Subsequent Events |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Subsequent Events In October 2022, the Company’s Board of Directors approved the exchange of 12,977,484 options, with a weighted average exercise price of $3.24 for 9,582,252 RSUs due to the Option Exchange. The Company is currently assessing the accounting treatment and related impacts from the Option Exchange.
The Company sold 698,992 shares of Class A common stock to Yorkville under the SEPA discussed in Note 9 for gross proceeds of $2.3 million which settled on October 3, 2022.
On November 10, 2022, the Company entered into a subscription agreement (the “HGI Subscription Agreement”) with HCI Grove LLC (“HGI”), pursuant to which, among other things, the Company agreed to issue and sell, on November 15, 2022, to HGI 1,984,126 shares of the Company’s Class A common stock for aggregate proceeds of $2.5 million. Under the terms of the HGI Subscription Agreement, the Company is required to file a registration statement for the Subscribed Shares upon the Company becoming eligible to file a registration statement on Form S-3 and in any event prior to July 15, 2023 (the “Subscribed Shares Registration Statement”).
The HGI Subscription Agreement also provides that the Company will issue additional shares of the Company’s Class A common stock to HGI in the event that the volume weighted average price of the Company’s Class A common stock is less than $1.26 during the three trading days commencing on the first trading day after (i) the Company files the Subscribed Shares Registration Statement (the “Registration Date”), (ii) the three-month anniversary of the Registration Date, (iii) the six-month anniversary of the Registration Date, or (iv) the nine-month anniversary of the Registration Date (“Measurement Periods” and each “Measurement Period”) upon HGI’s election to receive such additional shares (the “HGI Additional Shares”). HGI may use all or a portion of each Subscribed Share once to determine the amount of any issuance of Additional Shares in connection with the Measurement Periods such that HGI may utilize, for example, half of the Subscribed Shares to receive further Additional Shares, and leave the remaining half of the Subscribed Shares available to utilize in connection with the remaining Measurement Periods. HGI must elect to receive HGI Additional Shares for one Measurement Period, or the right lapses or is superseded by the next measurement period. The Company is currently assessing the accounting for the obligation to issue these potential additional shares, if any. Concurrent with the HGI Subscription Agreement, the Company also entered into a consulting services agreement (the “Consulting Agreement”) with HCI Grove Management LLC (the “Consultant”). In consideration for the services under the Consulting Agreement, the Company (i) will pay the Consultant an upfront fee of $150,000 and (ii) issued the Consultant 4,525,000 warrants (the “HGI Warrant Shares”) to purchase shares of the Company’s Class A common stock (the “HGI Warrants”), at an exercise price per share of $1.26 (the “Exercise Price”). On November 10, 2022, 40% of the HGI Warrant Shares vested and became issuable, and the remaining HGI Warrant Shares shall vest and become exercisable if, prior to December 31, 2024, the Company achieves at least $100 million in quarterly net revenue on a consolidated basis or if the Company consummates a Change of Control, as defined in HGI Warrant. If, as a result of the Change of Control, the Company’s equity holders own less than 25% of the equity securities of the surviving entity in such Change of Control, the Exercise Price shall be increased by 50%. The Company is currently assessing the accounting for the obligation to issue these warrants to purchase shares of the Company’s class A common stock that have vested as of November 10, 2022 and those that may potentially vest at a future date, if any.
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