v3.21.2
Stockholders' Equity
 6 Months Ended
Jun. 30, 2021
Stockholders' Equity Note [Abstract]  
Stockholders' Equity

Note 3 — Stockholders’ Equity:

 

Common Stock

 

In November 2020, the Company filed a new registration statement, under which the Company could issue and sell up to an aggregate of $100.0 million of shares of its common stock, $0.001 par value per share. On November 27, 2020, the Company entered into an Amended and Restated At Market Issuance Sales Agreement (“Amended Sales Agreement”) with B. Riley FBR Inc. (“B.Riley”) and Needham & Company, LLC (“Needham”), together with B. Riley, acting as sales agents (“Sales Agent”). The Amended Sales Agreement relates to the sale of shares of up to $25.0 million of the Company’s common stock under its ATM program, of which the Company may issue and sell common stock from time to time through the Sales Agent, subject to limitations imposed by the Company and subject to the Sales Agent’s acceptance, such as the number or dollar amount of shares registered under the registration statement to which the offering relates. The Sales Agent is entitled to a commission of up to 3% of the gross proceeds from the sale of common stock sold under the ATM program. At December 31, 2020, the Company had approximately $17.8 million available under the Amended Sales Agreement and $75.0 million available under its current shelf registration for the issuance of equity, debt or equity-linked securities unrelated to the Amended Sales Agreement. On February 5, 2021, the Company allocated to its ATM program an additional $25.0 million of the remaining $75.0 million available under its shelf registration statement. Giving effect to the additional $25.0 million, plus the $17.8 million available at December 31, 2020, the Company had a total of $42.8 million available under the ATM program. During the six months ended June 30, 2021 and 2020, the Company sold an aggregate of 3,737,862 and 368,144 shares of its common stock under the ATM program, respectively, and realized net proceeds of $41,456,000 and $2,470,000, respectively. As of June 30, 2021, the Company has no available balance under its ATM program and it has $50.0 million available under its current shelf registration for the issuance of equity, debt or equity-linked securities.

During the six months ended June 30, 2021, the Company issued an aggregate of 656,069 shares of its common stock upon conversion of 50,000 Series C-3 preferred shares by an unrelated party and 10,001 Series G preferred shares by a related party.

 

During the six months ended June 30, 2021 and 2020, the Company issued an aggregate of 31,407 and 91,500 shares of its common stock, respectively, upon cash exercise of warrants, resulting in net proceeds to the Company of $165,000 and $412,000, respectively.

 

During the six months ended June 30, 2021, the Company issued an aggregate of 70,269 shares of its common stock upon cashless exercise of 95,286 warrants.

 

During the six months ended June 30, 2021, there were no restricted stock units issued by the Company and for the six months ended June 30, 2020, the Company issued an aggregate of 2,385 shares of its common stock upon the vesting of restricted stock units issued to the Company’s board of directors.

 

During the six months ended June 30, 2021, the Company issued an aggregate of 32,734 shares of its common stock upon exercise of stock options, resulting in net proceeds to the Company of $137,000. No stock options were exercised during the six months ended June 30, 2020.

 

Preferred Stock

 

The Company is authorized to issue up to 2,000,000 shares of preferred stock in one or more series without stockholder approval. The Company’s board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. Of the 2,000,000 shares of preferred stock authorized, the Company’s board of directors has designated (all with par value of $0.001 per share) the following:

 

   As of June 30, 2021   As of December 31, 2020 
   Preferred
Shares
Outstanding		   Liquidation
Preference
(Per Share)		   Total
Liquidation
Preference		   Preferred
Shares
Outstanding		   Liquidation
Preference
(Per Share)		   Total
Liquidation
Preference		 
Series C-3   2,000   $10.00   $20,000    52,000   $10.00   $520,000 
Series E   89,623   $49.20   $4,409,452    89,623   $49.20   $4,409,452 
Series G   89,999   $187.36   $16,862,213    100,000   $187.36   $18,736,452 
Total   181,622        $21,291,665    241,623        $23,665,904 

 

During the six months ended June 30, 2021, 50,000 Series C-3 preferred shares were converted into 100,000 shares of the Company’s common stock by an unrelated party and 10,001 Series G preferred shares were converted into 556,069 shares of the Company’s common stock by a related party.

 

Stock Options

 

During the six months ended June 30, 2021, the Company granted ten-year qualified and non-qualified stock options covering an aggregate of 1,389,700 shares of the Company’s common stock under the 2019 Stock Incentive Plan. The weighted average exercise price of these options is $8.48 per share.

 

During the three and six months ended June 30, 2021, total compensation expense for stock options issued to employees, directors, officers and consultants was $1,010,000 and $2,742,000, respectively, and $693,000 and $1,362,000 for the three and six months ended June 30, 2020, respectively.

 

As of June 30, 2021, there was approximately $8,585,000 in total unrecognized compensation expense related to stock options granted, which expense will be recognized over an expected remaining weighted average period of 1.6 years.

 

The fair value of each stock option award estimated on the grant date is determined using the Black-Scholes option pricing model, except for an aggregate of 410,000 stock option awards, of which vesting was upon achievement of certain milestones. The fair value of these options was determined using the Monte Carlo option pricing model. The following assumptions were used for the Black-Scholes option pricing model for the stock options granted during the six months ended June 30, 2021:

 

Expected term   5 years 
Volatility   103.08% - 104.32% 
Dividend yield   0.0%
Risk-free interest rate   0.50% - 0.84% 
Weighted average grant date fair value of options granted during the period  $5.83 

 

A summary of the assumptions used in the Monte Carlo option pricing model are as follows:

 

Expected term   2 years 
Volatility   107.10%
Dividend yield   0.0%
Risk-free interest rate   1.15%

 

The Company estimated the expected term of the stock options granted based on anticipated exercises in future periods as calculated by the Company’s historical option exercise activities. The expected term of the stock options granted to consultants is based upon the full term of the respective option agreements. The expected stock price volatility for the Company’s stock options is calculated based on the historical volatility since the initial public offering of the Company’s common stock in March 2010. The expected dividend yield of 0.0% reflects the Company’s current and expected future policy for dividends on the Company’s common stock. To determine the risk-free interest rate, the Company utilized the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of the Company’s awards which is 5 years for employees and 10 years for non-employees.

 

The following table summarizes the Company’s stock options activity and related information for the six months ended June 30, 2021:

 

   Shares   Weighted Average
Exercise
Price		   Weighted Average
Remaining
Contractual
Term (Years)		   Aggregate
Intrinsic
Value		 
Outstanding at beginning of period   2,447,687   $7.22    7.1   $3,009,584 
Granted   1,389,700   $8.48        $0 
Exercised   (32,734)  $4.19        $87,520 
Expired   (10,499)  $8.30        $7,639 
Forfeited   (28,408)  $5.50        $47,956 
Outstanding at end of period   3,765,746   $7.72    7.8   $2,866,470 
Exercisable at end of period   1,807,790   $8.20    6.1   $1,667,250 

 

The aggregate intrinsic value is calculated as the difference between the exercise prices of the underlying options and the quoted closing price of the common stock of the Company at the end of the reporting period for those options that have an exercise price below the quoted closing price.

 

Restricted Stock Units

 

During the six months ended June 30, 2021, the Company did not grant any restricted stock units (“RSUs”), no compensation expense was recognized and there are no outstanding RSUs at June 30, 2021.

 

During the six months ended June 30, 2020, the Company issued an aggregate of 2,385 shares of its common stock upon the vesting of RSUs issued to the Company’s board of directors. Compensation expense recorded by the Company was $3,000 and $10,000 for the three and six months ended June 30, 2020, respectively.

 

Warrants

 

During the six months ended June 30, 2021 and 2020, the Company issued an aggregate of 31,407 and 91,500 shares of its common stock, respectively, upon cash exercise of warrants, resulting in net proceeds to the Company of $165,000 and $412,000, respectively.

 

During the six months ended June 30, 2021, the Company issued an aggregate of 70,269 shares of its common stock upon cashless exercise of 95,286 warrants.

 

As of June 30, 2021, there were 56,455 outstanding warrants with a weighted average exercise price of $5.25 per share and a weighted average remaining contractual life of 1.11 years.