XML 23 R12.htm IDEA: XBRL DOCUMENT

Redeemable Convertible Preferred Stock - Series A

12 Months Ended

Dec. 31, 2018

Temporary Equity Disclosure [Abstract]

Redeemable Convertible Preferred Stock - Series A

Note 6 — Redeemable Convertible Preferred Stock — Series A

The Company has 10,000,000 authorized shares of $0.001 par value preferred stock as per its Amended and Restated Certificate of Incorporation. In June 2017, the Company issued 6,685,082 Series A Preferred at a price of $3.00 per share and all shares remained outstanding until the Company’s IPO in November 2018. The gross proceeds were $20,055 from the Series A Preferred stock offering. The Series A Preferred shares, including accrued and unpaid dividends, automatically converted to the Company’s common shares at the date of the IPO (See Note 7).

As of December 31, 2017, the liquidation value of the mezzanine Series A Preferred was $20,698, which consisted of the issuance amount of $20,055 plus accrued dividends of $643. As of the date of the IPO on November 15, 2018, the liquidation value of the mezzanine Series A Preferred was $21,746, which consisted of the issuance amount of $20,055 plus accrued dividends of $1,691.

The Series A Preferred automatically converted to common shares upon completion of the IPO in November 2018. The conversion share calculation was based on the $3.00 initial issue price for the Series A Preferred plus accrued and unpaid dividends, and automatically converted into shares of the Company’s common stock using a stated divisor conversion price equal to 50% of the IPO price to the public which was $6.00 per share. In accordance with relevant accounting literature, since the terms of the conversion option did not permit the Company to compute the additional number of shares that it would need to issue upon conversion of the Series A Preferred when the contingent event occurred, the Company recorded the beneficial conversion amount of $21,747 as a deemed dividend at the date of the IPO in November 2018.

As a result of the Series A Preferred having a possible cash redemption feature in the event that an IPO or alternate financing was not completed by December 31, 2018, the Series A Preferred was classified as temporary equity and not included as part of Company’s stockholders’ equity (deficit) prior to the November 2018 IPO. In accordance with that classification, the $2,534 of issuance costs associated with the Series A Preferred offering were being ratably accreted as a deemed dividend using the effective interest method through the expected redemption date.

The following is a reconciliation of the carrying value of the Series A Preferred (in thousands):

	December 31, 2018			December 31, 2017
Gross proceeds from Series A Preferred offering	$	20,055		$	20,055
Issuance costs – cash		(2,055	)		(2,055	)
Issuance costs – common stock warrants		(479	)		(479	)
Accrued dividends on Series A Preferred		1,691			643
Deemed dividends for accretion of Series A Preferred issuance costs		2,534			840
Automatic conversion to common shares at the IPO date		(21,746	)		—
Balance as of the end of the period	$	—		$	19,004