Common Stock

9 Months Ended

Sep. 30, 2019

7. Common Stock

2019

Public Offering

On April 8, 2019, the Company closed its underwritten public offering in which, pursuant to the underwriting agreement entered into between the Company and H.C. Wainwright & Co., LLC, as representative of the underwriters, dated April 3, 2019, the Company issued and sold an aggregate of (i) 1,719,554 common units, with each common unit being comprised of one share of the Company’s common stock, par value $0.0001 per share and one warrant to purchase one share of common stock and (ii) 8,947,112

pre-funded

units with each

pre-funded

unit being comprised of one

pre-funded

warrant to purchase one share of common stock and one common warrant to purchase one share of common stock. The public offering price was $1.35 per common unit and $1.34 per

pre-funded

unit. The common warrants have an exercise price of $1.35 per share. In addition, on April 8, 2019, the Company closed on the sale of an additional 1,599,999 common units purchased pursuant to the exercise in full of the underwriter’s option to purchase additional securities. Each common unit contains one share of common stock and one common warrant to purchase a share of common stock.

The common warrants issued on April 8, 2019 have a fair value of $0.997 per share.

370,000

pre-funded

warrants issued in th

offering were exercised

during the t

hree months ending September 30, 2019 which resulted in the issuance of 370,000

shares of common stock

with net proceeds of $4.

8,647,112 of the 8,947,112 pre-funded warrants issued in the offering were exercised during the nine months ending September 30, 2019 which resulted in the issuance of 8,647,112 shares of common stock with net proceeds of $87.

Warrants were also issued to the underwriters to purchase 797,334 shares of common stock

with

an exercise price of $1.6875

and a fair value of

2632

per

share. Both the common and underwriter warrants have an exercise term of five years and are exercisable immediately following their issuance.

After giving effect to the exercise of the Underwriters’ overallotment option and the exercise of 8,647,112

pre-funded

warrants, the gross aggregate proceeds from the offering on April 8 was $16,557, prior to deducting underwriting discounts and commissions and other estimated offering expenses. The Company agreed to pay H.C. Wainwright & Co, LLC a commission of 7% of the gross proceeds. The Company also agreed to pay or reimburse certain expenses on behalf of H.C. Wainwright. A total of $1,904

of commissions and other issuance costs were associated with the public offering.

For the nine months ending September 30

, 2019

, after giving effect to fees, commissions and other expenses of approximately $1,904

, the Company recorded net proceeds of $14,653 in aggregate for the sale of the public offering and

the pre-funded warrant

exercises.

Confidential Marketed Public Offering (“CMPO”)

On January 31, 2019 and February 4, 2019, the Company closed two CMPOs, pursuant to which the Company sold 156,118 and 532,353 shares of common stock, respectively, at $1.70 per share and issued warrants to exercise 10,151 and 34,605 shares of common stock, respectively, to underwriters at an exercise price of $2.125 per share with expiration dates of January 26, 2024 and January 30, 2024, respectively.

The underwriter warrants had a fair value of $0.9332 and $1.1946 per share at the January 31, 2019 and February 4, 2019 issuance date, respectively.

Prior to deducting fees and commissions for both offerings, the Company recorded aggregate gross proceeds of approximately $1,170.

Registered Direct Offering

On February 12, 2019, the Company sold 1,706,484 shares at $1.465 per share for gross proceeds of approximately $2,500. In this registered direct offering, the Company issued warrants to purchase 1,706,484 shares of its common stock to investors with an exercise price of $1.34

and a fair value of $0.5962

per share

, respectively,

with

an expiration date of August 12, 2024. In addition, the Company issued warrants to purchase 110,922 shares of its common stock to underwriters with an exercise price of $1.8313 per share and an expiration date of February 7, 2024.

The underwriter warrants had a fair value of $0.5314 per share at the issuance date.

Exercise of Warrants

During the three months ended March 31, 2019,

697,500 pre-funded warrants,

which were issued as part of the November 2018 securities purchase agreement with an institutional investor, were exercised and the Company recorded $70 in net proceeds.

For the three months ending March

2019

, after giving effect to fees, commissions and other expenses of approximately $

691

, the Company recorded net proceeds of $

3,049

in aggregate for the sale of the CMPOs, the registered direct offering and

the pre-funded warrant

exercises.

For the nine months ending September 30, 2019, after giving effect to fees, commissions and other expenses of approximately $2,595, the Company recorded net proceeds of $17,702 in aggregate for the sale of the public offering, CMPOs, the registered direct offering and

the pre-funded warrant

exercises. The Company intends to use the net proceeds for research and development of its therapeutic candidates, particularly the development of Pulmazole, as well as for working capital and general corporate purposes.

2018

Public Offering

On April 3, 2018, the Company closed its previously announced underwritten public offering in which, pursuant to the underwriting agreement entered into between the Company and Oppenheimer & Co. Inc., as representative of the underwriters, dated March 28, 2018, the Company issued and sold (i) 1,566,000 common units, with each common unit being comprised of one share of the Company’s common stock, par value $0.0001 per share, one Series A warrant to purchase one share of common stock and one Series B warrant to purchase one share of common stock, and (ii) 784,000

pre-funded

units, with each

pre-funded

unit being comprised of one

pre-funded

warrant to purchase one share of common stock, one Series A Warrant and one Series B Warrant. The public offering price was $6.50 per common unit and $6.40 per

pre-funded

unit, and the gross proceeds received by the Company on April 3, 2018 pursuant to such sales were $15,197, prior to deducting underwriting discounts and commissions and other estimated offering expenses.

In addition, on April 4, 2018, the Company closed on the sale of 115,000 additional common units pursuant to the underwriters’ option, under the underwriting agreement, to purchase up to an additional 115,000 common and

pre-funded

units, which were exercised in full. After giving effect to the exercise of the Underwriters’ overallotment option, the gross aggregate proceeds from the offering on April 3 and 4 were $15,944, prior to deducting underwriting discounts and commissions and other estimated offering expenses.

All of the

pre-funded

warrants issued in the offering were exercised in April 2018 and, as 15,000 were exercised on a cashless basis, resulted in the issuance of an additional 783,707 shares of common stock with gross proceeds of $78.

The Series A Warrants included in the common units and

the pre-funded

units were immediately exercisable at a price of $6.50 per share of common stock, subject to adjustment in certain circumstances, and

expired

six months from the date of issuance. The Series B Warrants included in the common units and

the pre-funded

units were immediately exercisable at a price of $7.50 per share of common stock, subject to adjustment in certain circumstances, and will expire five years from the date of issuance. The shares of common stock,

or pre-funded warrants

in the case of

the pre-funded

units, and the Series A Warrants and Series B Warrants were offered together, but the securities contained in the common units and

the pre-funded

units were issued separately.

The Company agreed to pay Oppenheimer & Co., Inc. a commission of (a) 7% of the gross proceeds raised up to $5,000 and (b) 6.5% of the gross proceeds raised in excess of $5,000. The Company also agreed to pay or reimburse certain expenses on behalf of Oppenheimer. A total of $1,497 of commissions and other issuance costs were associated with the public offering.

The net proceeds to the Company from the Offering of the common units and

pre-funded

units were approximately $14,517, after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering for research and development of its therapeutic candidates, particularly the development of Pulmazole, as well as for working capital and general corporate purposes.

At-the-Market

Offering

On March 17, 2017, the Company entered into an

At-The-Market

Sales Agreement (the “Sales Agreement”) with BTIG, LLC (“BTIG”) to act as the Company’s sales agent with respect to the issuance and sale of up to $11,000 of the Company’s shares of common stock, from time to time in an

at-the-market

public offering. Sales of common stock under the Sales Agreement

re made pursuant to an effective shelf registration statement on Form

S-3,

which was filed with the Securities and Exchange Commission on July 15, 2016, and subsequently declared effective on August 3, 2016 (File

No. 333-212546),

and a related prospectus. BTIG act

as the Company’s sales agent on a commercially reasonable efforts basis, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of The NASDAQ Global Market.

BTIG

received

compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of the Company’s common stock pursuant to the Sales Agreement.

During the

nine

-month

period ended

September

30, 2018, the Company sold 123,266 shares of its common stock under the Sales Agreement at an average selling price of approximately $15.40 per share which resulted in gross proceeds of approximately $1,904 and net proceeds of approximately $1,847 after payment of 3% commission to BTIG and other issuance costs.