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Convertible Preferred Stock and Stockholders' Equity
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Convertible Preferred Stock and Stockholders' Equity

9. Convertible Preferred Stock and Stockholders’ Equity

Reverse Stock Split

On April 29, 2022, the Company filed a charter amendment to effect a 1.018 for 1 reverse stock split of its issued and outstanding shares of common stock, which resulted in a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. Accordingly, all share and per share amounts for all periods presented in the accompanying

consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios.

Series A-1 convertible preferred stock and Series A-2 convertible preferred stock

In connection with the November 24, 2020 Stock Purchase Agreement, the Company agreed to issue an aggregate of 3,939,069 shares of Series A-2 convertible preferred stock to new and existing investors at a price of $11.42 per share, in three closings, and elected to convert 1,348,693 shares of outstanding Class A and Class B common stock into 1,372,970 shares of Series A-1 convertible preferred stock. A total of 1,033,117 shares of Class A common stock held by certain founding investors and employees were not modified and continue to exist as Class A common stock. The Series A-1 and Series A-2 convertible preferred stock was converted to common stock immediately prior to the consummation of the Company’s IPO in May 2022 (see Note 1).

Series B convertible preferred stock

In July 2021 the Company entered into the Series B Stock Purchase Agreement, whereby the Company agreed to issue and sold an aggregate of 7,234,766 shares of Series B convertible stock to new and existing investors at a per share price of $15.55 per share for aggregate gross proceeds of $112.5 million. The Series B convertible preferred stock was converted to common stock immediately prior to the consummation of the Company's IPO in May 2022 (see Note 1).

Common stock

Under the Third Amended and Restated Certificate of Incorporation, dated May 10, 2022, as currently in effect, the Company has the authority to issue a total of 500,000,000 shares of common stock (par value of $0.0001 per share) and 10,000,000 shares of undesignated preferred stock (par value of $0.0001 per share). In connection with the IPO, the Company re-designated all shares of Class A common stock as shares of common stock. Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No cash dividends have been declared by the board of directors during the three and nine months ended September 30, 2023 and September 30, 2022.

The Company has reserved the following shares of common stock for issuance, on an as-converted basis, as follows:

 

 

 

September 30,
2023

 

 

December 31,
2022

 

Stock options issued and outstanding

 

 

4,170,445

 

 

 

3,341,834

 

Authorized for future stock awards or option grants

 

 

1,158,160

 

 

 

901,462

 

Authorized for future issuance under employee stock purchase plan

 

 

226,000

 

 

 

226,000

 

Total

 

 

5,554,605

 

 

 

4,469,296

 

 

Shares of Common Stock Subject to Repurchase

In November 2020, in connection with the Series A-2 convertible preferred stock financing, two founding stockholders entered into Stock Restriction Agreements, or Restriction Agreements, whereby 139,057 shares that were previously vested and not subject to repurchase became restricted and subject to repurchase. The repurchase rights lapse 50% on the one-year anniversary of the Restriction Agreements and 50% on the second anniversary of the Restriction Agreements. Shares subject to repurchase by the Company are not deemed, for accounting purposes, to be outstanding until those shares vest and therefore are not included in the shares outstanding on the condensed consolidated balance sheet.

In connection with the vesting restrictions placed on these previously vested shares, the Company was required to determine the measurement date fair value of the shares, which was $2.37 per share or $0.3 million in aggregate. The measurement date fair value of the restricted stock will be recognized as stock-based compensation expense over the vesting period. The final shares subject to restriction were released in November 2022, and as of September 30, 2023 and December 31, 2022, zero shares of restricted stock were subject to repurchase by the Company, respectively.