Note

- Equity

Registered Direct Offerings

November 22, 2019,

the Company completed a registered direct offering (“RDO”), whereby the Company sold to investors an aggregate of

3,167,986

shares of the Company’s common stock at

$0.40

per share and warrants to purchase up to

3,167,986

shares of the Company’s common stock at an exercise price of

$0.46

per share. The warrants are

first

exercisable on

May 22, 2020.

The Company received net proceeds of approximately

$1,093,000

after commissions and expenses. Additionally, the placement agent has been issued warrants to purchase common stock equal to

of the aggregate number of shares of common stock issued and issuable pursuant to the RDO (including shares underlying any warrants), or

443,518

shares of common stock at an exercise price of

125%

of the RDO price per share, or

$0.50

per share.

In connection with the closing of the Company’s RDO, the Company further adjusted the warrants to purchase up to

2,283,740

shares of the Company's common stock, that had been issued as part of the

May 9, 2018

private placement and adjusted in

August 2018

to (i) reduce the exercise price for each share from

$4.25

per share to

$0.46

per share, (ii) extended the date upon which such warrants could be initially exercised to

May

22,

2020,

and (iii) extended the termination date of the warrants by

six

months and

one

day.

January 21, 2020,

the Company completed a registered direct offering, in which the Company sold to an accredited investor

961,000

shares of the Company’s common stock at

$0.24

per share. The Company received net proceeds of approximately

$200,000

after commissions and expenses.

January 23, 2020,

the Company completed a registered direct offering, in which the Company sold to investors an aggregate of

7,620,000

shares of the Company’s common stock at

$1.05

per share. The Company received net proceeds of approximately

$7.2

million after commissions and expenses.

February 19, 2020,

the Company amended its Registration Statement on Form S-

to increase the maximum offering size by approximately

$3,000,000.

February 21, 2020,

the Company completed a registered direct offering under the amended S-

Registration Statement, in which the Company sold to investors an aggregate of

5,000,000

shares of the Company’s common stock at

$3.50

per share. The Company received net proceeds of approximately

$16

million after commissions and expenses.

Stock Issuances

During the

three

months ended

March 31, 2020

, we issued (i)

13,581,000

shares of common stock in the Company's registered direct offerings for cash of

$25,731,640,

and (ii)

5,000

shares of common stock for service provided to us, valued at

$1,550.

During the year ended

December 31, 2019

, we issued (i)

3,167,986

shares of common stock from the Company’s RDO for cash of

$1,267,194,

(ii)

506,707

shares of common stock for service provided to us, valued at

$469,588,

and (iii) we issued

350,000

shares of common stock held in abeyance for an investor in the

May 2018

private placement.

Preferred Stock

In connection with the Company’s IPO, all preferred stock included in Series A through Series G preferred stock, totaling

1,394,953

shares at

March 31, 2018

were converted to an aggregate of

9,324,177

shares of the Company's common stock in association with the forward-split (See Note

- Capital Stock). Upon the completion of the IPO, the Company became authorized to issue

10,000,000

shares of preferred stock at a par value of

$0.001

per share,

none

of which are outstanding at

March 31, 2020

Common Stock

Upon the completion of the IPO, all of the Company’s non-voting common stock automatically converted into voting common stock on a

one

-to-

one

basis. Immediately following the completion of the IPO, the Company became authorized to issue

200,000,000

shares of common stock at a par value of

$0.001

per share, all of which is voting common stock. There are

32,849,841

shares of common stock outstanding at

March 31, 2020

Common Stock Purchase Warrants

Common stock purchase warrant activity for the period and year ended

March 31, 2020

and

December 31, 2019

, respectively, are as follows:

	Number of		Weighted Avg.
	Warrants		Exercise Price
Outstanding at January 1, 2019		3,864,552	$	2.36
Issued		3,611,504		0.46
Cancelled or expired		—		—
Exercised		—		—
Outstanding at December 31, 2019		7,476,056	$	1.45
Issued		—		—
Cancelled or expired		—		—
Exercised		—		—
Outstanding at March 31, 2020		7,476,056	$	1.45

The Company did

not

issue warrants in the

three

-month period ended

March 31, 2020

In the year ended

December 31, 2019

, we (i) issued warrants to purchase

3,167,986

shares of our common stock at an exercise price of

$0.46

per share to the investors in the Company’s RDO, (ii) issued warrants to purchase

443,518

shares of our common stock at an exercise price of

$0.50

per share to the placement agent in the RDO, and (iii) reduced the purchase price of the warrants, issued to investors in the

May 2018

private placement, to purchase

2,283,740

shares of the Company’s common stock from

$4.25

per share to

$0.46

per share.

January 29, 2018,

the Company entered into an agreement with FundAthena, Inc. whereby the Company agreed to grant warrants to purchase

6,000

shares of our common stock at an exercise price of

$5.00

per share in consideration of services valued at

$30,000

provided to the Company. At

March 31, 2020

, the Company has

not

issued these warrants.

2018

Equity Incentive Plan

The Company’s board of directors and stockholders have approved and adopted the Company’s

2018

Equity Incentive Plan (

“2018

Plan”), which became effective on the completion of the IPO on

April 3, 2018.

The

2018

Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, other forms of equity compensation and performance cash awards. ISOs

may

be granted only to employees. All other awards

may

be granted to employees, including officers, and to the Company’s non-employee directors and consultants, and affiliates.

A total of

4,160,000

shares of common stock are available under the

2018

Plan, which includes

554,963

shares of common stock reserved for issuance under our

2009

Equity Incentive Plan that were added to the

2018

Plan.

further grants will be made under the

2009

Plan and any shares subject to outstanding stock options under the

2009

Plan that would otherwise be returned to the

2009

Plan will instead be added to the shares initially reserved under the

2018

Plan.

In addition, the number of shares of common stock reserved for issuance under the

2018

Plan will automatically increase on

January 1

of each year, beginning on

January 1, 2020

of the total number of shares of the Company’s common stock outstanding on

December 31

of the preceding calendar year, or a lesser number of shares determined by the administrator of the

2018

Plan. On

January 1, 2019

and

2020,

the number of shares of common stock reserved for issuance under the

2018

Plan was increased by an aggregate of

761,957

and

963,192

shares, respectively.

2018

Employee Stock Purchase Plan

The Company’s board of directors and stockholders have approved and adopted the Company’s

2018

Employee Stock Purchase Plan (“ESPP”), which became effective on the completion of the IPO on

April 3, 2019.

The ESPP authorizes the issuance of

208,500

shares of the Company’s common stock pursuant to purchase rights granted to our eligible employees. The number of shares of common stock reserved for issuance will automatically increase on

January 1

of each calendar year, from

January 1, 2020

by the lesser of

of the total number of shares of our common stock outstanding on

December 31

of the preceding calendar year or a number determined by the administrator of the ESPP. The administrator of the ESPP, which is our Board of Directors, determined

not

to increase the number of shares reserved for issuance under the ESPP on

January 1, 2020

Stock Options

As of

March 31, 2020

, the Company has outstanding stock options to purchase

7,148,248

shares of common stock that have been granted to various employees, vendors and independent contractors. These options can vest immediately or over periods ranging from

months, are exercisable for a period of up to

ten

years, and enable the holders to purchase shares of our common stock at exercise prices ranging from

$0.001

$9.80.

The per-share fair values of these options range from

$0.001

$7.93,

based on Black-Scholes-Merton pricing models with the following assumptions:

Expected term:		10 years
Risk-free rate:		0.21% – 2.63%
Volatility:		75.98% – 79.89%
Dividend yield:		0%

In the

three

-month period ending

March 31, 2020

, the Company granted stock options to employees and consultants to purchase an aggregate of

1,165,325

shares of the Company's common stock with exercise prices ranging from

$1.28

$2.67

per share.

In the year ending

December 31, 2019,

Company granted stock options to employees and consultants to purchase an aggregate of

1,744,300

shares of common stock with exercise prices ranging from

$0.30

$1.62

per share and cancelled options to purchase

297,058

shares of common stock due to the inactivity of service providers.

The weighted average remaining contractual term for the outstanding options at

March 31, 2020

and

December 31, 2019

7.64

and

7.45

years, respectively.

Stock option activity for the

three

months and year ended

March 31, 2020

and

December 31, 2019

, respectively, is as follows:

	Number of			Weighted Avg.
	Shares			Exercise Price
Outstanding at January 1, 2019		4,535,681		$	3.31
Options granted		1,744,300			1.48
Options exercised		—			—
Options expired		(297,058	)		—
Outstanding at December 31, 2019		5,982,923		$	2.66
Options granted		1,165,325			2.00
Options exercised		—			—
Options expired or cancelled		—			—
Outstanding at March 31, 2020		7,148,248		$	2.55

Share-Based Compensation

The Company’s total compensation cost related to non-vested time-based stock option awards granted to employees and board members and

not

yet recognized was approximately

$5.3

million for the quarter ended

March 31, 2020

. The Company expects to record this stock-based compensation expense over the next

three

years in the amount of

$5.2

million with respect to stock option awards using a graded vesting method and

$0.1

million with respect to stock option awards using a cliff vesting method. As of

March 31, 2020

, the weighted average term over which these expenses are expected to be recognized are

2.21

years and

0.25

years, for stock options granted using a graded vesting method and a cliff vesting method, respectively.

As of

March 31, 2020

, the Company’s total compensation cost related to non-vested performance-based stock option awards granted to an employee and

not

yet recognized was approximately

$1.3

million. The entirety of this award

may

be recognized and recorded, upon the achievement of certain milestones, within

1.1

years from

March 31, 2020

In the

three

months ended

March 31, 2020

, the Company's total share-based compensation was approximately

$0.75

million, all of which represents the vesting of options issued to service providers, employees, and board members.