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STOCKHOLDERS' EQUITY | 3 Months Ended
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Mar. 31, 2021
STOCKHOLDERS' EQUITY [Abstract] |
STOCKHOLDERS' EQUITY | 8. STOCKHOLDERS’ EQUITY Common Stock. Pursuant to our Third Amended and Restated Certificate of Incorporation, as amended, we currently have 150,000,000 shares of common stock authorized for issuance. On December 20, 2018, the Company’s shareholders approved the proposal to authorize the Company’s Board of Directors to, in its discretion, amend the Company’s Third Amended and Restated Certificate of Incorporation to increase the total number of authorized shares of common stock from 150,000,000 shares to 250,000,000 shares. The Company has not yet effected this increase. During the three months ended March 31, 2021 and 2020, the Company issued zero and 427,997 shares of its common stock, respectively, in connection with the conversion of convertible notes, plus interest, totaling zero and $0.4 million, respectively. See Note 4 – Convertible Notes. During the three months ended March 31, 2021, the Company issued 55,147 shares of its common stock for approximately $0.2 million of consulting services. LP Purchase Agreement On September 7, 2018, the Company entered into a purchase agreement (the “LP Purchase Agreement”) with Lincoln Park, pursuant to which Lincoln Park has agreed to purchase from the Company up to an aggregate of $10,000,000 of common stock of the Company (subject to certain limitations) from time to time over the term of the LP Purchase Agreement. During the three months ended March 31, 2020, we received approximately $1.3 million from the sale of 930,012 shares of common stock to Lincoln Park under the LP Purchase Agreement. The LP Purchase Agreement terminated during our second fiscal quarter of 2020. E ffective April 13, 2020, the Company became eligible to sell additional shares to Lincoln Park pursuant to the LP 2020 Purchase Agreement, as discussed below. LP 2020 Purchase Agreement On March 26, 2020, the Company entered into a purchase agreement (the “LP 2020 Purchase Agreement”) and a registration rights agreement (the “LP 2020 Registration Rights Agreement”) with Lincoln Park pursuant to which Lincoln Park has agreed to purchase from us, from time to time, up to $10,000,000 of our common stock, subject to certain limitations, during the 24 month term of the LP 2020 Purchase Agreement. Pursuant to the terms of the LP 2020 Purchase Agreement, on the agreement date, the Company issued 250,000 shares of its common stock to Lincoln Park as consideration for its commitment to purchase shares of common stock of the Company under the LP Purchase Agreement (the “LP 2020 Commitment Shares”). Pursuant to the terms of the LP 2020 Registration Rights Agreement, on March 27, 2020, as amended on April 8, 2020, the Company filed with the SEC a registration statement on Form S-1 to register for resale under the Securities Act of 1933, as amended, or the Securities Act, 1,770,000 shares of common stock, which includes the LP 2020 Commitment Shares, that have been or may be issued to Lincoln Park under the LP 2020 Purchase Agreement. The Form S-1 was declared effective by the SEC on April 13, 2020. No shares registered under this S-1 were sold to Lincoln Park during the three months ended March 31, 2020. As of June 22, 2020, all shares registered under this S-1 had been sold and/or issued to Lincoln Park. On June 26, 2020, the Company filed with the SEC a registration statement on Form S-1 to register for resale under the Securities Act of 1933, as amended, or the Securities Act, an additional 4,500,000 shares of common stock that have been or may be issued to Lincoln Park under the LP Purchase Agreement. The Form S-1 was amended twice on July 7, 2020 and declared effective by the SEC on July 7, 2020. As of March 31, 2021, 3,460,000 shares registered under this S-1 had been sold and/or issued to Lincoln Park. As of the date of issuance of this Quarterly Report on Form 10-Q, we have already received an aggregate of $8.8 million from the sale of common stock to Lincoln Park under the LP 2020 Purchase Agreement, including approximately $1.3 million from the sale of 500,000 shares of common stock during the three months ended March 31, 2021. Preferred Stock. The Company’s Board of Directors is authorized to issue up to 15,000,000 shares of preferred stock in one or more series, from time to time, with such designations, powers, preferences and rights and such qualifications, limitations and restrictions as may be provided in a resolution or resolutions adopted by the Board of Directors. Series B Preferred Stock. The Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (“Series B Preferred Stock”) with the State of Delaware, which designates 6,900 shares of our preferred stock as Series B Preferred Stock. The Series B Preferred Stock has a stated value of $1,000 per share and a par value of $0.01 per share. The Series B Preferred Stock includes a beneficial ownership blocker but has no dividend rights (except to the extent dividends are also paid on the common stock). On August 28, 2017, the Company completed an underwritten public offering (the “August 2017 Offering”) consisting of the Company’s Series B Preferred Stock and warrants. The conversion price of the Series B Preferred Stock contains a down round feature. The Company will recognize the effect of the down round feature when it is triggered. At that time, the effect would be treated as a deemed dividend and as a reduction of income available to common shareholders in our basic earnings per share calculation. The March 2020 Amendment, see Note 4 – Convertible Notes, triggered the down round feature of the Series B Preferred Stock and, as a result, the conversion price of the Company’s Series B Convertible Preferred Stock was automatically adjusted from $2.25 per share to $0.40 per share. In connection with the down round adjustment, the Company calculated an incremental beneficial conversion feature of approximately $3.3 million which was recognized as a deemed dividend at time of the down round adjustment (“Deemed Dividend A”). There were no conversions of Series B Preferred Stock during the three months ended March 31, 2021 and 2020, respectively. At March 31, 2021 and December 31, 2020, the Company had 6,900 shares of Series B Preferred Stock designated and issued and 47 shares of Series B Preferred Stock outstanding. Common Stock Warrants. The following represents a summary of the warrants outstanding as of March 31, 2021:
|  |  |  |  |  | Underlying |  | Exercise
|  | Issue Year |  | Expiration |  | Shares |  | Price
Warrants |  |  |  |  |  |  |  |  |
(1) |  | 2017 |  | June 2022 |  | 2,540 |  | $ | 41.25
(1) |  | 2017 |  | June 2022 |  | 500 |  | $ | 7.50
(2) |  | 2017 |  | June 2022 |  | 6,095 |  | $ | 105.00
(3) |  | 2017 |  | August 2022 |  | 25,201 |  | $ | 0.40
(4) |  | 2017 |  | August 2022 |  | 4,000 |  | $ | 46.88
(5) |  | 2017 |  | August 2022 |  | 47,995 |  | $ | 150.00
(5) |  | 2017 |  | August 2022 |  | 9,101 |  | $ | 7.50
(6) |  | 2017 |  | August 2022 |  | 16,664 |  | $ | 0.40
(6) |  | 2017 |  | August 2022 |  | 7,335 |  | $ | 0.40
(7) |  | 2017 |  | October 2022 |  | 666 |  | $ | 0.40
(8) |  | 2018 |  | October 2022 |  | 7,207 |  | $ | 112.50
(9) |  | 2018 |  | April 2023 |  | 69,964 |  | $ | 5.40
(9) |  | 2018 |  | April 2023 |  | 121,552 |  | $ | 5.40
(10) |  | 2018 |  | October 2022 |  | 15,466 |  | $ | 11.25
(11) |  | 2018 |  | July 2023 |  | 14,671 |  | $ | 5.40
(11) |  | 2018 |  | July 2023 |  | 14,672 |  | $ | 5.40
(11) |  | 2018 |  | August 2023 |  | 36,334 |  | $ | 5.40
(11) |  | 2018 |  | August 2023 |  | 36,334 |  | $ | 5.40
(11) |  | 2018 |  | September 2023 |  | 19,816 |  | $ | 5.40
(11) |  | 2018 |  | September 2023 |  | 20,903 |  | $ | 5.40
(12) |  | 2018 |  | November 2023 |  | 75,788 |  | $ | 5.40
(12) |  | 2018 |  | December 2023 |  | 51,282 |  | $ | 5.40
(13) |  | 2019 |  | April 2024 |  | 147,472 |  | $ | 5.40
(14) |  | 2019 |  | May 2024 |  | 154,343 |  | $ | 9.56
|  |  |  |  |  | 905,901 |  |  |
| (1) |  | These warrants were issued in connection with a June 2017 merger transaction (the “Merger”).
| (2) |  | These warrants were issued in connection with the Merger.
| (3) |  | These warrants were issued in connection with an underwritten public offering completed on August 28, 2017 (the “August 2017 Offering”) and are the August 2017 Offering Warrants discussed below.
| (4) |  | These warrants were issued in connection with the August 2017 Offering.
| (5) |  | These warrants were issued in connection with the conversion of our Series A Senior stock, at the time of the closing of the August 2017 Offering.
| (6) |  | These warrants were issued in connection with the conversion of convertible bridge notes, at the time of the closing of the August 2017 Offering, and are the Note Conversion Warrants discussed below.
| (7) |  | These warrants were issued in connection with the waiver of default the Company received in the fourth quarter of 2017 in connection with the Convertible Promissory Notes and are the Convertible Promissory Note Warrants discussed below.
| (8) |  | These warrants were issued in connection with the Debt Obligation settlement agreements and are the Creditor Warrants discussed below.
| (9) |  | These warrants were issued in connection with the 2018 Note Agreement and are the April 2018 Warrants discussed below.
| (10) |  | These warrants were issued in connection with the 2018 Note Agreement and are the Advisor Warrants discussed below.
| (11) |  | These warrants were issued in connection with the 2018 Note Agreement and are the Q3 2018 Warrants discussed below.
| (12) |  | These warrants were issued in connection with the 2018 Note Agreement and subsequent Amendment Agreement and are the Q4 2018 Warrants discussed below.
| (13) |  | These warrants were issued in connection with the 2018 Note Agreement and subsequent Amendment No. 2 Agreement and are the April 2019 Warrants discussed below.
| (14) |  | These warrants were issued in connection with the May 2019 Bridge Notes and are the May 2019 Warrants discussed below.
During the three months ended March 31, 2021 and 2020, 239 and 1,588 warrants expired, respectively. These warrants had been issued in connection with transactions which were completed in January 2016 and February 2015, respectively. During the three months ended March 31, 2021, 357 warrants were settled for cash of approximately $0.1 million. For further discussion, see the 2016 Warrant Liability in Note 9 – Fair Value. August 2017 Offering Warrants In connection with the August 2017 Offering, the Company issued 178,666 warrants at an exercise price of $45.00, which contain a down round provision (the “August 2017 Offering Warrants”). The August 2017 Offering Warrants were exercisable immediately and expire 5 years from date of issuance. As a result of the March 2020 Amendment, the exercise price of the August 2017 Offering Warrants was adjusted from $2.25 to $0.40. At the time the exercise price was adjusted, the Company calculated the fair value of the down round provision on the warrants to be approximately $6,000 and recorded this as a deemed dividend (“Deemed Dividend B”). Note Conversion Warrants Upon the closing of the August 2017 Offering, the Company issued 23,999 warrants to purchase the Company’s common stock (the “Note Conversion Warrants”). The Note Conversion Warrants have an exercise price of $45.00 per share and contain a down round provision. As a result of the March 2020 Amendment, the exercise price of the Note Conversion Warrants was adjusted from $2.25 to $0.40. At the time the exercise price was adjusted, the Company calculated the fair value of the down round provision on the warrants to be approximately $5,000 and recorded this as a deemed dividend (“Deemed Dividend C”). Convertible Promissory Note Warrants The Convertible Promissory Note Warrants had an original exercise price of $45.00 per share and contain a down round provision. As a result of the March 2020 Amendment, the exercise price of the Convertible Promissory Note Warrants was adjusted from $2.25 to $0.40. At the time the exercise price was adjusted, the Company calculated the fair value of the down round provision on the warrants to be less than $1,000 and recorded this as a deemed dividend (“Deemed Dividend D”). Creditor Warrants In the fourth quarter of 2017, the Company entered into Settlement Agreements with the Creditors pursuant to which the Company agreed to issue, to certain of its Creditors, 7,207 Creditor Warrants (the “Creditor Warrants”) to purchase 7,207 shares of the Company’s common stock at an exercise price of $112.50 per share. The Creditor Warrants were issued in February 2018. April 2018 Warrants In connection with the issuance of Bridge Notes in April 2018, the Company issued 243,224 warrants at an exercise price of $11.25 at time of issuance. At issuance, half of these April 2018 Warrants had a five-year term and half had a one-year term. In April 2019, as a result of the Amendment No.2 Agreement, the exercise price of the April 2018 Warrants was adjusted to $5.40 and all April 2018 Warrants that had a one-year term were amended to have a five-year term. Advisor Warrants At the time of the 2018 Note Agreement, the Company issued 15,466 warrants with an exercise price of $11.25 to a financial advisor. Q3 2018 Warrants In connection with the issuance of Bridge Notes during the third quarter of 2018, the Company issued 196,340 warrants with an exercise price of $11.25 at time of issuance (the “Q3 2018 Warrants”). At the time of issuance, half of these Q3 2018 Warrants had a five-year term and half had a one-year term. In September 2018, the exercise price was modified to $7.50. In April 2019, as a result of the Amendment No.2 Agreement, the exercise price of the Q3 2018 Warrants was adjusted to $5.40 and all Q3 2018 Warrants that had a one-year term were amended to have a five-year term. Q4 2018 Warrants In connection with the issuance Bridge Notes during the fourth quarter of 2018, the Company issued 300,115 warrants with an exercise price of $5.40 at time of issuance and a five-year term (the “Q4 2018 Warrants”). April 2019 Warrants In connection with the issuance of the April 2019 Bridge Notes, the Company issued 147,472 warrants with an exercise price of $5.40 and a five-year term. May 2019 Warrants In connection with the issuance of the May 2019 Bridge Notes, the Company issued 154,343 warrants with an exercise price of $5.40 and a five-year term. Deemed Dividends As discussed above, certain of our preferred stock and warrant issuances contain down round provisions which require us to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic earnings per share. There were no deemed dividends during the three months ended March 31, 2021. The following represents a summary of the dividends recorded for the three months ended March 31, 2020:
|  | Amount Recorded
Deemed Dividends |  | (in thousands)
Dividends resulting from the March 2020 Amendment |  |  |
Deemed Dividend A |  | $ | 3,333
Deemed Dividend B |  |  | 6
Deemed Dividend C |  |  | 5
Deemed Dividend D |  |  | *
For the three months ended March 31, 2020 |  | $ | 3,344
* Represents less than one thousand dollars

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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