4. Stockholders' Equity and Stock-Based Compensation

Preferred Stock

The Company’s Board of Directors (the “Board”) has the authority to issue preferred stock in one or more series and to fix the rights, preferences, privileges, restrictions and the number of shares constituting any series or the designation of the series.

2021 Registered Direct Offering

On February 12, 2021, the Company completed a common stock offering pursuant to which certain investors purchased 4,081,633 shares of common stock at a price of $49.00 per share. Net proceeds of the offering were approximately $189.7 million after deducting offering expenses.

2020 Follow-on Public Offering

On November 13, 2020, the Company completed the sale of 9,375,000 shares of Cassava common stock in an underwritten public offering at a price of $8.00 per share. The Company received net proceeds from the offering of $70,251,000 after deducting underwriting discounts and offering expenses.

Common Stock Warrants

In August 2018, the Company issued warrants to purchase up to an aggregate of 9.1 million shares of its common stock in conjunction with an offering of its common stock.

During 2020, the Company received proceeds of $4.9 million from the exercise of 4.0 million shares pursuant to warrants. During 2019, the Company received proceeds of $5.9 million from the exercise of 4.6 million shares pursuant to warrants.

Subsequent to December 31, 2020, the Company received proceeds of $0.7 million from the exercise of an additional 0.6 million shares pursuant to warrants. There were no warrants outstanding following the 2021 exercises.

Warrants outstanding as of December 31, 2020 and 2019 were as follows:


			Number of Shares Outstanding under Warrant
			December 31,
Issuance Date	Expiration Date	Exercise Price Per Share	2020	2019

August 17, 2018	February 17, 2021	1.25	554,019	4,496,116
August 17, 2018	February 17, 2021	1.59	—	7,975
			554,019	4,504,091

At the Market (ATM) Common Stock Issuance

On March 27, 2020, the Company established an at-the-market offering program (ATM) to sell, from time to time, shares of Company common stock having an aggregate offering price of up to $100 million in transactions pursuant to a shelf registration statement that was declared effective by the U.S. Securities and Exchange Commission (the SEC) on May 5, 2020. The Company is obligated to pay a commission of 3.0% of the gross proceeds from the sale of shares of common stock in the offering. The Company is not obligated to sell any shares in the offering.

There were no common stock sales under the ATM during the year ended December 31, 2020.

2008 Equity Incentive Plan

Under the Company’s 2008 Equity Incentive Plan, or 2008 Equity Plan, its employees, directors and consultants received share-based awards, including grants of stock options and performance awards. The 2008 Equity Plan expired in December 2017. Share-based awards generally expire ten years from the date of grant.

2018 Equity Incentive Plan

In January 2018, the Company’s Board approved the Company’s 2018 Omnibus Incentive Plan (the 2018 Plan). The Company’s Board or a designated Committee of the Board is responsible for administration of the 2018 Plan and determined the terms and conditions of each option granted, consistent with the terms of the 2018 Plan. The Company’s employees, directors, and consultants are eligible to receive awards under the 2018 Plan, including grants of stock options and performance awards. Share-based awards generally expire ten years from the date of grant. The 2018 Plan provides for issuance of up to 1,000,000 shares of common stock, par value $0.001 per share under the 2018 Plan, subject to adjustment as provided in the 2018 Plan.

When stock options or performance awards are exercised net of the exercise price and taxes, the number of shares of stock issued is reduced by the number of shares equal to the amount of taxes owed by the award recipient and that number of shares are cancelled. The Company then uses its cash to pay tax authorities the amount of statutory taxes owed by and on behalf of the award recipient.

Stock Options

The following summarizes information about stock option activity during 2020:


	Number of Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
				In years	In millions
Outstanding as of December 31, 2019	3,210,965	$	12.27	6.05	$	4.2
Options granted	60,000		7.25
Options exercised	(71,105)		3.60
Options forfeited/canceled	(382,356)		20.31
Outstanding as of December 31, 2020	2,817,504		11.30	5.60	$	6.4
Vested and expected to vest at December 31, 2020	2,817,504		11.30	5.60	$	6.4
Exercisable at December 31, 2020	2,167,633	$	13.86	4.85	$	3.7

The following summarizes information about stock options at December 31, 2020 by a range of exercise prices:


				Options outstanding				Options exercisable
					Weighted
					average	Weighted			Weighted
				Number of	remaining	average		Number of	average
Range of exercise prices				outstanding	contractual	exercise		vested	exercise
From		To		options	life (in years)	price		options	price
$	0.95	$	1.88	659,688	8.4	$	1.47	251,613	$	1.31
$	3.24	$	4.09	812,094	6.7	$	3.51	643,377	$	3.48
$	4.10	$	13.09	598,462	5.0	$	10.89	525,383	$	11.42
$	14.21	$	35.00	619,599	2.8	$	24.02	619,599	$	24.02
$	36.40	$	53.55	127,661	0.7	$	51.72	127,661	$	51.72
				2,817,504	5.6	$	11.30	2,167,633	$	13.86

The Company uses Black-Scholes to estimate the fair value of options granted. Black-Scholes considers a number of factors, including the market price of the Company’s common stock. It used certain factors to value each stock option granted, which resulted in a weighted average fair value of options granted during 2020 and 2019, as follows:


	2020	2019
Volatility	123% to 139%	118% to 119%
Risk-free interest rates	0.46% to 0.78%	1.7% to 2.5%
Expected life of option	7 years	7 years
Dividend yield	zero	zero
Forfeiture rate	zero	zero
Weighted average fair value of stock options granted	$6.69	$1.60

Volatility is based on reviews of the historical volatility of the Company’s common stock. Risk-free interest rates are based on yields of U.S. treasury notes in effect at the date of grant. Expected life of option is based on actual historical option exercises. Dividend yield is zero because the Company does not anticipate paying cash dividends in the foreseeable future.

As of December 31, 2020, the Company expects to recognize compensation expense of $1.5 million related to non-vested options held by equity plan participants over the weighted average remaining recognition period of 2.1 years.

Subsequent to December 31, 2020, there were 20,385 stock options exercised resulting in proceeds to the Company totaling $169,000.

Performance Awards

The following summarizes information about performance award activity during 2020:


		Number of Performance Awards
Outstanding as of December 31, 2019		138,055
Granted		—
Vested performance awards		—
Forfeited/Canceled		—
Outstanding as of December 31, 2020		138,055

If and when outstanding performance awards vest, the Company would recognize $2.3 million in non-cash stock-based compensation expense. These performance awards expire between 2022 and 2026.

Stock-Based Compensation Expense

The following summarizes information about non-cash stock-based compensation expense, in thousands:



	Year ended
	December 31,
	2020		2019
Research and development	$	453	$	542

General and administrative		535		754

Total non-cash stock-based compensation expense	$	988	$	1,296