12.	Common Stock

Purchase Agreement with Lincoln Park Capital, LLC

June 8, 2020,

the Company entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which the Company has the right to sell to LPC, and LPC has committed to purchase from us, from time to time, up to

$10,000,000

of our common stock, subject to certain limitations, during the

months term of the Purchase Agreement.

June 9, 2020,

LPC purchased

52,500

shares of common stock at a price per share of

$6.50

(the “Initial Purchase Shares”) under the Purchase Agreement. Thereafter, under the Purchase Agreement, on any business day selected by us (the “Purchase Date”), the Company

may

direct LPC to purchase up to

25,000

shares of our common stock on such business day (each, a “Regular Purchase”), provided, however, that (i) the Regular Purchase

may

be increased to up to

30,000

shares, provided that the closing sale price of our common stock is

not

below

$10

on the Purchase Date and (ii) the Regular Purchase

may

be increased to up to

50,000

shares, provided that the closing sale price of our common stock is

not

below

$20

on the Purchase Date. In each case, LPC's maximum commitment in any single Regular Purchase

may

not

exceed

$1,000,000.

LPC has

right to require the Company to sell any shares of common stock to LPC, but LPC is obligated to make purchases as the Company directs, subject to certain conditions. The purchase price per share for each such Regular Purchase will be based off of prevailing market prices of our common stock immediately preceding the time of sale without any fixed discount.

In addition to Regular Purchases described above, the Company

may

also direct LPC, on any business day following the date on which the Company has properly submitted a Regular Purchase notice directing LPC to purchase the maximum number of shares of our common stock that the Company is then permitted to include in a single Regular Purchase notice (the “Accelerated Purchase Date”), to purchase an additional amount of our common stock (an “Accelerated Purchase”),

not

to exceed the lesser of (i)

three

(

) times the number of shares purchased pursuant to such Regular Purchase, and (ii)

30%

of the trading volume on the Accelerated Purchase Date at a purchase price equal to the lesser of (a) the closing sale price on the Accelerated Purchase Date, and (b)

95%

of the Accelerated Purchase Date's volume weighted average price. The Company shall have the right in its sole discretion to set a minimum price threshold for each Accelerated Purchase.

Under certain circumstances and in accordance with the Purchase Agreement, the Company

may

direct LPC to purchase shares in multiple Accelerated Purchases on the same trading day, provided that all prior Accelerated Purchases (including those that have occurred earlier on the same day) have been completed and all of the shares to be purchased thereunder (and under the corresponding Regular Purchase) have been properly delivered to LPC in accordance with the Purchase Agreement.

Other than as described above, there are

trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of any sales of our common stock to LPC.

Transaction costs in connection with the Purchase Agreement with LPC totaled approximately

$494,000.

Included in these transaction costs was a commitment fee paid by the Company in the amount of

$325,000.

While this commitment fee relates to the entire offering and the purchases of common shares that will occur over time, the Company has recorded the entire commitment fee as issuance costs in additional paid-in capital at the time the commitment fee was paid because the offering has been consummated, and there is

guaranteed future economic benefit from this payment.

2019

Public Offering

November 2019,

the Company closed an underwritten public offering of units (the

“November 2019

Offering”) for gross proceeds of approximately

$11,500,000,

which included the full exercise of the underwriter's overallotment option to purchase additional shares and warrants. The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses and payable by the Company, were approximately

$9,922,000.

The offering comprised of: (

) Class A Units, priced at a public offering price of

$15.50

per unit, with each unit consisting of

one

share of common stock, a Series A warrant to purchase

one

share of common stock at an exercise price of

$15.50

per share that expires on the

first

anniversary of the date of issuance and a Series B warrant to purchase

one

share of common stock at an exercise price of

$15.50

per share that expires on the

fifth

anniversary of the issuance; and (

) Class B Units, priced at a public offering price of

$15.50

per unit, with each unit consisting of

one

share of Series A preferred stock, convertible into

one

share of common stock, a Series A warrant to purchase

one

share of common stock at an exercise price of

$15.50

per share that expires on the

first

anniversary of the date of issuance and a Series B warrant to purchase

one

share of common stock at an exercise price of

$15.50

per share that expires on the

fifth

anniversary of the issuance.

The securities comprising the units were immediately separable and were issued separately.

A total of

194,595

shares of common stock

547,341

shares of Series A preferred stock, Series A warrants to purchase up to

741,939

shares of common stock, and Series B warrants to purchase up to

741,939

shares of common stock were issued in the offering, including the full exercise of the over-allotment option.

As of

December 31, 2020,

all Series A convertible preferred stock had been converted into common stock. (See Note

– Preferred Stock.)

As of

December 31, 2020,

there are

Series A warrants remaining to purchase shares of common stock and Series B warrants to purchase a total of

325,632

shares of common stock still remaining and outstanding. (See “Warrants for Common Stock” below.)

ATM Equity Offerings

Through the

August 2019

ATM Facility, the Company

may

offer and sell, from time-to-time, up to

$6,760,000

aggregate offering price of shares of its common stock”). The Company's offering of

$6,760,000

of its common stock under the

August 2019

ATM Facility was completed in late

September 2019.

During the year ended

December 31, 2019,

the Company sold

100,423

shares of common stock under the

August 2019

ATM Facility for net proceeds, after deducting sales commissions and other offering costs, of approximately

$6,322,000.

As of

December 31, 2019,

the Company had

remaining capacity to issue shares under the

August 2019

ATM Facility.

August 2019,

the Company terminated the

November 2017

ATM Facility under which the Company could offer and sell, from time-to-time, up to

$25,000,000

aggregate offering price of shares of its common stock. During the year ended

December 31, 2019,

the Company sold

zero

shares of common stock under the

November 2017

ATM Facility.

Restricted Common Shares

The activity of restricted common shares for the year ended

December 31, 2020

is described as follows:

March 2020,

the Company issued

2,832

restricted shares of its common stock at an aggregate value of approximately

$24,000.

June 2020,

the Company issued

3,453

restricted shares of its common stock at an aggregate value of approximately

$25,000.

September 2020,

the Company issued

4,709

restricted shares of its common stock at an aggregate value of approximately

$25,000.

The activity of restricted common shares for the year ended

December 31, 2019

is described as follows:

March 2019,

the Company issued

restricted shares of its common stock at an aggregate value of approximately

$25,000.

October 2019,

the Company issued

774

restricted shares of its common stock at an aggregate value of approximately

$25,000.

December 2019,

the Company issued

3,068

restricted shares of its common stock at an aggregate value of approximately

$25,000.

Warrants for Common Stock

As of

December 31, 2020,

outstanding warrants to purchase shares of common stock were as follows:

					Number of
					Shares
					Outstanding
	Exercisable	Expiration	Exercise		Under
Issuance Date	for	Date	Price		Warrants

February 2015	Common Shares	February 17, 2025	$	4,000.00		79
March 2015	Common Shares	March 26, 2025	$	2,720.00		2
May 2015	Common Shares	May 12, 2025	$	4,240.00		37
December 2015	Common Shares	December 16, 2025	$	5,600.00		31
April 2016	Common Shares	April 1, 2026	$	6,080.00		25
May 2016	Common Shares	May 11, 2021	$	7,740.00		6
June 2016	Common Shares	June 20, 2026	$	4,980.00		101
May 2017	Common Shares	May 25, 2027	$	9,500.00		223
November 2019	Common Shares	November 26, 2024	$	6.10		325,632
November 2019	Common Shares	November 26, 2024	$	18.36		989,379
April 2020	Common Shares	April 21, 2025	$	6.37		413,210
						1,728,725

As of

December 31, 2019,

outstanding warrants to purchase shares of common stock were as follows:

					Number of
					Shares
					Outstanding
	Exercisable	Expiration	Exercise		Under
Issuance Date	for	Date	Price		Warrants

February 2015	Common Shares	February 17, 2025	$	4,000.00		79
March 2015	Common Shares	March 26, 2025	$	2,720.00		2
May 2015	Common Shares	May 12, 2025	$	4,240.00		37
May 2015	Common Shares	May 17, 2020	$	4,240.00		22
December 2015	Common Shares	December 16, 2025	$	5,600.00		31
April 2016	Common Shares	April 1, 2026	$	6,080.00		25
May 2016	Common Shares	May 11, 2021	$	7,740.00		6
June 2016	Common Shares	June 20, 2026	$	4,980.00		101
May 2017	Common Shares	May 25, 2027	$	9,500.00		223
November 2019	Common Shares	November 26, 2020	$	18.36		989,379
November 2019	Common Shares	November 26, 2024	$	15.50		741,940
November 2019	Common Shares	November 26, 2024	$	15.50		741,940
						2,473,785

In connection with the

November 2019

Offering, Series A warrants to purchase up to

741,939

shares of common stock, and Series B warrants to purchase up to

741,939

shares of common stock were issued in the offering. A Series A warrant to purchase

one

share of common stock at an exercise price of

$15.50

per share that expires on the

first

anniversary of the date of issuance and a Series B warrant to purchase

one

share of common stock at an exercise price of

$15.50

per share that expires on the

fifth

anniversary of the issuance. The Series A warrants to purchase

one

share of common stock have a contractual term of

one

year and an exercise price of

$15.50

per share. The Series B warrants to purchase

one

share of common stock have a contractual term of

five

years and an exercise price of

$15.50

per share. The Company determined the fair value of the Series A warrants on the date of issuance to be approximately

$1,210,000

using the Black-Scholes option pricing model. Assumptions used were dividend yield of

0%,

volatility of

91.1%,

risk free interest rate of

1.59%

and a contractual life of

one

year. The Company determined the fair value of the Series B warrants on the date of issuance to be approximately

$2,871,000

using the Black-Scholes option pricing model. Assumptions used were dividend yield of

0%,

volatility of

68.8%,

risk free interest rate of

1.58%

and a contractual life of

five

years. The fair value of the Series A and B warrants totaling approximately

$4,081,000

is recorded as issuance costs relating to

November 2019

Offering.

February 2020,

a total of

102,626

shares of common stock were issued in connection with the exercise of Series A warrants for gross proceeds of approximately

$1,591,000,

and a total of

4,548

shares of common stock were issued in connection with the exercise of Series B warrants for gross proceeds of approximately

$70,000.

April 15, 2020,

the Company reduced the exercise price of the outstanding Series A warrants and Series B warrants from

$15.50

per share to

$6.10

per share. The Series A and B warrant exercise price adjustment to

$6.10

per share from

$15.50

per share resulted in the recognition of a modification expense on

April 15, 2020,

under the analogous guidance with respect to stock option modification under FASB ASC Topic

718,

Stock-Based Compensation (ASC

718

), wherein an exchange of warrants is deemed to be a modification of the initial warrant agreement by the replacement with a revised warrant agreement, requiring the incremental fair value, measured as the difference between the fair value immediately after the modification as compared to the fair value immediately before the modification, to the extent an increase, recognized as a modification expense. In this regard, the Series A warrants and Series B warrants exercise price adjustment resulted in the recognition of a current period modification expense of

$1,838,000

included in other income (expense) in the consolidated statement of operations, with a corresponding increase to additional paid-in capital in the consolidated balance sheet. The modification expense incremental fair value was estimated using a Black-Scholes valuation model, using the following assumptions:

	Immediately			Immediately
	before Modification			After Modification

Exercise price	$	15.50		$	6.10
Common stock price	$	6.30		$	6.30
Expected term (in years)		2.8			2.8
Average volatility		97	%		97	%
Risk-free interest rate		0.27	%		0.27	%
Dividend yield		0	%		0	%

April 16, 2020,

the Company entered into inducement letter agreements with certain institutional and accredited holders of Series A warrants and Series B warrants pursuant to which such holders agreed to exercise Series A warrants to purchase

482,059

shares of common stock and Series B warrants to purchase

24,279

shares of common stock for aggregate exercise proceeds to the Company of approximately

$3,089,000.

In conjunction, the Company also agreed to issue new Series A-

warrants to purchase up to

482,059

shares of common stock as an inducement for the exercise of Series A warrants, and new Series B-

warrants to purchase up to

24,279

shares of common stock as an inducement for the exercise of Series B warrants, in each case at an exercise price of

$6.371

per share and for a term of

five

years. The Company determined the fair value of the Series A-

and the Series B-

warrants on the date of issuance to be approximately

$1,838,000

using the Black-Scholes option pricing model. Assumptions used were dividend yield of

0%,

volatility of

84.1%,

risk free interest rate

of.35%

and a contractual life of

five

years. The fair value of the Series A-

and B-

warrants is recorded as a cost of issuance of the offering and as additional paid-in capital. The transaction closed on

April 20, 2020.

Other transaction costs in connection with the

2020

Warrant Offering were approximately

$334,000.

May 2020,

a total of

410

shares of common stock were issued in connection with the exercise of Series A warrants for gross proceeds of approximately

$2,000.

June 2020,

a total of

2,761

shares of common stock were issued in connection with the exercise of Series A warrants for gross proceeds of approximately

$17,000,

and a total of

5,070

shares of common stock were issued in connection with the exercise of Series B warrants for gross proceeds of approximately

$31,000.

August 2020,

a total of

111,704

shares of common stock were issued in connection with the exercise of Series A warrants for gross proceeds of approximately

$681,000,

and a total of

380,913

shares of common stock were issued in connection with the exercise of Series B warrants for gross proceeds of approximately

$2,324,000.

August 2020,

a total of

89,230

shares of common stock were issued in connection with the exercise of Series A-

warrants for gross proceeds of approximately

$568,000,

and a total of

3,899

shares of common stock were issued in connection with the exercise of Series B-

warrants for gross proceeds of approximately

$25,000.

September 2020,

a total of

1,500

shares of common stock were issued in connection with the exercise of Series B warrants for gross proceeds of approximately

$9,000.

As of

December 31, 2020,

there were

Series A warrants remaining to purchase shares of common stock and Series B warrants to purchase a total of

325,632

shares of common stock still remaining and outstanding.

As of

December 31, 2020,

there were Series A-

warrants to purchase a total of

392,830

shares of common stock, and Series B-

warrants to purchase a total of

20,380

shares of common stock still remaining and outstanding.

In connection with the CRG Debt Conversion, CRG received warrants exercisable for

989,379

shares of common stock, an amount equal to

15%

of our common stock on a fully diluted basis after taking the

November 2019

Offering into account (the “CRG Warrants”). The CRG Warrants have a contractual term of

five

years and an exercise price equal to

120%

of the Series B convertible preferred stock conversion price of

$15.30

$18.36

per share. The Company determined the fair value of the warrants on the date of issuance to be approximately

$3,502,000

using the Black-Scholes option pricing model. Assumptions used were dividend yield of

0%,

volatility of

68.8%,

risk free interest rate of

1.58%

and a contractual life of

five

years. The fair value of the CRG warrants is recorded as additional paid-in capital as part of the accounting for the debt conversion.

In connection with the

2017

Loan Agreement, the Company issued warrants to purchase a total of

223

shares of common stock at an exercise price of

$9,500.00

per share. The warrants have a contractual life of

ten

years and are exercisable immediately in whole or in part. The Company determined the fair value of the warrants on the date of issuance to be

$940,000

using the Black-Scholes option pricing model. Assumptions used were dividend yield of

0%,

volatility of

55.1%,

risk free interest rate of

2.25%

and a contractual life of

ten

years. The fair value of the warrants along with financing and legal fees totaling

$790,000,

are recorded as debt issuance costs and presented in the consolidated balance sheets as a deduction from the carrying amount of the note payable. The debt issuance costs are amortized to interest expense over the loan term. During the years ended

December 31, 2020

and

2019,

the Company recorded

$3,000

and

$352,000,

respectively, of interest expense relating to the debt issuance costs using the effective interest method. As of

December 31, 2020,

the unamortized debt discount was

$9,000.

During the year ended

December 31, 2020,

a total of

1,209,000

shares were issued in connection with the exercise of warrants for gross proceeds of approximately

$8,407,000.

shares were issued in connection with the exercise of warrants during the year ended

December 31, 2019.

shares issuable pursuant to warrants have been cancelled during the year ended

December 31, 2020

and

2019.

A total of

42,404

shares issuable pursuant to warrants expired during the year ended

December 31, 2020.

A total of

140

shares issuable pursuant to warrants expired during the year ended

December 31, 2019.