The following table summarizes details of convertible preferred stock authorized, issued and outstanding as of June 30, 2021 and December 31, 2020:

The terms of Series Seed, Series A, Series B, Series C, and Series D preferred stock are as follows:

Dividends

The holders of the Series Seed, Series A, Series B, Series C, and Series D preferred stock are entitled to receive, when and as declared by the Board of Directors and out of funds legally available, dividends payable in preference and priority to any dividend payment on common stock. As of June 30, 2021, no dividends have been declared or paid by the Company.

Liquidation Preference

In the event of any liquidation, dissolution, change of control or winding-up of the affairs of the Company, the holders of the then outstanding Series Seed, Series A, Series B, Series C, and Series D preferred stock are entitled to receive, on a pari passu basis, an amount equal to the original issue price of $0.06, $0.29, $0.44, $2.07 and $4.75, respectively, per share plus any declared and unpaid dividends. If the amount paid would be greater had the preferred stockholders converted to common stock, the calculation of the amount to be distributed to the preferred shareholders shall be calculated as if the preferred stockholders had converted just prior to the distribution without having them first convert to common stock. After payment to the preferred stockholders, the remaining proceeds shall be distributed on a pro-rata basis

Conversion

Each share of Series Seed, Series A, Series B, Series C and Series D preferred stock, at the option of the holder, is convertible into a number of fully paid shares of common stock as determined by dividing the respective preferred stock issue price by the conversion price in effect at the time. The initial conversion price of Series Seed preferred stock is $0.06 per share and is subject to adjustment in accordance with anti- dilution provisions contained in the Company’s Certificate of Incorporation. The initial conversion price of Series A preferred stock is $0.29 per share and is subject to adjustment in accordance with anti-dilution provisions contained in the Company’s Certificate of Incorporation. The initial conversion price of Series B preferred stock is $0.44 per share and is subject to adjustment in accordance with anti-dilution provisions contained in the Company’s Certificate of Incorporation. The initial conversion price of Series C preferred stock is $2.07 per share and is subject to adjustment in accordance with anti-dilution provisions contained in the Company’s Certificate of Incorporation. The initial conversion price of Series D preferred stock is $4.75 per share and is subject to adjustment in accordance with anti-dilution provisions contained in the Company’s Certificate of Incorporation.

With respect to Series Seed, Series A, Series B, and Series C, conversion is at the holder’s option, however, all outstanding shares of preferred stock shall automatically convert immediately upon the closing of a sale of shares of common stock to the public at a price per share of at least $2.59 per share. At the election of the majority of all preferred stockholders and 10% of the outstanding Series C holders, shares of Series Seed, Series A, Series B, and Series C stock shall be automatically converted. With respect to

Series D, conversion is at the holder’s option, however, all outstanding shares of preferred stock shall automatically convert immediately upon the closing of a sale of shares of common stock to the public at a price per share of at least $4.75 per share. The Series D stock shall be automatically converted at the election of the majority of Series D holders.

Redemption

The preferred stock is not redeemable at the option of the holder.

Management determines the fair value of its common stock using the methodology described in the Summary of Significant Accounting Policies in its proxy statement/prospectus, adjusting for changes in inputs based on material information known at the time of a repurchase transaction such as estimated timing to exit events and respective probabilities of such events occurring.

Common Stock Reserved for Future Issuance

The Company has reserved the following shares of common stock for future issuance:

 

The following table summarizes details of convertible preferred stock authorized, issued and outstanding as of December 31, 2020 and 2019:

 

Voting

The holders of the Series Seed, Series A, Series B, Series C, and Series D preferred stock are entitled to vote, together with the holders of common stock, on all matters submitted to stockholders for a vote. Each preferred stockholder is entitled to the number of votes equal to the number of shares of common stock into which each preferred share is convertible at the time of such vote. Series A class is entitled to elect two representatives to the Board of Directors. Each of the Series B, Series C, and Series D classes is entitled to elect one representative to the Board of Directors. The Series Seed class is not entitled to elect a representative to the Board of Directors.

In the event of any liquidation, dissolution, change of control or of the affairs of the Company, the holders of the then outstanding Series Seed, Series A, Series B, Series C, and Series D preferred stock are entitled

to receive, on a pari passu basis, an amount equal to the original issue price 

pro-rata

Conversion

Each share of Series Seed, Series A, Series B, Series C and Series D preferred stock, at the option of the holder, is convertible into a number of fully paid shares of common stock as determined by dividing the respective preferred stock issue price by the conversion price in effect at the time. The initial conversion price of Series Seed preferred stock is $0.06 per share and is subject to adjustment in accordance with anti- dilution provisions contained in the Company’s Certificate of Incorporation. The initial conversion price of Series A preferred stock is $0.29 per share and is subject to adjustment in accordance with anti-dilution provisions contained in the Company’s Certificate of Incorporation. The initial conversion price of Series B preferred stock is $0.44 per share and is subject to adjustment in accordance with anti-dilution provisions contained in the Company’s Certificate of Incorporation. The initial conversion price of Series C preferred stock is $2.07 per share and is subject to adjustment in accordance with anti-dilution provisions contained in the Company’s Certificate of Incorporation. The initial conversion price of Series D preferred stock is $4.75 per share and is subject to adjustment in accordance with anti-dilution provisions contained in the Company’s Certificate of Incorporation

With respect to Series Seed, Series A, Series B, and Series C, conversion is at the holder’s option, however, all outstanding shares of preferred stock shall automatically convert immediately upon the closing of a sale of shares of common stock to the public at a price per share of at least $2.59 per share. At the election of the majority of all preferred stockholders and 10% of the outstanding Series C holders, shares of Series Seed, Series A, Series B, and Series C stock shall be automatically converted. With respect to Series D, conversion is at the holder’s option, however, all outstanding shares of preferred stock shall automatically convert immediately upon the closing of a sale of shares of common stock to the public at a price per share of at least $4.75 per share. The Series D stock shall be automatically converted at the election of the majority of Series D holders.

Redemption

The preferred stock is not redeemable at the option of the holder.

Repurchases

During the year ended December 31, 2020, the Company repurchased 263,031 shares of common stock from an employee for $4.75 per share net of withholding taxes of $0.2 million classified within accrued payroll for the employee’s related income tax liability. The fair value per share on the date of repurchase was $3.14. The repurchase resulted in additional compensation expense of $0.4 million for the value of the repurchase in excess of fair value. The expense is recognized in operating expenses within the general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company became contractually obligated to repurchase an additional 263,030 shares of common stock from this employee for $4.75 per share in 2021, with such obligation having been contingent but not probable of occurring as of December 31, 2020. However, the Company expects this obligation to be waived subsequent to the merger as described within Note 15 to the consolidated financial statements.

During the year ended December 31, 2019, the Company repurchased 315,637 shares of series Seed convertible preferred stock from an employee for $4.75 per share. The fair value per share on the date of repurchase was $2.55. The repurchase resulted in additional compensation expense of $0.7 million for the value of the repurchase in excess of fair value. The expense is recognized in operating expenses in the research and development expenses on the consolidated statements of operations and comprehensive loss.

Management determines the fair value of its common stock using the methodology described in Note 2 Summary of Significant Accounting Policies, adjusting for changes in inputs based on material information known at the time of a repurchase transaction such as estimated timing to exit events and respective probabilities of such events occurring.

Common Stock Reserved for Future Issuance

The Company has reserved the following shares of common stock for future issuance: