Warrants to Acquire Shares of Common Stock

9 Months Ended

Sep. 30, 2020

Warrants and Rights Note Disclosure [Abstract]

Warrants to Acquire Shares of Common Stock

Warrants Outstanding

The following is a summary of the activity of the Company's warrants to acquire shares of common stock for the nine months ended September 30, 2020 (in thousands):


Warrant Issuance	Outstanding, December 31, 2019	Granted	Exercised	Canceled/Expired	Outstanding, September 30, 2020	Expiration
July 2020 PIPE Offering	—	2,744	—	—	2,744	August 2025
January 2020 Offering	—	819	—	—	819	July 2025
Pre-funded January 2020 Offering	—	449	(449)	—	—	July 2025
June 2019 Offering	2	—	—	—	2	June 2024

March 2019 Exercise Agreement	63	—	—	—	63	March 2024
July 2018 Offering	208	—	—	—	208	July 2023

Series A Convertible Preferred	19	—	—	—	19	September 2023
2017 Equilibria	6	—	—	—	6	December 2022
Galena February 2017	1	—	—	—	1	February 2022
Galena Other	3	—	—	(1)	2	January 2022






	302	4,012	(449)	(1)	3,864

Warrants to acquire shares of common stock consist of warrants that may be settled in cash, which are liability-classified warrants, and equity-classified warrants.

Warrants Classified as Liabilities

Liability-classified warrants consist of warrants to acquire common stock issued in connection with previous equity financings for Series A Convertible Preferred Stock, Galena's February 2017 financing, and various other Galena equity financings that were assumed by the Company at the consummation of the Merger. These warrants may be settled in cash and were determined not to be indexed to the Company’s common stock.

The estimated fair value of outstanding warrants accounted for as liabilities is determined at each balance sheet date. Any decrease or increase in the estimated fair value of the warrant liability since the most recent balance sheet date is recorded in the consolidated statement of operations as change in fair value of warrant liability. The fair value of the warrants is estimated using a Black-Scholes pricing model with the following inputs:


As of September 30, 2020

Warrant Issuance	Outstanding (in thousands)	Strike price (per share)		Expected term (years)	Volatility %		Risk-free rate %
Series A Convertible Preferred	19	$	7.50	3.00	131.54	%	0.16	%
Galena February 2017	1	$	1,650.00	1.37	135.60	%	0.13	%
Galena Other	2	$	30,901.09	1.29	135.60	%	0.13	%




As of December 31, 2019
Warrant Issuance	Outstanding (in thousands)	Strike price (per share)		Expected term (years)	Volatility %		Risk-free rate %
Series A Convertible Preferred	19	$	7.50	3.75	112.84	%	1.64	%
Galena February 2017	1	$	1,650.00	2.12	114.91	%	1.64	%
Galena Other	3	$	41,494.00	1.43	114.91	%	1.64	%

The expected volatility assumptions are based on the Company's implied volatility in combination with the implied volatilities of similar publicly traded entities. The expected life assumption is based on the remaining contractual terms of the warrants. The risk-free rate is based on the zero coupon rates in effect at the time of valuation. The dividend yield used in the pricing model is zero, because the Company has no present intention to pay cash dividends.

The changes in fair value of the warrant liability for the nine months ended September 30, 2020 were as follows (in thousands):


Warrant Issuance	Warrant liability, December 31, 2019		Fair value of warrants granted		Fair value of warrants exercised		Adjustment to exercise price of warrants		Change in fair value of warrants		Warrant liability, September 30, 2020
Series A Convertible Preferred	$	52	$	—	$	—	$	—	$	(25)	$	27
Galena February 2017	—		—		—		—		—		—





	$	52	$	—	$	—	$	—	$	(25)	$	27

Warrants Classified as Equity

The pre-funded warrants exercisable for shares of common stock and warrants to acquire shares of common stock issued during the January 2020 Offering and concurrent private placement and the warrants to acquire shares of common stock issued during the July 2020 PIPE Offering were recorded as equity upon issuance. During its evaluation of equity classification of these pre-funded warrants and common stock purchase warrants, the Company considered the conditions as prescribed within ASC 815-40, Derivatives and Hedging, Contracts in an Entity’s own Equity (“ASC 815-40”). The conditions within ASC 815-40 are not subject to a probability assessment. The pre-funded warrants exercisable for shares of common stock and warrants to acquire shares of common stock do not fall under the liability criteria within ASC 480, Distinguishing Liabilities from Equity, as they are not puttable and do not represent an instrument that has a redeemable underlying security. The pre-funded warrants exercisable for shares of common stock and warrants to acquire shares of common stock do meet the definition of a derivative instrument under ASC 815, but are eligible for the scope exception as they are indexed to the Company’s own stock and would be classified in permanent equity if freestanding.

Warrant Modification

On March 6, 2019, the Company entered into a Warrant Exercise Agreement (the "March 2019 Exercise Agreement") with one of the holders of the Company's warrants issued in July 2018. Pursuant to the March 2019 Exercise Agreement, new warrants to purchase up to an aggregate of approximately 76,000 shares of common stock at an exercise price of $70.00 per share ("March 2019 Exercise Agreement Warrants") were issued on a share-for-share basis in an amount equal to the number of the warrants issued in 2018 that were cash exercised by the warrant holder prior to May 31, 2019. On January 2, 2020, the Company amended the March 2019 Exercise Agreement Warrants to provide for an exercise price of $7.50 per share (subject to adjustment for stock splits and the like). The reduced exercise price of the 63,000 March 2019 Exercise Agreement Warrants increased the fair value of these warrants by approximately $0.1 million during the nine months ended September 30, 2020, which is recorded as a deemed dividend increasing the net loss attributable to common stockholders and additional paid-in-capital.