|9 Months Ended|
Sep. 30, 2021
On May 1, 2020, the Company adopted the Amended Operating Agreement. The Amended Operating Agreement changed the Company’s classes of membership from two classes (voting and non-voting) to one class of membership and gave the Company’s board of directors (the “Board”) the right to make all decisions concerning the business, affairs and properties of the Company. Under the Amended Operating Agreement, the members had the right to vote on the dissolution and termination of the Company, the removal of existing directors, the appointment of new directors and any plan of conversion or merger. As such, at September 30, 2020, all members had the same rights, privileges and powers and were considered as voting members’ interests.
In July 2020, the Board approved two issuances of membership interests equal to an aggregate of 5.0% of the Company’s total membership interests to the Company’s founder. These issuances were considered equity-based compensation award grants that do not have any future service conditions. As a result, all compensation expense associated with such issuances were recognized upon issuance. In order to determine the amount of compensation associated with such issuances, the Company utilized recent observable prices under the terms of its Fifth Offering. For the three and nine months ended September 30, 2020, the Company recognized $2,000,000 of compensation expense for these issuances.
In July 2020, the Notes issued in the first round of the Fourth Offering matured. As a result, the outstanding principle amount of $1,465,000 plus accrued interest of $172,800 converted into membership interest based on the carrying value of the convertible debt with no gain or loss recognized. Accrued interest of $3,000 was paid in cash.
In conjunction with the Corporate Conversion, all of the Company’s outstanding membership interests converted into shares of common stock.
The entire disclosure for the formation, structure, control and ownership of a limited liability company (LLC).
Reference 1: http://www.xbrl.org/2003/role/disclosureRef