Stockholders' Equity | 11. Stockholders’ Equity Convertible Preferred Stock The authorized, issued and outstanding shares, liquidation preference, and carrying value of the Company’s convertible preferred stock as of December 31, 2019 were as follows: Shares Shares Shares Liquidation Carrying Series A 3,200,000 3,178,650 3,130,077 51,741 28,889 Series B 833,334 787,725 787,725 37,060 23,632 Series C 13,711,111 10,095,133 10,095,133 519,648 603,278 17,744,445 14,061,508 14,012,935 608,449 655,799 In the year ended December 31, 2019, the Company issued and sold 628,719 shares of Series C preferred stock at a price of $75 per share for gross proceeds of $47,154. The Company incurred $1,318 of issuance costs in connection with the issuance of the Series C preferred stock. Additionally, the Company issued 456,667 shares of Series C preferred stock at a price of $75 per share in connection with the acquisition of Aligned (see Note 7). In February 2020, the Company issued and sold 170,000 shares of Series C preferred stock at a price of $75 per share for gross proceeds of $12,750. The Company incurred $261 of issuance costs in connection with the issuance of the Series C preferred stock In May 2020, the Company issued and sold 1,342,750 shares of Series C preferred stock at a price of $100 per share for gross proceeds of $134,275. The Company incurred $750 of issuance costs in connection with the issuance of the Series C preferred stock. In conjunction with the Company’s IPO in September 2020, all shares of convertible preferred stock then outstanding, totaling 15,525,685 shares (pre-split), an equivalent number of 8.8-to-1.0 In connection with the IPO, the Company filed an Amended and Restated Certificate of Incorporation which authorizes the issuance of 100,000,000 shares of undesignated preferred stock, par value of $0.01 per share, with rights and preferences, including voting rights, designated from time to time by the board of directors. Common Stock In September 2020, upon completion of the IPO, the Company sold 45,681,499 shares of Class A common stock at an offering price of $18.00 per share, including 4,459,277 shares of Class A , for net proceeds of , after deducting offering costs of $900. Concurrently with the IPO , shares of Class A and Class B common stock from certain executive officers and other employees, to permit such executive officers and other employees to pay taxes owed in connection with the vesting of equity awards, including the repayment of third party loans incurred to finance the payment of such taxes. In connection with the IPO, the Company filed an Amended and Restated Certificate of Incorporation which authorizes capital stock of 1,000,000,000 shares of Class A common stock, par value $0.01 per share, 100,000,000 shares of Class B common stock, par value $0.01 per share, and 200,000,000 shares of Class C common stock, par value $0.01 per share. Except for the rights noted below , is does is and each share of Class B common stock will be entitled to a number of votes equal to the total number of votes held by all Class B common stock divided by the total number of then outstanding shares of Class B common stock. Shares of Class B and Class C common stock will be converted into shares of Class A common stock on a one-for-one basis upon the occurrence of certain events. Shares of Class B common stock will automatically convert on the first business day (i) after the date on which the outstanding shares of Class B common stock constitutes less than 5% of the aggregate number of shares of common stock then outstanding, (ii) after the date on which neither founder is serving as an executive officer or As of September 30, 2020 the par value of the Class A, Class B and Class C shares was $1,997, $290, and $56, respectively. Shares Shares Issued Shares Class A 1,000,000,000 200,131,318 199,647,646 Class B 100,000,000 29,950,326 29,032,042 Class C 200,000,000 5,555,555 5,555,555 1,300,000,000 235,637,199 234,235,243 As of September 30, 2020, the Company had reserved 63,226,337 shares of common stock for the exercise of outstanding stock options, the vesting of restricted stock units and the number of shares remaining available for future grant. As of December 31, 2019, the Company had reserved 157,998,948 shares of common stock for the conversion of the outstanding shares of Preferred Stock, the exercise of outstanding stock options, the vesting of restricted stock units and the number of shares remaining available for future grant. Stock Plans and Stock Options The Company maintains the 2006 Employee, Director and Consultant Stock Plan as amended and restated (the “2006 Plan”) and 2020 Equity Incentive Plan (the “2020 Plan” together, the “Plans”) under which it has granted incentive stock options, non-qualified non-employee The 2020 Plan became effective on shares of Class A and Class B common stock were initially reserved for issuance pursuant to the 2020 Plan, which number was increased to 31,275,204 shares immediately following the IPO The Company had 27,614,753 shares available for grant as of September 30, 2020. Options issued under the Plans are exercisable for periods not to exceed ten years, and vest and contain such other terms and conditions as specified in the applicable award document. Options to buy common stock are issued under the Plans, with exercise prices equal to the closing price of shares of the Company’s common stock on the New York Stock Exchange on the date of award. Activity under the Plans is as follows: Number of Weighted Average Weighted Average Aggregate Outstanding as of December 31, 2019 24,917,003 $ 3.90 6.9 $ 79,798 Granted 2,637,220 $ 7.80 Forfeited (1,697,171 ) $ 4.80 Expired (132,001 ) $ 2.16 Exercised (1,660,751 ) $ 2.59 Outstanding as of September 30, 2020 24,064,300 $ 4.35 6.4 $ 610,782 Vested and expected to vest as of December 31, 2019 22,650,355 $ 3.73 6.7 $ 76,321 Vested and expected to vest as of September 30, 2020 22,212,804 $ 4.09 6.2 $ 567,533 Options exercisable as of December 31, 2019 14,685,654 $ 2.83 5.5 $ 62,869 Options exercisable as of September 30, 2020 16,254,829 $ 3.43 5.3 $ 426,049 The weighted-average grant date fair value of common stock options granted during the three months ended September 30, 2020 was $ 5.06 . No 4.17 2.78 12,688 Executive Equity Awards In the second quarter of 2020, the Company entered into employment agreements with the Company’s two Chief Executive Officers. Each agreement provided a restricted stock units, totaling 5,721,760 restricted stock units. The restricted stock unit grants of 2,860,880 units to each CEO, have no future service period in order to vest and therefore the Company recognized $56,971, the full amount of stock-based compensation expense, in the second quarter of 2020. The employment agreements modified the that had been previously issued, 1,764,884 options each , the In addition, each CEO has received, and will receive additional restricted stock units, equaling up to % of the Company’s fully-diluted outstanding capital stock as a result of the IPO (“IPO RSUs”), 50% of the IPO RSUs (representing 0.75% of the Company’s fully diluted outstanding capital stock immediately prior to the IPO or 3,230,750 shares of Class A common stock) were granted on the closing date of the IPO based on the closing price per share on the IPO closing date, and 50% (representing up to immediately prior to the IPO ) March 16 The grant-date fair value of each of the awards issued on the IPO closing date and to be issued on the 180-day anniversary of the IPO was estimated using a binomial lattice approach. The main inputs to valuing the IPO RSUs include the fair value of Class A common stock ($9.96 post-split $23,644 stock-based compensation expense, which included both tranches of the IPO RSU for each CEO, on the date of the IPO as the requisite future service of the awards is not substantive for accounting purposes. Restricted Stock Units During the year four years four years Activity for the restricted stock units is as follows: Shares Weighted Average Unvested as of December 31, 2019 2,322,408 $ 5.79 Granted 13,039,392 13.41 Vested (3,810,645 ) 9.50 Forfeited (3,871 ) 10.79 Unvested as of September 30, 20 2 11,547,284 $ 13.17 The amount of compensation costs recognized for the three months ended September 30, 2020 and 2019 on the restricted stock units expected to vest was $31,253 and $1,297, respectively. The amount of compensation costs recognized for the nine months ended September 30, 2020 and 2019 on the restricted stock units expected to vest was $91,168 and $1,297, respectively. As of September 30, 2020, the unrecognized stock-based compensation expense related to these restricted awards was $39,449, which is expected to be recognized over a weighted-average period of 3.0 years. Stock-Based Compensation The weighted average of assumptions that the Company used to determine the fair value of the common stock options granted to employees and directors were as follows: Nine Month Ended 2020 2019 Risk-free interest rate 1.09 % 2.44 % Expected term (in years) 6.1 6.1 Expected volatility 52 % 50 % Expected dividend yield 0 % 0 % Stock-based compensation expense was classified in the condensed Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of revenues $ 309 $ 124 $ 668 $ 360 Research and development 2,083 360 3,519 1,169 Selling and marketing 1,138 540 2,684 1,848 General and administrative 30,890 2,580 99,645 5,298 Total $ 34,420 $ 3,604 $ 106,516 $ 8,675 2020 Employee Stock Purchase Plan In July and August 2020, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2020 Employee Stock Purchase Plan (“ESPP”). A total of 3,084,218 shares of Class A common stock were reserved for issuance under the ESPP. The ESPP is expected to become effective January 1, 2021. Rights granted under the ESPP will be issued only with respect to shares of Class A common stock. Subject to any limitations contained therein, under the ESPP an employee will be permitted to accrue the right to purchase stock under the ESPP up to $25,000 worth of shares during any calendar year. The purchase price of the shares will not be less than 85% of the fair market value of Class A common stock on the lower of the purchase date, which will be the final trading day of the purchase period, or the enrollment date, which will be the first trading day of the offering period. |