As of December 31, 2022, the Company was authorized to issue up to 10,000,000 shares of preferred stock at a par value of $0.0001, with no shares issued or outstanding.

Immediately prior to the Effective Time, each share of Private Disc’s preferred stock was converted into a share of Private Disc’s common stock. At the closing of the merger, the shares of Private Disc's common stock were converted into shares of the Company's common stock based on the Exchange Ratio.

As of December 31, 2021, the Preferred Stock authorized, issued and outstanding consisted of the following (in thousands, except share amounts):


	December 31, 2021
	Preferred Stock Authorized		Preferred Stock Issued and Outstanding		Carrying Value		Liquidation Value		Common Stock Issuable Upon Conversion
Series Seed		5,000,000		5,000,000	$	2,350	$	5,000		5,000,000
Series A		41,666,666		41,666,666		49,762		50,000		41,666,666
Series B		37,499,999		37,499,999		89,744		90,000		37,499,999
Total		84,166,665		84,166,665	$	141,856	$	145,000		84,166,665

The Preferred Stock as of December 31, 2021 had the following rights and preferences:

The holders of the Preferred Stock were entitled to receive noncumulative dividends when and if declared by the Board at the rate per annum of eight percent (8%) of the applicable Original Issue Price, which is $1.00 per share for the Series Seed Preferred Stock, $1.20 per share for the Series A Preferred Stock, and $2.40 per share for the Series B Preferred Stock. Preferred Stock dividends would have been paid in preference and in priority to any dividends on common stock. If Private Disc had declared, paid or set aside, on the same date, a dividend on shares of more than one class or series of capital stock of Private Disc, the dividend payable to the holders of the Preferred Stock would have been based on the number of common shares the Preferred Stock would convert into. There have been no dividends declared by the Board to date.

In the event of any liquidation, dissolution, or winding up of Private Disc (“Liquidation Event”), the holders of Series A and Series B Preferred Stock were entitled to receive prior and in preference to the holders of common stock and Series Seed Preferred Stock, an amount equal to the Original Issue Price plus all declared and unpaid dividends on the Series A and Series B Preferred Stock. If the assets and funds available to be distributed to all holders of Series A and Series B Preferred Stock were insufficient to permit the payment, in full, of any of the liquidation preferences, then the entire assets and funds legally available for distribution to the Series A and Series B Preferred Stock would have been distributed ratably among the holders of Series A and Series B Preferred Stock at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be respectively entitled.

After the payment of the full liquidation preference of the Series A and Series B Preferred Stock as set forth above, the holders of shares of Series Seed Preferred Stock were entitled to receive an amount per share of Series Seed Preferred Stock equal to the Original Issue Price plus all declared and unpaid dividends on the Series Seed Preferred Stock. If the assets and funds available to be distributed to all holders of Series Seed Preferred Stock were insufficient to permit the payment, in full, of any of the liquidation preferences, then the entire assets and funds legally available for distribution to the Series Seed Preferred Stock would have been distributed ratably among the holders of Series Seed Preferred Stock at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be respectively entitled or when the remaining capital is distributed.

After the payment of all preferential amounts related to the holders of Preferred Stock, the remaining assets of Private Disc would have been distributed pro rata to the holders of the Preferred Stock and common stock as if the Preferred Stock had converted at the time of the Liquidation Event. Preferential amounts to the holders of Preferred Stock were capped at 2.5 times the applicable Original Issue Price per share plus any dividends declared but unpaid or the amount such holder would have received if all shares had been converted to common stock immediately prior to the Liquidation Event.

As of December 31, 2021, the shares of Preferred Stock were convertible into equal shares of common stock, at the conversion price in effect at the time of such conversion, (a) at any time upon the written consent of the holders of a majority of the outstanding shares of the Preferred Stock and at least one holder of Series B Preferred Stock that owned at least 4,166,666 shares of Series B Preferred Stock and that had not purchased any shares of Series A Preferred Stock as part of the Series A Agreement or (b) immediately upon the closing of a Qualified Public Offering. The conversion ratio for the shares of Preferred Stock was 1:1, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization.

The Preferred Stock vote together with the common stock on an as-converted basis, and not as a separate class, except for matters as defined by the Certificate of Incorporation which required the written consent or affirmative votes of the holders of a majority of the outstanding shares of the Preferred Stock and at least one holder of Series B Preferred Stock that owned at least 4,166,666 shares of Series B Preferred Stock and that had not purchased any shares of Series A Preferred Stock as part of the Series A Agreement. For any transactions that affect the priority of the Series A or Series B Preferred Stock, a majority of Series A or Series B Preferred Stock was required, respectively.

The Preferred Stock was not redeemable at the option of the holders thereof. However, the Preferred Stock was redeemable upon the occurrence of certain contingent events, unless otherwise determined by the holders.

As it relates to the redemption upon the occurrence of a contingent event, Private Disc evaluated the Preferred Stock in accordance with the guidance in ASC 480 and determined that the redemption upon the occurrence of a contingent event was not solely within Private Disc’s control and accordingly classified the Preferred Stock in temporary equity. The Preferred Stock was not currently redeemable, nor was it probable that the instruments would have become redeemable, and therefore the instruments were not being accreted to redemption value.