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Subsequent Events
9 Months Ended
Sep. 30, 2022
Subsequent Events [Abstract]  
Subsequent Events

15. Subsequent Events

For its condensed consolidated financial statements as of the nine months ended September 30, 2022 and for the period then ended, the Company evaluated subsequent events through December 15, 2022, the date on which these financial statements were issued.

Amended and Restated Certificate of Incorporation

In October 2022, the Board approved the amended and restated certificate of incorporation, which was filed upon the closing of the IPO and which, among other things, increased the number of shares of common stock authorized for issuance from 40,013,683 to 500,000,000 shares of common stock.

2022 Equity Incentive Plan

In October 2022, the Board adopted, and in November 2022 its stockholders approved, the 2022 Stock Option and Incentive Plan (the “2022 Plan”), which became effective immediately prior to and contingent upon the execution of the underwriting agreement related to the Company’s IPO. The 2022 Plan allows the Company to make equity-based and cash-based incentive awards to its officers, employees, directors, and consultants. The 2022 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, RSUs and other stock-based awards. The number of shares initially reserved for issuance under the 2022 Plan is 5,606,723, which is the sum of: (i) 2,555,271 new shares, plus (ii) the number of shares that remain available for issuance under the 2019 Plan at the time the 2022 Plan became effective and (iii) up to 2,148,679 shares of common stock subject to awards granted under the 2019 Plan that, after the effective date of the 2022 Plan, expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased. In addition, the number of shares reserved and available for issuance under the 2022

Plan will automatically increase on January 1, 2023 and each January 1 thereafter, by five percent of the aggregate number of shares of common stock of all classes issued and outstanding on the immediately preceding December 31 or such lesser number of shares of common stock as determined by the compensation committee.

The shares of common stock underlying any awards under the 2022 Plan and the 2019 Plan that are forfeited, canceled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of stock, expire, or are otherwise terminated (other than by exercise) will be added back to the shares of common stock available for issuance under the 2022 Plan.

2022 Employee Stock Purchase Plan

In October 2022, the Board adopted, and in November 2022 its stockholders approved, the 2022 Employee Stock Purchase Plan (the “2022 ESPP”), which became effective immediately prior to and contingent upon the execution of the underwriting agreement related to the Company’s IPO. A total of 215,000 shares of common stock were initially reserved for issuance under this plan. The number of shares of common stock that may be issued under the 2022 ESPP shall cumulatively increase beginning on January 1, 2023 and each January 1 thereafter through January 1, 2032, by one percent of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the compensation committee.

Reverse Stock Split

In November 2022, the Company effected a 1-for-2.466 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios of each series of the Company’s preferred stock (see Note 9). Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the preferred stock conversion ratios.

IPO Option Grants and Restricted Stock Unit Awards

In November 2022, in connection with the IPO, the Company issued certain directors and employees, including its executive officers, stock options to purchase an aggregate of 1,097,168 shares of its common stock with an exercise price equal to the initial public offering price of $12.50 per share, under the 2022 Plan. The Company estimates that the aggregate grant-date fair value of the options granted in connection with the IPO is $10.0 million, which is expected to be recognized as stock-based compensation expense over a period of three to four years.

In addition, in November 2022, the Company granted certain employees, including its executive officers, an aggregate of 1,768,632 RSUs under the 2022 Plan. Based on an assumed fair value of $12.50 per share, which was the initial public offering price, the Company estimates that the aggregate grant-date fair value of the RSUs granted in connection with the IPO is $22.1 million, which is expected to be recognized as stock-based compensation expense over a period of three to four years.

Initial Public Offering and Concurrent Private Placement

In November 2022, the Company completed its IPO, pursuant to which it issued and sold 7,550,000 shares of its common stock. In connection with the IPO, the Company granted the underwriters a 30-day option to purchase 1,132,500 additional shares of common stock. Additionally, the Company also completed the Concurrent Private Placement in which the Company issued and sold 400,000 shares of its common stock and received aggregate net proceeds of $4.7 million, after deducting the placement agent fee. In December 2022, the underwriters partially exercised the option to purchase 1,035,540 additional shares, which is expected to close on December 16, 2022. The Company estimates the aggregate net proceeds from the IPO, including exercise by the underwriters of their option to purchase additional shares, will be approximately $99.8 million, after deducting underwriting discounts and commissions, but before deducting estimated offering expenses payable by the Company, which are estimated to be $2.9 million. Upon the closing of the IPO, all of the shares of the Company’s convertible preferred stock then outstanding converted into 11,140,262 shares of common stock. Upon the conversion of the convertible preferred stock, the Company reclassified the carrying value of the convertible preferred stock to common stock (at par value) and additional paid-in capital.