Series A Preferred Stock and Stockholders' Deficit |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A Preferred Stock and Stockholders’ Deficit |
7. Series A Preferred Stock and Stockholders’ Deficit Series A Preferred Stock On November 5, 2018, the Company entered into a Series A Preferred Stock Purchase Agreement with various investors for issuance of up to 119,752,983 shares of Series A Preferred Stock at a purchase price of $1.00259507 per share. In an initial closing, the Company issued 59,908,284 shares of Series A Preferred Stock at $1.00259507 per share, for approximately $59.8 million in cash and the conversion of approximately $51,014 in principal and accrued interest under convertible promissory note. On April 12, 2019, the Second Closing of Series A Preferred Stock was completed for issuance of 59,844,699 shares and cash proceeds of $60.0 million. The Series A Preferred Stock has been classified outside of stockholders’ deficit as temporary equity on the accompanying condensed consolidated balance sheet because the shares contain certain redemption features that are not solely within the control of the Company. The Series A Preferred Stock is not generally redeemable; however, upon certain change in control events that are outside of the Company’s control, including liquidation, sale or transfer of control of the Company, holders of the Series A Preferred Stock may have the right to receive its liquidation preference under the terms of the Company’s certificate of incorporation. The Company is not adjusting the carrying value of the Series A Preferred Stock as it is uncertain whether or when a redemption event will occur. Upon the completion of the IPO (see Note 1), all outstanding shares of Series A Preferred Stock were automatically converted into 14,969,118 shares of common stock. Redeemable Common Stock In connection with the Shire License Agreement, the Company entered into a common stock issuance agreement (the “Common Stock Agreement”) with Shire and issued 1,859,151 shares of the Company’s common stock (the “Shire Stock”), or 9% of the Company’s outstanding fully diluted shares issued as of June 30, 2019. Pursuant to the terms of the Common Stock Agreement, (1) in the event of an initial public offering prior to the occurrence of certain liquidation events, if Shire’s ownership of the Company’s common stock is less than 5% of the outstanding fully diluted shares of common stock immediately prior to the closing of the IPO, the Company will issue additional shares of common stock to increase Shire’s ownership to 5% of the then-outstanding fully diluted shares, and (2) in the event that certain liquidation events occur prior to an initial public offering and Shire’s ownership is less than 5% of the then outstanding fully diluted shares of common stock, Shire is entitled to receive additional proceeds, if needed, to equal 5% of proceeds available for distribution to the Company’s security holders. The Shire Stock has been classified outside of stockholders’ deficit as temporary equity on the accompanying condensed consolidated balance sheet because these features are deemed for accounting purposes to contain certain redemption features that may be triggered in the event of certain liquidation events that are not solely in the control of the Company. The Company is not adjusting the carrying value of the Shire Stock as it is uncertain whether or when a redemption event will occur. Upon the completion of the IPO (see Note 1), the Shire Stock was reclassified to permanent equity due to the expiration of the deemed redemption feature. Common Stock In August and October 2018, the Company issued 1,187,500 shares of common stock as founder shares for services rendered to the Company, valued at $0.0001 per share for consideration of approximately $950. On November 5, 2018, in connection with the issuance of the Series A Preferred Stock, vesting conditions were placed on 562,500 previously issued founder shares. These shares vest over 4 years and are subject to repurchase by the Company in the event of termination of services. Shares subject to repurchase are not deemed, for accounting purposes, to be outstanding until those shares vest. In April 2019, the Company repurchased 25,782 shares of the common stock from a former employee in connection with termination of employment. As of June 30, 2019 and December 31, 2018, 456,445 and 550,781 shares of common stock, respectively, were subject to repurchase by the Company. The unvested stock liability related to these shares is immaterial to all periods presented. Each share of common stock is entitled to one voting right. Common stockholders are entitled to dividends when funds are legally available and declared by the Board. Common Stock Reserved for Issuance Common stock reserved for issuance is as follows:
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