Redeemable Convertible Preferred Stock Warrant Liability

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Redeemable Convertible Preferred Stock Warrant Liability

Redeemable Convertible Preferred Stock Warrant Liability

Warrants to purchase shares of redeemable convertible preferred stock outstanding and exercisable are as follows (in thousands, except per share data):

				Shares Outstanding at			Fair Value at
Dates			Exercise Price	September 30,	December 31,	Initial Value	September 30,		December 31,
Issuance	Expiration	Series		2021	2020		2021		2020
Jun 2017	Jun 2022	E	13.73	—	72	763	$	—	$	177

In July 2015, in connection with the issuance of convertible notes, the Company issued 869,842 redeemable convertible preferred stock warrants that were exercisable into Series D redeemable convertible preferred stock immediately, with $5.08 exercise price and expiration in five years. During the three and nine months ended September 30, 2020, warrants for 531,423 and 651,328 shares were exercised, respectively, and none were outstanding at December 31, 2020.

In June 2017, in connection with the issuance of convertible notes, the Company issued 108,145 redeemable convertible preferred stock warrants that were exercisable into Series E or the next round of redeemable convertible preferred stock. During the and three and nine months ended September 30, 2021, 62,454 warrants were exercised and the remaining unexercised warrants expired, none were outstanding at September 30, 2021. During the three and nine months ended September 30, 2020, no warrants were exercised.

Redeemable Convertible Preferred Stock

A summary of the Company’s redeemable convertible preferred stock are as follows:

	December 31, 2020
Series	Shares Authorized	Shares Issued and Outstanding	Carrying Value (in thousands)
A	1,243,223	1,104,728	$	2,781
B	1,841,805	1,543,804	5,404
C	1,564,851	1,564,851	7,073
D	8,245,295	7,547,542	36,879
E	8,825,653	8,414,496	115,229
F	5,263,157	5,226,981	76,488
Total	26,983,984	25,402,402	$	243,854

Upon the completion of the Company’s IPO in September 2021, all 29,912,264 shares of its then-outstanding redeemable convertible preferred stock automatically converted into 29,912,264 shares of common stock and it reclassified $329.5 million of redeemable convertible preferred stock to additional paid-in capital on our condensed consolidated balance sheet.

In July 2020, an aggregate of $1.5 million shares of redeemable convertible preferred stock was converted to common stock as requested by the holder. The corresponding carrying value was reclassified from redeemable convertible preferred stock to common stock and additional paid in capital.

Series G Redeemable Convertible Preferred Stock

In June 2021, the Company issued 4,447,530 shares of Series G redeemable convertible preferred stock for gross proceeds of $85.0 million. Issuance costs totaled $0.3 million and were recorded as an offset to gross proceeds.

Series F Redeemable Convertible Preferred Stock

In July and August 2020, the Company issued 5,226,969 shares of Series F redeemable convertible preferred stock for gross proceeds of $77.0 million. Issuance costs totaled $0.5 million and were recorded as an offset to gross proceeds.

A summary of the Company’s redeemable convertible preferred stock terms were as follows:

Series	Liquidation Preference Per Share		8% Dividend Per Share
A	$	2.5175	$	0.2014
B	3.2376		0.2590
C	4.5600		0.3648
D	5.0825		0.4066
E	13.7275		1.0982
F	14.7279		1.1782
G	19.1116		1.5289

The Company recorded its redeemable convertible preferred stock at fair value on the dates of issuance, net of issuance costs. A redemption event would only occur upon the liquidation or winding up of the Company, a greater than 50% change in control, or sale of substantially all of the assets of the Company. As the redemption event was outside the control of the Company, all shares of redeemable convertible preferred stock were presented outside of permanent equity. Further, the Company had determined the carrying values of the redeemable convertible preferred stock should not be adjusted to the redemption value of such shares, since it was uncertain whether or when a

redemption event would occur. Subsequent adjustments to increase the carrying values of the redeemable convertible preferred stock to the redemption values would have been made when it became probable that such redemption would occur. As of September 30, 2021, no shares of redeemable convertible preferred stock were outstanding, and as of December 31, 2020, it was not probable that such redemption would occur.

Dividends

The holders of the Series D, E, F and G redeemable convertible preferred stock, in preference to the holders of Series A, B and C redeemable convertible preferred stock and common stock, were entitled to receive noncumulative dividends at the rate of 8% per share of the original issuance price, when and as declared by the board of directors. After the payment of any dividends to holders of Series D, E, F and G redeemable convertible preferred stock, and in preference to the holders of common stock, the holders of Series A, B, and C redeemable convertible preferred stock would have been entitled to receive noncumulative dividends at the rate of 8% per share of the original issuance price, when and as declared by the board of directors. No dividends were declared and payable for the nine months ended September 30, 2021 and year ended December 31, 2020.

Liquidation

In the event of any liquidation, dissolution, or winding-up of the Company, including a merger, acquisition, or sale of assets, as defined in the certificate of incorporation, each holder of Series G redeemable convertible preferred stock was entitled to receive a liquidation preference amount, plus any dividends declared but unpaid before any payments to holders of Series A, B, C, D, E or F redeemable convertible preferred stock and common stock. If the assets of the Company were insufficient to make payment in full to all Series G redeemable convertible preferred stockholders, then the assets or consideration would have been distributed ratably among such holders in proportion to the full liquidation preference amounts to which the holders would otherwise have been entitled to.

After the full payment of the liquidation preference to the holders of Series G redeemable convertible preferred stock, each holder of Series F redeemable convertible preferred stock would have been entitled to be paid a liquidation preference amount, plus any dividends declared but unpaid before any payments to holders of Series A, B, C, D or E redeemable convertible preferred stock and common stock. If the assets of the Company were insufficient to make payment in full to all Series F redeemable convertible preferred stockholders, then the assets or consideration would have been distributed ratably among such holders in proportion to the full liquidation preference amounts to which the holders would otherwise have been entitled to.

After the full payment of the liquidation preference to the holders of Series F redeemable convertible preferred stock, each holder of Series E redeemable convertible preferred stock would have been entitled to be paid a liquidation preference amount, plus any dividends declared but unpaid before any payments to holders of Series A, B, C or D redeemable convertible preferred stock and common stock. If the assets of the Company were insufficient to make payment in full to all Series E redeemable convertible preferred stockholders, then the assets or consideration would have been distributed ratably among such holders in proportion to the full liquidation preference amounts to which the holders would otherwise have been entitled to.

After the full payment of the liquidation preference to the holders of Series E redeemable convertible preferred stock, each holder of Series D redeemable convertible preferred stock would have been entitled to be paid a liquidation preference amount, plus any dividends declared but unpaid before any payments to holders of Series A, B or C redeemable convertible preferred stock and common stock. If the assets of the Company were insufficient to make payment in full to all Series D redeemable convertible preferred stockholders, then the assets or consideration would have been distributed ratably among such holders in proportion to the full liquidation preference amounts to which the holders would otherwise have been entitled to.

After the full payment of the liquidation preference to the holders of Series D redeemable convertible preferred stock, each holder of Series A, B and C redeemable convertible preferred stock would have been entitled to be paid a liquidation preference amount, plus any dividends declared but unpaid before any payments to holders of common stock. If the assets of the Company were insufficient to make payment in full to all holders of Series A, B or C redeemable convertible preferred stock, then the assets or consideration would have been distributed ratably among

such holders in proportion to the full liquidation preference amounts to which the holders would otherwise have been entitled to.

After the payment of the full liquidation preference to holders of redeemable convertible preferred stock, the remaining assets of the Company legally available for distribution would have been distributed ratably to the holders of the common stock.

Voting

Each holder had the right to one vote for each share of common stock into which such redeemable convertible preferred stock would have been converted. So long as any shares of redeemable convertible preferred stock were outstanding, the Company was prohibited, without first obtaining the approval of more than 50% of the holders of redeemable convertible preferred stock then outstanding, voting together as a separate class to (a) amend certificate of incorporation in any way that would materially and adversely alter or change the rights, preferences, or privileges of the series preferred stock or (b) increase the total number of authorized shares of any Series Preferred stock. Additionally, the vote of at least a majority of the holders of Series D, E, F and G redeemable convertible preferred stock was needed to materially and adversely affect the rights of such holders of each series, including increasing or decreasing the number of authorized shares of Series D, E, F and G redeemable convertible preferred stock, as applicable.

Redemption

The redeemable convertible preferred shares were not mandatorily redeemable.

Conversion

Upon the completion of the Company’s IPO in September 2021, all 29,912,264 shares of its then-outstanding redeemable convertible preferred stock automatically converted into 29,912,264 shares of common stock and it reclassified $329.5 million of redeemable convertible preferred stock to additional paid-in capital on our condensed consolidated balance sheet.