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Stockholders' Equity (Deficit)
 9 Months Ended
Sep. 30, 2022
Stockholders' Equity Note [Abstract]  
Stockholders' Equity (Deficit)
(9)
Stockholders’ Equity (Deficit)
Authorized Shares
The Company is authorized to issue 40,000,000 shares of common stock, $0.01 par value, and 10,000,000 shares of preferred stock, $0.01 par value. To date, the Company has designated the following preferred stock: Series A (4,200 shares), Series B (2,360 shares), Series C (590 shares), Series D (10,000 shares), Series E (40,000 shares) and Series
E-1
(12,960 shares).
Preferred Stock
As of September 30, 2022, there were an aggregate of 11,357 shares of Series E and Series
E-1
Convertible Preferred Stock outstanding.
Omnibus Equity Incentive Plan
On September 30, 2020, the Company’s 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) was adopted by the Company’s Board of Directors. On November 23, 2020, the Company’s stockholders approved the 2020 Plan. The 2020 Plan will continue in effect until the tenth anniversary of the date of its adoption by the Board or until earlier terminated by the Board. The 2020 Plan is administered by the Board of Directors or a committee designated by the Board of Directors. The 2020 Plan provides for the grant of incentive stock options,
non-qualified
stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, as well as other stock-based awards or cash awards that are deemed to be consistent with the purposes of the plan to Company employees, directors and consultants. As of September 30, 2022, there are 2,475,000 shares of common stock reserved under the 2020 Plan, of which 803,105 remained available to be issued.
Employee Stock Purchase Plan
In August 2021, the Company’s Board of Directors, with shareholder approval in May 2022, adopted the Employee Stock Purchase Plan (ESPP). The Company ESPP’s plan provides for a maximum of 260,295 shares of common stock to be purchased by participating employees. Employees who elect to participate in the Company’s ESPP will be able to purchase common stock at the lower of 85% of the fair market value of common stock on the first or last day of the applicable
six-month
offering period.
Equity Offerings and Placements
At-the-Market
Offering
On August 18, 2020, the Company entered into a sales agreement with Cantor Fitzgerald & Co. (“Cantor Fitzgerald”), pursuant to which the Company may offer and sell, from time to time, through Cantor Fitzgerald, as sales agent or principal, shares of the
 
Company’s common stock, (the “Placement Shares”), having an aggregate offering price of up to $10.0 million (the “ATM Offering”). The Company has no obligation to sell any Placement Shares under the sales agreement. Subject to the terms and conditions of the sales agreement, Cantor Fitzgerald is required to use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of the Nasdaq Stock Market, to sell Placement Shares from time to time based upon the Company’s instructions, including any price, time or size limits specified by the Company. The Company will pay Cantor Fitzgerald a commission of 3.0% of the aggregate gross proceeds from each sale of Placement Shares, reimburse Cantor Fitzgerald’s legal fees and disbursements up to $50,000 and provide Cantor Fitzgerald with customary indemnification and contribution rights. The sales agreement may be terminated by Cantor Fitzgerald or the Company upon notice to the other party as provided in the sales agreement, or by Cantor Fitzgerald at any time in certain circumstances, including the occurrence of a material and adverse change in the Company’s business or financial condition that makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares.
In connection with the ATM Offering, in consideration for a fee equal to 1.05% of the gross sales price per share sold in the ATM Offering, ROTH Capital Advisors, LLC (“Roth”) waived, solely with respect to the ATM Offering, (i) Roth’s right, pursuant to certain engagement letters dated August 14, 2019 and January 13, 2020 between Roth and the Company, to act as placement agent or underwriter with respect to offerings of the Company’s securities and to receive a minimum of 35% of the fees paid to the agents or underwriters for such offerings and (ii) the
lock-up
provision included in a certain underwriting agreement dated May 1, 2020 between Roth and the Company requiring the prior written consent of Roth for any offer or sale of the Company’s common stock by the Company during the
90-day
period following the date of such underwriting agreement.
There were no shares sold during the nine months ended September 30, 2022.
Private Placement
On July 20, 2022, the Company closed a private placement for the issuance and sale of 690,954 shares of common stock (the “Common Stock”) and 566,751
pre-funded
warrants to purchase common stock (the
“Pre-Funded
Warrants”) to certain investors. Each share of common stock was sold at a price per share of $3.98 and the
Pre-Funded
Warrants were sold at a price of $3.97 per
Pre-Funded
Warrant. The
Pre-Funded
Warrants have an exercise price of $0.01 per share of Common Stock and are immediately exercisable. The Company received gross proceeds from the private placement of approximately $5.0 million before deducting offering expenses. The Company intends to use the net proceeds from the private placement for working capital purposes and other general corporate purposes.
Stock Options
The Company values stock options using the Black-Scholes option pricing model and used the following assumptions:
 
    
Nine months ended September 30,
    
2022
   
2021
Expected terms (years)
   
0.7 - 8.4
   
5.1 - 6.3
Expected volatility
   
166.4% - 180.3%
   
178.3% - 181.3%
Risk-free interest rate
   
1.8% - 2.9%
    0.7% - 1.1%
Expected dividends
    0.00%    0.00%
The weighted average estimated fair value of the stock options granted during the nine months ended September 30, 2022 and 2021 was approximately $6.31 and $9.69 per share, respectively.
 
The following is a summary of stock option activity for the nine months ended September 30, 2022:
 
    
Number of
Options
     
Weighted Average
Exercise Price
Per Share
     
Weighted Average
Remaining
Contractual
Term (in years)
     
Aggregate
Intrinsic
Value
  
Outstanding at January 1, 2022
      1,732,460      $ 11.69                    
Granted
      650,083        7.05                    
Expired
      (36,628 )       10.44                    
Cancelled/Forfeited
      (95,960 )       9.69                    
    
 
 
     
 
 
     
 
 
     
 
 
  
Outstanding at September 30, 2022
      2,249,955      $ 10.46        8.4      $ —    
    
 
 
     
 
 
     
 
 
     
 
 
  
Exercisable at September 30, 2022
      1,143,154      $ 11.27        8.1      $ —    
    
 
 
     
 
 
     
 
 
     
 
 
  
The following table summarizes information for stock option shares outstanding and exercisable at September 30, 2022:
 
           
Options Exercisable
  
Range of Exercise Prices
   
Outstanding
Number of
Options
     
Weighted Average
Remaining Option
Term (in years)
     
Number of
Options
  
$6.24 - $53.85
      2,249,456        8.4        1,142,655  
$53.85+
      499        6.3        499  
    
 
 
     
 
 
     
 
 
  
       2,249,955        8.1        1,143,154  
    
 
 
     
 
 
     
 
 
  
The following is a summary of share-based compensation expense in the statement of operations for the three and nine months ended September 30, 2022 and 2021 (in thousands):
 
    
Three months
ended September 30
     
Nine months ended
September 30,
  
    
2022
     
2021
     
2022
     
2021
  
Selling, general and administrative
    $ 857      $ 1,655      $ 2,816      $ 4,245  
Research and development
      346        734        1,370        1,827  
Cost of goods sold
      52        60        160        152  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total
    $ 1,255      $ 2,449      $ 4,346      $ 6,224  
    
 
 
     
 
 
     
 
 
     
 
 
  
At September 30, 2022, there was $6.3 million of aggregate unrecognized compensation expense related employee and board stock option grants. The cost is expected to be recognized over a weighted average period of 1.7 years.
 
Warrants
The following is a summary of warrant activity for the nine months ended September 30, 2022:
 
    
Warrants
     
Weighted Average
Exercise Price
     
Weighted Average
Remaining Life
(in years)
  
Outstanding at January 1, 2022
      3,894,498      $ 9.27           
Warrants issued
      566,751        .01           
Warrants exercised
      —          —             
Warrants expired
      —          —             
    
 
 
     
 
 
     
 
 
  
Outstanding at September 30, 2022
      4,461,249      $ 8.09        2.8  
    
 
 
     
 
 
     
 
 
  
Exercisable at September 30, 2022
      4,461,249      $ 8.09        2.8  
    
 
 
     
 
 
     
 
 
  
The following table presents information related to stock warrants at September 30, 2022:
 
           
Warrants Exercisable
  
Range of Exercise Prices
   
Outstanding Number
of Warrants
     
Weighted Average
Remaining
Warrant Term
     
Number of
Warrants
  
$0.01
      850,506        4.3        850,506  
$10.00
      3,610,743        2.4        3,610,743  
    
 
 
     
 
 
     
 
 
  
       4,461,249        2.8        4,461,249