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Equity

3 Months Ended

Mar. 31, 2021

12. Equity

The changes in shareholders’ equity for three months ended March 31, 2021 were as follows:


						Additional						Total
	Common Stock					Paid- In			Accumulated			Shareholders’
	Shares			Amount		Capital			Deficit			Equity (Deficit)
Balance, December 31, 2020	34,612,054		$	35		$	519,143		$	(333,147)		$	186,031
Cumulative effect adjustment for adoption of ASU 2020-06	—			—			(44,777)			5,288			(39,489)
Exercise of common stock options	289,164			—			4,102			—			4,102
Issuance for employee stock purchase plan	24,630			—			358			—			358
Vesting of restricted stock units ("RSUs") and performance share units ("PSUs")	413,538			—			—			—			—
Shares withheld for employee taxes upon vesting of RSUs and PSUs	(135,562)			—			(3,508)			—			(3,508)
Stock-based compensation	—			—			6,879			—			6,879
Net income	—			—			—			15,662			15,662
Balance, March 31, 2021	35,203,824		$	35		$	482,197		$	(312,197)		$	170,035

The changes in shareholders’ equity for three months ended March 31, 2020 were as follows:


						Additional						Total
	Common Stock					Paid- In			Accumulated			Shareholders’
	Shares			Amount		Capital			Deficit			Equity (Deficit)
Balance, December 31, 2019	33,678,840		$	34		$	447,297		$	(359,899)		$	87,432
Exercise of common stock options	455,573			—			4,454			—			4,454
Issuance for employee stock purchase plan	39,411			—			357			—			357
Vesting of RSUs	195,280			—			—			—			—
Shares withheld for employee taxes upon vesting of RSUs	(63,064)			—			(1,358)			—			(1,358)
Stock-based compensation	—			—			4,951			—			4,951
Equity component of 2020 Convertible Notes, net of issuance costs of $1,773	—			—			44,777			—			44,777
Net income	—			—			—			450			450
Balance, March 31, 2020	34,306,040		$	34		$	500,478		$	(359,449)		$	141,063

Common Stock

In May 2015, the Company adopted the Amended and Restated 2014 Stock Incentive Plan (the “Plan”), under which an aggregate of 2,700,000 shares of common stock were authorized for issuance to employees, officers, directors, consultants and advisors of the Company, plus an annual increase on the first day of each fiscal year until the expiration of the Plan equal to 4% of the total number of outstanding shares of common stock on December 31^st of the immediately preceding calendar year (or a lower amount as otherwise determined by the Company’s board of directors (“Board of Directors”) prior to January 1^st). As of March 31, 2021, there were 768,668 shares of common stock available for issuance pursuant to the Plan. The Plan provides for granting of both Internal Revenue Service qualified incentive stock options and non-qualified options, restricted stock awards, restricted stock units and performance stock units. The Company’s qualified incentive stock options, non-qualified options and restricted stock units generally vest ratably over a four-year period of service. The stock options generally have a ten-year contractual life and, upon termination, vested options are generally exercisable between one and three months following the termination date, while unvested options are forfeited immediately upon termination. Refer to Note 13, Stock-based Compensation, for more information.

Warrants

As of March 31, 2021, the warrant issued to Assertio in November 2018 was the Company’s only outstanding warrant. In connection with the Third Amendment to the Nucynta Commercialization Agreement, the Company issued a warrant to Assertio to purchase 1,041,667 shares of common stock of the Company at an exercise price of $19.20 per share. The terms of the warrant are fixed, with the exception of customary adjustments for changes in the Company’s capitalization. The warrant may only be settled with the issuance of shares of common stock upon exercise and will expire in November 2022. The Company has recorded the relative fair value of the warrant as a component of equity interest issued by the Company as consideration transferred in the cost accumulation model for the asset acquisition. The Company estimated the fair value of the warrant on the date of issuance to be approximately $8,043 using the Black-Scholes option-pricing model. The Company concluded that the warrant met the definition of an equity instrument and was recorded as a component of additional paid-in capital in the Company’s Condensed Consolidated Balance Sheet as of the issuance date.