Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Stockholders’ Equity

9. Stockholders’ Equity

As of June 30, 2022, the Company’s authorized capital stock consisted of 200,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

The Company had 34,352,084 and 29,455,668 shares of common stock outstanding as of June 30, 2022 and December 31, 2021, respectively.

Registered Direct Offering and related warrants

On February 3, 2021, the Company entered into a securities purchase agreement (the Securities Purchase Agreement) with two institutional investors (the Purchasers), relating to the issuance and sale (the Offering) of an aggregate of 4,285,710 shares of common stock and warrants to purchase 1,285,713 shares of common stock (the Warrants) for aggregate gross proceeds to the Company from this Offering of approximately $30.0 million, excluding any proceeds the Company may receive upon exercise of the Warrants. No underwriter or placement agent participated in the Offering. The proceeds, net of related issuance costs, were $29.9 million.

The Warrants are exercisable immediately upon issuance at an initial exercise price of $14.00 per share and are exercisable on a cashless basis. The Warrants expire on the earlier of (i) the fifth anniversary of issuance or (ii) the 15th calendar date following the date on which the Company closes upon an equity financing that results in not less than $25 million of gross proceeds to the Company at a price per share of common stock equal to or greater than $25.00, at which time, all remaining Warrants will automatically be exercised on a cashless basis. The exercise price and the number of shares of common stock purchasable upon the exercise of the Warrants are subject to adjustment upon the occurrence of specific events, including stock dividends, stock splits, reclassifications and combinations of the Company’s common stock. All of the warrants are recorded within equity in accordance with authoritative accounting guidance.

Pursuant to the terms of the Securities Purchase Agreement, the Company appointed Dr. Yu (Katherine) Xu, Ph.D. to the Board as a nominee of the Purchasers.

At-the-Market Offering Program

On July 14, 2020, the Company entered into an "at the market" (ATM) equity offering program (2020 ATM Facility) with Jefferies LLC (Jefferies) under which the Company may offer and sell shares of the Company’s common stock having an aggregate price of up to $150 million, from time to time, through Jefferies acting as our sales agent. During the three and six months ended June 30, 2022, there was no activity under the 2020 ATM Facility. As of June 30, 2022, the Company sold an aggregate of 788,685 shares of common stock under the 2020 ATM Facility and received gross proceeds of $10.4 million. The Company paid commissions on the gross proceeds, plus reimbursement of expenses to Jefferies and other issuance costs in the aggregate amount of approximately $0.4 million, resulting in net proceeds of $10.0 million. Since June 30, 2022 and through the date of the filing of this Quarterly Report on Form 10-Q, there have been no additional sales of the Company’s stock under the 2020 ATM Facility.

Purchase Agreement

On March 27, 2020, the Company entered into a purchase agreement (Purchase Agreement), with Lincoln Park, which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to $15.0 million of shares of its common stock from time to time over the 36-month term of the Purchase Agreement. Upon execution of the Purchase Agreement, the Company issued 65,374 shares of its common stock to Lincoln Park as commitment shares in accordance with the closing conditions contained within the Purchase Agreement. The commitment shares were valued using the closing price of the Company’s common stock on the effective date of the Purchase Agreement resulting in a fair market value of approximately $0.2 million. The fair market value of the commitment shares as well as other issuance costs associated with the Purchase Agreement totaled $0.4 million. These issuance costs are classified as prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet. As shares of common stock are sold to Lincoln Park in accordance with the Purchase Agreement, the

issuance costs, including the fair value of the commitment shares, will be reclassified to additional paid-in capital on the Company’s condensed consolidated balance sheet. There have been no sales of the Company’s stock under this Purchase Agreement as of June 30, 2022 and through the date of the filing of this Quarterly Report on Form 10-Q.

Stock Options

The following table summarizes stock option activity during the six months ended June 30, 2022:

	Shares Subject to Options			Weighted- Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Options outstanding at December 31, 2021		3,947,025		$	4.58
Granted		2,094,800		$	3.67
Exercised		-		$	-
Forfeitures and cancellations		(738,000	)	$	5.04
Options outstanding at June 30, 2022		5,303,825		$	4.16		8.30	$	-
Options exercisable at June 30, 2022		2,048,297		$	4.20		6.62	$	-

(a)Aggregate intrinsic value in this table was calculated as the positive difference, if any, between the closing price per share of the Company’s common stock on June 30, 2022 of $2.04 and the price of the underlying options.

At June 30, 2022, unamortized stock compensation for stock options was $9.7 million, with a weighted-average recognition period of 2.8 years.

Stock-Based Compensation Expense

The non-cash stock-based compensation expense for all stock awards, net of forfeitures recognized as they occur, that was recognized in the condensed consolidated statements of operations is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	397	$	462	$	942	$	936
General and administrative		905		602		1,658		1,172
Total	$	1,302	$	1,064	$	2,600	$	2,108

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance at June 30, 2022 is as follows:

	June 30,		December 31,
	2022		2021
Stock options issued and outstanding		5,303,825		3,947,025
Warrants for common stock		1,366,141		1,366,141
Awards available under the 2018 Equity Incentive Plan		583,007		467,024
Employee stock purchase plan		988,028		769,658
Total		8,241,001		6,549,848