On April 2, 2018, the Company closed its initial public offering with the sale of 10,350,000 shares of common stock, including shares issued upon the exercise in full of the underwriters’ over-allotment option, at a public offering price of $16.00 per share, resulting in net proceeds of $150.8 million, after deducting underwriting discounts and commissions and offering expenses. Upon the closing of the IPO, all of the Company’s outstanding shares of convertible preferred stock automatically converted into 24,168,656 shares of common stock at the applicable conversion ratio then in effect.

Prior to the IPO, the Company had financed its operations primarily through the sales of preferred stock and through funding from a collaboration partner. In December 2015, the Company authorized the sale and issuance of up to 62,269,145 shares of Series A preferred stock. The Series A preferred financing was structured to close in two tranches. The first tranche closed on December 22, 2015 with the issuance of 28,873,237 shares at $0.71 per share resulting in gross cash proceeds of $20.5 million. Issuance costs totaled $0.1 million. As part of the closing on December 22, 2015, the Company also issued 4,522,670 shares of Series A in connection with the conversion of notes payable to investors that were originally issued in 2015.

The investors in the first tranche were granted the right to purchase an additional 28,873,237 shares of Series A preferred stock to be offered in the second tranche at $0.71 per share. The Company determined that the right of the investors to purchase Series A preferred stock in the second tranche met the definition of a freestanding financial instrument and therefore was recognized as a liability at fair value until the tranche right was exercised in February 2017.

Upon the first tranche closing, the Company recognized a liability of $6.2 million for the fair value of the convertible preferred stock tranche liability representing the future obligation. The convertible preferred stock tranche liability was re-measured with a fair value of $5.1 million as of February 9, 2017. The fair value of the convertible preferred stock tranche liability was determined using an option pricing model with the following assumptions:

	February 9, 2017
Probability of milestone closing		99.9	%
Expected years closing		0.0
Discount rate		1.0	%
Risk-free interest rate		0.84	%
Expected dividend yield		0.0	%

The Company adjusted the carrying value of the convertible preferred stock tranche liability to its estimated fair value at each reporting date and upon issuance of the second tranche of Series A preferred stock on February 10, 2017, recognizing the changes in fair value in other income (expense) in the consolidated statement of operations. During the year ended December 31, 2017, the Company recognized total other income (expense) of $(0.9) million related to changes in the fair value of the convertible preferred stock tranche liability.

On February 10, 2017, the Company issued 28,873,237 shares of Series A preferred stock at $0.71 per share for gross proceeds of $20.5 million. Issuance costs were less than $0.1 million. Accordingly, the convertible preferred stock tranche liability was re-measured at fair value and then derecognized with a corresponding amount of $5.1 million reclassified to Series A preferred stock.

On July 28, 2017, the Company authorized the sale of 64,930,561 shares of Series B convertible preferred stock and issued 57,986,116 shares of Series B convertible preferred stock at $1.44 per share, for gross proceeds of $83.5 million upon closing. Total issuance costs were $0.4 million. All holders of Series A convertible preferred stock participated in the Series B issuance along with new investors.

On November 6, 2017, the Company entered into a Collaboration and License Agreement with Novartis for the development and commercialization of products using the Company’s gene editing technology for the treatment of certain ophthalmic targets and sickle cell disease (see Note 16). Under the terms of the Collaboration Agreement, Novartis invested $10.0 million to purchase 6,944,445 shares of Series B convertible preferred stock. The difference between the cash proceeds received from Novartis for the purchase of Series B preferred stock and the $11.7 million estimated fair value of the Series B at the time of purchase was allocated from the collaboration proceeds to Series B preferred stock.