In May 2022, the Company issued and sold 10,752,688 shares of common stock at an offering price of $1.60 per share and pre-funded warrants to purchase up to 17,372,312 shares of common stock at an offering price of $1.5999 per warrant (representing the price per share of common stock sold in the offering minus the $0.0001 exercise price per warrant) in a registered direct offering pursuant to a shelf registration statement on Form S-3. The net proceeds to the Company from this offering were approximately $42.9 million, after deducting placement agent fees and offering costs of $2.1 million.

In February 2019, April 2020 and May 2022, the Company issued pre-funded warrants to purchase the Company’s common stock in underwritten public offerings at the offering price of the common stock, less the $0.0001 per share exercise price of each warrant. The warrants were recorded as a component of stockholders’ equity within additional paid-in capital and have no expiration date. Per the terms of the warrant agreements, the outstanding warrants to purchase shares of common stock may not be exercised if the holder’s ownership of the Company’s common stock would exceed 4.99% (“Maximum Ownership Percentage”), or 9.99% for certain holders. By written notice to the Company, each holder may increase or decrease the Maximum Ownership Percentage to any other percentage (not in excess of 19.99% for the majority of such warrants). The revised Maximum Ownership Percentage would be effective 61 days after the notice is received by the Company.

As of September 30, 2022, the following pre-funded warrants for common stock were issued and outstanding:


Issue Date	Expiration Date	Exercise Price		Number of Warrants Outstanding
February 8, 2019	None	$	0.0001		3,750,000
April 30, 2020	None	$	0.0001		11,860,328
May 20, 2022	None	$	0.0001		17,120,800
Total pre-funded warrants					32,731,128

The 2016 Equity Incentive Plan (“2016 Plan”) provides for an automatic increase in the number of shares reserved for issuance thereunder on January 1 of each year for the remaining term of the plan (through 2028) equal to (a) 4.0% of the number of issued and outstanding shares of common stock on December 31 of the immediately preceding year, or (b) a lesser amount as approved by the Company’s board of directors each year. As a result of this provision, on January 1, 2022 and January 1, 2021, an additional 1,974,205 and 1,918,363 shares, respectively, became available for issuance under the 2016 Plan.

As of September 30, 2022, the 2016 Plan had 1,182,245 shares available for future issuance.

The following table summarizes the Company’s stock awards granted for each of the periods indicated:


	Three Months Ended September 30,								Nine Months Ended September 30, 2022
	2022				2021				2022				2021
	Grants		Weighted Average Grant Date Fair Value		Grants		Weighted Average Grant Date Fair Value		Grants		Weighted Average Grant Date Fair Value		Grants		Weighted Average Grant Date Fair Value
Stock options		1,270,153	$	0.67		396,200	$	4.91		3,842,153	$	2.10		2,557,600	$	5.05

In July 2020, the Company granted 228,200 RSUs to certain employees, with vesting terms subject to regulatory, commercial, and clinical milestones, in addition to a service condition. As of September 30, 2022, 150,000 of these RSUs are outstanding. As of September 30, 2022 and 2021, respectively, the performance conditions of these RSUs were not probable of being achieved. If and when the performance milestones are deemed probable of being achieved within the required time frame, the Company may recognize up to $1.2 million of stock-based compensation.

Under the Company’s 2016 Employee Stock Purchase Plan (“2016 ESPP”), the Company issued and sold 87,087 shares for aggregate cash proceeds of less than $0.1 million during the three months ended September 30, 2022 and 151,827 shares for aggregate cash proceeds of $0.2 million during the nine months ended September 30, 2022. There were 44,957 shares issued and sold under the 2016 ESPP for aggregate cash proceeds of $0.2 million during the three months ended September 30, 2021 and 82,965 shares for aggregate cash proceeds of $0.4 million during the nine months ended September 30, 2021.

Total stock-based compensation expense related to the 2016 Plan and 2016 ESPP was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Research and development	$	639	$	703	$	2,031	$	2,057
General and administrative		926		1,404		3,653		3,887
Total stock-based compensation expense	$	1,565	$	2,107	$	5,684	$	5,944

The following table summarizes the weighted-average Black-Scholes option pricing model assumptions used to estimate the fair value of stock options granted under the Company’s 2016 Plan, and the shares purchasable under the 2016 ESPP during the periods presented:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
2016 Plan
Expected term (in years)		6.02			6.08			5.96			5.99
Expected volatility		85	%		82	%		83	%		83	%
Risk-free interest		3.16	%		0.95	%		2.43	%		0.84	%
Dividend yield		—			—			—			—

2016 ESPP
Expected term (in years)		0.50			0.50			0.49			0.50
Expected volatility		95	%		77	%		84	%		86	%
Risk-free interest		3.26			0.08	%		1.95	%		0.08	%
Dividend yield		—			—			—			—