Annual report pursuant to Section 13 and 15(d)

Shareholders' Equity

v3.20.4
Shareholders' Equity
12 Months Ended
Dec. 31, 2020
Equity [Abstract]  
Shareholders' Equity Shareholders' Equity
Common shares: The Company has authorized an unlimited number of shares of common shares, no par value. As of December 31, 2020, 2019 and 2018, 126.7 million, 111.8 million and 85.5 million Common Shares, respectively, were issued and outstanding. Each share entitles the holder to one vote on all matters submitted to a vote of the Company’s shareholders. Common shareholders are not entitled to receive dividends unless declared by the Company’s Board of Directors.
The common share activity for 2020, 2019 and 2018 is as follows:
Common Shares
Number of Shares
(in thousands)
Amount (in thousands)
Balance at December 31, 2017 84,052  $ 483,294 
Issued pursuant to exercise of warrants 1,172  3,977 
Issued pursuant to exercise of stock options 276  1,473 
Balance at December 31, 2018 85,500  488,744 
Issued pursuant to Public Offering 12,782  191,737 
Issued pursuant to At-the-Market (ATM) Facilities 6,953  45,010 
Share issue costs —  (13,629)
Issued pursuant to exercise of warrants 2,983  12,428 
Issued pursuant to exercise of stock options 3,580  22,197 
Balance at December 31, 2019 111,798  746,487 
Issued pursuant to Public Offering 13,333  200,000 
Share issue costs —  (12,268)
Issued pursuant to exercise of warrants
Issued pursuant to exercise of stock options 1,593  10,107 
Balance at December 31, 2020 126,725  $ 944,328 
July 27, 2020 public offering

On July 27, 2020 the Company completed a public offering of 13.3 million Common Shares at a price of $15.00 per share. Gross proceeds from this offering were $200.0 million and the share issue costs totaled an estimated $12.3 million which included a 6% underwriting commission of $12.0 million and professional fees of $268 thousand.
December 12, 2019 public offering
On December 12, 2019 the Company completed a public offering of 12.8 million common shares at a price of $15.00 per share. Gross proceeds from this offering were $191.7 million and the share issue costs totaled $11.8 million which included a 6% underwriting commission of $11.5 million and professional fees of $315 thousand.
September 13, 2019 ATM facility
On September 13, 2019 the Company entered into an Open Market Sale Agreement (the "Sale Agreement") with Jeffries pursuant to which the Company may from time to time sell, through ATM offerings, common shares that would have an aggregate offering price of up to $40.0 million. Aurinia filed a prospectus supplement with securities regulatory authorities in Canada in the provinces of British Columbia, Alberta and Ontario, and with the United States Securities and Exchange Commission, which supplements Aurinia's short form base shelf prospectus dated March 29, 2018, and Aurinia's shelf registration statement on Form F-10 dated March 26, 2018, declared effective on March 29, 2018. Sales from the ATM offering were only conducted in the United States through Nasdaq at market prices.
Pursuant to this agreement the Company issued 2.3 million common shares at a weighted average price of $6.40 resulting in gross proceeds of $15.0 million. The Company incurred share issue costs of $640 thousand including a 3% commission of $450 thousand paid to the agent and professional fees of $190 thousand directly related to the ATM. On December 9, 2019, the Company terminated the September 13, 2019 Sale Agreement with Jefferies LLC related to the 2019 ATM.
November 30, 2018 ATM facility
On November 30, 2018 the Company entered into an Open Market Sale Agreement (the “Sale Agreement”) with Jefferies LLC (“Jefferies”) pursuant to which the Company sold, through at-the-market (ATM) offerings, common shares that would have an aggregate offering price of up to $30.0 million. Aurinia filed a prospectus supplement with securities regulatory authorities in Canada in the provinces of British Columbia, Alberta and Ontario, and with the United States Securities and Exchange Commission, which supplements Aurinia’s short form base shelf prospectus dated March 26, 2018, and Aurinia’s shelf registration statement on Form F-10 dated March 26, 2018, declared effective on March 29, 2018. Sales from the ATM offering were only conducted in the United States through Nasdaq at market prices.
Pursuant to this agreement the ATM Facility was fully utilized resulting in gross proceeds of $30.0 million upon the issuance of 4.6 million common shares at a weighted average price of $6.51. The Company incurred share issue costs of $1.2 million including a 3% commission of $900 thousand paid to the agent and professional and filing fees of $270 thousand directly related to the ATM.
A summary of the anticipated and actual use of net proceeds used to date from the above financings is set out in the table below.
Allocation of net proceeds Total net proceeds from financings (in thousands) Net proceeds used to date (in thousands)
March 20, 2017 Offering
R&D Activities $ 123,400  $ 123,400 
Working capital and corporate purposes 38,924  38,924 
162,324  162,324 
November 30, 2018 ATM facility 28,830  28,830 
September 2019 ATM facility 14,371  14,371 
December 2019 Public Offering:
Pre-commercial and launch activities, working capital and corporate purposes 179,918  44,181 
July 2020 Public Offering:
Pre-commercial and launch related activities
$117,000 to $143,000
— 
R&D activities
$28,000 to $34,000
— 
Working capital and corporate purposes
10,500 to 42,500
— 
187,700  — 
Total $ 573,143  $ 249,706 
Warrants:
Warrant related to February 14, 2014 private placement offering: On February 14, 2014, the Company completed a $52.0 million private placement (2014 Private Offering). Under the terms of the 2014 Private Offering, a Unit consisted of one common share and one-quarter (0.25) of a common share purchase price warrant (2014 Warrant). The Company issued 18.9 million Units at a subscription price per Unit of $2.7485, exercisable for a period of five years from the date of issuance, at an exercise price of $3.2204. These February 2014 Warrants meet the scope exceptions provided in ASC 815, Derivatives and Hedging, as they are indexed to the Company’s own shares, and therefore are accounted for under ASC 505, Equity.
In 2019, certain holders of these 2014 Warrants elected the cashless exercise option and the Company issued 0.7 million common shares in lieu of 1.3 million 2014 Warrants, which was recorded through an increase in equity (common shares) and decrease in additional paid-in capital. One holder of 464 thousand 2014 Warrants exercised these 2014 Warrants for cash and received 464 thousand common shares. The Company received cash proceeds of $1.5 million and recorded an increase in cash and additional paid in capital. In 2018, no holders of the 2014 Warrants elected the cashless exercise option. As a result, the Warrants related to the February 14, 2014 private placement offering have been extinguished upon the exercise of the aforementioned warrants, at December 31, 2019.
Warrant related to December 28, 2016 bought deal public offering: On December 28, 2016, the Company completed a $28.8 million Bought Deal public offering (2016 Public Offering). Under the terms of 2016 Public Offering, each Unit consists of one common share and one-half (0.50) of a common share purchase warrant (December 2016 Warrant). The Company issued 12.8 million Units at a subscription price per Unit of $2.25, exercisable for a period of five years from the date of issuance at an exercise price of $3.00. These December 2016 Warrants also meet the scope exceptions provided in ASC 815, Derivatives and Hedging, as they are indexed to the Company’s own shares, and therefore are accounted for under ASC 505, Equity.
At initial recognition on December 28, 2016, the Company recorded a warrant in the amount of $7.2 million based on the estimated fair value of the December 2016 Warrants with allocated share issuance costs of $655 thousand recognized as a reduction of equity.
In 2020, a holder exercised 500 Warrants at $3.00 per share for gross proceeds of $2 thousand which was recorded through an increase in cash and equity. In 2019, certain holders of these Warrants exercised at $3.00 per share for gross proceeds of $5.5 million. In 2018, no holders of these Warrants exercised.
A summary of the outstanding warrants as of December 31, 2020 is presented below:
Number of Warrants
(in Thousands)
Weighted-Average
Exercise Price
$
Expiry date:
December 28, 2021 1,690 3.00
1,690 3.00
The warrant activity for 2019 and 2018 is as follows:
Number of Warrants
(in thousands)
Balance at December 31, 2018 3,523 
Warrants exercised (1,832)
Balance at December 31, 2019 1,691 
Warrants exercised (1)
Balance at December 31, 2020 1,690