The Company's authorized capital stock consists of 1,000,000,000 shares of Common Stock, par value $0.0001 per share and 100,000,000 shares of preferred stock, par value $0.0001 per share. As of December 31, 2023, there were 78,356,527 shares of Common Stock issued and outstanding and 133,578 warrants outstanding to purchase Common Stock. There were no shares of preferred stock issued and outstanding.

The holders of the Common Stock are entitled to one vote for each share of Common Stock. The holders of Common Stock shall be entitled to receive dividends out of funds legally available. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Common Stock shall be entitled to share ratably in the remaining assets of the Company available for distribution. The Board or any authorized committee thereof is authorized to issue shares of preferred stock and to fix the designations, powers, including voting powers, full or limited, or no voting powers, preferences and the relative, participating, optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof.

Prior to the Business Combination, Legacy Akili had issued Series A-1 convertible preferred stock, Series A-2 convertible preferred stock, Series B convertible preferred stock, Series C convertible preferred stock and Series D convertible preferred stock, collectively referred to as the “Legacy Convertible Preferred Stock.” In connection with the Business Combination, the Legacy Convertible Preferred Stock was retroactively adjusted, converted into Common Stock at an exchange ratio of approximately 1.15, and reclassified to permanent equity as a result of the reverse recapitalization. As of December 31, 2023, there is no Legacy Convertible Preferred Stock authorized, issued or outstanding.

Common Stock Warrants: In May 2021, the Company entered into the Amended and Restated Loan and Security Agreement (see note 10). In conjunction with this modification, the Company issued warrants to the Lenders to purchase a total of 224,938 shares of common stock with an exercise price of $3.82 per share, of which, 84,350 were fully vested and immediately exercisable. These warrants were determined to be a separate freestanding instrument from the Amended and Restated Loan and Security Agreement. The Company also concluded that the remaining warrants that could vest in future periods in connection with additional loan advances will be treated as separate issuances if and when they are issued. In connection with the June 2022 draw, warrants to purchase an additional 31,242 shares of common stock became vested. The Company considered the accounting for the warrants and concluded that they met the requirements for equity classification under ASC 815-40. Upon initial issuance, the vested warrants to purchase the Company’s common stock were recorded at fair value. The Company utilized the Black- Scholes option valuation approach to value the common warrants that were issued, resulting in an estimated fair value of $268 in May 2021 and $282 in June 2022. The Company recorded this amount as an increase to additional paid-in capital and an increase to debt issuance costs (see Note 10).

The Company determined the fair value of the warrants using the Black-Scholes option model with the following assumptions:


Amended and Restated Loan and Security Agreement Warrants	May 2021	June 2022
Fair value of common stock	$3.82	$10.06
Expected volatility	95.00%	96.56%
Expected term (in years)	10.00	8.91
Risk-free interest rate	1.56%	3.23%
Expected dividend yield	0.00%	0.00%

In August 2020, the Company entered into the First Loan Modification Agreement with SVB. In conjunction with this modification, the Company issued warrants to the lender, of which, 17,986 are fully vested and outstanding as of December 31, 2023. The warrants have an exercise price of $5.95 per share.

In connection with the Closing, the Company adopted the 2022 Employee Stock Purchase Plan (the “2022 ESPP”). The 2022 ESPP is a shareholder-approved plan under which substantially all employees may voluntarily enroll to purchase the Company’s Common Stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the offering date or the exercise date, provided that no offering shall exceed 27 months. An employee’s payroll deductions under the 2022 ESPP are limited to 15% of the employee’s compensation and employees may not purchase more than $25,000 of stock during any calendar year.

A total of 1,167,881 shares of our Common Stock are reserved and authorized for issuance under the 2022 ESPP. In addition, the number of shares of Common Stock available for issuance under the 2022 ESPP is automatically increased each January 1 of each calendar year beginning on January 1, 2023, and ending in 2031, by the least of (i) the excess (if any) of (A) 1% of the outstanding shares issued and outstanding on the immediately preceding December 31st (excluding any shares reserved for issuance under equity-based plans of Akili, Inc. including the 2022 Stock Option and Incentive Plan and the 2022 ESPP) over (B) the number of shares of stock then reserved for issuance under the 2022 ESPP as of such date, (ii) 1,167,881 or (iii) such number of shares determined by the administrator. Through December 31, 2023, no shares have been issued under the 2022 ESPP.