COMMON STOCK WARRANTS

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

COMMON STOCK WARRANTS

10. COMMON STOCK WARRANTS

On February 14, 2020, the Company completed an underwritten offering of 10,638,298 shares of its common stock and warrants to purchase 10,638,298 shares of common stock. Each common share and warrant were sold together for a combined public purchase price of $2.35 before underwriting discount and commission. The exercise price of each warrant is $2.80 per share, the warrants were exercisable immediately, and they will expire February 12, 2027. As the warrants could require cash settlement in certain scenarios, the warrants were classified as a liability and are recorded at an estimated fair value using a Monte Carlo simulation model. The total proceeds from the offering were allocated first to the warrant liability based on the estimated fair value with the residual allocated to the common shares. As of September 30, 2020, none of the warrants had been exercised.

The change in fair value of the common stock warrant liability is presented in the following table and is reported as a change in fair value of common stock warrant liability in the statements of operations (in thousands):

	September 30, 2020
Beginning balance	$	–
Initial value of common stock warrant liability		11,677
Change in fair value of common stock warrant liability		(4,444	)
Ending balance	$	7,233