In June 2017, the Company authorized the issuance of an unlimited number of Series A Preferred Shares with no par value in connection with the sale and issuance of up to 13,237,696 Series A Preferred Shares. The Series A Preferred Share financing was structured to close in three tranches, each contingent upon the achievement of certain specified milestones.

In June 2017, in connection with the closing of the first tranche of Series A Preferred Shares, the Company issued 5,906,049 Series A Preferred Shares at $4.91 per share for total proceeds of $29.0 million, net of issuance costs of $0.04 million and converted previously issued and outstanding Convertible Notes amounting to $4.5 million issued in October 2016 and April 2017 into 907,291 Series A Preferred Shares. The terms included the obligation of the investors to purchase, and the Company to sell, up to 7,331,647 additional Series A Preferred Shares contingent upon the achievement of certain specified milestones. The Company concluded that the obligation and right to make future issuances of Series A Preferred Shares met the definition of a freestanding financial instrument, as the rights were legally detachable from the Series A Preferred Shares (Note 3). In January 2019, in connection with the closing of the second tranche of Series A Preferred Shares, the Company issued 4,276,795 Series A Preferred Shares at $4.91 per share for total gross proceeds of $21.0 million, and the liability related to the Series A second tranche obligation was settled and recognized at fair value as Series A Preferred Shares.

In August 2019, the Company authorized the issuance of an unlimited number of Series B Preferred Shares with no par value. In September 2019, the Company issued 10,468,258 Series B Preferred Shares to existing and new investors at $7.88 per share for total proceeds of $82.5 million. In connection with the issuance and sale of Series B Preferred Shares, the Series A third tranche obligation liability was terminated and recognized as additional paid-in-capital.

The carrying value of the Series A Preferred Shares was based on the net proceeds received at initial issuance net of the fair value of the Series A Preferred Share Tranche Obligation. At issuance of the first and second tranches, no beneficial conversion features were present. The carrying value of the Series B Preferred Shares was based on the net proceeds received. At initial issuance, no beneficial conversion features were present.

Upon completion of the IPO in June 2020, all issued and outstanding Series A and Series B convertible preferred shares were converted into 21,558,393 common shares and the existing classes of Series A and Series B convertible preferred shares were removed.

As of December 31, 2019, preferred shares consisted of the following in the table below:

	December 31, 2019
	Preferred Shares Issued and Outstanding		Carrying Value		Liquidation Value		Common Shares Issuable Upon Conversion
		(in thousands, except share amounts)
Series A Preferred Shares		11,090,135	$	53,749	$	52,750		11,090,135
Series B Preferred Shares		10,468,258		82,248		82,496		10,468,258
		21,558,393	$	135,997	$	135,246		21,558,393

The following is a summary of the rights and privileges of the holders of the preferred shares.

The holders of preferred shares were entitled to vote, together with the holders of common shares, on all matters submitted to the shareholders for a vote and were entitled to the number of votes equal to the number of whole common shares into which the preferred shares held by such holders could convert on the record date for determination of shareholders entitled to vote. Except for meetings at which only holders of another specified class are entitled to vote, the holders of preferred shares would vote together with the holders of common shares and vote as a single class.

The holders of the preferred shares were entitled to receive, prior and in preference to any dividends on any other common shares of the Company, noncumulative dividends of 8% per annum of the sum of the preferred shares issuance price and all declared but unpaid dividends accrued thereon only when and if declared by the board of directors.

Each preferred share was convertible into common shares, at any time, at the option of the holder, and without the payment of additional consideration, at the applicable conversion ratio in effect for preferred shares, which was initially one-to-one and subject to adjustment for certain anti-dilutive events. In addition, each preferred share was automatically converted into common shares at the applicable conversion ratio in effect for preferred shares upon either (i) the closing of a qualified initial public offering of its common shares at a price per share of at least $15.76 per share (subject to adjustment for any share split, combination or dividend or distribution payable) resulting in $50,000 or more in gross proceeds to the Company, or (ii) the election to convert the preferred shares by at least 70% of the holders of preferred shares.

In the event of any liquidation, dissolution or winding-up of the affairs of the Company, or unless waived by 70% of the holders of preferred shares, a sale of the Company that resulted in a change of control or a sale of substantially all of the Company’s assets or intellectual property, the holders of preferred shares were entitled to be paid, in priority to the holders of any other class of shares, a liquidation preference equal to the aggregate of all accrued but unpaid dividends on the preferred shares. After satisfying the liquidation preference, the holders of record of preferred shares would have been entitled to receive ratably with the holders of common shares the residual assets of the Company on an as-converted basis.