| Convertible Preferred Stock | 9. Convertible Preferred Stock Series A, B, and C Convertible Preferred Stock The Company issued its convertible preferred stock in a series of transactions as follows: • In August 2018, 7,142,857 shares of Series A convertible preferred stock were issued for cash at a price of $ 0.70 per share, resulting in aggregate net proceeds of $ 4.9 million; • In June 2019, an additional 26,046,438 shares of Series A convertible preferred stock were issued for cash at a price of $ 0.70 per share, resulting in aggregate net proceeds of $ 18.1 million; • In July 2020, an additional 33,189,295 shares of Series A convertible preferred stock were issued for cash at a price of $ 0.70 per share, resulting in aggregate net proceeds of $ 23.2 million; • In April 2021, the Company entered into a Series B convertible preferred stock purchase agreement under which it issued 78,211,116 shares of its Series B convertible preferred stock for cash, at a price of $ 1.35 per share, resulting in aggregate net proceeds of $ 105.3 million; • In April and May 2023, the Company entered into a Series C convertible preferred stock purchase agreement under which it issued 142,857,138 shares of Series C convertible preferred stock for cash, at a price of $ 0.70 per share, resulting in aggregate net proceeds of $ 99.7 million. Rights, Preferences, and Privileges of Convertible Preferred Stock The holders of the Company’s Series A, B, and C convertible preferred stock (collectively, the Preferred Stock) have the following rights, preferences, and privileges: Voting Rights The holders of Preferred Stock are entitled to vote, together with the holders of common stock, on all matters submitted to the stockholders for a vote and are entitled to the number of votes equal to the number of whole shares of common stock into which such holders of Preferred Stock could convert on the record date for determination of stockholders entitled to vote. Dividends The Company cannot declare and pay any common stock dividends without first declaring and paying dividends, as defined in the terms of the Company’s amended and restated certificate of incorporation, to the convertible preferred stockholders. The holders of Preferred Stock are entitled to receive, when, as and if, declared by the Company’s Board of Directors, noncumulative dividends at the rate of 6.0 % of the applicable original issue price of such Preferred Stock (Original Issue Price), subject to appropriate adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization with respect to the Preferred Stock. No dividends have been declared as of March 31, 2024 or December 31, 2023, respectively. Liquidation Rights In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or Deemed Liquidation Event (as defined in the Company’s amended and restated certificate of incorporation), each holder of Preferred Stock is entitled to receive, prior and in preference to any distributions to the common stockholders, an amount equal to the greater of (i) the Original Issue Price per share, plus any declared but unpaid dividends thereon or (ii) the amount such holder would have received if such holder had converted its shares into common stock immediately prior to such liquidation event. If the assets available for distribution to the holders of Preferred Stock are insufficient to pay such holders the full amounts to which they are entitled, the assets available for distribution will be distributed on a pro rata basis among the holders of the Preferred Stock in proportion to the respective amounts that would otherwise be payable in respect of such stock. After payments have been made in full to the holders of Preferred Stock, then, to the extent available, the remaining amounts would be distributed among the holders of the common stock, pro rata based on the number of shares held by each holder. Conversion Rights The shares of Preferred Stock are convertible into an equal number of shares of common stock, at the option of the holder, subject to certain anti-dilution adjustments. Each share of Preferred Stock will be automatically converted into common stock, (A) immediately upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of common stock for the account of the Company in which the aggregate gross proceeds is at least $ 50.0 million and the public offering price of at least $ 1.6875 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization (Qualified IPO Price), (B) at any time upon the affirmative election of the holders of at least 60 % of the outstanding shares of the Preferred Stock, including at least one of the holders holding, together with its affiliates, the most, the second most, or the third most shares of Series B Preferred Stock, or (C) the closing of a transaction pursuant to which (i) the Company is merged into, or otherwise combines with, a special purpose acquisition company, or subsidiary thereof, listed on a national securities exchange (SPAC Entity) at a value per share of at least the Qualified IPO Price and (ii) the shares of capital stock of the Company immediately outstanding prior to such transaction are converted to or exchanged for shares of capital stock that represent a majority, by voting power, of the capital stock of the SPAC Entity. Redemption The Preferred Stock does not have redemption rights, except for the contingent redemption upon the occurrence of a Deemed Liquidation Event (as defined in the Company’s amended and restated certificate of incorporation). |
