| Stockholders' Equity | 9 .
Stockholders’ Equity Our authorized capital stock consists of 520,000,000 shares, all with a par value of $0.0001 per share, of which 500,000,000 shares are designated as common stock and 20,000,000 shares are designated as preferred stock. There were no shares of preferred stock outstanding as of March 31 Equity Offerings As part of our July 2019 underwritten public offering, we issued and sold pre-funded warrants to purchase 2,945,026 shares of common stock in an underwritten public offering pursuant to a shelf registration on Form S-3. Each pre-funded warrant entitles the holder to purchase one share of common stock at an exercise price of $0.0001 per share and expires seven years from the date of issuance. These warrants were recorded as a component of stockholders’ equity within additional paid-in capital. Per the terms of the warrant agreement, a holder of the outstanding warrants is not entitled to exercise any portion of any pre-funded warrant if, upon exercise of the warrant, the holder’s ownership (together with its affiliates) of our common stock or combined voting power of our securities beneficially owned by such holder (together with its affiliates) would exceed 9.99% after giving effect to the exercise (“Maximum Ownership Percentage”). Upon at least 61 days’ prior notice to us by the holder, any holder may increase or decrease the Maximum Ownership Percentage to any other percentage not to exceed 19.99%. As of March 31, 2022, pre-funded warrants to purchase 2,888,526 shares of our common stock from the July 2019 underwritten public offering were outstanding. In the second and fourth quarters of 2020, we issued and sold pre-funded warrants to purchase 2,866,961 and 2,040,816 shares of common stock, respectively, in underwritten public offerings pursuant to a shelf registration on Form S-3, with terms similar to those described above. As of March 31, 2022, all of the pre-funded warrants issued and sold as part of the 2020 underwritten public offerings were outstanding. ATM Facility In November 2021, we entered into a sales agreement (the “2021 ATM Facility”) with Cowen and Company, LLC (“Cowen”), which provides for the sale, in our sole discretion, of shares of our common stock having an aggregate offering price of up to $100.0 million through Cowen, as our sales agent. The issuance and sale of these shares by us pursuant to the 2021 ATM Facility are deemed “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), and are registered under the Securities Act During the three months ended March 31, 2022, we sold an aggregate of 1,319,878 shares of common stock under the 2021 ATM Facility, at an average price of $15.88 per share, for gross proceeds of $21.0 million and net proceeds of $20.5 million, after deducting commissions and other offering expenses payable by us. As of March 31, 2022, $57.4 million of common stock remained available to be sold under the 2021 ATM Facility, subject to certain conditions as specified in the sales agreements. Equity Incentive Plans Under the terms of the 2014 Equity Incentive Plan, as amended (“2014 EIP”), we may grant stock options, restricted stock awards (“RSAs”) and RSUs to employees, directors, consultants and other service providers. RSUs generally vest over four years. We have granted performance-based RSUs to certain of our employees that provide for the issuance of common stock if specified Company performance criteria related to our clinical programs are achieved. The number of performance-based RSUs that ultimately vests depends upon if, when and which performance criteria are achieved, as well as the employee’s continuous service, as defined in the 2014 EIP, through the date of vesting. The fair value of performance-based RSUs is determined as the closing stock price on the date of grant. Stock options are granted at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors, provided, however, that the exercise price of an option granted to a 10% shareholder cannot be less than 110% of the estimated fair value of the shares on the date of grant. Options granted generally vest over four years and expire in seven to ten years. We have granted performance-based stock options to certain of our employees that provide for the issuance of a right to purchase a share of common stock if specified Company performance criteria related to product candidate partnerships are achieved. The vesting of performance-based stock options depends upon if and when the performance criteria are achieved, as well as the employee’s continuous service as defined in the 2014 EIP, through the date of vesting. As of March 31, 2022, a total of 20,275,111 shares of common stock were reserved for issuance under the 2014 EIP, of which 3,873,561 shares were available for future grant and 16,401,550 shares were subject to outstanding options and RSUs, including performance-based awards. In February 2018, we adopted the 2018 Inducement Plan (“Inducement Plan”), under which we may grant options, stock appreciation rights, RSAs and RSUs to new employees. In November 2020, we amended the Inducement Plan to reserve an additional 1,500,000 shares of the Company’s common stock for issuance under the Inducement Plan. In September 2021, we further amended the Inducement Plan to reserve an additional 1,500,000 shares of the Company’s common stock for issuance under the Inducement Plan. As of March 31, 2022, 4,002,970 shares of common stock were reserved for issuance under the Inducement Plan, of which 1,101,975 shares were available for future grant and 2,900,995 shares were subject to outstanding options and RSUs. Restricted Stock Units The following is a summary of RSU activity under our 2014 EIP and Inducement Plan:
RSUs
Shares
Weighted Average Grant Date Fair Value
Balance as of December 31, 2021
5,592,358
$
16.22
Granted
3,368,090
$
10.37
Forfeited
(367,370
)
$
15.09
Vested
(446,696
)
$
22.22
Balance as of March 31, 2022
8,146,382
$
13.53
As of March 31, 2022, there was $98.9 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted average period of 3.1 Stock Options The following is a summary of stock option activity under our 2014 EIP and Inducement Plan:
Shares
Weighted Average Exercise Price
Weighted Average Remaining Contractual Term (Years)
Aggregate Intrinsic Value (in thousands)
Balance as of December 31, 2021
9,219,837
$
20.81
6.4
$
12,810
Granted
2,352,082
10.46
Exercised
(10,000
)
9.58
Forfeited or expired
(405,756
)
24.99
Balance as of March 31, 2022
11,156,163
$
18.49
6.8
$
328
Aggregate intrinsic value represents the difference between the closing stock price of our common stock on March 31, 2022 and the exercise price of outstanding, in-the-money options. As of March 31, 2022, there was $47.4 million of unrecognized stock-based compensation expense related to stock options that is expected to be recognized over a weighted average period of 2.9 years. This excludes unrecognized stock-based compensation expense for performance-based stock options that were deemed not probable of vesting in accordance with U.S GAAP. Reserved Shares The following shares of common stock were reserved for future issuance under our equity incentive plans as of March 31, 2022:
Total Shares Reserved
2014 Equity Incentive Plan
20,275,111
2018 Inducement Plan
4,002,970
2014 Employee Stock Purchase Plan
1,093,151
Total reserved shares of common stock
25,371,232
Stock-based Compensation Expense Total stock-based compensation expense related to all employee and non-employee stock awards was as follows:
Three Months Ended March 31,
2022
2021
(in thousands)
Research and development
$
8,506
$
7,530
General and administrative
5,829
4,738
Total stock-based compensation expense
$
14,335
$
12,268 |
