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Capital Structure
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
CAPITAL STRUCTURE

(6) CAPITAL STRUCTURE

Common Stock

Common stock reserved for future issuance, on an as if converted basis, as of September 30, 2020 and December 31, 2019, consists of the following:

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Convertible preferred stock issued and outstanding

 

 

 

 

 

10,313,808

 

Stock options issued and outstanding

 

 

4,751,589

 

 

 

1,183,745

 

Stock options authorized for future issuance

 

 

2,941,162

 

 

 

566,900

 

Warrants issued and outstanding

 

 

 

 

 

61,292

 

Warrants authorized for future issuance

 

 

 

 

 

30,646

 

Total

 

 

7,692,751

 

 

 

12,156,391

 

 

Convertible Preferred Stock

 

On July 21, 2020, the Company completed its initial public offering and issued 9,775,000 shares of common stock for net proceeds of approximately $169.5 million, after deducting underwriting discounts and commissions of $13.0 million and offering-related expenses of $3.2 million. Upon the closing of the initial public offering, all shares of convertible preferred stock outstanding and accrued cumulative dividends were automatically converted into 23,934,533 shares of common stock.

As of December 31, 2019, the Company’s convertible preferred stock consisted of the following (in thousands, except share amounts):

 

 

 

December 31, 2019

 

 

 

 

 

 

 

Shares

 

 

 

 

 

 

Aggregate

 

 

 

Authorized

 

 

Issued And

 

 

Net

 

 

Liquidation

 

 

 

Shares

 

 

Outstanding

 

 

Proceeds(1)

 

 

Preference

 

Shares designated as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A convertible preferred stock

 

 

9,421,633

 

 

 

9,297,081

 

 

$

60,933

 

 

$

73,571

 

Series B convertible preferred stock

 

 

2,145,370

 

 

 

1,016,727

 

 

 

9,430

 

 

 

10,014

 

Total

 

 

11,567,003

 

 

 

10,313,808

 

 

$

70,363

 

 

$

83,585

 

 

(1)

Net proceeds are gross proceeds from the offerings net of issuance costs

 

Preferred Stock Warrant Liability

On July 21, 2020, the warrants to purchase 61,292 Series B convertible preferred stock issued to SVB and WestRiver with an exercise price of $9.4972 per share were automatically converted to warrants to purchase 61,292 shares of common stock at an exercise price of $9.4972 per share. The Company revalued the Series B convertible preferred stock warrants as of the completion of the initial public offering and reclassified the outstanding preferred stock warrant liability balance to additional paid-in capital with no further re-measurement required as the common stock warrants are considered permanent equity.

On August 17, 2020, SVB and WestRiver delivered the Notice of Exercise to net exercise 61,292 warrants at an exercise price of $9.4972 per share. Accordingly, the Company issued 48,932 shares of the Company’s common stock.

 

Dividends

Cumulative dividends of 6.0% per annum of the original issue price for each preferred stock series are payable when and as declared by the Company’s Board of Directors, or Board of Directors, upon the occurrence of a liquidation event or upon a contingent mandatory conversion of the preferred stock in connection with a qualified initial public offering as described below. The Series A original issue price is $6.58, and the Series B and Series C original issue price is $9.4972. The original issue price is subject to adjustment in the event of any share dividend, share split, combination, consolidation or other recapitalization. The dividends shall accrue from day to day from the issue date of such preferred stock whether or not declared and shall be cumulative. In addition, the preferred stockholders participate on an as-converted basis in any dividends payable to ordinary shareholders. As of July 20, 2020, there were approximately $18.0 million of accrued cumulative dividends on the Series A, Series B and Series C convertible preferred stock, which became payable upon the consummation of the Company’s initial public offering and automatically converted into 2,564,759 shares of the Company’s common stock.