Convertible Preferred Stock |
6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Dec. 31, 2021 |
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Temporary Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock |
The Company’s outstanding convertible preferred stock consisted of the following as of December 31, 2021 (in thousands, except share and per share data):
Conversion At the closing of the Business Combination, all series of convertible preferred stock of Legacy Grove were converted on an
as-converted basis to the Company’s Class B common stock at an exchange ratio of approximately 1.1760. As of June 30, 2022, no shares of convertible preferred stock were outstanding. |
In January and February 2019, the Company received total gross proceeds of $48.6 million through the issuance of 6,923,051 shares of Series D convertible preferred stock at $7.0135 per share. In January 2019, employees and investors sold an aggregate amount of 1,493,666 shares of common stock, 209,946 shares of Series Seed convertible preferred stock and 435,113 shares of Series A convertible preferred stock at $7.0135 per share, for a total of $15.0 million, to an existing investor. Upon the sale, the shares were exchanged to Series D preferred shares. As a result of the sale of shares sold by employees and a consultant, the Company recorded the excess purchase price above fair value of $7.3 million as stock-based compensation expense, with a corresponding credit to Series D preferred shares, a component of convertible preferred stock presented within the balance sheets. Additionally, the Company recognized a deemed dividend of $1.8 million for the excess purchase price above fair value for Series Seed and Series A convertible preferred shares sold by investors and then exchanged for Series D convertible preferred shares, with a corresponding credit to additional paid-in capital, to the extent there was additional paid-in capital, with the remainder to accumulated deficit.In August, September and December 2019, the Company received gross proceeds of $48.2 million through the issuance of 5,314,209 shares of Series D-1 convertible preferred stock at $9.0731 per share. In May and June 2020, the Company received gross proceeds of $90.0 million through the issuance of 14,551,370 shares of Series D-2 convertible preferred stock at $6.185 per share. The issuance of Series D-2 convertible preferred stock was at a per share price less than the original issue prices of the Series D and D-1 convertible preferred stock, which triggered down-round adjustments to the conversion prices of such series of convertible preferred stock. The down-round adjustments did not result in any contingent beneficial conversion feature (“BCF”) being recognized. In November and December 2020, the Company received gross proceeds of $125.0 million through the issuance of 14,762,823 shares of Series E convertible preferred stock at $8.4672 per share. The issuance of Series E convertible preferred stock triggered further down-round adjustments to the conversion prices of the Series D-1 convertible preferred stock. The down-round adjustment did not result in any contingent BCF being recognized. The Company’s outstanding convertible preferred stock consisted of the following as of December 31, 2020 and 2021 (in thousands, except share data):
Significant provisions of the convertible preferred stock are as follows: Dividends – The holders of convertible preferred stock are entitled to receive, on a pari passu basis,
non-cumulative dividends prior and in preference to any declaration or payment of any dividends to the holders
as-converted basis. No dividends have been declared by the Board of Directors or paid since inception. Liquidation Voting C-1 convertible preferred stock, voting together as a single class, are entitled to elect one director of the Company, and the holders of the shares of Series E preferred stock, exclusively as a separate class, are entitled to elect one director of the Company. The holders of the shares of common stock, exclusively as a separate class, are entitled to elect four directors of the Company. In addition, the holders the shares of each class of convertible preferred stock, other than the Series
D-2 Preferred Stock, and common stock, collectively, are entitled to elect one independent director of the Company.
Protective Provisions wind-up the business and affairs of the Company, effect any merger or consolidation or any other deemed liquidation event, or consent to any of the foregoing, (ii) amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Company, (iii) alter or change the rights, preferences or privileges of any series of the convertible preferred stock, (iv) create, or authorize creation of, any additional class or series of capital stock, unless the same ranks junior to the convertible preferred stock with respect to all rights, preferences, privileges or powers, including the distribution of assets on the liquidation, dissolution or winding up of the Company, the payment of dividends and rights of redemption, (v) increase or decrease the authorized number of shares of convertible preferred stock, common stock, or any additional class or series of capital stock, (vi) purchase or redeem or pay or declare any dividend or make any distributions on any shares of capital stock of the Company other than those expressly identified in the Company’s Certificate of Incorporation, (vii) create, authorize the creation of, issue, or authorize the issuance of any debt security if the aggregate indebtedness of the Company and its subsidiaries for borrowed money following such action would exceed $20.0 million or working capital revolving debt in excess of $50.0 million, (viii) permit any direct or indirect subsidiary to issue any class or series of capital stock to any third party, (ix) increase the number of shares authorized for issuance under any existing stock or option plan or create any new stock or option plan, or (x) increase or decrease the authorized number of directors constituting the Board of Directors. In addition, the Company shall not, without the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of a Series of convertible preferred stock, amend the provisions of the Certificate of Incorporation or Bylaws of the Company in a manner that impacts the voting or other powers, preferences or other special rights, privileges or restrictions of such Series of convertible preferred stock, or increase or decrease the total number of authorized shares of such Series of convertible preferred stock other than a reduction in the number of authorized shares equal to the number of any such shares that have been converted into common stock.
Conversion non-assessable shares of common stock as determined by dividing the applicable original issue price by the applicable conversion price (the “conversion ratio”), subject to adjustment for stock splits, stock dividends and the like. As of December 31, 2021, the applicable conversion price for each series of convertible preferred stock was the respective original issue price, with the exception of Series D and Series D-1 convertible preferred stock, which have conversion prices of $6.9188 and $8.7145, and conversion ratios of 1.0136935 and 1.0411425, respectively. Each share of convertible preferred stock automatically converts into the number of shares of common stock into which such shares are convertible at the then applicable conversion ratio upon the closing of the sale of shares of common stock in a public offering, resulting in gross proceeds of at least $75.0 million. The converted shares may not be reissued by the Company. Redemption— sheets. |