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Convertible Preferred Stock | 3 Months Ended
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Mar. 31, 2021
Convertible Preferred Stock [Abstract] |
Convertible Preferred Stock |
4. | Convertible Preferred Stock
All shares of preferred stock described below were converted into an aggregate of 16,079,230 shares of the Company’s common stock at the time of the IPO in February 2021. Series A Preferred Stock In April 2017, the Company entered into a Series A convertible preferred stock purchase agreement (Series A Agreement) whereby the Company issued 2,089,285 shares of Series A convertible preferred stock at $10.50 per share for an aggregate purchase price of $21.9 million. Terns China received an aggregate $8.0 million from the LAV PRC Entities in connection with the Series A financing, which is presented as a noncontrolling interest. In connection with the Series A Agreement and this Terns China investment, the Company also issued an option to the LAV PRC Entities to convert their interest in the China Subsidiaries into an interest in Terns Cayman (the LAV Option). Series B Preferred Stock In October 2018, the Company entered into a Series B convertible preferred share purchase agreement (Series B Agreement), whereby the Company issued an aggregate of 2,384,195 shares of Series B convertible preferred stock at $30.80 per share for an aggregate purchase price of $73.4 million. Terns China received $6.7 million from the LAV PRC Entities in connection with the Series B financing, which is presented as a noncontrolling interest. In connection with the Series B Agreement and this Terns China investment, the LAV Option was to allow the LAV PRC Entities to convert this interest in the China Subsidiaries into an interest in Terns Cayman. LAV Series A and Series B Preferred Stock Options In November 2020, the Chinese government provided approval for entities affiliated with Lilly Asia Ventures (LAV) to exercise the LAV Option. Terns Hong Kong agreed to repurchase all equity interests held by the LAV PRC Entities with proceeds to be used by LAV to purchase shares of Series A convertible preferred stock and Series B convertible preferred stock of the Company (Repurchase). In December 2020, the Company issued 767,857 shares of Series A convertible preferred stock and 216,450 shares of Series B convertible preferred stock to an affiliate of LAV (LAV Affiliate) in exchange for a promissory note with a principal amount equal to the original investment by LAV in Terns China (LAV Series A and Series B Promissory Note). The LAV Series A and Series B Promissory Note was repaid through proceeds of the Repurchase which was completed in January 2021. Series C Preferred Stock In December 2020, the Company entered into a Series C preferred stock purchase agreement (Series C Convertible Preferred Stock Financing) whereby it issued an aggregate of 7,500,665 shares of Series C convertible preferred stock at $11.65 per share for gross proceeds of $87.4 million, which includes shares issued upon conversion of the 2020 Notes. In connection with the Series C Convertible Preferred Stock Financing, the 2020 Notes, totaling unpaid principal and accrued interest of $15.9 million, converted into 1,366,820 shares of Series C convertible preferred stock. Furthermore, in December 2020, as part of the effective conversion of the Bridge Loan, the Company issued LAV an aggregate of 167,159 shares of Series C convertible preferred stock. Series A convertible preferred stock, Series B convertible preferred stock and Series C convertible preferred stock are collectively referred to as “convertible preferred stock.” As of December 31, 2020, convertible preferred stock consisted of the following:
|  | As of December 31, 2020 |
(in thousands, except share amounts) |  | Convertible Preferred Stock Authorized |  |  | Convertible Preferred Stock Issued and Outstanding |  |  | Carrying Value |  |  | Liquidation Preference |  |  | Common Stock Issuable Upon Conversion |
Series A convertible preferred stock |  |  | 40,000,000 |  |  |  | 2,857,142 |  |  | $ | 30,000 |  |  | $ | 30,000 |  |  |  | 2,857,142 |
Series B convertible preferred stock |  |  | 36,409,088 |  |  |  | 2,600,645 |  |  |  | 68,995 |  |  |  | 80,100 |  |  |  | 5,721,423 |
Series C convertible preferred stock |  |  | 111,619,996 |  |  |  | 7,500,665 |  |  |  | 87,038 |  |  |  | 87,368 |  |  |  | 7,500,665 |
Total convertible preferred stock |  |  | 188,029,084 |  |  |  | 12,958,452 |  |  | $ | 186,033 |  |  | $ | 197,468 |  |  |  | 16,079,230 |
In connection with the IPO, all the outstanding shares of convertible preferred stock converted into common stock and the Company does not have any shares of preferred stock outstanding as of March 31, 2021.

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