Annual report pursuant to Section 13 and 15(d)

STOCKHOLDERS' EQUITY

v3.21.1
STOCKHOLDERS' EQUITY
12 Months Ended
Dec. 31, 2020
STOCKHOLDERS' EQUITY  
9. STOCKHOLDERS' EQUITY

9. STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

The Company is currently authorized to issue up to 10 million shares of preferred stock, $0.0001 par value per share. There were no shares of preferred stock outstanding at December 31, 2020 and 2019.

 

Common Stock

 

As of December 31, 2020 and 2019, the Company was authorized to issue 150,000,000 shares of its common stock, $0.0001 par value per share, and 104,902,888 and 59,318,355 shares of common stock were outstanding as of December 31, 2020 and 2019, respectively. On August 23, 2019, the Company’s stockholders approved an amendment to the Company’s Second Amended and Restated Certificate of Incorporation to increase the number of shares of common stock that the Company is authorized to issue from 75,000,000 to 150,000,000. After giving effect to shares reserved for the issuance of warrants and for awards issued under the Company’s equity incentive plans, 30,655,784 shares of common stock were available for issuance as of December 31, 2020.

On August 5, 2020, the Company entered into the Sale Agreement with Jefferies, pursuant to which the Company could offer and sell, from time to time, at its option, through or to Jefferies, up to an aggregate of $50 million of shares of the Company’s common stock. On November 5, 2020, the Company and Jefferies amended the Sale Agreement to provide for an increase in the aggregate offering amount under the Sale Agreement such that, as of November 5, 2020, the Company could sell shares having an additional aggregate offering price of up to $20 million. For the year ended December 31, 2020, the Company sold 18,537,907 shares of common under the Sale Agreement and received net proceeds of $42.5 million.

 

On February 11, 2020, the Company completed an underwritten public offering of 23,500,000 shares of its common stock for gross proceeds of $82.3 million. On February 21, 2020, the Company sold an additional 3,525,000 shares pursuant to the underwriters’ exercise of their option to purchase additional shares of the Company’s common stock for additional gross proceeds of $12.3 million. The Company received net proceeds, after underwriting discounts and other expenses associated with the offering, of approximately $88.7 million.

 

On May 21, 2019, the Company issued 12,937,500 shares of its common stock in an underwritten public offering for gross proceeds of approximately $51.8 million. After deducting underwriters’ commissions and other expenses associated with the offering, the Company received net proceeds of $48.4 million.

 

During the years ended December 31, 2020 and 2019, the Company issued 6,626 and 27,787 shares, respectively, of common stock in connection with the exercise of stock options that had been granted to employees.

 

Warrants

 

On December 8, 2020, the Company issued the Perceptive Tranche IV Warrant, whereby Perceptive may purchase an aggregate of 2,390,000 shares of common stock at an exercise price $1.94 per share (see Note 8). The warrant was valued at $3.7 million, using the Black-Scholes option-pricing model assuming an expected term of 10 years, a volatility of 69.3%, a dividend yield of 0% and a risk-free interest rate of 0.92%.

 

On the Perceptive Closing Date, the Company issued the Perceptive Warrant, whereby Perceptive may purchase an aggregate of 1,360,000 shares of common stock at an exercise price of $3.28 per share. The Perceptive Warrant became exercisable on the Perceptive Closing Date and was valued at $2.7 million. The Perceptive Warrant was valued using the Black-Scholes option-pricing model assuming an expected term of 10 years, a volatility of 61.2%, a dividend yield of 0% and a risk-free interest rate of 2.65%.

 

On May 3, 2019, the Company issued the Perceptive Tranche III Warrant, whereby Perceptive may purchase an aggregate of 250,000 shares of common stock at an exercise price of $4.64 per share. The Perceptive Tranche III was exercisable on the date of issuance and was valued at $0.9 million. The Perceptive Tranche III Warrant was valued using the Black-Scholes option-pricing model assuming an expected term of 10 years, a volatility of 62.3%, a dividend yield of 0% and a risk-free interest rate of 2.54%.

 

At December 31, 2020, the Company had outstanding warrants to purchase an aggregate of 4,528,160 shares of common stock, with a weighted average exercise price of $2.82 per share and expiration dates ranging between June 2022 and December 2030. At December 31, 2019, the Company had outstanding warrants to purchase an aggregate of 2,138,160 shares of common stock, with a weighted average exercise price of $3.81 per share and expiration dates ranging between June 2022 and May 2029.

 

Equity Incentive Plans

 

From time to time the Company grants stock options or other equity-based awards under the Company’s 2007 Employee Stock Option Plan (the “2007 Plan”) and the Amended and Restated 2014 Omnibus Incentive Compensation Plan (the “2014 Plan”).

 

The 2014 Plan, as amended, was approved by the Board on March 15, 2017 and by the Company’s stockholders on May 25, 2017. Currently, the maximum number of shares reserved for grant under the 2014 Plan is: (a) 2,334,940 shares, less any shares available as of such date for issuance under the 2007 Plan; plus (b) an annual increase as of the first day of the Company’s fiscal year, beginning in 2018 and occurring each year thereafter through 2022, equal to 4% of the outstanding shares of common stock as of the end of the Company’s immediately preceding fiscal year, or any lesser number of shares determined by the Board; provided, however, that no more than an aggregate of 10 million shares of common stock may be issued pursuant to incentive stock options intended to qualify under Section 422 of the Internal Revenue Code. As of December 31, 2020, an aggregate of 2,664,237 shares were available for issuance under the 2007 Plan and the 2014 Plan. In accordance with the foregoing, on January 1, 2021 the aggregate number of shares available for issuance increased to 6,860,353.

During the years ended December 31, 2020 and 2019, the Company recorded stock-based compensation expense to employees of $2.9 million and $2.7 million, respectively. The fair value of employee options granted was determined on the date of grant using the Black-Scholes model. The Black-Scholes option valuation model was developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable. The Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the underlying Black-Scholes assumptions can materially affect the fair value estimate. To determine the risk-free interest rate, the Company utilized the U.S. Treasury yield curve in effect at the time of the grant with a term consistent with the expected term of the Company’s awards. The expected term of the options granted is in accordance with Staff Accounting Bulletins 107 and 110, which is based on the average between vesting terms and contractual terms. The expected dividend yield reflects the Company’s current and expected future policy for dividends on the Company’s common stock. For the years ended December 31, 2020 and 2019, the expected stock price volatility for the Company’s stock options was calculated by examining the historical volatility of the Company’s common stock since the stock became publicly traded in the fourth quarter of 2013.

 

The grant date fair values of stock options awarded during the years ended December 31, 2020 and 2019 were determined using the Black-Scholes option-pricing model with the following assumptions:

 

 

 

 

Years Ended

 

 

 

December 31,

2020

 

 

December 31,

2019

 

Expected term

 

5.5-6.3 years

 

 

5.8-6.3 years

 

Volatility

 

62-70

%

 

54-63

%

Dividend yield

 

 

0.0

 

 

 

0.0

 

Risk-free interest rate

 

0.33-1.68

%

 

1.36-2.92

%

The 2007 Plan and 2014 Plan provide for the Board or a Committee of the Board (the “Committee”) to grant awards to optionees and to determine the exercise price, vesting term, expiration date and all other terms and conditions of the awards, including acceleration of the vesting of an award at any time. All options granted under the 2007 Plan and 2014 Plan are intended to be incentive stock options (“ISOs”), unless specified by the Committee to be non-qualified options (“NQOs”) as defined by the Internal Revenue Code. ISOs and NQOs may be granted to employees, consultants or Board members at an option price not less than the fair market value of the common stock subject to the stock option agreement. The following table summarizes information about stock options outstanding as of December 31, 2020 and 2019:

  

 

 

 

Shares

 

 

Weighted Average Exercise Price

 

Options outstanding, vested and expected to vest at December 31, 2018

 

 

4,342,231

 

 

$ 5.16

 

Forfeited

 

 

(169,993 )

 

$ 3.97

 

Expired

 

 

(19,983 )

 

$ 4.60

 

Granted

 

 

1,508,000

 

 

$ 3.49

 

Exercised

 

 

(29,904 )

 

$ 2.84

 

Options outstanding, vested and expected to vest at December 31, 2019

 

 

5,630,351

 

 

$ 4.76

 

Forfeited

 

 

(141,724 )

 

$ 3.81

 

Expired

 

 

(27,482 )

 

$ 4.26

 

Granted

 

 

1,468,412

 

 

$ 2.93

 

Exercised

 

 

(6,626 )

 

$ 2.03

 

Options outstanding, vested and expected to vest at December 31, 2020

 

 

6,922,931

 

 

$ 4.40

 

 

 

 

 

 

 

 

 

 

Options exercisable

 

 

4,544,902

 

 

$ 5.01

 

    

The weighted average remaining contractual term of stock options outstanding and expected to vest at December 31, 2020 is 6.5 years. The weighted average remaining contractual term of stock options exercisable at December 31, 2020 is 5.4 years. The following table summarizes additional information regarding outstanding and exercisable options under the stock option plans at December 31, 2020:

 

 

 

 

Stock Options Outstanding

 

 

Stock Options Exercisable

 

Range of Exercise Prices

 

Options Outstanding

 

 

Weighted Average Remaining Contractual Life (Years)

 

 

Weighted Average Exercise Price

 

 

Aggregate Intrinsic Value

 

 

Options Outstanding

 

 

Weighted Average Remaining Contractual Life (Years)

 

 

Weighted Average Exercise Price

 

 

Aggregate Intrinsic Value

 

$2.04 - $3.20

 

 

1,328,220

 

 

 

9.2

 

 

$ 2.80

 

 

$ -

 

 

 

140,474

 

 

 

8.3

 

 

$ 2.95

 

 

$ -

 

$3.22 - $4.83

 

 

3,925,951

 

 

 

6.9

 

 

$ 3.62

 

 

 

-

 

 

 

2,787,632

 

 

 

6.6

 

 

$ 3.64

 

 

 

-

 

$4.84 - $7.26

 

 

520,607

 

 

 

5.5

 

 

$ 5.51

 

 

 

-

 

 

 

468,643

 

 

 

5.2

 

 

$ 5.48

 

 

 

-

 

$7.56 - $10.80

 

 

1,148,153

 

 

 

2.2

 

 

$ 8.39

 

 

 

-

 

 

 

1,148,153

 

 

 

2.2

 

 

$ 8.39

 

 

 

-

 

 

 

 

6,922,931

 

 

 

6.5

 

 

$ 4.40

 

 

$ -

 

 

 

4,544,902

 

 

 

5.4

 

 

$ 5.00

 

 

$ -

 

  

During the year ended December 31, 2020, the Company granted Restricted Stock Units (“RSUs”) to members of the Company’s Board of Directors and to certain management employees of the Company. The total RSUs granted during the year represent an aggregate of 361,000 shares of the Company’s common stock. The RSUs vest semi-annually over a period of one year for directors and annually over a period of four years for employees. Total compensation expense related to unvested RSUs for the year ended December 31, 2020 was $0.3 million. A summary of the Company’s unvested RSU activity and related information is as follows:

 

 

 

 

Shares

 

 

Weighted

Average Grant

Date Fair Value

 

Balance at December 31, 2019

 

 

-

 

 

$ -

 

Granted

 

 

361,000

 

 

$ 2.82

 

Vested

 

 

(15,000 )

 

$ 2.92

 

Forfeited

 

 

(20,000 )

 

$ 2.83

 

Balance at December 31, 2020

 

 

326,000

 

 

$ 2.81

 

Aggregate stock-based compensation expense for the years ended December 31, 2020 and 2019 was as follows:

 

 

 

 

2020

 

 

2019

 

Research and development

 

$ 471,146

 

 

$ 360,569

 

Plasma center operating expenses

 

 

33,464

 

 

 

51,340

 

Selling, general and administrative

 

 

2,107,577

 

 

 

2,047,025

 

Cost of product revenue

 

 

242,935

 

 

 

191,843

 

Total stock-based compensation expense

 

$ 2,855,122

 

 

$ 2,650,777

 

    

As of December 31, 2020, the total unrecognized compensation expense related to unvested options was $4.0 million, which is expected to be recognized over a weighted-average period of 2.3 years. As of December 31, 2020, the Company had $0.7 million of unrecognized compensation expense related to unvested RSUs granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period of 3.2 years.