Stockholders' Equity | 10. Stockholders’ Equity Preferred Stock The Company has 10,000,000 shares of authorized preferred stock available for issuance in one or more series. Upon issuance, the Company can determine the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. There were 17,897 shares and 20,200 shares of preferred stock outstanding as of December 31, 2016 2015, respectively. These shares are non-voting Series B and Series C Convertible Preferred Stock at a price of $840 and $3,850 per share, respectively. Each share of non-voting Series B is convertible into 166 shares of our common stock (as adjusted for the Reverse Split) and each share of non-voting Series C Stock is convertible into 1000 shares of our common stock, provided that conversion will be prohibited if, as a result, the holder and its affiliates would own more than 9.98% of the total number of shares of our common stock then outstanding . In the event of the Company’s liquidation, dissolution, or winding up, holders of Series B and Series C Stock will receive a payment equal to $0.0001 per share of Series B and Series C Stock before any proceeds are distributed to the holders of Common Stock. Shares of Series B and Series C Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the outstanding Series B and Series C Stock will be required to amend the terms of the Series B and Series C Stock. Shares of the Series B and Series C Stock will not be entitled to receive any dividends, unless and until specifically declared by the Company’s board of directors, and will rank: • senior to all of the Company’s Common Stock; • senior to any class or series of the Company’s capital stock hereafter created specifically ranking by its terms junior to the Series B and Series C Stock; • on parity with any class or series of the Company’s capital stock hereafter created specifically ranking by its terms on parity with the Series B and Series C Stock; • junior to any class or series of the Company’s capital stock hereafter created specifically ranking by its terms senior to the Series B and Series C Stock; in each case, as to distributions of assets upon the Company’s liquidation, dissolution or winding up whether voluntarily or involuntarily. Common Stock Holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders of the Company. Subject to the preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors. Under the terms of the Loan Agreement with the Lenders, the Company is precluded from paying cash dividends without the prior written consent of the Lenders. Underwritten Offering In December 2015, the Company completed underwritten offering of (i) 1,832,698 shares of its common stock, that included the In October 2016, the Company completed underwritten offering of (i) 5,675,825 shares of its common stock at a price of $3.85 per share, and (ii) 1,558 shares of its non-voting Series C Convertible Preferred Stock (“Series C Stock”) at a price of $3,850.00 per share. Gross proceeds from the sale were $27.9 million and net proceeds were $25.9 million. Each share of non-voting Series C Stock is convertible into 1,000 shares of Sunesis common stock, provided that conversion will be prohibited if, as a result, the holder and its affiliates would own more than 9.98% of the total number of shares of Sunesis common stock then outstanding. Controlled Equity Offerings In August 2011, the Company entered into a Controlled Equity Offering SM During the year ended December 31, 2016, the Company sold an aggregate of 57,000 4.73 0.3 17.9 2010 Offering In October 2010, the Company completed an underwritten offering, pursuant to which the Company issued an aggregate of 1,226,268 shares of common stock and warrants to purchase 613,133 shares of common stock, for aggregate gross proceeds of $15.5 million (the “2010 Offering”). Net proceeds from the sale were $14.2 million, after deducting underwriting discounts and offering expenses. The warrants had an exercise price of $15.12 per share. In October 2015, all outstanding warrants related to the 2010 Offering expired unexercised. Equity Incentive Plans The Company grants options to purchase shares of its common stock primarily to: (i) new employees, of which 25% of the shares subject to such options become exercisable on the first anniversary of the vesting commencement date, and 1/48th of the shares subject to such options become exercisable each month over the remainder of the four-year vesting period, (ii) existing employees with various vesting schedules over three to four years, (iii) new non-employee members of the board of directors, of which 50% of the shares subject to such options become exercisable on each of the first and second anniversary of the vesting commencement date, and (iv) continuing non-employee members of the board of directors, of which 1/24th of the shares subject to such options become exercisable each month following the date of grant over a two-year vesting period. On March 15, 2011, the Company’s Board of Directors adopted, and on June 3, 2011, the Company’s stockholders approved, the 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan is intended as the successor to and continuation of the Company’s 1998 Stock Plan, 2001 Stock Plan, 2005 Equity Incentive Award Plan and 2006 Employment Commencement Incentive Plan (collectively, the “Prior Plans”). No additional stock awards will be granted under the Prior Plans. The Company initially reserved a total of 1,006,976 shares of common stock for issuance under the 2011 Plan, which is the sum of (i) the 89,967 shares remaining available as of the Effective Date under the Prior Plans, (ii) an additional 733,333 new shares, and (iii) that portion of the 183,676 shares underlying stock options granted and currently outstanding under the Prior Plans that expire or terminate for any reason prior to exercise or settlement or that are forfeited because of the failure to meet a contingency or condition required to vest such shares. The number of shares of common stock available for issuance under the 2011 Plan automatically increases on January 1st of each year for a period of 10 years commencing on January 1, 2012 by an amount equal to: (i) 4.0% of the Company’s outstanding shares of common stock on December 31st of the preceding calendar year, or (ii) a lesser amount determined by the Board of Directors. On January 1, 2016 and 2015, in accordance with the above, . During the year ended December 31, 2016, options to purchase 777,049 88,411 Employee Stock Purchase Plans On March 5, 2011, the Company’s Board of Directors adopted, and on June 3, 2011, the Company’s stockholders approved, the 2011 Employee Stock Purchase Plan (the “2011 ESPP”). The 2011 ESPP is intended as the successor to the Company’s 2005 Employee Stock Purchase Plan, which was terminated on June 3, 2011. The 2011 ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Eligible employees can purchase shares of the Company’s common stock at 85% of the lower of the fair market value of the common stock at (i) the beginning of a 12-month offering period, or (ii) at the end of one of the two related 6-month purchase periods. No participant in the 2011 ESPP may be issued or transferred shares of common stock valued at more than $25,000 per calendar year. The initial offering under the 2011 ESPP commenced on June 13, 2011 and ended on May 31, 2012. Subsequent commenced or will The Company initially reserved a total of 83,333 shares of common stock for issuance under the 2011 ESPP. The number of shares of common stock available for issuance under the 2011 ESPP automatically increases on January 1st of each year for a period of 10 years commencing on January 1, 2012 by an amount equal to: (i) 1.0% of the Company’s outstanding shares of common stock on December 31st of the preceding calendar year, or (ii) a lesser amount determined by the Board of Directors. A total of 59,086 6,179 Warrants Warrants to purchase shares of the Company’s common stock outstanding as of December 31, 2016 were as follows (in thousands, except per share amounts): Exercise Price Date Issued Shares Per Share Expiration February 2015 10 $ 13.32 February 2020 March 2016 208 $ 3.25 March 2021 Total warrants outstanding and exercisable 218 Reserved Shares Shares of the Company’s common stock reserved for future issuance as of December 31, 2016 Shares Available Total for Future Outstanding Shares Grant Securities Reserved Warrants — 218 218 Convertible preferred stock — 4,270 4,270 Stock option plans 89 2,698 2,787 Employee stock purchase plan 46 — 46 Total reserved shares of common stock 135 7,186 7,321 |