Redeemable Convertible Preferred Stock and Stockholders’ Deficit

9 Months Ended

Sep. 30, 2019

Redeemable Convertible Preferred Stock and Stockholders’ Deficit

Redeemable Convertible Preferred Stock and Stockholders’ Deficit

(6) Redeemable Convertible Preferred Stock and Stockholders’ Deficit

Preferred Stock

During the nine months ended September 30, 2019, the Company entered into various stock purchase agreements with new and existing investors pursuant to which the Company sold an aggregate 12,527,956 shares of the Company’s Series B redeemable convertible preferred stock (“Series B”) at $1.16 per share for aggregate gross proceeds of $14.5 million. Transaction fees of $0.1 million were recorded as a reduction of the carrying value of the Series B. 

Warrants

The Company had the following warrants outstanding to purchase Series B at September 30, 2019:

		Exercise	Expiration
	Outstanding	price	dates
Preferred stock warrants issued to MidCap	206,897	$ 1.16	2028
Preferred stock warrants issued to note payable holders	387,932	$ 1.16	2027
Preferred stock warrants issued to convertible promissory note holders	1,591,864	$ 1.16	2027
	2,186,693

The Company accounts for its warrants to purchase shares of redeemable convertible preferred stock as liabilities as they are exercisable for a redeemable instrument. The Company adjusted the liability for changes in fair value until the consummation of the Company’s IPO.

In connection with the IPO, the Company’s outstanding shares of preferred stock including accrued dividends payable were converted into an aggregate of 6,708,649 shares of common stock, and the Company’s outstanding warrants to purchase shares of preferred stock were automatically converted into warrants to purchase an aggregate of 88,556 shares of common stock.