Redeemable Convertible Preferred Stock

6 Months Ended

Jun. 30, 2020

Temporary Equity Disclosure [Abstract]

Redeemable Convertible Preferred Stock

6 – REDEEMABLE CONVERTIBLE PREFERRED STOCK

As of each balance sheet date, the Preferred Stock consisted of the following:

	June 30, 2020
	Issued and Outstanding		Carrying Value		Liquidation Preference		Common Stock Issuable Upon Conversion
	(dollars in thousands)
Series A		25,000,000	$	33,479	$	33,479		3,343,542
Series B		29,972,284		75,314		75,014		4,499,824
Series C		53,123,923		85,475		85,475		7,104,883
		108,096,207	$	194,268	$	193,968		14,948,249

	December 31, 2019
	Issued and Outstanding		Carrying Value		Liquidation Preference		Common Stock Issuable Upon Conversion
	(dollars in thousands)
Series A		25,000,000	$	32,482	$	32,482		3,343,542
Series B		26,283,386		64,446		64,446		3,946,001
		51,283,386	$	96,928	$	96,928		7,289,543

Preferred stock is classified outside of stockholders’ deficit because the shares contain redemption features that are not solely within the control of the Company.

Series C Preferred Stock Financing

In June 2020, the Company entered into the Series C Preferred Stock Purchase Agreement, or the Series C Agreement, pursuant to which the Company was authorized to issue 62,489,557 shares of Series C convertible preferred stock (Series C), at a price of $1.6016 per share. As part of the closing, the Company issued 46,828,167 shares of Series C at $1.6016 per share for consideration of $75.0 million and an additional 6,295,756 shares of Series C in satisfaction of the conversion of $10.0 million convertible loan notes and $0.1 million of accrued interest. The aggregate purchase price of the Series C was $85.1 million and the Company incurred issuance costs of $0.4 million, which was recorded as a reduction to the Series C carrying value.

Series B Preferred Stock Financing

In January 2020, the Company issued 3,688,898 of Series B at a price of $2.16867 per share, resulting in net proceeds received of $8.0 million. The rights and preferences of the Series B issued in January 2020 are identical to Series B issued in prior periods. As a result of the issuance, the fair value of the associated outstanding series B tranche right liability of $0.3 million was reclassified to Series B. In connection with the Series C financing, the conversion price of the Series B was decreased from $16.21536 to $14.4451 such that the rate at which shares of Series B may be converted into shares of common stock was adjusted from 1:1 to 0.15013:1.

Dividends

Preferred stock accrues dividends on a cumulative basis at $0.08 per share per annum for Series A, $0.17349 per share per annum for Series B and $0.128128 per share per annum for Series C, to be calculated daily and is payable when and if declared by the Company’s board of directors. No dividends may be paid to common stockholders until all dividends to preferred stockholders are paid in full, except stock dividends paid to common stockholders. Cumulative dividends were as follows:

	June 30,		December 31,
	2020		2019
	(in thousands)
Series A	$	8,479	$	7,482
Series B	$	10,014	$	7,446
Series C	$	392	$	—

Through June 30, 2020, no dividends have been declared or paid by the Company.