Stockholders' Equity | 7. Stockholders’ Equity At the Market Offering Program In June 2016, we entered into a sales agreement with Cowen and Company, LLC (Cowen) for at the market offerings (ATM Offering Program), under which we were able to offer and sell shares of our common stock having an aggregate offering price of up to $35.0 million from time to time. In May 2019, we terminated the ATM Offering Program with Cowen. During the year ended December 31, 2019 and prior to termination in May 2019, we sold an aggregate of 193,670 shares of common stock at an average price of $7.35 per common share for net proceeds of $1.4 million under the ATM Offering Program with Cowen In May 2019, we entered into a sales agreement with H.C. Wainwright & Co., LLC (Wainwright) to create an ATM Offering Program under which we may 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 up to $20.0 million. Wainwright is entitled to a commission at a fixed commission rate equal to 3% of the gross proceeds. During the year ended December 31, 2020, we sold an aggregate of 1,657,075 shares of common stock at an average price of $4.07 per share for gross proceeds of $6.8 million under the ATM Offering Program. During the year ended December 31, 2019, we sold an aggregate of 611,687 shares of common stock at an average price of $5.43 per common share for Underwritten Follow-On Public Offering In February 2020, we completed an underwritten follow-on public offering of 4,235,294 shares of our common stock at a price to the public of $4.25 per share. In March 2020, the underwriters fully exercised their option to purchase additional shares resulting in the issuance of an additional 635,294 shares of common stock. The total gross proceeds from the underwritten follow-on public offering, including the underwriters’ option to purchase additional shares, was approximately $20.7 million, before deducting underwriting discounts, commissions and offering expenses payable by us. Purchase Agreement In September 2020 , 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. 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). The 2015 Plan became effective on May 6, 2015 and we ceased granting any new awards under our 2014 Plan. 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. A total of 112,469 shares of our common stock were initially reserved for issuance under the 2015 Plan. In addition, the number of shares reserved and available for issuance under the 2015 Plan automatically increased each January 1, beginning on January 1, 2016 and thereafter until January 1, 2019, by the lesser of (i) 131,428 shares, (ii) 4% of the outstanding number of shares of our common stock on the immediately preceding December 31 or (iii) an amount determined by our board of directors. Pursuant to this provision, through January 1, 2019, an aggregate of 307,949 additional shares were reserved for issuance under the 2015 Plan. At our 2020 Annual Meeting of Stockholders, our stockholders approved an amendment to increase the number of shares of common stock reserved under the 2015 Plan by 350,000 shares. Total shares available for issuance under the 2015 Plan as of December 31, 2020 were 381,663. 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 Grants Options under inducement grants vest over a period of four years, with 25% vesting on the one year anniversary of the grant date and the remaining 75% vesting on a monthly basis over three years thereafter, subject to continuous employment. These options were inducement grants issued outside of the 2015 Plan in accordance with Nasdaq Listing Rule 5635(c)(4). In addition, from time to time, we may make inducement grants of stock options to new employees. During the year ended December 31, 2020, we did not make inducement grants of stock options. 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). The 2015 ESPP became effective on May 6, 2015. A total of 16,258 shares of our common stock were initially reserved for issuance under the 2015 ESPP. In addition, the number of shares reserved and available for purchase under the 2015 ESPP automatically increased each January 1, beginning on January 1, 2016 and thereafter until January 1, 2019, by 1% of the outstanding number of shares of our common stock on the immediately preceding December 31 or such lesser number of shares as determined by the administrator of the 2015 ESPP. Pursuant to this provision, through January 1, 2019, an aggregate of 76,988 additional shares were reserved for issuance under the 2015 ESPP. As of December 31, 2020, total shares reserved for issuance under the 2015 ESPP were 75,315. Stock-based Compensation Stock Options Stock option activity is summarized as follows: Number of Outstanding Stock Options Weighted Average Exercise Price Weighted Remaining Contractual Term Aggregate Intrinsic Value Outstanding as of December 31, 2019 351,078 $ 51.34 Granted 412,432 $ 4.18 Canceled/forfeited/expired (186,976 ) $ 33.73 Outstanding as of December 31, 2020 576,534 $ 23.33 7.89 $ 15,087 Options vested and expected to vest as of December 31, 2020 576,534 $ 23.33 7.89 $ 15,087 Options exercisable as of December 31, 2020 268,039 $ 41.06 6.70 $ 1,233 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, 2020 2019 2018 Expected term (in years) 5.50– 6.08 5.51– 6.07 5.50 – 6.08 Risk-free interest rate 0.3% – 1.5 % 1.4% – 2.6 % 2.3% – 3.0 % Expected volatility 102.2% – 109.7 % 97.2% – 105.4 % 87.9% – 98.4 % 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, 2020 2019 2018 Expected term (in years) 0.50 0.50 0.50 Risk-free interest rate 0.1% – 1.6 % 1.6% – 2.5 % 1.4% – 2.1 % Expected volatility 89.7% – 143.2 % 99.7% – 141.7 % 71.5% – 99.7 % 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 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 Company's common stock reported on the Nasdaq Global Select Market on the date of grant. Number of Outstanding Restricted Stock Units Weighted Average Grant Date Fair Value Balance as of December 31, 2019 12,475 $ 9.90 Granted 5,000 $ 4.29 Released (8,678 ) $ 10.47 Forfeited (1,120 ) $ 11.90 Balance as of December 31, 2020 7,677 $ 5.32 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, 2020 2019 2018 Research and development $ 254 $ 354 $ 1,216 General and administrative 1,211 1,429 2,215 Total stock-based compensation expense $ 1,465 $ 1,783 $ 3,431 The weighted–average grant date fair value per share of stock options granted by us, during the years ended December 31, 2020, 2019 and 2018 was $3.39, $5.67 and $25.76, respectively. The total grant date fair value of restricted stock units granted by us during the years ended December 31, 2020, 2019 and 2018 was $21,000, $39,000 and $0.2 million, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2018 was $6,000. We did not have any options exercised during the years ended December 31, 2020 and 2019. The aggregate intrinsic value of restricted stock units released during the years ended December 31, 2020, 2019 and 2018 was $34,000, $31,000 and $19,000, respectively. As of December 31, 2020, total unrecognized share-based compensation expense related to unvested stock options and restricted stock units was approximately $1.8 million and $17,000, respectively. These unrecognized costs for options and restricted stock units are expected to be recognized ratably over a weighted-average period of approximately 2.8 years and 1.7 years, respectively. Warrants Warrants outstanding for the purchase of common stock as of December 31, 2020 were as follows: Number Exercise Price Expiration Outstanding Per Share Date 144 $ 104.65 March 2021 1,066 $ 281.50 July 2023 6,830 $ 43.93 November 2023 2,978 $ 50.37 June 2024 2,886 $ 51.98 December 2024 13,904 Common Stock Reserved for Future Issuance Common stock reserved for future issuance was as follows: December 31, 2020 Common stock warrants 13,904 Common stock options and restricted stock units 584,211 Shares available under the 2015 equity incentive plan 381,663 Shares available under the employee stock purchase plan 75,315 1,055,093 |