6. Stockholders’ Equity

Equity Offerings

Under its certificate of incorporation, the Company was authorized to issue up to 200,000,000 shares of common stock as of September 30, 2022. The Company also was authorized to issue up to 5,000,000 shares of preferred stock as of September 30, 2022. The Company is required, at all times, to reserve and keep available out of its authorized but unissued shares of common stock sufficient shares to effect the conversion of the shares of the preferred stock and all outstanding stock options and warrants.

Registered Direct Stock Offering and Concurrent Warrant Issuance

In July 2022, the Company announced a targeted registered direct financing of 1,800 shares of the Company’s Series A convertible preferred stock, or the Series A Preferred, and 200 shares of the Company’s Series B convertible preferred stock, or Series B Preferred. The shares of preferred stock issued in this offering are convertible into an aggregate of 8,000,000 shares of common stock. The Series A Preferred has voting rights equal to the number of shares of common stock into which the Series A Preferred is convertible. The Series B Preferred has voting rights, only with respect to a proposal to effect a reverse split of the Company’s common stock, equal to 25,000,000 votes per share of Series B Preferred, provided that any votes cast by the Series B Preferred with respect to the reverse split proposal must be counted by the Company in the same proportion as the shares of common stock and Series A Preferred voted on such proposal. The shares of preferred stock were convertible at the option of the holder at any time following the date of issuance, and in August 2022 these shares of preferred stock were converted into shares of common stock.

In connection with this registered direct offering, the Company also issued warrants to purchase 8,000,000 shares of common stock (“Common Stock Warrant”) (together with the Series A Preferred and Series B Preferred, the “Preferred Stock Transaction”). These warrants have an exercise price of $0.263 per share, will be exercisable beginning on the later of six months following the date of issuance and the effective date of a reverse stock split of our common stock in an amount sufficient to permit the exercise in full of the warrants and will expire five and one-half years following the date of issuance. The Common Stock Warrants are classified as a liability. The Company evaluates its warrants to determine if the contracts qualify as liabilities in accordance with ASC 480-10, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The Common Stock Warrant, valued using the Black Scholes valuation model, were initially recorded at their issuance date fair value and are remeasured on each subsequent balance sheet date with changes in fair value recorded as a component of other income (expense), net.

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The net proceeds from the Preferred Stock Transaction were allocated as follows:

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The net proceeds related to the Preferred Stock Transaction were approximately $1.6 million. Approximately $0.4 million of issuance costs were incurred and allocated on a pro rata basis to the Common Stock Warrant liability and the Series A and Series B Preferred Stock, respectively. Approximately $0.3 million was allocated to the Common Stock Warrant liability and recorded in selling, general and administrative expenses. The Series A and Series B Preferred Stock were recorded net of approximately $0.1 million of issuance costs.

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The fair value of the Common Stock Warrant liability was determined using Level 3 inputs and was estimated using the Black-Scholes valuation model. The assumptions used to estimate the fair value were as follows:

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On August 2, 2022, the Series A Preferred and Series B Preferred were converted into 8,000,000 share of common stock.

The following is a roll forward of the Common Stock Warrant liability from the date of issuance to September 30, 2022:

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R-Bridge Financing

In connection with the R-Bridge Financing, the Company issued a warrant to purchase 5,000,000 shares of common stock. This warrant has a term of 3 years, is immediately exercisable and has an exercise price of $0.82 per share. It was issued in April 2022 upon receipt of the first $15.0 million tranche.

ATM Programs

In April 2019, the Company entered into a Common Stock Sales Agreement with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which the Company may offer and sell through Wainwright, from time to time at the Company’s sole discretion, shares of its common stock, having an aggregate offering price of up to $50.0 million, or the HCW ATM Program. Sales of the shares of common stock are deemed to be “at-the-market offerings,” as defined in Rule 415 under the Securities Act. In December 2020, the Company and Wainwright entered into Amendment No. 1 to Common Stock Sales Agreement, or the Amendment, to amend the Common Stock Sales Agreement to, among other things, update the reference to the registration statement pursuant to which the shares of common stock may be sold and to include an additional $50.0 million of shares of common stock in the HCW ATM Program. There were no sales under the HCW ATM Program during the nine months ended September 30, 2022. As of September 30, 2022, there was approximately $41.9 million remaining available for future issuances under the HCW ATM Program.

Registered Direct Offering and Concurrent Warrant Issuance

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In connection with the Company’s January 2019 securities purchase agreements, the Company issued warrants to purchase 500,000 shares of common stock to certain designees of H.C. Wainwright & Co., LLC. These warrants have a term of five years, are immediately exercisable and have an exercise price of $1.25 per share. As of September 30, 2022, 172,500 of these warrants remain outstanding.

Equity Incentive Plans

In 2008, the Company adopted the 2008 Equity Incentive Plan, as amended on February 29, 2008, January 7, 2010, July 8, 2010, December 10, 2010, June 23, 2011 and June 17, 2013, collectively, the 2008 Plan, that authorized the Company to grant restricted stock and stock options to eligible employees, directors and consultants to the Company.

In 2013, the Company adopted the 2013 Equity Incentive Plan, as amended on May 14, 2014, collectively, 2013 Plan. The 2013 Plan became effective upon the Company’s entry into the underwriting agreement related to its IPO in January 2014 and, as of such date, no further grants were permitted under the 2008 Plan. The 2013 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards and other forms of equity compensation (collectively, stock awards), all of which may be granted to employees, including officers, non-employee directors and consultants of the Company. Additionally, the 2013 Plan provides for the grant of cash and stock-based performance awards. The 2013 Plan contains an “evergreen” provision, pursuant to which the number of shares of common stock available for issuance under the plan automatically increases on January 1 of each year beginning in 2015.

On December 15, 2016, the Company adopted the Trevena, Inc. Inducement Plan, or the Inducement Plan, effective January 1, 2017, pursuant to which the Company reserved 500,000 shares of the Company’s common stock for issuance under the Inducement Plan. The Inducement Plan provides for nonqualified stock options and restricted stock unit awards. The only persons eligible to receive grants of awards under the Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq Marketplace Rule 5635(c)(4) and the related guidance under Nasdaq IM 5635-1, including individuals who were not previously an employee or director of the Company or are following a bona fide period of non-employment, in each case as an inducement material to such individual’s agreement to enter into employment with the Company.

Under all of the Company’s equity incentive plans, the amount, terms of grants and exercisability provisions are determined by the board of directors or its designee. The term of the options may be up to 10 years, and options are exercisable in cash or as otherwise determined by the board of directors or its designee. Vesting generally occurs over a period of not greater than four years. For performance-based stock awards, the Company recognizes expense when achievement of the performance condition is probable, over the requisite service period.

The estimated grant date fair value of the Company’s share-based awards is amortized on a straight-line basis over the awards’ service periods. Share based compensation expense recognized was as follows (in thousands):

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Stock Options

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A summary of stock option activity and related information through September 30, 2022 follows:

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The aggregate intrinsic value of options exercisable as of September 30, 2022 was zero, based on the difference between the Company’s closing stock price of $0.1532 and the exercise price of each stock option. At September

30, 2022, there was $3.6 million of total unrecognized compensation expense related to unvested options that will be recognized over the weighted average remaining vesting period of 2.30 years.

The Company uses the Black Scholes option pricing model to estimate the fair value of stock options at the grant date. The Black Scholes model requires the Company to make certain estimates and assumptions, including estimating the fair value of the Company’s common stock, assumptions related to the expected price volatility of the Company’s common stock, the period during which the options will be outstanding, the rate of return on risk free investments and the expected dividend yield for the Company’s common stock.

The per-share weighted-average grant date fair value of the options granted to employees and directors during the nine months ended September 30, 2022 and 2021 was estimated at $0.36 and $1.45 per share, respectively, on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

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Restricted Stock Units

RSU-related expense is recognized on a straight-line basis over the vesting period. Upon vesting, these awards may be settled on a net-exercise basis to cover any required withholding tax with the remaining amount converted into an equivalent number of shares of common stock.

The following is a summary of changes in the status of non-vested RSUs during the nine months ended September 30, 2022:

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For the three and nine months ended September 30, 2022, the Company recorded $0.3 million and $1.2 million, respectively, in stock-based compensation expense related to RSUs, which is reflected in the consolidated statements of operations and comprehensive loss.

As of September 30, 2022, there was $3.86 million of total unrecognized compensation expense related to unvested RSUs that will be recognized over the weighted average remaining period of 2.68 years.

Shares Available for Future Grant

At September 30, 2022, the Company has the following shares available to be granted under its equity incentive plans:

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Shares Reserved for Future Issuance

At September 30, 2022, the Company has reserved the following shares of common stock for issuance:

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