Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40263 | |
Entity Registrant Name | Grove Collaborative Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 88-2840659 | |
Entity Address, Address Line One | 1301 Sansome Street | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94111 | |
City Area Code | 800 | |
Local Phone Number | 231-8527 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001841761 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A common stock, par value $0.0001 | |
Trading Symbol | GROV | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 128,876,248 | |
Common stock warrants | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Redeemable warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share | |
Trading Symbol | GROV.WS | |
Security Exchange Name | NYSE | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 49,874,913 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 81,653 | $ 81,084 |
Restricted cash | 5,850 | 11,950 |
Inventory, net | 40,930 | 44,132 |
Prepaid expenses and other current assets | 5,806 | 4,844 |
Total current assets | 134,239 | 142,010 |
Restricted cash | 2,951 | 2,951 |
Property and equipment, net | 13,852 | 14,530 |
Operating lease right-of-use assets | 11,721 | 12,362 |
Other long-term assets | 2,817 | 2,192 |
Total assets | 165,580 | 174,045 |
Current liabilities: | ||
Accounts payable | 12,293 | 10,712 |
Accrued expenses | 13,967 | 31,354 |
Deferred revenue | 9,152 | 10,878 |
Operating lease liabilities, current | 3,762 | 3,705 |
Other current liabilities | 565 | 249 |
Debt, current | 340 | 575 |
Total current liabilities | 40,079 | 57,473 |
Debt, noncurrent | 69,049 | 60,620 |
Operating lease liabilities, noncurrent | 15,233 | 16,192 |
Derivative liabilities | 13,519 | 13,227 |
Total liabilities | 137,880 | 147,512 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value - 100,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares outstanding at March 31, 2023 and December 31, 2022 | 0 | 0 |
Common stock - $0.0001 par value – 600,000,000 Class A shares authorized at March 31, 2023 and December 31, 2022; 128,870,368 and 125,617,015 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively; 200,000,000 Class B shares authorized at March 31, 2023 and December 31, 2022; 49,874,913 and 52,240,311 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 18 | 18 |
Additional paid-in capital | 618,609 | 604,373 |
Accumulated deficit | (590,927) | (577,858) |
Total stockholders’ equity | 27,700 | 26,533 |
Total liabilities and stockholders’ equity | $ 165,580 | $ 174,045 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets - Parenthetical - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Temporary equity, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Temporary equity, shares issued (in shares) | 0 | 0 |
Temporary equity, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Class A Common Stock | ||
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, shares issued (in shares) | 128,870,368 | 125,617,015 |
Common stock, shares outstanding (in shares) | 128,870,368 | 125,617,015 |
Class B Common Stock | ||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 49,874,913 | 52,240,311 |
Common stock, shares outstanding (in shares) | 49,874,913 | 52,240,311 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues [Abstract] | ||
Revenue, net | $ 71,565 | $ 90,479 |
Cost of goods sold | 34,310 | 47,742 |
Gross profit | 37,255 | 42,737 |
Operating Expenses [Abstract] | ||
Advertising | 8,673 | 32,793 |
Product development | 4,216 | 6,240 |
Selling, general and administrative | 38,021 | 50,970 |
Operating loss | (13,655) | (47,266) |
Interest expense | 3,729 | 2,087 |
Change in fair value of Additional Shares liability | 223 | 0 |
Change in fair value of Earn-Out liability | 143 | 0 |
Change in fair value of Public and Private Placement Warrants liability | (674) | 0 |
Change in fair value of Structural Derivative liability | 600 | 0 |
Other income, net | (4,617) | (1,992) |
Interest and other expense (income), net | (596) | 95 |
Loss before provision for income taxes | (13,059) | (47,361) |
Provision for income taxes | 10 | 23 |
Net loss | $ (13,069) | $ (47,384) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.08) | $ (5.05) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.08) | $ (5.05) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 168,739,298 | 9,387,142 |
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted (in shares) | 168,739,298 | 9,387,142 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Convertible Preferred Stock, Contingently Redeemable Convertible Common Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Contingently Redeemable Convertible Common Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | ||
Temporary equity, balances at beginning of period (in shares) at Dec. 31, 2021 | [1] | 114,795,000 | 0 | |||||
Temporary equity, balances at beginning of period at Dec. 31, 2021 | [1] | $ 487,918 | $ 0 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Issuance of convertible common stock (in shares) | [1] | 2,750,000 | ||||||
Issuance of convertible common stock | [1] | $ 27,473 | ||||||
Temporary equity, balances at ending of period (in shares) at Mar. 31, 2022 | [1] | 114,795,000 | 2,750,000 | |||||
Temporary equity, balances at ending of period at Mar. 31, 2022 | [1] | $ 487,918 | $ 27,473 | |||||
Balances at beginning of period (in shares) at Dec. 31, 2021 | [1] | 9,368,000 | ||||||
Balances at beginning of period at Dec. 31, 2021 | $ (456,279) | $ 1 | [1] | $ 33,863 | $ (490,143) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock upon exercise of stock options (in shares) | [1] | 87,000 | ||||||
Issuance of common stock upon exercise of stock options | 171 | 171 | ||||||
Reduction in transaction costs | 0 | |||||||
Vesting of early exercise of options | 125 | 125 | ||||||
Stock-based compensation | 4,501 | 4,501 | ||||||
Net loss | (47,384) | (47,384) | ||||||
Balances at ending of period (in shares) at Mar. 31, 2022 | [1] | 9,455,000 | ||||||
Balances at ending of period at Mar. 31, 2022 | $ (498,866) | $ 1 | [1] | 38,660 | (537,527) | |||
Temporary equity, balances at beginning of period (in shares) at Dec. 31, 2022 | 0 | |||||||
Temporary equity, balances at beginning of period at Dec. 31, 2022 | $ 0 | |||||||
Temporary equity, balances at ending of period (in shares) at Mar. 31, 2023 | 0 | |||||||
Temporary equity, balances at ending of period at Mar. 31, 2023 | $ 0 | |||||||
Balances at beginning of period (in shares) at Dec. 31, 2022 | 177,857,000 | |||||||
Balances at beginning of period at Dec. 31, 2022 | $ 26,533 | $ 18 | 604,373 | (577,858) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock upon exercise of stock options (in shares) | 178,564 | 179,000 | ||||||
Issuance of common stock upon exercise of stock options | $ 68 | 68 | ||||||
Cancellation of Earn-Out Shares (in shares) | (985,722) | (986,000) | ||||||
Issuance of common stock upon settlement of restricted stock units, net of tax withholdings (in shares) | 1,695,000 | |||||||
Issuance of common stock upon settlement of restricted stock units, net of tax withholdings | $ (356) | (356) | ||||||
Reduction in transaction costs | 9,609 | 9,609 | ||||||
Stock-based compensation | 4,915 | 4,915 | ||||||
Net loss | (13,069) | (13,069) | ||||||
Balances at ending of period (in shares) at Mar. 31, 2023 | 178,745,000 | |||||||
Balances at ending of period at Mar. 31, 2023 | $ 27,700 | $ 18 | $ 618,609 | $ (590,927) | ||||
[1] (1) The shares of the Company’s common and convertible preferred stock prior to the Closing of the Business Combination (as defined in Note 1) have been retroactively restated to reflect the exchange ratio of approximately 1.1760 established in the Merger Agreement |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Convertible Preferred Stock, Contingently Redeemable Convertible Common Stock and Stockholders’ Equity (Deficit) - Parenthetical | Jun. 16, 2022 |
2022 Equity Incentive Plan | Class B Common Stock | |
Recapitalization exchange ratio | 1.1760 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | |
Cash Flows from Operating Activities | ||
Net loss | $ (13,069) | $ (47,384) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Remeasurement of convertible preferred stock warrant liability | 0 | (1,886) |
Stock-based compensation | 4,893 | 4,460 |
Depreciation and amortization | 1,448 | 1,410 |
Changes in fair value of derivative liabilities | 292 | 0 |
Reduction in transaction costs allocated to derivative liabilities upon Business Combination | (3,745) | 0 |
Non-cash interest expense | 948 | 195 |
Inventory reserve | 124 | 856 |
Other non-cash expenses | 77 | 8 |
Changes in operating assets and liabilities: | ||
Inventory | 3,078 | 3,038 |
Prepaids and other assets | (828) | (3,312) |
Accounts payable | 1,554 | 10,287 |
Accrued expenses | 162 | 2,917 |
Deferred revenue | (1,726) | 159 |
Operating lease right-of-use assets and liabilities | (261) | (22) |
Other liabilities | 316 | (229) |
Net cash used in operating activities | (6,737) | (29,503) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (784) | (1,352) |
Net cash used in investing activities | (784) | (1,352) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of contingently redeemable convertible common stock | 0 | 27,500 |
Payment of transaction costs related to the Business Combination | (4,150) | (489) |
Proceeds from issuance of debt | 7,500 | 0 |
Payment of debt issuance costs | (837) | 0 |
Repayment of debt | (235) | (275) |
Proceeds from exercise of stock options and settlement of restricted stock units, net of withholding taxes paid related to common stock issued to employees | (288) | 171 |
Net cash provided by financing activities | 1,990 | 26,907 |
Net decrease in cash, cash equivalents and restricted cash | (5,531) | (3,948) |
Cash, cash equivalents and restricted cash at beginning of period | 95,985 | 78,376 |
Cash, cash equivalents and restricted cash at end of period | 90,454 | 74,428 |
Supplemental Disclosure | ||
Cash paid for taxes | 9 | 21 |
Cash paid for interest | 2,734 | 1,461 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Purchase of property and equipment in accounts payable and accrued liabilities | 113 | 286 |
Reduction in transaction costs allocated to equity instruments | 9,609 | 0 |
Transaction and contingently redeemable convertible common stock issuance costs in accounts payable and accrued liabilities | 0 | 2,582 |
Vesting of early exercised stock options | 0 | 125 |
Reconciliation of cash, cash equivalents, and restricted cash: | ||
Cash and cash equivalents | 81,653 | 74,428 |
Restricted cash | 8,801 | 0 |
Total cash, cash equivalents and restricted cash | $ 90,454 | $ 74,428 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Grove Collaborative Holdings, Inc., a public benefit corporation, (formerly known as Virgin Group Acquisition Corp. II, or “VGAC II”) and its wholly owned subsidiaries (collectively, the “Company” or “Grove”) is a digital-first, sustainability-oriented consumer products innovator specializing in the development and sale of household, personal care, beauty and other consumer products with an environmental focus and headquartered in San Francisco, California. In the United States, the Company sells its products through two channels: a direct-to-consumer (“DTC”) platform at www.grove.co and the Company’s mobile applications, where the Company sells products from Grove-owned brands (“Grove Brands”) and third-parties, and the retail channel into which the Company sell products from Grove-owned brands at wholesale. The Company develops and sells natural products that are free from the harmful chemicals identified in the Company’s “anti-ingredient” list and designs form factors and product packaging that reduces plastic waste and improves the environmental impact of the categories in which the Company operates. The Company also purchases environmental offsets that have made it the first plastic neutral retailer in the world. Grove Collaborative, Inc. (herein referred to as “Legacy Grove”), the Company’s accounting predecessor, was incorporated in Delaware in 2016. On June 16, 2022 (the “Closing Date”), the Company consummated the previously-announced transactions contemplated by the Agreement and Plan of Merger, dated December 7, 2021, amended and restated on March 31, 2022 (the “Merger Agreement”), among Virgin Group Acquisition Corp. II, a blank check company incorporated as a Cayman Islands exempt company in 2020 (“VGAC II”), Treehouse Merger Sub, Inc. (“VGAC II Merger Sub I”), Treehouse Merger Sub II, LLC (“VGAC II Merger Sub II”), and Legacy Grove (“the Merger”). In connection with the Merger, VGAC II changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware and changed its name to Grove Collaborative Holdings, Inc (the “Domestication”), a public benefit corporation. On the Closing Date, VGAC Merger Sub II merged with and into Legacy Grove with Legacy Grove being the surviving corporation and a wholly-owned subsidiary of the Company (the “Initial Merger”), and, immediately following the Initial Merger, and as part of the same overall transaction as the Initial Merger, Legacy Grove merged with and into VGAC Merger Sub II, the separate corporate existence of Legacy Grove ceased, and Merger Sub II continued as the surviving company and a wholly-owned subsidiary of the Company and changed its name to Grove Collaborative, Inc.(together with the Merger and the Domestication, the “Business Combination”). The Business Combination is accounted for as a reverse recapitalization with Legacy Grove being the accounting acquirer and VGAC II as the acquired company for accounting purposes. Accordingly, all historical financial information presented in the unaudited condensed consolidated financial statements represents the accounts of Legacy Grove. The shares and net loss per common share prior to the Closing have been retroactively restated as shares reflecting the exchange ratio established in the Closing. Prior to the Business Combination, VGAC II’s public shares, and public warrants were listed on the New York Stock Exchange (“NYSE”) under the symbols “VGII” and “VGII.WS,” respectively. On June 17, 2022, the Company's Class A common stock and public warrants began trading on (“NYSE”), under the symbols “GROV” and “GROV.WS,” respectively. See Note 7, Common Stock and Warrants for additional details. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Liquidity The Company’s unaudited condensed consolidated financial statements (the “condensed consolidated financial statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiary in which it holds controlling financial interest. All intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in accordance with GAAP applicable to interim financial statements. These financial statements are presented in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. As such, the information included herein should be read in conjunction with the Company’s financial statements and accompanying notes as of and for the year ended December 31, 2022 (the “audited financial statements”) that were included in the Company’s Form 10-K filed with the SEC on March 16, 2023. In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2023 and the results of operations for the three months ended March 31, 2023 and 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 or any other future interim or annual period. The Company has historically incurred losses and negative cash flows from operations and had an accumulated deficit of $590.9 million as of March 31, 2023. The Company’s existing sources of liquidity as of March 31, 2023 include cash and cash equivalents of $81.7 million and availability of debt from the Siena Revolver (defined in Note 5, Debt ). Prior to the Business Combination, the Company historically funded operations primarily with issuances of convertible preferred stock, contingently redeemable convertible common stock and the incurrence of debt. The Company believes its existing cash and cash equivalents will be sufficient to fund its operations for a period of at least one year from the date of issuance of this quarterly report on Form 10-Q (the “Quarterly Report”). Over the longer-term, the Company will need to raise additional capital through debt or equity financing to fund future operations until it generates positive cash flows from profitable operations. There can be no assurance that such additional debt or equity financing will be available on terms acceptable to the Company, or at all. Emerging Growth Company The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The JOBS Act permits companies with emerging growth company status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. Following the closing of the Business Combination, the Company uses this extended transition period to enable it to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date the Company (1) is no longer an emerging growth company or (2) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates. Comprehensive Loss Comprehensive loss represents all changes in stockholders’ deficit. The Company’s net loss was equal to its comprehensive loss for all periods presented. Significant Accounting Policies There have been no significant changes in the Company's significant accounting policies from those that were disclosed in Note 2, Summary of Significant Accounting Policies , included in the Company’s audited financial statements and the notes thereto for the year ended December 31, 2022. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. These estimates made by management include the determination of reserves amounts for the Company’s inventories on hand, useful life of intangible assets, sales returns and allowances and certain assumptions used in the valuation of equity awards, the estimated fair value of common stock liability classified Public and Private Placement Warrants, the fair value of Earn-Out liabilities, the fair value of Additional Shares liabilities, the fair value of the Structural Derivative Liability and stock based compensation expense. Actual results could differ from those estimates, and such estimates could be material to the Company’s financial position and the results of operations. Restricted Cash Short-term restricted cash primarily represents cash on deposit with a financial institution to collateralize short-term obligations related to company credit cards. Long-term restricted cash primarily represents cash on deposit with a financial institution to collateralize letters of credit related to the Company’s non-cancellable operating leases for its corporate headquarters. Restricted cash is stated at cost, which approximates fair value. Concentration of Risks Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. The Company maintains the majority of its cash, cash equivalents and restricted cash in accounts with one financial institution within the United States, generally in the form of demand accounts. Deposits in this institution may exceed federally insured limits. Management believes minimal credit risk exists with respect to this financial institution and the Company has not experienced any losses on such amounts. The Company depends on a limited number of vendors to supply products sold by the Company. For the three months ended March 31, 2023 and 2022, the Company’s top five suppliers combined represented approximately 50% of the Company’s total inventory purchases. Revenue Recognition The Company primarily generates revenue from the sale of both third-party and Grove Brands products through its DTC platform. Customers purchase products through the website or mobile application through a combination of directly selecting items from the catalog, items that are suggested by the Company’s recurring shipment recommendation engine, and features that appear in marketing on-site, in emails and on the Company’s mobile application. Most customers purchase a combination of products recommended by the Company based on previous purchases and new products discovered through marketing or catalog browsing. Customers can have orders auto-shipped to them on a specified date or shipped immediately through an option available on the website and mobile application. In order to reduce the environmental impact of each shipment, the Company has a minimum total sales order value threshold policy which is required to be met before the order qualifies for shipment. Payment is collected upon finalizing the order. The products are subsequently packaged and shipped to fill the order. Customers can customize future purchases by selecting products they want to receive on a specified cadence or by selecting products for immediate shipment. The Company also offers a VIP membership to its customers for an annual fee which includes the rights to free shipping, free gifts and early access to exclusive sales, all of which are available at the customers’ option, should they elect to make future purchases of the Company’s products within their annual VIP membership benefit period. Many customers receive a free 60-day VIP membership for trial purposes, typically upon their first qualifying order. After the expiration of this free trial VIP membership period, customers will be charged their annual VIP membership fee, which automatically renews annually, until cancelled. The customer is alerted before any VIP membership renews. In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains control of promised goods, in an amount that reflects the consideration that it expects to receive in exchange for those goods. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration, if any, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration to which it is entitled in exchange for the goods it transfers to a customer. A contract with a customer exists when the customer submits an order online for the Company’s products. Under this arrangement, there is one performance obligation which is the obligation for the Company to fulfill the order. Product revenue is recognized when control of the goods is transferred to the customer, which occurs upon the Company’s delivery to a third-party carrier. The VIP membership provides customers with a suite of benefits that are only accessible to them at their option, upon making a future qualifying order of the Company’s products. The VIP membership includes free shipping, a select number of free products and early access to exclusive sales. Under ASC 606, sales arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options; therefore, the Company must assess whether these options provide a material right to the customer and if so, they are considered a performance obligation. The Company concluded that its VIP membership benefits include two material rights, one related to the future discount (i.e., free shipping) on the price of the customer’s qualifying order(s) over the membership period and the second one relating to a certain number of free products provided at pre-set intervals within the VIP membership benefit period, that will only ship with a customer’s next qualifying order (i.e., bundled). At inception of the VIP membership benefit period, the Company allocates the VIP membership fee to each of the two material rights using a relative standalone selling price basis. Generally, standalone selling prices are determined based on the observable price of the good or service when sold separately to non-VIP customers and the estimated number of shipments and free products per benefit period. The Company also considers the likelihood of redemption when determining the standalone selling price for free products and then recognize these allocated amounts upon the shipment of a qualifying customer order. To date, customers buying patterns closely approximate a ratable revenue attribution method over the customers VIP Membership period. The Company deducts discounts, sales tax, customer service credits and estimated refunds to arrive at net revenue. Sales tax collected from customers is not considered revenue and is included in accrued liabilities until remitted to the taxing authorities. The Company has made the policy election to account for shipping and handling as activities to fulfill the promise to transfer the good. Shipping, handling and packaging expenses are recognized upon shipment and classified within selling, general and administrative expenses. Discounts are recorded as a reduction to revenue when r evenue is recognized. The C ompany records a refund reserve based on historical refund patterns. As of March 31, 2023 an d December 31, 2022 the refund reserve, which is included in accrued liabilities in the condensed consolidated balance sheets, was not material. Disaggregation of Revenue The following table sets forth revenue by product type (in thousands): Three Months Ended 2023 2022 Revenue, net: Grove Brands $ 34,976 $ 46,796 Third-party products 36,589 43,683 Total revenue, net $ 71,565 $ 90,479 Contractual Liabilities The Company has three types of contractual liabilities from transactions with customers: (i) cash collections for products which have not yet shipped, which are included in deferred revenue and are recognized as revenue upon the Company’s delivery to a third-party carrier, (ii) cash collections of VIP membership fees, which are included in deferred revenue and (iii) customer service credits, which are included in other current liabilities and are recognized as a reduction in revenue when provided to the customer. Contractual liabilities included in deferred revenue and other current liabilities were $9.2 million and $0.2 million, respectively, as of March 31, 2023 and $10.9 million and $0.2 million, respectively, as of December 31, 2022. The contractual liabilities included in deferred revenue are generally recognized as revenue within twelve months from the end of each reporting period. Revenue recognized during the three months ended March 31, 2023 that was previously included in deferred revenue and other current liabilities as of December 31, 2022 was $6.6 million and $0.2 million, respectively. Fulfillment Costs Fulfillment costs represent those costs incurred in operating and staffing the Company’s fulfillment centers, including costs attributable to receiving, inspecting and warehousing inventories, picking, packaging, and preparing customer orders for shipment (“Fulfillment Labor”), shipping and handling expenses, packaging materials costs and payment processing and related transaction costs. These costs are included within selling, general and administrative |
Fair Value Measurements and Fai
Fair Value Measurements and Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Fair Value of Financial Instruments | Fair Value Measurements and Fair Value of Financial Instruments The Company measures certain financial assets and liabilities at fair value on a recurring basis. The Company determines fair value based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy. These levels are: Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. Financial instruments consist of cash equivalents, accounts payable, accrued liabilities, debt, Additional Shares, Earn-Out Shares Public and Private Placement Warrants and Structural Derivative. Cash equivalents, Earn-Out Shares, Public and Private Placement Warrants and Structural Derivative are stated at fair value on a recurring basis. Accounts payable and accrued liabilities are stated at their carrying value, which approximates fair value due to the short period time to the expected receipt or payment. The carrying amount of the Company’s outstanding debt approximates the fair value as the debt bears interest at a rate that approximates prevailing market rate. The Public Warrants are classified as Level 1 due to the use of an observable market quote in an active market. Private Placement Warrants are classified as Level 2 as the fair value approximates the fair value of the Public Warrants. The Private Placement Warrants are identical to the Public Warrants, with certain exceptions as defined in Note 7, Common Stock and Warrants . The Additional Shares and Earn-Out Shares are classified as Level 3 and their fair values were estimated using a Monte Carlo options pricing model utilizing assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimated the expected volatility assumption using an average of the implied volatility of its publicly traded warrants and an implied volatility based on its peer companies. The Structural Derivative Liability is a compound embedded derivative related to features within the Structural Debt Facility, including an increase in interest rate upon an event of default and the contingent issuance of the Structural Subsequent Shares as defined in Note 5, Debt . This liability is classified as Level 3 and is valued using a risk-neutral income approach related to an event of default occurring and expected cash flows in such a scenario and an income and Black-Scholes pricing model for the contingent issuance of the Structural Subsequent Shares utilizing assumptions related to expected stock price volatility, expected life, risk-free interest rate and dividend yield. The Company estimated the expected volatility assumption using an average of the implied volatility of its publicly traded warrants and an implied volatility based on its peer companies. The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022 by level within the fair value hierarchy (in thousands): March 31, 2023 Level 1 Level 2 Level 3 Total Financial Assets: Cash equivalents: Money market funds $ 78,213 $ — $ — $ 78,213 Total $ 78,213 $ — $ — $ 78,213 Financial Liabilities: Additional Shares — — 803 803 Earn-Out Shares — — 4,265 4,265 Private Placement Warrants — 364 — 364 Public Warrants 437 — — 437 Structural Derivative Liability — — 7,650 7,650 Total $ 437 $ 364 $ 12,718 $ 13,519 December 31, 2022 Level 1 Level 2 Level 3 Total Financial Assets: Cash equivalents: Money market funds $ 74,990 $ — $ — $ 74,990 Total $ 74,990 $ — $ — $ 74,990 Financial Liabilities: Additional Shares — — 580 580 Earn-Out Shares — — 4,122 4,122 Private Placement Warrants — 670 — 670 Public Warrants 805 — — 805 Structural Derivative Liability — — 7,050 7,050 Total $ 805 $ 670 $ 11,752 $ 13,227 There were no transfers of financial assets or liabilities into or out of Level 1, Level 2, or Level 3 during the periods presented. Additional Shares Liability At the closing of the HGI Subscription Agreement defined in Note 7, Common Stock and Warrants , the Company recorded a liability related to the potential issuance of Additional Shares. Subsequent changes in fair value of the Additional Shares liability until settlement is recognized in the statements of operations. The following table provides a summary of changes in the estimated fair value of the Additional Shares liability (in thousands): Balance at December 31, 2022 $ 580 Change in fair value of Additional Shares Liability 223 Balance at March 31, 2023 $ 803 Earn-Out Shares At Closing of the Business Combination, certain Earn-Out Shares were accounted for as a liability. Subsequent changes in fair value, until settlement or until equity classification is met, is recognized in the statements of operations. The following table provides a summary of changes in the estimated fair value of the Earn-Out liability (in thousands): Balance at December 31, 2022 $ 4,122 Cancellation of Earn-Out Shares $ (347) Change in fair value 490 Balance at March 31, 2023 $ 4,265 Private Placement and Public Warrant Liabilities As of March 31, 2023, the Company has Private Placement and Public Warrants. Such warrants are measured at fair value on a recurring basis. The following table provides a summary of changes in the estimated fair value of the Private Placement Warrants and Public Warrants (in thousands): Private Placement Warrants Public Warrants Balance at December 31, 2022 $ 670 $ 805 Changes in fair value (306) (368) Balance at March 31, 2023 $ 364 $ 437 Structural Derivative Liability At closing of the Structural Debt Facility, the Company recorded a liability related to the features that are required to be bifurcated and accounted for as a compound derivative at fair value. Subsequent changes in fair value of the Structural Derivative Liability until settlement is recognized in the statement of operations. The following table provides a summary of changes in the estimated fair value of the Structural Derivative Liability (in thousands): Balance at December 31, 2022 $ 7,050 Change in fair value 600 Balance at March 31, 2023 $ 7,650 |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following (in thousands): March 31, December 31, Inventory purchases $ 2,530 $ 2,757 Compensation and benefits 2,861 1,714 Advertising costs 1,020 1,203 Fulfillment costs 1,335 1,725 Sales taxes 1,509 1,374 Transaction costs — 17,500 Other accrued expenses 4,712 5,081 Total accrued expenses $ 13,967 $ 31,354 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s outstanding debt, net of debt discounts, consisted of the following (in thousands): March 31, December 31, Structural Debt Facility $ 61,549 $ 60,620 Siena Revolver 7,500 — Atel Loan Facility Draw 3 292 480 Atel Loan Facility Draw 4 48 95 Total debt 69,389 61,195 Less: debt, current (340) (575) Total debt, noncurrent $ 69,049 $ 60,620 Structural Debt Facility In December 2022, the Company entered into a Loan and Security Agreement (“Structural Debt Facility”) with Structural Capital Investments III, LP, Structural Capital Investments IV, LP and Series PCI Grove series of Structural Capital Primary Co-Investment Fund, LLC (collectively, “Structural Funds”) and Avenue Sustainable Solutions Fund, L.P. (“Avenue”) (collectively “Structural Lenders”) to borrow $72.0 million which was used primarily to settle previously outstanding obligations with a prior lender. The Structural Debt Facility bears an annual rate of interest at the greater of 15.00% or 7.50% plus the prime rate, payable monthly. The principal repayment period commences on July 1, 2025 and continues until the maturity date of December 21, 2026. The Company may prepay all outstanding amounts under this facility at anytime. Under the agreement, when amounts are prepaid or repaid in full at the Maturity Date, the Company may be obligated to pay additional fees which would allow for Structural Funds and Avenue to reach a Minimum Return, as defined by the agreement. The Structural Debt Facility is collateralized by the assets of the Company and includes financial covenants the Company must meet in order to avoid an Event of Default, as defined by the agreement. Such covenants include (i) maintaining a minimum of $57.0 million in unrestricted cash at all times and (ii) achieving certain revenue targets for the trailing four quarter period beginning with this fiscal quarter ended March 31, 2023. The Structural Debt Facility contains a subjective acceleration clause in the event that lenders determine that a material adverse change has or will occur within the business, operations, or financial condition of the Company or a material impairment of the prospect of repaying any portion of this financial obligation. In accordance with the loan agreement, Structural has been provided with the Company’s periodic financial statements and updated projections to facilitate their ongoing assessment of the Company. The Company believes the likelihood that Structural Lenders would exercise the subjective acceleration clause is remote. As of March 31, 2023, the Company was in compliance with these debt covenants. On December 21, 2022, in connection with the closing of the Structural Debt Facility, the Company issued to Structural Funds, including certain affiliates, and to Avenue a total of 4,950,000 shares of the Company’s Class A common stock (the “Structural Closing Shares”). The Company recorded a debt discount of $1.1 million related to the issuance of these shares, with a corresponding offset to the Company’s Class A common stock and additional paid-in capital. Further, if there are outstanding obligations relating to the Structural Debt Facility on July 21, 2025, representing the thirty-month anniversary of such closing, the Company agrees to issue to Structural Funds, including certain affiliates, and to Avenue, the aggregate number of shares of the Company’s Class A common stock equal to $9,900,000, divided by the lower of (i) $2.00 and (ii) the volume weighted average price of the Company’s Class A common stock for the sixty The Company has identified several features within the Structural Debt Facility consisting of the contingent obligation to issue the Structural Subsequent Shares, mandatory and voluntary prepayment features and default interest rate (“Structural Derivative Liability”), which are required to be bifurcated and accounted for as a compound embedded derivative at fair value. Changes in fair value of the Structural Derivative Liability are recognized through the statements of operations and was $0.6 million for the three months ended March 31, 2023. Closing costs consisted of $3.3 million in costs directly related to the issuance of the Structural Facility to third parties, issuance of certain Structural Closing Shares amounting to $1.1 million and incurrence of an additional Structural Derivative Liability amount of $7.1 million. At March 31, 2023, the Company had $72.0 million in principal outstanding under the Structural Debt Facility with an effective interest rate of 20.34%. Siena Revolver In March 2023, the Company entered into a Loan and Security Agreement (the “Siena Revolver”) with Siena Lending Group, LLC (“Siena”) which permits the Company to receive funding through a revolving line of credit with an initial commitment of $35.0 million. The Company’s borrowing capacity under the Siena Revolver is subject to certain conditions, including the Company’s eligible inventory and accounts receivable balances among other limitations as specified in the agreement. In connection with this facility the Company incurred $1.0 million of debt issuance costs which have been included in other assets on the Company’s balance sheet and being amortized through the Revolver’s scheduled maturity date. Additional borrowing capacity from the Siena Revolver was $10.2 million as of March 31, 2023. The interest rates applicable to borrowings under the Siena Revolver are based on a fluctuating rate of interest measured by reference to either, at the Company’s option, (i) a Base Rate, plus an applicable margin, or (ii) the Term SOFR rate then in effect, plus 0.10% and an applicable margin. The Base Rate is defined as the greatest of: (1) Prime Rate as published in the Wall Street Journal, (2) Federal Funds Rate plus 0.5% and (3) 5.0% per annum. The applicable margin for Siena Revolver borrowings is based on the Company’s monthly average principal balance outstanding and ranges from 2.75% to 4.50% per annum in the case of Base Rate Borrowings and 3.75% to 5.50% per annum in the case of Term SOFR borrowings. The Siena Revolver also contains various financial covenants the Company must maintain to avoid an Event of Default, as defined by the agreement, including a subjective acceleration clause in the event that Siena determines that a material adverse change has or will occur within the business, operations, or financial condition of the Company or a material impairment of the prospect of repaying any portion of this financial obligation. In accordance with the agreement, Siena has been provided with the Company’s periodic financial statements and updated projections to facilitate their ongoing assessment of the Company. The Company believes the likelihood that Siena would exercise the subjective acceleration clause is remote. As of March 31, 2023, the Company was in compliance with these debt covenants. The Siena Revolver matures at the earlier of March 10, 2026 or the maturity date of the Structural Debt Facility. As of March 31, 2023, the Company has an outstanding principal balance of $7.5 million under the Siena Revolver. The interest rate on the outstanding balance at March 31, 2023 is 8.52%. Atel Loan Facility In July 2018, the Company entered into an equipment financing arrangement (the “Atel Loan Facility”) with Atel Ventures, Inc. (“Atel”) for funding of machinery and warehouse equipment that will become collateral. The loan agreement contains customary events of default. As of March 31, 2023, the Company had $0.3 million outstanding on its third draw and less than $0.1 million outstanding on its fourth draw, which mature in April 2023 and May 2023, respectively. The effective interest rates on the loans are 19.23%. By the end of the equal monthly installments of principal and interest, the principal under each loan will be fully repaid. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Merchandise Purchase Commitments As of March 31, 2023 and December 31, 2022 , the Company had obligations to purchase $15.3 million and $18.7 million, respectively, of merchandise. Letters of Credit The Company had irrevocable standby letters of credit in the amount of $3.5 million and $3.1 million as of March 31, 2023 and December 31, 2022, respectively, primarily related to the Company’s operating leases. The letters of credit have expiration dates through January 2029. Contingencies The Company records loss contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses material contingencies when a loss is not probable but reasonably possible. Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. Although the Company cannot predict with assurance the outcome of any litigation or non-income-based tax matters, the Company does not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on the Company’s financial position, operating results or cash flows. |
Common Stock and Warrants
Common Stock and Warrants | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Common Stock and Warrants | Common Stock and Warrants As discussed in Note 1, Description of the Business , VGAC II completed the acquisition of Legacy Grove and acquired 100% of Legacy Grove’s shares and Legacy Grove received gross proceeds of $97.1 million, which includes proceeds from issuance of common stock upon the consummation of the Business Combination. During the year ended December 31, 2022, the Company recorded $24.4 million of transaction costs, which consisted of legal, accounting, and other professional services directly related to the Business Combination. Transaction costs were allocated on a relative fair value basis between the issuance of equity and liability instruments. Direct and incremental transaction costs allocated to equity-classified instruments were recorded within equity as an offset against proceeds upon accounting for the consummation of the Business Combination in the condensed consolidated financial statements. Direct and incremental transaction costs allocated to liability-classified equity instruments were expensed in the condensed consolidated financial statements and included in other expense, net in the condensed consolidated statements of operations . The cash outflows related to these costs were presented as financing activities on the Company’s condensed consolidated statement of cash flows. As per the original agreement, the Company had $17.5 million of transaction costs accrued as of December 31, 2022. In March 2023, the Company entered into an amended agreement with a vendor to reduce this liability by $13.4 million. This reduction of costs was allocated between the liability and equity instruments with $3.8 million being recorded to other income, net on the Company’s statement of operations and $9.6 million recorded to additional paid-in capital, within equity. On the Closing Date and in accordance with the terms and subject to the conditions of the Business Combination, each holder of Legacy Grove common stock received approximately 1.1760 shares of the Company’s Class B common stock, par value $0.0001 per share. All equity awards of Legacy Grove were assumed by the Company and converted into comparable equity awards that are settled or exercisable for shares of the Company’s Class B common stock. As a result, each outstanding stock option was converted into an option exercisable for the Company’s Class B common stock based on an exchange ratio of approximately 1.1760, each outstanding restricted stock unit was converted into restricted stock units of the Company that, upon vesting and issued, will be settled for shares of the Company’s Class B common stock based on an exchange ratio of approximately 1.1760 and each outstanding warrant to purchase Legacy Grove common stock or preferred stock was converted into a warrant to purchase shares of the Company’s Class B common stock based on an exchange ratio of approximately 1.1760. Each public and private warrant of VGAC II that was unexercised at the time of the business combination was assumed by the Company and represents the right to purchase one share of the Company’s Class A common stock upon exercise of such warrant. Earn-Out At the closing of the Business Combination, Class B common stock shareholders (including Grove stock option, restricted stock unit, and warrant holders) were issued 13,999,960 shares of the Company’s Class B Common Stock (“Earn-Out Shares”). During the three months ended March 31, 2023, certain shareholders surrendered an aggregate 985,722 Earn-Out Shares which, per terms of the Merger Agreement, were cancelled by the Company and not reallocated among the remaining holders. The remaining 13,014,238 Earn-Out Shares will vest (i) with respect to 6,507,310 of the Earn-Out Shares, upon the closing price of the Company’s Class A common stock equaling or exceeding $12.50 per share for any 20 trading days within any 30-trading-day period and (ii) with respect to 6,506,928 of the Earn-Out Shares, upon the closing price of the Company’s Class A common stock equaling or exceeding $15.00 per share for any 20 trading days within any 30-trading-day period. Such events can occur during a period of ten years following the Business Combination (the “Earn-Out Period”). If, during the Earn-Out Period, there is a Change of Control Transaction (as defined in the Merger Agreement), then all remaining triggering events that have not previously occurred and the related vesting conditions shall be deemed to have occurred. If, upon the expiration of the Earn-Out Period, any Earn-Out Shares shall have not vested, then such Earn-Out Shares shall be automatically forfeited by the holders thereof and canceled by the Company. The settlement amount to be paid to the selling shareholders of the Earn-Out Shares can change and is not indexed to the Company’s stock. Due to the change in control event contingency and variable number of Earn-Out shares to be settled to the holders, the Earn-Out Shares fail the equity scope exception and are accounted for as a derivative in accordance with ASC 815 and will be remeasured on a recurring basis at fair value, with changes in fair value recorded in the condensed consolidated statements of operations. As of March 31, 2023, the Company did not meet any Earn-Out thresholds. Class A Common Stock Warrants As the accounting acquirer, Grove Collaborative, Inc. is deemed to have assume d 6,700,000 P rivate Placement Warrants for the Company’s Class A common stock that were held by Virgin Group Acquisition Sponsor II LLC (the “Sponsor”) at an exercise price of $11.50 and 8,050,000 of the Company’s Class A common stock Public Warrants that were held by VGAC II’s shareholders at an exercise price of $11.50. The warrants will expire on July 16, 2027, or earlier upon redemption or liquidation. Subsequent to the Closing of the Business Combination, the Private Placement and Public Warrants for shares of the Company’s Class A common stock meet liability classification requirements since the warrants may be required to be settled in cash under a tender offer. In addition, Private Placement warrants are potentially subject to a different settlement amount as a result of being held by the Sponsor which precludes the private placement warrants from being considered indexed to the entity's own stock, and therefore classified as liabilities on the condensed consolidated balance sheets. As of March 31, 2023, the following Warrants were outstanding: Warrant Type Shares Exercise Price Public Warrants 8,050,000 $ 11.50 Private Placement Warrants 6,700,000 $ 11.50 Public Warrants The Public Warrants become exercisable into shares of the Company’s Class A common stock commencing on July 16, 2022 and expire on July 16, 2027, or earlier upon redemption or liquidation. At closing, the Company assumed 8,050,000 public warrants. Each warrant entitles the holder to purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to certain adjustments. The Company may redeem, with 30 days written notice, each whole outstanding Public Warrant for cash at a price of $0.01 per warrant if the Reference Value equals or exceeds $18.00 per share, subject to certain adjustments. The warrant holders have the right to exercise their outstanding warrants prior to the scheduled redemption date during the Redemption Period at $11.50 per share, subject to certain adjustments. If the Company calls the Public Warrants for redemption, the Company will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis”, as described in the warrant agreement. For purposes of the redemption, “Reference Value” shall mean the last reported sales price of the Company’s Class A common stock for any twenty thirty Private Placement Warrants The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants were not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, then such warrants will be redeemable by the Company and exercisable by the warrant holders on the same basis as the Public Warrants. At Closing, the Company assumed 6,700,000 Private Placement Warrants. Backstop Warrants In connection with the Business Combination, the Company issued to the Corvina Holdings limited 3,875,028 warrants to purchase the Company’s Class A common stock (each warrant exercisable to purchase one share of the Company’s Class A common stock for $0.01) (such warrants, the “Backstop Warrants”). The Backstop Warrants are exercisable by the Backstop Investor at any time on or before June 16, 2027, and are on terms customary for warrants of such nature. None of these warrants have been exercised as of March 31, 2023. Standby Equity Purchase Agreement On July 18, 2022, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, LTD (“Yorkville” or “SEPA Investor”), pursuant to which Yorkville has agreed to purchase up to $100 million of common stock from time to time over a period of 36 months, subject to certain conditions. The shares of the Company’s common stock that may be issued under the SEPA may be sold by us to Yorkville at our discretion from time to time and sales of the Company’s common stock under the SEPA will depend upon market conditions and other factors. Additionally, in no event may the Company sell more than 32,557,664 shares of common stock to Yorkville under the SEPA, which number of shares is equal to 19.99% of the shares of the Company's common stock outstanding immediately prior to the execution of the Equity Purchase Agreement (the “Exchange Cap”), unless stockholder approval is obtained to issue shares of common stock in excess of the Exchange Cap in accordance with applicable NYSE rules or comply with certain other requirements as described in the Equity Purchase Agreement. As a result, unless the Company’s stock price exceeds $3.07, the Company will be unable to sell the full $100.0 million commitment to Yorkville without seeking stockholder approval to issue additional shares in excess of the Exchange Cap. The purchase price per share for Class A common stock will be 97.55% of the Volume-Weighted Average Price (“VWAP”) of the Company’s Class A common stock over the Pricing Period, as defined by the agreement. The Company deferred $0.7 million of transaction costs related to the SEPA and will offset these costs against proceeds of any sales under the SEPA. As of March 31, 2023, the Company has sold 739,825 shares under the SEPA for total gross proceeds of $2.4 million. Issuance costs related to these shares are not material. As of March 31, 2023, there were 31,817,839 shares available to be sold to Yorkville under the Exchange Cap. HGI Subscription Agreement 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 issued to HGI 1,984,126 shares of the Company’s Class A common stock (“Subscribed Shares”) 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 (the “HGI 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 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) paid 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 (the “Vested Warrants”), and the remaining HGI Warrant Shares (the “Unvested Warrants”) shall vest and become exercisable if, prior to December 31, 2024, the Company achieves at least $100.0 million in quarterly net revenue on a consolidated basis or if the Company consummates a Change of Control, as defined in HGI Warrants. 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 determined the Vested Warrants and Unvested Warrants qualify as stock based compensation to a nonemployee. The Company recorded $1.2 million in stock based compensation expense on the execution date of the HGI Subscription Agreement. The Company performs a probability reassessment related to the Unvested Warrants each reporting period and will recognize the cumulative catch-up adjustment based on the grant-date fair value when the vesting conditions are probable of being achieved. Any remaining expense will continue to ratably recognized until the date the revenue target is achieved, and the Unvested Warrants are fully vested. The fair value of Vested Warrants and Unvested Warrants granted to HGI was estimated at the date of grant using the Black-Scholes option-pricing model, with the following assumptions: Fair value of common stock $1.26 Expected term (in years) 4.5 Volatility 62.50% Risk-free interest rate 4.00% Dividend yield — Reserved for Issuance The Company has the following shares of common stock reserved for future issuance, on an as-if converted basis: March 31, 2023 December 31, 2022 Class A Common Stock Class B Common Stock Class A Common Stock Class B Common Stock Private Placement Warrants 6,700,000 — 6,700,000 — Public Warrants 8,050,000 — 8,050,000 — Backstop Warrants 3,875,028 — 3,875,028 — Common Stock Warrants 4,525,000 568,905 4,525,000 568,905 Outstanding Stock Options 5,969,813 4,202,678 6,318,978 4,198,917 Outstanding Restricted Stock Units 29,238,710 175,184 19,322,240 263,052 Remaining Shares available for issuance under 2022 Equity Incentive Plan 9,338,297 — 20,794,363 — Shares available for issuance under 2022 Employee Stock Purchase Plan 5,052,643 — 3,274,070 — Total shares of common stock reserved 72,749,491 4,946,767 72,859,679 5,030,874 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Options Stock option activity under the Company’s incentive plan is as follows (in thousands, except share and per share amounts): Options Outstanding Number of Options Weighted–Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value Balance – December 31, 2022 10,521,571 $ 1.59 4.87 $ 61 Exercised (178,564) 0.38 Cancelled/forfeited (170,516) 2.82 Balance – March 31, 2023 10,172,491 1.59 4.05 98 Options vested and exercisable – March 31, 2023 9,040,393 $ 1.32 3.58 $ 98 No options were granted during three months ended March 31, 2023 and 2022. The total grant date fair value of options that vested during three months ended March 31, 2023 and 2022 was $0.1 million and $4.4 million, respectively. The aggregate intrinsic value of options exercised during the three months ended March 31, 2023 and 2022 was nominal and $0.4 million, respectively. The aggregate intrinsic value is the difference between the current fair value of the underlying common stock and the exercise price for in-the-money stock options. Market-Based Stock Options In February 2021, the Company granted 1,017,170 stock options with market and liquidity event-related performance-based vesting criteria with an exercise price of $3.77 per share. 100% of the stock options vest upon valuation of the Company’s stock at a stated price upon occurrence of specified transactions. Fair value was determined using the probability weighted expected term method (“PWERM”), which involves the estimation of future potential outcomes as well as values and probabilities associated with each potential outcome. Two potential scenarios were used in the PWERM that utilized 1) the value of the Company’s common equity, and 2) a Monte Carlo simulation to specifically value the award. The total grant date fair value of the award was determined to be $5.5 million. Since a liquidity event is not deemed probable until such event occurs, no compensation cost related to the performance condition was recognized prior to the Business Combination on June 16, 2022. Subsequently, the Company recorded stock-based compensation expense of $4.6 million for service periods completed prior to the Business Combination. As of March 31, 2023, the market-based vesting criteria had not been met. Restricted Stock Units The following table summarizes the activity for all RSU’s under all of the Company’s equity incentive plans for the three months ended March 31, 2023: Number of shares Weighted–Average Grant Date Fair Value Per Share Unvested – December 31, 2022 19,482,427 $ 1.75 Granted 13,314,042 0.43 Vested (2,549,326) 2.28 Cancelled/forfeited (833,249) 2.69 Balance – March 31, 2023 29,413,894 1.08 Employee Stock Purchase Plan In May 2022, the Company’s board of directors adopted the 2022 Employee Stock Purchase Plan (the “ESPP”), which was subsequently approved by the Company’s stockholders. The ESPP went into effect on November 16, 2022. Subject to certain limitations contained therein, the ESPP allows eligible employees to contribute, through payroll deductions, up to 20% of their eligible compensation to purchase the Company’s Class A common stock at a discounted price per share. As of March 31, 2023, no shares of Class A common stock had been purchased under the ESPP. Stock-Based Compensation Expense For the three months ended March 31, 2023 and 2022 , the Company recognized a total of $4.9 million and $4.5 million of stock-based compensation expense, respectively, related to stock options and RSUs granted to employees and non-employees. Stock-based compensation expense was predominately recorded in selling, general and administrative expenses in the statements of operations for each period presented. As of March 31, 2023, the total unrecognized compensation expense related to unvested options and RSUs was $28.6 million, which the Company expects to recognize over an estimated weighted average period of 2.3 years. |
Net loss Per Share Attributable
Net loss Per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net loss Per Share Attributable to Common Stockholders | Net loss Per Share Attributable to Common Stockholders The following potentially dilutive shares were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have been anti-dilutive (on an as-converted basis): Three Months Ended 2023 2022 Convertible preferred stock — 115,287,015 Contingently redeemable convertible common stock — 2,750,000 Common stock options 10,172,491 25,691,329 Restricted stock units 29,413,894 3,224,181 Convertible preferred stock warrants — 735,763 Common stock warrants 5,093,905 688,362 Private and Public Placement Warrants 14,750,000 — Earn-Out Shares 13,005,238 — Shares subject to repurchase — 16,539 Total 72,435,528 148,393,189 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn April 19, 2023, the Company entered into an amendment to the lease agreement for its warehousing facility located in St. Peters, Missouri to provide for, among other things, an extension of the lease term to September 2028. At the option of the Company, the lease may be extended an additional 5 years. The amendment requires the Company to make escalating undiscounted annual payments of up to $0.7 million, payable monthly. The Company is currently evaluating all the terms of this lease modification and its impact on the consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Liquidity | Basis of Presentation and Liquidity The Company’s unaudited condensed consolidated financial statements (the “condensed consolidated financial statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiary in which it holds controlling financial interest. All intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in accordance with GAAP applicable to interim financial statements. These financial statements are presented in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. As such, the information included herein should be read in conjunction with the Company’s financial statements and accompanying notes as of and for the year ended |
Comprehensive Loss | Comprehensive Loss Comprehensive loss represents all changes in stockholders’ deficit. The Company’s net loss was equal to its comprehensive loss for all periods presented. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. These estimates made by management include the determination of reserves amounts for the Company’s inventories on hand, useful life of intangible assets, sales returns and allowances and certain assumptions used in the valuation of equity awards, the estimated fair value of common stock liability classified Public and Private Placement Warrants, the fair value of Earn-Out liabilities, the fair value of Additional Shares liabilities, the fair value of the Structural Derivative Liability and stock based compensation expense. Actual results could differ from those estimates, and such estimates could be material to the Company’s financial position and the results of operations. |
Restricted Cash | Restricted CashShort-term restricted cash primarily represents cash on deposit with a financial institution to collateralize short-term obligations related to company credit cards. Long-term restricted cash primarily represents cash on deposit with a financial institution to collateralize letters of credit related to the Company’s non-cancellable operating leases for its corporate headquarters. Restricted cash is stated at cost, which approximates fair value. |
Concentration of Risks | Concentration of Risks Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. The Company maintains the majority of its cash, cash equivalents and restricted cash in accounts with one financial institution within the United States, generally in the form of demand accounts. Deposits in this institution may exceed federally insured limits. Management believes minimal credit risk exists with respect to this financial institution and the Company has not experienced any losses on such amounts. |
Revenue Recognition | Revenue Recognition The Company primarily generates revenue from the sale of both third-party and Grove Brands products through its DTC platform. Customers purchase products through the website or mobile application through a combination of directly selecting items from the catalog, items that are suggested by the Company’s recurring shipment recommendation engine, and features that appear in marketing on-site, in emails and on the Company’s mobile application. Most customers purchase a combination of products recommended by the Company based on previous purchases and new products discovered through marketing or catalog browsing. Customers can have orders auto-shipped to them on a specified date or shipped immediately through an option available on the website and mobile application. In order to reduce the environmental impact of each shipment, the Company has a minimum total sales order value threshold policy which is required to be met before the order qualifies for shipment. Payment is collected upon finalizing the order. The products are subsequently packaged and shipped to fill the order. Customers can customize future purchases by selecting products they want to receive on a specified cadence or by selecting products for immediate shipment. The Company also offers a VIP membership to its customers for an annual fee which includes the rights to free shipping, free gifts and early access to exclusive sales, all of which are available at the customers’ option, should they elect to make future purchases of the Company’s products within their annual VIP membership benefit period. Many customers receive a free 60-day VIP membership for trial purposes, typically upon their first qualifying order. After the expiration of this free trial VIP membership period, customers will be charged their annual VIP membership fee, which automatically renews annually, until cancelled. The customer is alerted before any VIP membership renews. In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains control of promised goods, in an amount that reflects the consideration that it expects to receive in exchange for those goods. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration, if any, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration to which it is entitled in exchange for the goods it transfers to a customer. A contract with a customer exists when the customer submits an order online for the Company’s products. Under this arrangement, there is one performance obligation which is the obligation for the Company to fulfill the order. Product revenue is recognized when control of the goods is transferred to the customer, which occurs upon the Company’s delivery to a third-party carrier. The VIP membership provides customers with a suite of benefits that are only accessible to them at their option, upon making a future qualifying order of the Company’s products. The VIP membership includes free shipping, a select number of free products and early access to exclusive sales. Under ASC 606, sales arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options; therefore, the Company must assess whether these options provide a material right to the customer and if so, they are considered a performance obligation. The Company concluded that its VIP membership benefits include two material rights, one related to the future discount (i.e., free shipping) on the price of the customer’s qualifying order(s) over the membership period and the second one relating to a certain number of free products provided at pre-set intervals within the VIP membership benefit period, that will only ship with a customer’s next qualifying order (i.e., bundled). At inception of the VIP membership benefit period, the Company allocates the VIP membership fee to each of the two material rights using a relative standalone selling price basis. Generally, standalone selling prices are determined based on the observable price of the good or service when sold separately to non-VIP customers and the estimated number of shipments and free products per benefit period. The Company also considers the likelihood of redemption when determining the standalone selling price for free products and then recognize these allocated amounts upon the shipment of a qualifying customer order. To date, customers buying patterns closely approximate a ratable revenue attribution method over the customers VIP Membership period. |
Fulfillment Costs | Fulfillment CostsFulfillment costs represent those costs incurred in operating and staffing the Company’s fulfillment centers, including costs attributable to receiving, inspecting and warehousing inventories, picking, packaging, and preparing customer orders for shipment (“Fulfillment Labor”), shipping and handling expenses, packaging materials costs and payment processing and related transaction costs. |
Fair Value Measurement | The Company measures certain financial assets and liabilities at fair value on a recurring basis. The Company determines fair value based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy. These levels are: Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. Financial instruments consist of cash equivalents, accounts payable, accrued liabilities, debt, Additional Shares, Earn-Out Shares Public and Private Placement Warrants and Structural Derivative. Cash equivalents, Earn-Out Shares, Public and Private Placement Warrants and Structural Derivative are stated at fair value on a recurring basis. Accounts payable and accrued liabilities are stated at their carrying value, which approximates fair value due to the short period time to the expected receipt or payment. The carrying amount of the Company’s outstanding debt approximates the fair value as the debt bears interest at a rate that approximates prevailing market rate. The Public Warrants are classified as Level 1 due to the use of an observable market quote in an active market. Private Placement Warrants are classified as Level 2 as the fair value approximates the fair value of the Public Warrants. The Private Placement Warrants are identical to the Public Warrants, with certain exceptions as defined in Note 7, Common Stock and Warrants . The Additional Shares and Earn-Out Shares are classified as Level 3 and their fair values were estimated using a Monte Carlo options pricing model utilizing assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimated the expected volatility assumption using an average of the implied volatility of its publicly traded warrants and an implied volatility based on its peer companies. The Structural Derivative Liability is a compound embedded derivative related to features within the Structural Debt Facility, including an increase in interest rate upon an event of default and the contingent issuance of the Structural Subsequent Shares as defined in Note 5, Debt . This liability is classified as Level 3 and is valued using a risk-neutral income approach related to an event of default occurring and expected cash flows in such a scenario and an income and Black-Scholes pricing model for the contingent issuance of the Structural Subsequent Shares utilizing assumptions related to expected stock price volatility, expected life, risk-free interest rate and dividend yield. The Company estimated the expected volatility assumption using an average of the implied volatility of its publicly traded warrants and an implied volatility based on its peer companies. |
Contingencies | ContingenciesThe Company records loss contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses material contingencies when a loss is not probable but reasonably possible. Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. Although the Company cannot predict with assurance the outcome of any litigation or non-income-based tax matters, the Company does not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on the Company’s financial position, operating results or cash flows |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following table sets forth revenue by product type (in thousands): Three Months Ended 2023 2022 Revenue, net: Grove Brands $ 34,976 $ 46,796 Third-party products 36,589 43,683 Total revenue, net $ 71,565 $ 90,479 |
Fair Value Measurements and F_2
Fair Value Measurements and Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022 by level within the fair value hierarchy (in thousands): March 31, 2023 Level 1 Level 2 Level 3 Total Financial Assets: Cash equivalents: Money market funds $ 78,213 $ — $ — $ 78,213 Total $ 78,213 $ — $ — $ 78,213 Financial Liabilities: Additional Shares — — 803 803 Earn-Out Shares — — 4,265 4,265 Private Placement Warrants — 364 — 364 Public Warrants 437 — — 437 Structural Derivative Liability — — 7,650 7,650 Total $ 437 $ 364 $ 12,718 $ 13,519 December 31, 2022 Level 1 Level 2 Level 3 Total Financial Assets: Cash equivalents: Money market funds $ 74,990 $ — $ — $ 74,990 Total $ 74,990 $ — $ — $ 74,990 Financial Liabilities: Additional Shares — — 580 580 Earn-Out Shares — — 4,122 4,122 Private Placement Warrants — 670 — 670 Public Warrants 805 — — 805 Structural Derivative Liability — — 7,050 7,050 Total $ 805 $ 670 $ 11,752 $ 13,227 |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a summary of changes in the estimated fair value of the Additional Shares liability (in thousands): Balance at December 31, 2022 $ 580 Change in fair value of Additional Shares Liability 223 Balance at March 31, 2023 $ 803 The following table provides a summary of changes in the estimated fair value of the Earn-Out liability (in thousands): Balance at December 31, 2022 $ 4,122 Cancellation of Earn-Out Shares $ (347) Change in fair value 490 Balance at March 31, 2023 $ 4,265 The following table provides a summary of changes in the estimated fair value of the Structural Derivative Liability (in thousands): Balance at December 31, 2022 $ 7,050 Change in fair value 600 Balance at March 31, 2023 $ 7,650 |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Observable Input Reconciliation | Private Placement Warrants Public Warrants Balance at December 31, 2022 $ 670 $ 805 Changes in fair value (306) (368) Balance at March 31, 2023 $ 364 $ 437 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of the following (in thousands): March 31, December 31, Inventory purchases $ 2,530 $ 2,757 Compensation and benefits 2,861 1,714 Advertising costs 1,020 1,203 Fulfillment costs 1,335 1,725 Sales taxes 1,509 1,374 Transaction costs — 17,500 Other accrued expenses 4,712 5,081 Total accrued expenses $ 13,967 $ 31,354 |
Debt and Convertible Preferred
Debt and Convertible Preferred Stock and Common Stock Warrants (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s outstanding debt, net of debt discounts, consisted of the following (in thousands): March 31, December 31, Structural Debt Facility $ 61,549 $ 60,620 Siena Revolver 7,500 — Atel Loan Facility Draw 3 292 480 Atel Loan Facility Draw 4 48 95 Total debt 69,389 61,195 Less: debt, current (340) (575) Total debt, noncurrent $ 69,049 $ 60,620 |
Common Stock and Warrants (Tabl
Common Stock and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Warrants Outstanding | As of March 31, 2023, the following Warrants were outstanding: Warrant Type Shares Exercise Price Public Warrants 8,050,000 $ 11.50 Private Placement Warrants 6,700,000 $ 11.50 |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | The fair value of Vested Warrants and Unvested Warrants granted to HGI was estimated at the date of grant using the Black-Scholes option-pricing model, with the following assumptions: Fair value of common stock $1.26 Expected term (in years) 4.5 Volatility 62.50% Risk-free interest rate 4.00% Dividend yield — |
Schedule of Reserved for Issuance | The Company has the following shares of common stock reserved for future issuance, on an as-if converted basis: March 31, 2023 December 31, 2022 Class A Common Stock Class B Common Stock Class A Common Stock Class B Common Stock Private Placement Warrants 6,700,000 — 6,700,000 — Public Warrants 8,050,000 — 8,050,000 — Backstop Warrants 3,875,028 — 3,875,028 — Common Stock Warrants 4,525,000 568,905 4,525,000 568,905 Outstanding Stock Options 5,969,813 4,202,678 6,318,978 4,198,917 Outstanding Restricted Stock Units 29,238,710 175,184 19,322,240 263,052 Remaining Shares available for issuance under 2022 Equity Incentive Plan 9,338,297 — 20,794,363 — Shares available for issuance under 2022 Employee Stock Purchase Plan 5,052,643 — 3,274,070 — Total shares of common stock reserved 72,749,491 4,946,767 72,859,679 5,030,874 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement, Option, Activity | Stock option activity under the Company’s incentive plan is as follows (in thousands, except share and per share amounts): Options Outstanding Number of Options Weighted–Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value Balance – December 31, 2022 10,521,571 $ 1.59 4.87 $ 61 Exercised (178,564) 0.38 Cancelled/forfeited (170,516) 2.82 Balance – March 31, 2023 10,172,491 1.59 4.05 98 Options vested and exercisable – March 31, 2023 9,040,393 $ 1.32 3.58 $ 98 |
Schedule of Performance-based Restricted Stock Units Activity | The following table summarizes the activity for all RSU’s under all of the Company’s equity incentive plans for the three months ended March 31, 2023: Number of shares Weighted–Average Grant Date Fair Value Per Share Unvested – December 31, 2022 19,482,427 $ 1.75 Granted 13,314,042 0.43 Vested (2,549,326) 2.28 Cancelled/forfeited (833,249) 2.69 Balance – March 31, 2023 29,413,894 1.08 |
Net loss Per Share Attributab_2
Net loss Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive shares were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have been anti-dilutive (on an as-converted basis): Three Months Ended 2023 2022 Convertible preferred stock — 115,287,015 Contingently redeemable convertible common stock — 2,750,000 Common stock options 10,172,491 25,691,329 Restricted stock units 29,413,894 3,224,181 Convertible preferred stock warrants — 735,763 Common stock warrants 5,093,905 688,362 Private and Public Placement Warrants 14,750,000 — Earn-Out Shares 13,005,238 — Shares subject to repurchase — 16,539 Total 72,435,528 148,393,189 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||
Accumulated deficit | $ 590,927 | $ 577,858 | |
Cash and cash equivalents | $ 81,653 | $ 74,428 | 81,084 |
Customer complementary membership period | 60 days | ||
Contractual liabilities | $ 9,152 | 10,878 | |
Fulfillment cost | 17,000 | 24,400 | |
Deferred Revenue | |||
Class of Stock [Line Items] | |||
Contractual liabilities | 9,200 | 10,900 | |
Contract with customer, liability, revenue recognized | 6,600 | ||
Other Current Liabilities | |||
Class of Stock [Line Items] | |||
Contractual liabilities | 200 | $ 200 | |
Contract with customer, liability, revenue recognized | 200 | ||
Shipping and Handling | |||
Class of Stock [Line Items] | |||
Fulfillment cost | 10,400 | 14,300 | |
Fulfillment Labor | |||
Class of Stock [Line Items] | |||
Fulfillment cost | $ 3,900 | $ 6,600 | |
Revenue Benchmark | Supplier Concentration Risk | Five Suppliers | |||
Class of Stock [Line Items] | |||
Concentration risk, percentage | 50% | 50% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue, net | $ 71,565 | $ 90,479 |
Grove Brands | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue, net | 34,976 | 46,796 |
Third-party products | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue, net | $ 36,589 | $ 43,683 |
Fair Value Measurements and F_3
Fair Value Measurements and Fair Value of Financial Instruments - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | $ 78,213 | $ 74,990 |
Financial Liabilities: | 13,519 | 13,227 |
Structural Derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 7,650 | 7,050 |
Additional Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 803 | 580 |
Earn-Out Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 4,265 | 4,122 |
Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 364 | 670 |
Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 437 | 805 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | 78,213 | 74,990 |
Financial Liabilities: | 437 | 805 |
Level 1 | Structural Derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Level 1 | Additional Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Level 1 | Earn-Out Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Level 1 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Level 1 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 437 | 805 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | 0 | 0 |
Financial Liabilities: | 364 | 670 |
Level 2 | Structural Derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Level 2 | Additional Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Level 2 | Earn-Out Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Level 2 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 364 | 670 |
Level 2 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | 0 | 0 |
Financial Liabilities: | 12,718 | 11,752 |
Level 3 | Structural Derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 7,650 | 7,050 |
Level 3 | Additional Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 803 | 580 |
Level 3 | Earn-Out Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 4,265 | 4,122 |
Level 3 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Level 3 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities: | 0 | 0 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | 78,213 | 74,990 |
Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | 78,213 | 74,990 |
Money market funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | 0 | 0 |
Money market funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | $ 0 | $ 0 |
Fair Value Measurements and F_4
Fair Value Measurements and Fair Value of Financial Instruments - Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Level 3 $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Earn-Out Shares | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2022 | $ 4,122 |
Cancellation of Earn-Out Shares | (347) |
Changes in fair value | 490 |
Balance at March 31, 2023 | 4,265 |
Structural Derivative | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2022 | 7,050 |
Changes in fair value | 600 |
Balance at March 31, 2023 | 7,650 |
Additional Share | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2022 | 580 |
Changes in fair value | 223 |
Balance at March 31, 2023 | $ 803 |
Fair Value Measurements and F_5
Fair Value Measurements and Fair Value of Financial Instruments - Schedule of Fair Value, Liabilities Measured on Recurring Basis, Observable Input Reconciliation (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Private Placement Warrants | Level 2 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Observable Input Reconciliation [Roll Forward] | |
Balance at December 31, 2022 | $ 670 |
Changes in fair value | (306) |
Balance at March 31, 2023 | 364 |
Public Warrants | Level 1 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Observable Input Reconciliation [Roll Forward] | |
Balance at December 31, 2022 | 805 |
Changes in fair value | (368) |
Balance at March 31, 2023 | $ 437 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Inventory purchases | $ 2,530 | $ 2,757 |
Compensation and benefits | 2,861 | 1,714 |
Advertising costs | 1,020 | 1,203 |
Fulfillment costs | 1,335 | 1,725 |
Sales taxes | 1,509 | 1,374 |
Transaction costs | 0 | 17,500 |
Other accrued expenses | 4,712 | 5,081 |
Accrued expenses | $ 13,967 | $ 31,354 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 69,389 | $ 61,195 |
Debt, current | (340) | (575) |
Debt, noncurrent | 69,049 | 60,620 |
Structural Lenders | Structural Debt Facility | ||
Debt Instrument [Line Items] | ||
Other long-term debt | 61,549 | 60,620 |
Siena Lending Group, LLC | Siena Revolver | ||
Debt Instrument [Line Items] | ||
Other long-term debt | 7,500 | 0 |
Atel | Atel Loan Facility Draw 3 | ||
Debt Instrument [Line Items] | ||
Other long-term debt | 292 | 480 |
Atel | Atel Loan Facility Draw 4 | ||
Debt Instrument [Line Items] | ||
Other long-term debt | $ 48 | $ 95 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
Dec. 21, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Jul. 21, 2025 | Mar. 10, 2023 | |
Debt Instrument [Line Items] | |||||||
Change in fair value of structural derivative liability | $ 600,000 | $ 0 | |||||
Payment of debt issuance costs | $ 837,000 | $ 0 | |||||
Atel Loan Facility Draw 3 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate, effective percentage | 19.23% | 19.23% | |||||
Atel Loan Facility Draw 4 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate, effective percentage | 19.23% | 19.23% | |||||
Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term line of credit | $ 7,500,000 | $ 7,500,000 | |||||
Line of Credit | Revolving Credit Facility | Loan And Security Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs, gross | 1,000,000 | 1,000,000 | |||||
Line of credit facility, additional borrowing capacity | $ 10,200,000 | $ 10,200,000 | |||||
Long-term debt, percentage bearing variable interest, percentage rate | 8.52% | 8.52% | |||||
Line of Credit | Secured Overnight Financing Rate (SOFR) | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.10% | ||||||
Line of Credit | Federal Funds Rate | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||
Line of Credit | Base Rate | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 5% | ||||||
Line of Credit | Minimum | Secured Overnight Financing Rate (SOFR) | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 3.75% | ||||||
Line of Credit | Minimum | Base Rate | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 2.75% | ||||||
Line of Credit | Maximum | Secured Overnight Financing Rate (SOFR) | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 5.50% | ||||||
Line of Credit | Maximum | Base Rate | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 4.50% | ||||||
Structural Lenders | Structural Debt Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 72,000,000 | ||||||
Debt instrument, interest rate, effective percentage | 20.34% | 20.34% | |||||
Debt instrument, covenant, minimum unrestricted cash required to maintain | 57,000,000 | ||||||
Debt instrument, unamortized discount (premium), net | $ 1,100,000 | ||||||
Payment of debt issuance costs | 3,300,000 | ||||||
Long-term debt, gross | $ 72,000,000 | $ 72,000,000 | |||||
Other long-term debt | 61,549,000 | 60,620,000 | 61,549,000 | ||||
Structural Lenders | Structural Debt Facility | Structural Derivative | Level 3 | |||||||
Debt Instrument [Line Items] | |||||||
Fair value, measurement with unobservable inputs reconciliation, recurring basis, liability, purchases | $ 7,100,000 | ||||||
Structural Lenders | Structural Debt Facility | Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, anniversary of closing date | 30 months | ||||||
Trading days prior to such date | 60 days | ||||||
Structural Lenders | Structural Debt Facility | Class A Common Stock | |||||||
Debt Instrument [Line Items] | |||||||
Number of shares issued | 4,950,000 | ||||||
Structural Lenders | Structural Debt Facility | Class A Common Stock | Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Contingently issuable shares, calculation, numerator | $ 9,900,000 | ||||||
Contingently issuable shares, calculation, maximum denominator | $ 2 | ||||||
Structural Lenders | Structural Debt Facility | Prime Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 7.50% | ||||||
Structural Lenders | Structural Debt Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate, effective percentage | 15% | ||||||
Siena Lending Group, LLC | Loan And Security Agreement | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 35,000,000 | ||||||
Atel | Atel Loan Facility | Tranche Three | |||||||
Debt Instrument [Line Items] | |||||||
Other long-term debt | 300,000 | 300,000 | |||||
Atel | Atel Loan Facility | Tranche Four | |||||||
Debt Instrument [Line Items] | |||||||
Other long-term debt | $ 100,000 | $ 100,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Long-Term Purchase Commitment [Line Items] | ||
Purchase obligation | $ 15.3 | $ 18.7 |
Standby Letters of Credit | ||
Long-Term Purchase Commitment [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 3.5 | $ 3.1 |
Common Stock and Warrants - Nar
Common Stock and Warrants - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | ||||||
Nov. 10, 2022 | Jul. 18, 2022 | Jun. 16, 2022 | Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Jul. 16, 2022 | |
Class of Warrant or Right [Line Items] | |||||||||
Reverse recapitalization, percentage of voting interests acquired | 100% | ||||||||
Proceeds from issuance of common stock, reverse recapitalization | $ 97,100 | ||||||||
Reverse recapitalization, transaction costs | $ 24,400 | ||||||||
Transaction costs | $ 0 | $ 0 | $ 0 | $ 17,500 | |||||
Decrease in accrued transaction costs | 13,400 | ||||||||
Increase to other income, net | 3,800 | ||||||||
Increase to additional paid in capital due to reduction of transaction costs | $ 9,600 | $ 9,609 | $ 0 | ||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Cancellation of earn-out shares (in shares) | 985,722 | ||||||||
Reverse recapitalization, contingent consideration, liability, earnout period | 10 years | ||||||||
Consulting fee expense | $ 150 | ||||||||
Stock-based compensation expense | $ 4,900 | $ 4,500 | |||||||
Standby Equity Purchase Agreement | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Purchase agreement, equity interests issuable, not yet issued | $ 100,000 | ||||||||
Purchase agreement, equity interests issuable, not yet issued, transaction period | 36 months | ||||||||
Sale of stock, exchange cap, maximum number of shares authorized to sell (in shares) | 32,557,664 | ||||||||
Sale of stock, exchange cap, percentage of shares outstanding | 19.99% | ||||||||
Sale of stock, ability to sell full commitment, share price threshold (in dollars per share) | $ 3.07 | ||||||||
Purchase agreement, volume weighted average price, percentage | 97.55% | ||||||||
Purchase agreement, deferred transaction cost | $ 700 | ||||||||
Sale of stock, number of shares issued in transaction (in shares) | 739,825 | ||||||||
Sale of stock, consideration received on transaction | $ 2,400 | ||||||||
Sale of stock, number of shares available in transaction (in shares) | 31,817,839 | ||||||||
HGI Subscription Agreement, Additional Shares | Sale Of Stock, Measurement Period One | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Sale of stock, covenant, volume weighted average price threshold, measurement period | 3 months | ||||||||
HGI Subscription Agreement, Additional Shares | Sale Of Stock, Measurement Period Two | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Sale of stock, covenant, volume weighted average price threshold, measurement period | 6 months | ||||||||
HGI Subscription Agreement, Additional Shares | Sale Of Stock, Measurement Period Three | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Sale of stock, covenant, volume weighted average price threshold, measurement period | 9 months | ||||||||
Private Placement Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Class of warrant or right, outstanding (in shares) | 6,700,000 | 6,700,000 | 6,700,000 | ||||||
Exercise price (in dollars per share) | $ 11.50 | $ 11.50 | $ 11.50 | $ 11.50 | |||||
Number of days after the completion of an initial business combination | 30 days | 30 days | 30 days | ||||||
Public Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Class of warrant or right, outstanding (in shares) | 8,050,000 | 8,050,000 | 8,050,000 | ||||||
Exercise price (in dollars per share) | $ 11.50 | $ 11.50 | $ 11.50 | ||||||
HGI Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 1.26 | ||||||||
Warrants issued (in shares) | 4,525,000 | ||||||||
Warrant shares, shares vesting rights, percentage | 40% | ||||||||
Warrants, covenant, quarterly net revenue | $ 100,000 | ||||||||
Warrants, equity ownership percentage | 25% | ||||||||
Warrant, exercise price, increase, percentage | 50% | ||||||||
Vested Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Stock-based compensation expense | $ 1,200 | ||||||||
Class B Common Stock | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | ||||||||
Reverse recapitalization, contingent consideration, liability (in shares) | 13,999,960 | ||||||||
Class A Common Stock | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Class of warrant or right, number of securities called by each warrant or right (in shares) | 1 | ||||||||
Reverse recapitalization, contingent consideration, liability (in shares) | 13,014,238 | ||||||||
Class A Common Stock | Corvina Holdings Limited | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Class of warrant or right, number of securities called by each warrant or right (in shares) | 1 | 1 | 1 | ||||||
Class of warrants or rights warrants issued during period (in shares) | 3,875,028 | 3,875,028 | 3,875,028 | ||||||
Share price (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Number of shares exercised by warrants at period end | 0 | 0 | 0 | ||||||
Class A Common Stock | HGI Subscription Agreement | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Sale of stock, number of shares issued in transaction (in shares) | 1,984,126 | ||||||||
Sale of stock, consideration received on transaction | $ 2,500 | ||||||||
Class A Common Stock | HGI Subscription Agreement, Additional Shares | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Sale of stock, number of shares issued in transaction (in shares) | 0 | ||||||||
Sale of stock, covenant, volume weighted average price threshold (in dollars per share) | $ 1.26 | ||||||||
Sale of stock, covenant, volume weighted average price threshold, trading period | 3 days | ||||||||
Class A Common Stock | Public Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Number of warrant or right, entitles to purchase (in shares) | 1 | ||||||||
Class of warrants redemption notice period | 30 days | ||||||||
Class of warrants or rights redemption price per unit (in dollars per share) | $ 0.01 | ||||||||
Share redemption trigger price (in dollars per share) | $ 18 | ||||||||
Class A Common Stock | Public Warrants | Minimum | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Class of warrant or right redemption threshold consecutive trading days | 20 days | ||||||||
Class A Common Stock | Public Warrants | Maximum | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Class of warrant or right redemption threshold consecutive trading days | 30 days | ||||||||
Class A Common Stock | Reverse Recapitalization Tranche One | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Reverse recapitalization, contingent consideration, liability (in shares) | 6,507,310 | ||||||||
Reverse recapitalization, contingent consideration, liability, earnout period, stock price trigger (in dollars per share) | $ 12.50 | ||||||||
Reverse recapitalization contingent consideration, liability, earnout period, threshold trading days | 20 days | ||||||||
Reverse recapitalization, contingent consideration, liability, earnout period, threshold trading day period | 30 days | ||||||||
Class A Common Stock | Reverse Recapitalization Tranche Two | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Reverse recapitalization, contingent consideration, liability (in shares) | 6,506,928 | ||||||||
Reverse recapitalization, contingent consideration, liability, earnout period, stock price trigger (in dollars per share) | $ 15 | ||||||||
Reverse recapitalization contingent consideration, liability, earnout period, threshold trading days | 20 days | ||||||||
Reverse recapitalization, contingent consideration, liability, earnout period, threshold trading day period | 30 days | ||||||||
2022 Equity Incentive Plan | Class B Common Stock | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Recapitalization exchange ratio | 1.1760 |
Common Stock and Warrants - Sch
Common Stock and Warrants - Schedule of Warrants Oustanding (Details) - $ / shares | Mar. 31, 2023 | Jul. 16, 2022 |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Class of warrant or right, outstanding (in shares) | 8,050,000 | |
Exercise price (in dollars per share) | $ 11.50 | |
Private Placement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Class of warrant or right, outstanding (in shares) | 6,700,000 | |
Exercise price (in dollars per share) | $ 11.50 | $ 11.50 |
Common Stock and Warrants - S_2
Common Stock and Warrants - Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares | |
Unvested Warrant | |
Class of Warrant or Right [Line Items] | |
Fair value of common stock (in dollars per share) | $ 1.26 |
Expected term (in years) | 4 years 6 months |
Volatility | 62.50% |
Risk-free interest rate | 4% |
Dividend yield | 0% |
Vested Warrants | |
Class of Warrant or Right [Line Items] | |
Fair value of common stock (in dollars per share) | $ 1.26 |
Expected term (in years) | 4 years 6 months |
Volatility | 62.50% |
Risk-free interest rate | 4% |
Dividend yield | 0% |
Common Stock and Warrants - S_3
Common Stock and Warrants - Schedule of Reserved for Issuance (Details) - shares | Mar. 31, 2023 | Dec. 31, 2022 |
Class A Common Stock | ||
Class of Warrant or Right [Line Items] | ||
Private placement warrant, shares reserved for future issuance (in shares) | 6,700,000 | 6,700,000 |
Public warrant, shares reserved for future issuance (in shares) | 8,050,000 | 8,050,000 |
Backstop warrant, shares reserved for future issuance (in shares) | 3,875,028 | 3,875,028 |
Common stock warrant, shares reserved for future issuance (in shares) | 4,525,000 | 4,525,000 |
Outstanding stock option, shares reserved for future issuance (in shares) | 5,969,813 | 6,318,978 |
Outstanding restricted stock unit, shares reserved for future issuance (in shares) | 29,238,710 | 19,322,240 |
Shares available for issuance under 2022 Employee Stock Purchase Plan (in shares) | 5,052,643 | 3,274,070 |
Total shares of common stock reserved (in shares) | 72,749,491 | 72,859,679 |
Class B Common Stock | ||
Class of Warrant or Right [Line Items] | ||
Private placement warrant, shares reserved for future issuance (in shares) | 0 | 0 |
Public warrant, shares reserved for future issuance (in shares) | 0 | 0 |
Backstop warrant, shares reserved for future issuance (in shares) | 0 | 0 |
Common stock warrant, shares reserved for future issuance (in shares) | 568,905 | 568,905 |
Outstanding stock option, shares reserved for future issuance (in shares) | 4,202,678 | 4,198,917 |
Outstanding restricted stock unit, shares reserved for future issuance (in shares) | 175,184 | 263,052 |
Shares available for issuance under 2022 Employee Stock Purchase Plan (in shares) | 0 | 0 |
Total shares of common stock reserved (in shares) | 4,946,767 | 5,030,874 |
2022 Equity Incentive Plan | Class A Common Stock | ||
Class of Warrant or Right [Line Items] | ||
Shares available for future issuance under equity incentive plan (in shares) | 9,338,297 | 20,794,363 |
2022 Equity Incentive Plan | Class B Common Stock | ||
Class of Warrant or Right [Line Items] | ||
Shares available for future issuance under equity incentive plan (in shares) | 0 | 0 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share-Based Payment Arrangement, Option, Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Number of Options | |||
Options outstanding, beginning of period (in shares) | 10,521,571 | ||
Exercised (in shares) | (178,564) | ||
Cancelled/forfeited (in shares) | (170,516) | ||
Options outstanding, ending of period (in shares) | 10,172,491 | ||
Options vested and exercisable (in shares) | 9,040,393 | ||
Weighted–Average Exercise Price | |||
Options outstanding, beginning of period (in dollars per share) | $ 1.59 | ||
Exercised (in dollars per share) | 0.38 | ||
Cancelled/forfeited (in dollars per share) | 2.82 | ||
Options outstanding, ending of period (in dollars per share) | 1.59 | ||
Options vested and exercisable (in dollars per share) | $ 1.32 | ||
Weighted-Average Remaining Contractual Life (years) | |||
Options, outstanding (in years) | 4 years 18 days | 4 years 10 months 13 days | |
Options vested and exercisable (in years) | 3 years 6 months 29 days | ||
Aggregate Intrinsic Value | |||
Options, outstanding, aggregate intrinsic value | $ 98 | $ 61 | |
Options, vested and exercisable, aggregate intrinsic value | $ 98 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 11 Months Ended | ||
May 31, 2022 | Feb. 28, 2021 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) shares | Mar. 31, 2022 USD ($) shares | Mar. 31, 2023 USD ($) shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | shares | 0 | 0 | |||
Share-based compensation arrangement by share-based payment award, options, vested in period, fair value | $ 0.1 | $ 4.4 | |||
Share-based compensation arrangement by share-based payment award, options, exercisable, aggregate intrinsic value | 0 | 0.4 | $ 0 | ||
Stock-based compensation expense | 4.9 | $ 4.5 | |||
Share-based payment arrangement, nonvested award, cost not yet recognized, amount | $ 28.6 | $ 28.6 | |||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition (in years) | 2 years 3 months 18 days | ||||
Market-based Stock Options | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | shares | 1,017,170 | ||||
Share-based compensation arrangement by share-based payment award, options, exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 3.77 | ||||
Vesting rights, percentage | 100% | ||||
Share-based compensation arrangement by share-based payment award, options, grant date, fair value | $ 5.5 | ||||
Stock-based compensation expense | $ 4.6 | ||||
Employee Stock | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, maximum employee contributions, percentage of eligible compensation | 0.20 | ||||
Number of shares purchased | shares | 0 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Performance-based Restricted Stock Units Activity (Details) - Restricted stock units | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Options | |
Outstanding and unvested, beginning of period (in shares) | shares | 19,482,427 |
Granted (in shares) | shares | 13,314,042 |
Vested (in shares) | shares | (2,549,326) |
Cancelled/forfeited (in shares) | shares | (833,249) |
Outstanding and unvested, ending of period (in shares) | shares | 29,413,894 |
Weighted–Average Exercise Price | |
Outstanding and unvested, beginning of period (in dollars per share) | $ / shares | $ 1.75 |
Granted (in dollars per share) | $ / shares | 0.43 |
Vested (in dollars per share) | $ / shares | 2.28 |
Cancelled/forfeited (in dollars per share) | $ / shares | 2.69 |
Outstanding and unvested, ending of period (in dollars per share) | $ / shares | $ 1.08 |
Net loss Per Share Attributab_3
Net loss Per Share Attributable to Common Stockholders (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 72,435,528 | 148,393,189 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 0 | 115,287,015 |
Contingently redeemable convertible common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 0 | 2,750,000 |
Common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 10,172,491 | 25,691,329 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 29,413,894 | 3,224,181 |
Convertible preferred stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 0 | 735,763 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 5,093,905 | 688,362 |
Private and Public Placement Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 14,750,000 | 0 |
Earn-Out Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 13,005,238 | 0 |
Shares subject to repurchase | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total net income (loss) per share attributable to common stockholders, basic and diluted (in shares) | 0 | 16,539 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Apr. 19, 2023 USD ($) |
Subsequent Event [Line Items] | |
Operating lease, renewal term | 5 years |
Operating lease, liability, undiscounted annual amount | $ 0.7 |