Annual report pursuant to Section 13 and 15(d)

STOCKHOLDERS??? EQUITY

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STOCKHOLDERS’ EQUITY
12 Months Ended
Dec. 31, 2020
Equity [Abstract]  
STOCKHOLDERS’ EQUITY
NOTE 11 — STOCKHOLDERS’ EQUITY
At-the-Market Program
We maintain an at-the-market equity offering program pursuant to which we may sell shares of our common stock from time to time on the Nasdaq. For the year ended December 31, 2020, we issued approximately 43.7 million shares of our common stock under our at-the-market program for net proceeds of approximately $53.8 million. As of December 31, 2020, we had remaining availability under the at-the-market program to raise aggregate gross sales proceeds of up to approximately $333.8 million. See Note 17, Subsequent Events, for further information.
Common Stock Issuances
On February 11, 2020, we sold approximately 2.1 million shares of our common stock in a registered direct offering at a price of $6.36 per share. Net proceeds from this offering, after deducting fees and expenses, were approximately $13.1 million. Additionally, on July 24, 2020, we completed a registered direct offering pursuant to which we sold 35.0 million shares of our common stock at an offering price of $1.00 per share. Net proceeds from this transaction were approximately $32.8 million.
In June 2018, we sold 12.0 million shares of common stock for proceeds of approximately $115.2 million, net of approximately $3.6 million in fees and commissions. The underwriters were granted an option to purchase up to an additional 1.8 million shares of common stock within 30 days, which was not exercised. In January 2018, and in connection with a common stock issuance in December 2017, the underwriters exercised their option to purchase an additional 1.5 million shares of our common stock for proceeds of approximately $14.5 million, net of approximately $0.5 million in fees and commissions.    
Common Stock Purchase Warrants
2020 Unsecured Note
As discussed in Note 9, Borrowings, on April 29, 2020 (the “Issuance Date”), in conjunction with the issuance of the 2020 Unsecured Note, we issued a warrant providing the lender with the right to purchase up to 20.0 million shares of our common stock at $1.542 per share. The Unsecured Warrant, which vested on the Issuance Date, was not exercisable until October 29, 2020 and will expire five years after it became exercisable. The Unsecured Warrant was valued using a Black-Scholes option pricing model that resulted in a relative fair value of approximately $16.1 million on the Issuance Date and is not subject to subsequent remeasurement. The Unsecured Warrant has been classified as equity and is recognized within Additional paid-in capital on our Consolidated Balance Sheets. The Unsecured Warrant has been excluded from the computation of diluted loss per share because including it in the computation would have been antidilutive for the periods presented.
2019 Term Loan    
As discussed in Note 9, Borrowings, we have entered into four amendments to the 2019 Term Loan. Pursuant to the Second Amendment, we replaced the previously issued Original Warrant, which provided the lender with the right to purchase up to 1.5 million shares of our common stock at $10.00 per share, with the Replacement Warrant, which provides the lender with the right to purchase 9.0 million shares of our common stock at $1.00 per share. Pursuant to the Third Amendment, we issued the Third Amendment Warrant, which provides the lender with the right to purchase approximately 4.7 million shares of our common stock at $1.542 per share. The Third Amendment Warrant expires five years after the date of the Third Amendment. Half of the Third Amendment Warrant vested immediately, but was not exercisable until October 29, 2020, and the remaining half vested, and became exercisable, on October 29, 2020.
The aggregate number of unvested shares of our common stock provided to the lender under the Replacement Warrant and the Third Amendment Warrant will be reduced proportionately as a result of any partial repayment of the 2019 Term Loan principal and, in the event the outstanding balance of the 2019 Term Loan is repaid in full, any unvested tranches will be canceled as of the date of such repayment. As of December 31, 2020, the aggregate number of unvested shares of our common stock provided to the lender under the Replacement Warrant and the Third Amendment Warrant has been reduced by approximately 2.4 million shares due primarily to partial repayments of the outstanding principal balance.
The Replacement Warrant expires five years after the date of the Second Amendment and vests as follows (in thousands):
Vesting Number of Shares
Immediately 3,000 
March 23, 2021 1,924 
June 23, 2021 1,924 
Total 6,848 
On December 2, 2020, the lender purchased 1.0 million shares of our common stock for proceeds of $1.0 million under the terms of the Replacement Warrant. See Note 17, Subsequent Events, for further information.
The Replacement Warrant was valued using a Black-Scholes option pricing model that resulted in a fair value of approximately $3.6 million on the date of the Second Amendment. The difference between the fair values of the Original Warrant and the Replacement Warrant was an increase of approximately $0.3 million and has been classified as equity and recognized within Additional paid-in capital on our Consolidated Balance Sheets. However, as the total number of warrants was no longer fixed, approximately $2.4 million was recognized as a liability on the date of the Second Amendment. This liability is remeasured every period end while it remains unvested, and if the vesting event occurs, the applicable portion of the liability will be remeasured on said vesting date and reclassified to equity. As of December 31, 2020, we had recognized approximately $3.8 million within Accrued and other liabilities on our Consolidated Balance Sheets associated with the Replacement Warrant. For the year ended December 31, 2020, we recognized an unrealized loss of approximately $1.4 million within Other income, net, on our Consolidated Statement of Operations due to the remeasurement of the unvested portion of the Replacement Warrant.
The Third Amendment Warrant was valued using a Black-Scholes option pricing model that resulted in a fair value of approximately $5.7 million on the date of the Third Amendment. As only half of the Third Amendment Warrant had vested on the date of the Third Amendment, and was therefore fixed, approximately $2.9 million was classified as equity and recognized within Additional paid-in capital on our Consolidated Balance Sheets. The remaining approximately $2.8 million did not meet the fixed-for-fixed criteria for equity classification, and was recognized as a liability on the date of the Third Amendment. This liability was remeasured every period end while it remained unvested. On October 29, 2020, the remaining half of the Third
Amendment Warrant vested and approximately $1.1 million was reclassified to equity. We recognized a realized gain of approximately $1.7 million within Other income, net, on our Consolidated Statement of Operations due to the remeasurement of the Third Amendment Warrant.
The Replacement Warrant and Third Amendment Warrant have been excluded from the computation of diluted loss per share because including it in the computation would have been antidilutive for the periods presented.
Preferred Stock
In March 2018, we entered into a preferred stock purchase agreement with BDC Oil and Gas Holdings, LLC (“Bechtel Holdings”), a Delaware limited liability company and an affiliate of Bechtel Oil, Gas and Chemicals, Inc., a Delaware corporation, pursuant to which we sold to Bechtel Holdings approximately 6.1 million shares of our Series C convertible preferred stock (the “Preferred Stock”).
The holders of the Preferred Stock do not have dividend rights but do have a liquidation preference over holders of our common stock. The holders of the Preferred Stock may convert all or any portion of their shares into shares of our common stock on a one-for-one basis. At any time after “Substantial Completion” of “Project 1,” each as defined in and pursuant to the LSTK EPC Agreement for the Driftwood LNG Phase 1 Liquefaction Facility, dated as of November 10, 2017, or at any time after March 21, 2028, we have the right to cause all of the Preferred Stock to be converted into shares of our common stock on a one-for-one basis. The Preferred Stock has been excluded from the computation of diluted loss per share because including it in the computation would have been antidilutive for the periods presented.