C warrants have an exercise price of $1.50, will expire 5 years from the date of issuance, and are immediately exercisable with certain restrictions. The gross proceeds from the offering, which closed on December 9, 2022, were $65.1 million before deducting underwriting discounts and offering expenses.

The Company has concluded that the Class C warrants do not meet the equity contract scope exception under ASC 815-40 as in the event of a fundamental transaction such as a merger certain provisions may require the Company to adjust the settlement value that is not consistent with a fixed-for-fixed option pricing model. As a result, as of issuance date, the Company allocated $21.5 million of the gross proceeds from the offering to the Class C Warrants based on their fair value, which was recorded as a warrant liability, and the remaining $43.6 million was allocated to the common shares and pre-funded warrants and recorded as permanent equity. The warrant liability was subsequently adjusted to fair value at December 31, 2022 and will be adjusted to fair value at each subsequent balance sheet date until the warrants are settled. Changes in fair value of the warrants are recognized as a component of other income (expense), net in the consolidated statement of operations and comprehensive loss.

The fair value of the warrant liability was calculated using the Black-Scholes option valuation model as further described in Note 4. The Company also allocated a portion of the transaction fees, including commissions and legal fees, to the Class C Warrant liability and expensed within other expense, net, approximately $1.7 million of these fees upon the closing of the Q4 2022 Public Offering.

For each of the common stock offerings, the Company evaluated the common stock, warrants and prefunded warrants for liability or equity classification in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity, and ASC 815-40, Derivatives and Hedging, and, other than as described above for warrants issued in the Q2 2022 PIPE and the Q4 2022 Public Offering, determined that equity treatment was appropriate as the warrants and prefunded warrants did not meet the definition of a liability.