Stockholders' Equity | 7. Stockholders’ Equity Underwritten Follow-On Public Offerings In February 2023, we completed an underwritten follow-on public offering of 23,125,000 shares of our common stock, including the partial exercise of the underwriters’ option to purchase additional shares, at a price to the public of $ 2.25 per share. The total gross proceeds from the offering were approximately $ 52.0 m illion, before deducting underwriting discounts, commissions and offering expenses payable by us. In September 2021, we completed an underwritten follow-on public offering of 10,781,250 shares of our common stock, including the full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $ 8.00 per share. The total net proceeds from the offering were approximately $ 80.6 million, after deducting underwriting discounts, commissions and offering expenses payable by us. At-the-Market Offering Programs In April 2022, we entered into an Open Market Sale Agreement SM with Jefferies LLC (Jefferies) implementing an “at-the-market” offering program (the Jefferies ATM Offering Program), pursuant to which we may offer and sell, from time to time and at our option, up to an aggregate of $ 65.0 million of shares of our common stock through Jefferies, acting as sales agent. Jefferies is entitled to a fixed commission rate of up to 3.0 % of the gross sales proceeds of shares sold under the Jefferies ATM Offering Program. During the year ended December 31, 2022, we sold an aggregate of 1,421,627 shares of common stock at a weighted-average price of $ 3.09 per share for net proceeds of approximately $ 4.0 million under the Jefferies ATM Offering Program In March 2021, we entered into a Capital on Demand TM Sales Agreement with JonesTrading Institutional Services LLC (JonesTrading) for an at-the-market offering program (the JonesTrading ATM Offering Program), pursuant to which we were entitled to sell from time to time, at our option, up to an aggregate of $ 25.0 million of shares of our common stock through JonesTrading, as sales agent or principal. JonesTrading was entitled to a commission at a fixed rate of up to 3.0 % of the gross proceeds. During 2021, we sold an aggregate of 986,267 shares of common stock at a weighted-average price of $ 4.75 per share for net proceeds of $ 4.4 million under the JonesTrading ATM Offering Program. In April 2022, we terminated the JonesTrading ATM Offering Program. During 2022 and prior to termination in April 2022, we sold an aggregate of 260,455 shares of common stock at a weighted-average price of $ 6.07 per share for net proceeds of approximately $ 1.5 million under the JonesTrading ATM Offering Program. In May 2019, we entered into a sales agreement with H.C. Wainwright & Co., LLC (Wainwright) for an ATM Offering Program (the Wainwright ATM Offering Program) under which we could offer and sell shares of our common stock having an aggregate offering price of up to $ 10.0 million. In November 2020, we amended our sales agreement with Wainwright to increase the amount of the ATM Offering Program to $ 20.0 million. Wainwright was entitled to a commission at a fixed commission rate equal to 3 % of the gross proceeds. In March 2021, the ATM Offering Program with Wainwright automatically terminated upon the issuance and sale of all of the shares having an aggregate offering price of $ 20.0 million. Under the Wainwright ATM Offering Program, during 2020, we sold an aggregate of 1,657,075 shares of common stock at an average price of $ 4.07 per share for net proceeds of $ 6.4 million. Prior to the termination of the sales agreement with Wainwright, in 2021, we sold an aggregate of 1,988,254 shares of common stock at an average price of $ 4.99 per share for net proceeds of $ 9.6 million. Purchase Agreement In September 2020 , we entered into a common stock purchase agreement (the Purchase Agreement) with Aspire Capital Fund, LLC (Aspire Capital), which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $ 20.0 million of shares of our common stock at our request from time to time during the 30 month term of the Purchase Agreement. Concurrently with entering into the Purchase Agreement , we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended, for the resale of the shares of our common stock that have been and may be issued to Aspire Capital under the Purchase Agreement. In 2021, we sold an aggregate of 3,000,000 shares of common stock at a weighted-avera ge price of $ 5.09 per share for net proceeds of $ 15.2 million under the Purchase Agreement. There were no issuances or sales under the Purchase Agreement during the year ended December 31, 2022, and this agreement has terminated effective March 11, 2023. 2014 Stock Plan We adopted a stock option plan in 2007 (the 2007 Plan), which was subsequently amended, restated and renamed in July 2014 (the 2014 Plan) to provide for the incentive stock options, nonstatutory stock options, stock and rights to purchase restricted stock to eligible recipients. Recipients of incentive stock options are eligible to purchase shares of our common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options under the 2014 Plan is ten years . Options granted generally vest over four years . We ceased granting under the 2014 Plan after our IPO in May 2015. Shares underlying any awards under the 2014 Plan that are forfeited, canceled, reacquired by us prior to vesting, satisfied without the issuance of stock or otherwise terminated (other than by exercise) will be added to shares available for issuance under the 2015 Plan. 2015 Stock Plan In April 2015, our board of directors adopted, and our stockholders approved, the 2015 Stock Plan (the 2015 Plan) which became effective on May 6, 2015 . Awards granted under the 2014 Plan prior to our IPO that are forfeited, canceled, reacquired by us prior to vesting satisfied without the issuance of stock or otherwise terminated (other than by exercise) will be added to shares available for issuance under the 2015 Plan. Total shares available for issuance under the 2015 Plan as of December 31, 2022 were 962,179 . Shares underlying any awards under the 2015 Plan that are forfeited, canceled, reacquired by us prior to vesting, satisfied without the issuance of stock or otherwise terminated (other than by exercise) will be added to shares available for issuance under the 2015 Plan. The maximum term of options granted under 2015 Plan is ten years . For an initial grant to an employee, 25 % of the options generally vest on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining three years. For subsequent grants to an employee, the options generally vest monthly over a four-year term. Inducement Plan In March 2022, our board of directors approved and adopted our 2022 Inducement Plan (our Inducement Plan). Awards granted under our Inducement Plan are in accordance with Nasdaq Listing Rule 5635(c)(4). A total of 300,000 shares of our common stock were initially reserved for the issuance under our Inducement Plan. The maximum term of options granted under our Inducement Plan is ten years . Each option vests over a period of four years , with 25 % of the shares vesting on the one-year anniversary of the applicable vesting commencement date and the remaining 75 % vesting in equal monthly installments over three years , thereafter, subject to continuous employment. During year ended December 31, 2022, we granted nonstatutory stock options under our Inducement Plan to purchase an aggregate of 205,600 shares of our common stock, with a weighted-average exercise price of $ 3.94 per share as inducement awards to new employees. Employee Stock Purchase Plan In April 2015, our board of directors adopted, and our stockholders approved, our 2015 Employee Stock Purchase Plan (the 2015 ESPP) which became effective on May 6, 2015 . As of December 31, 2022, total shares reserved for issuance under the 2015 ESPP were 801,321 . Stock-based Compensation Stock Options Stock option activity is summarized as follows: Number of Weighted- Weighted Aggregate Outstanding as of December 31, 2021 1,412,550 $ 12.01 Granted 1,590,844 $ 3.43 Exercises ( 259 ) $ 3.77 Canceled/forfeited/expired ( 46,965 ) $ 8.59 Outstanding as of December 31, 2022 2,956,170 $ 7.45 8.47 $ — The assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Years Ended December 31, 2022 2021 2020 Expected term (in years) 5.98 – 6.08 5.50 – 6.08 5.50 – 6.08 Risk-free interest rate 1.7 % – 4.2 % 0.6 % – 1.3 % 0.3 % – 1.5 % Expected volatility 84.2 % – 86.5 % 86.3 % – 104.8 % 102.2 % – 109.7 % Expected dividend yield 0.0 % 0.0 % 0.0 % The assumptions used in the Black-Scholes option pricing model to determine the fair value of the ESPP offering were as follows: Years Ended December 31, 2022 2021 2020 Expected term (in years) 0.50 0.50 0.50 Risk-free interest rate 0.06 % – 4.54 % 0.04 % – 0.12 % 0.1 % – 1.6 % Expected volatility 51.9 % – 95.9 % 89.7 % – 108.12 % 89.7 % – 143.2 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected term . The expected term represents the period of time that options are expected to be outstanding. Because we do not have sufficient history of exercise behavior, we determine the expected life assumption using the simplified method, which is an average of the contractual term of the option and its vesting period. Risk-free interest rate. We base the risk-free interest rate assumption on the U.S. Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. Expected volatility. The expected volatility assumption is based on our historical volatility as well as the volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biotechnology industry. Expected dividend yield. We base the expected dividend yield assumption on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. Restricted Stock Units Occasionally, we grant restricted stock units to employees. The fair value of restricted stock is determined by the closing price of the our common stock reported on the Nasdaq Capital Market on the date of grant. Restricted stock unit activity is summarized as follows: Number of Outstanding Weighted-Average Balance as of December 31, 2021 7,500 $ 4.08 Granted 116,438 $ 5.13 Released ( 2,500 ) $ 4.13 Balance as of December 31, 2022 121,438 $ 5.09 The allocation of stock-based compensation for all options, including performance options with market condition and restricted stock units is as follows (in thousands): Years Ended December 31, 2022 2021 2020 Research and development $ 528 $ 295 $ 254 General and administrative 1,626 1,319 1,211 Total stock-based compensation expense $ 2,154 $ 1,614 $ 1,465 The weighted-average grant date fair value per share of stock options granted by us, during the years ended December 31, 2022, 2021 and 2020 was $ 2.49 , $ 3.82 and $ 3.39 , respectively. The total grant date fair value of restricted stock units granted by us during the years ended December 31, 2022, 2021, and 2020 was approximately $ 597,000 , $ 16,000 and $ 21,000 , respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2022, 2021 and 2020 was approximately $ 1,000 , $ 80,000 and $ 0 , respectively. The aggregate intrinsic value of restricted stock units released during the years ended December 31, 2022, 2021 and 2020 was approximately $ 6,000 , $ 31,000 and $ 34,000 , respectively. As of December 31, 2022, total unrecognized share-based compensation expense related to unvested stock options and restricted stock units was approximately $ 5.5 million and $ 0.4 million, respectively. As of December 31, 2022, these unrecognized costs for options and restricted stock units are expected to be recognized ratably over a weighted-average period of approximately 3.0 years and 2.2 years, respectively. Warrants Warrants outstanding for the purchase of common stock as of December 31, 2022 were as follows: Number Exercise Price Expiration Outstanding Per Share Date 1,066 $ 281.50 July 2023 6,830 $ 43.93 November 2023 2,978 $ 50.37 June 2024 2,886 $ 51.98 December 2024 13,760 Common Stock Reserved for Future Issuance Common stock reserved for future issuance was as follows: December 31, 2022 Common stock warrants 13,760 Common stock options and restricted stock units 3,077,608 Shares available under the 2015 equity incentive plan 962,179 Shares available under the 2022 inducement plan 98,400 Shares available under the employee stock purchase plan 801,321 4,953,268 |