Warrants to acquire shares of Series A convertible preferred stock

9 Months Ended

Sep. 30, 2020

Warrants to acquire shares of Series A convertible preferred stock

Warrants to acquire shares of Series A convertible preferred stock

11. Warrants to acquire shares of Series A convertible preferred stock

Liability-classified warrants consist of 1,035,196 warrants to acquire shares of Series A convertible preferred stock issued in connection with the June 2020 sale of the Company’s Series A convertible preferred stock. These warrants are liability-classified as the underlying Series A convertible preferred stock is contingently redeemable and outside of the Company’s control. The warrants become exercisable for shares of the Company’s common stock upon completion of an IPO.

The fair value of the warrants was estimated using a Black-Scholes pricing model with the following inputs:

	June 2, 2020			September 30, 2020
Volatility rate		79.0	%		81.9	%
Risk-free interest rate		0.2	%		0.2	%
Expected term (in years)		3.0			2.7
Strike price (per share)	$	9.00		$	9.00
Fair value of Series A convertible preferred stock	$	4.44		$	12.00