|9 Months Ended|
Sep. 30, 2019
|Stockholders' Equity (Deficit)||
6. Stockholders’ Equity
At-the-Market Offering (the “ATM”)
In April 2019, we implemented the ATM for the sale of up to $8.6 million of our common stock. During the three months ended June 30, 2019, we issued a total of 329,656 shares of our common stock at a weighted-average price of $1.60 per share for total net proceeds of approximately $0.5 million under the ATM. In August 2019, we reduced the dollar amount that can be sold under ATM to $4.0 million.
August 2019 Offering
In August 2019, we completed an offering (the “August 2019 Offering”) with a single accredited institutional investor (the “Purchaser”) pursuant to which we issued 1,480,000 shares of our common stock and pre-funded warrants to purchase 1,372,314 shares of our common stock with an exercise price of $0.01 per share (the “Pre-funded Warrants”) in a registered direct offering and warrants to purchase 2,852,314 shares of our common stock with an exercise price of $1.07 per share (the “Placement Warrants”) in a concurrent private placement. The Pre-Funded Warrants, which were exercised for common stock in September 2019, were issued in lieu of common stock in order to ensure the Purchaser did not exceed certain beneficial ownership limitations. The Placement Warrants will become exercisable in February 2020 and will expire in February 2025. The Placement Warrants agreement contains a provision where the warrant holder has the option to receive cash, equal to the Black Scholes fair value of the remaining unexercised portion of the warrant, as cash settlement in the event that there is a fundamental transaction (contractually defined to include various merger, acquisition or stock transfer activities). As a result of this provision, in accordance with ASC 480, “Distinguishing Liabilities from Equity,” the Placement Warrants are required to be classified as liabilities. The fair value of the Placement Warrants is determined using the Black-Scholes Option Pricing model to calculate the call option and Binomial Option Pricing model to calculate the put option with changes in the fair value recorded in the condensed statements of operations and comprehensive loss.
During the three months ended September 30, 2019, approximately $1.4 million and approximately $0.6 million, respectively, were allocated to warrant liability and additional paid-in capital.
The warrant liability associated with the Placement Warrants is classified within level 3 of the fair value hierarchy. The below table represents the weighted-average key assumptions used to calculate the fair value of the Placement Warrants:
The below table presents the roll-forward of the warrant liability associated with the Placement Warrants (in thousands):
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef