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Redeemable Convertible Preferred Stock | 9 Months Ended
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Sep. 30, 2022
Temporary Equity Disclosure [Abstract] |
Redeemable Convertible Preferred Stock | 8. Redeemable Convertible Preferred Stock On July 1, 2021, the Company amended its certificate of incorporation in which it authorized 13,150,430 shares of Series C-1 redeemable convertible preferred stock and 3,170,585 shares of Series C-2 redeemable convertible preferred stock. In July 2021, the Company consummated a financing transaction in which it issued 13,150,430 shares of Series C-1 redeemable convertible preferred stock. In connection with the issuance of these shares, the principal including accrued interest of the 2021 Notes totaling $27.7 million automatically converted into 3,170,585 shares of Series C-2 redeemable convertible preferred stock. The Company’s redeemable convertible preferred stock consisted of the following:
|  | December 31, 2021 |
|  | (dollars in thousands) |
|  | Preferred Shares Authorized |  |  | Preferred Shares Issued and Outstanding |  |  | Carrying Value |  |  | Liquidation Preference |  |  | Common Stock Issuable Upon Conversion |
Series A preferred stock |  |  | 6,289,609 |  |  |  | 6,289,609 |  |  | $ | 7,675 |  |  | $ | 7,730 |  |  |  | 6,407,256 |
Series B preferred stock |  |  | 15,100,000 |  |  |  | 14,496,835 |  |  | $ | 64,387 |  |  | $ | 246,070 |  |  |  | 16,746,059 |
Series C-1 preferred stock |  |  | 13,150,430 |  |  |  | 13,150,430 |  |  | $ | 134,791 |  |  | $ | 135,000 |  |  |  | 13,150,430 |
Series C-2 preferred stock |  |  | 3,170,585 |  |  |  | 3,170,585 |  |  | $ | 32,498 |  |  | $ | 27,666 |  |  |  | 3,170,585 |
|  |  | 37,710,624 |  |  |  | 37,107,459 |  |  | $ | 239,351 |  |  | $ | 416,466 |  |  |  | 39,474,330 |
As of December 31, 2021, the holders of the Series C Preferred Stock, or together with the Series A redeemable convertible preferred stock and the Series B redeemable convertible preferred stock, collectively, the Preferred Stock, have the following rights and preferences: Conversion— On June 18, 2020, in connection with the conversion of the 2017 Notes, the Company adjusted the conversion price for the Series A redeemable convertible preferred stock of $1.229073 per share to $1.2065. The adjustment was made in accordance with the anti-dilution provisions in the certificate of incorporation then in effect immediately prior to the conversion of the 2017 Notes. The adjustment to the conversion price resulted in neither modification nor extinguishment of the Series A redeemable convertible preferred stock as the terms of the Series A redeemable convertible preferred stock were not amended. The adjustment to the conversion price resulted in additional 117,650 shares of common stock to be issued to holders of the Series A redeemable convertible preferred stock upon conversion of such shares into common stock. As of December 31, 2020, these additional shares of common stock were not issued and outstanding. In July 2021, in connection with the conversion of the 2021 Notes, the Company adjusted the conversion price for the Series B redeemable convertible preferred stock of $16.974077 per share to $14.6942. The adjustment was made in accordance with the anti-dilution provisions in the certificate of incorporation then in effect immediately prior to the conversion of the 2021 Notes. The adjustment to the conversion price resulted in additional 2,249,224 shares of common stock into which Series B redeemable convertible preferred stock would be convertible. As of December 31, 2021, these additional shares were not issued and outstanding. Each share of Preferred Stock is convertible into an equivalent number of common stock, at any time, at the option of the holder. The initial conversion price for the Series C-1 redeemable convertible preferred stock and Series C-2 redeemable convertible preferred stock is the respective original issue prices. The conversion price for the Preferred Stock was subject to adjustments for stock splits, stock dividends, or similar recapitalization, and subject to adjustments in accordance with the anti-dilution provisions. The shares of Preferred Stock were to automatically convert into common stock of the Company immediately upon either (a) the closing of the sale of shares of common stock to the public in a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act, resulting in at least $75.0 million of proceeds, net of the underwriting discount and commissions, to the Company, or Qualified IPO, or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of a majority of the then outstanding shares of Preferred Stock. Dividends—Dividends may be paid to the holders of the Series A redeemable convertible preferred stock. The holders the Series A redeemable convertible preferred stock are entitled to receive non-cumulative dividends at a rate per annum of $0.073744 per share when and if declared by the Board of Directors. The holders of the Series B redeemable convertible preferred stock were entitled to receive a non-cumulative dividend at the rate of 6% per annum of the Series B original issue price per share when and if declared by the Board of Directors. As of December 31, 2021, no cash dividends were declared or paid. From and after the date of issuance of the Series C Preferred Stock, the Company was not to set, declare, pay or set aside unless holders of the Series C Preferred Stock then outstanding shall first receive, or simultaneously receive, dividends on each outstanding share of Series C Preferred Stock in an amount equal to (i) in the case of dividends being distributed to common stock or any class or series of capital stock that is convertible into common stock, the equivalent dividend on an as-converted basis or (ii) in the case of dividends being distributed on a series or class not convertible into common stock, an additional dividend equal to a dividend rate calculated based on the respective original issue price of the Series C Preferred Stock. The original issue prices per share for the Series C-1 redeemable convertible preferred stock and Series C-2 redeemable convertible preferred stock were $10.265809 and $8.725938, respectively. Voting Rights— The holders of the Preferred Stock were entitled to vote on any matter presented to stockholders of the Company for consideration. Each holder of the Preferred Stock was entitled to cast the number of votes equal to the number of shares of common stock into which the shares of the Preferred Stock held by such holder were convertible on such date. Redemption—The Preferred Stock did not contain any mandatory redemption features. In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480), preferred stock issued with redemption provisions that are outside of the control of the Company or that contain certain redemption rights in a deemed liquidation event is required to be presented outside of stockholders’ deficit on the face of the consolidated balance sheets. The Company classified the Preferred Stock outside of the stockholders’ deficit as mezzanine equity because in the event of certain deemed liquidation events, which included events such as a sale or merger, that were not solely within the control of the Company, the shares of the Preferred Stock would have become redeemable at the option of the holders. As of June 30, 2021, the Company did not adjust the carrying values of the Preferred Stock to the redemption values of such shares since a deemed liquidation event did not occur and the shares were not probable of becoming redeemable in the future as of the consolidated balance sheet dates. Liquidation—In the event of a liquidation, deemed liquidation, dissolution or winding up of the Company, holders of the Preferred Stock would have been entitled to be paid out of the assets of the Company that were available for distribution before any payment is made to the holders of common stock. The amount to paid would have been the greater of (i) respective original issue prices plus any dividends declared but unpaid or (ii) the amount that would have been payable had all shares of Preferred Stock been converted into common stock immediately before such event. If upon any such liquidation, deemed liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its stockholders would have been insufficient to pay the holders of Preferred Stock the full amount to which they would have been entitled, the holders of Preferred Stock would have shared ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. After the payment of all preferential amounts required to be paid to the holders of Preferred Stock, the remaining assets of the Company available for distribution to its stockholders would have been distributed among the holders of the shares of common stock on a pro rata basis based on the number of shares held by each such holder. In January 2022, upon the completion of the initial public offering, all of the Company's outstanding shares of preferred stock were converted into shares of its common stock. There were no redeemable convertible preferred stock outstanding as of September 30, 2022.

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