Sale of Common Stock and Pre-Funded Warrants

In June 2022, the Company issued and sold 841,989 shares of its common stock at a purchase price of $1.32 per share and pre-funded warrants to purchase 2,205,018 shares of its common stock at a purchase price of $1.31 per share of underlying common stock with an exercise price of $0.01 per share of underlying common stock (the 2022 Pre-Funded Warrants) for net proceeds of approximately $3.9 million in a registered direct offering (the Offering) with an accredited institutional healthcare-focused fund. In accordance with their terms, the 2022 Pre-Funded Warrants may not be exercised if the holder’s ownership of the Company’s common stock would exceed 19.99% of the shares of the Company’s common stock outstanding immediately after giving effect to such exercise. The 2022 Pre-Funded Warrants were recorded as a component of stockholders’ equity (deficit) within additional paid-in capital on the consolidated balance sheets. In connection with the Offering, the Company amended two existing pre-funded warrants to purchase shares of the Company’s common stock held by the same institutional healthcare-focused fund to extend the exercise periods and to permit exercise in excess of a similar 19.99% limit following approval of the Company’s stockholders of such exercise.

At-The-Market Issuance Sales Agreement

In December 2020, as amended in March 2022, the Company entered into a Capital on Demand^TM Sales Agreement (the Sales Agreement) with JonesTrading, pursuant to which it may sell from time to time, at its option, up to an aggregate of $50.0 million of the Company’s common stock through JonesTrading, as sales agent or principal, $47.4 million of which remains available for sale as of September 30, 2022. Sales of the Company’s common stock made pursuant to the Sales Agreement with JonesTrading, if any, will be made on the Nasdaq Capital Market under the Company’s effective registration statement on Form S-3, subject to limitations on the amount of securities the Company may sell pursuant to its effective registration statement on Form S-3 within any 12-month period, by means of ordinary brokers’ transactions at market prices. Additionally, under the terms of the Sales Agreement, the Company may also sell shares of its common stock through JonesTrading, on the Nasdaq Capital Market or otherwise, at negotiated prices or at prices related to the prevailing market price. JonesTrading will use its commercially reasonable efforts to sell the Company’s common stock from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company is required to pay JonesTrading 2.5% of gross proceeds for the common stock sold through the Sales Agreement.

Equity Plan Activity

During the three and nine months ended September 30, 2022, the Company issued no shares of common stock upon the exercise of outstanding stock options and upon the vesting of restricted stock units. During the three and nine months ended September 30, 2022, the Company issued 0 shares and 23,461 shares of common stock, respectively, in connection with the employee stock purchase plan (the ESPP). During the year ended December 31, 2021, the Company issued 3,727 shares of common stock upon the exercise of outstanding stock options, 0 shares of common stock upon the vesting of restricted stock units, and 36,687 shares of common stock in connection with the ESPP.

Common Stock Warrants

As of September 30, 2022, the Company had the following outstanding warrants for the purchase of common stock:

During the three and nine months ended September 30, 2022, the Company issued 0 and 170,668 shares of its common stock upon the cashless exercise of pre-funded warrants to purchase 176,554 shares of common stock, respectively. During the year ended December 31, 2021, no warrants were exercised.

Stock-Based Compensation Expense

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows:

Stock compensation expense for the ESPP was immaterial for the three and nine months ended September 30, 2022 and 2021.

The allocation of stock-based compensation expense was as follows (in thousands):