| Redeemable Convertible Preferred Shares | 17. REDEEMABLE CONVERTIBLE PREFERRED SHARES As of January 1, 2020, the Company had outstanding preferred shares as follows:
• 5,910,100 10.0
• 8,985,050 Pre-A 0.72 6.5
• 22,096,550 0.79
• 1,060,200 Series A+ preferred shares at US$1.65 per share for a total cash consideration of US$1.8 million in October 2018;
• 17,140,700 Series B preferred shares at US$2.36 per share for a total cash consideration of US$40.4 million in November 2018;
• 11,072,800 Series B2 preferred shares at US$2.71 per share for a total cash consideration of US$30.0 million in January 2019;
• 2,332,400 Series B preferred shares at US$2.36 per share for a total cash consideration of US$5.5 million in March 2019;
• 7,803,400 ordinary shares held by the Founder were re-designated (Note 13);
• 28,013,200 Series B3 preferred shares at US$3.93 per share for a total cash consideration of US$110.0 million in May 2019; and
• 6,989,700 Series B4 preferred shares at US$4.29 per share for a total cash consideration of US$30.0 million in June 2019 In April 2020, the Company issued 39,952,300 Series C1 preferred shares to certain investors at US$7.77 per share for a total cash consideration of US$310.5 million. In addition, the Company also issued 11,377,300 Series C1 preferred shares to convertible noteholders who were required to convert their 2019 Convertible Notes upon the closing of the Series C1 preferred shares financing. In April 2020, the Company issued 6,664,000 Series B4-1 In April 2020, the Company issued 465,550 Series Angel+ preferred shares to EatTogether and 605,600 Series B4-1 In March 2021, the Company issued 6,989,750 Series B4 preferred shares to an investor upon the exercise of the Series B4 Warrant for a total cash consideration of US$30.0 million (Note 4). In March 2021, the Company issued 2,895,100 Series C1 preferred shares to an investor at US$7.77 per share for a total cash consideration of US$22.5 million. In March 2021, the Company issued 49,207,650 Series D redeemable convertible preferred shares to existing shareholders and certain investors for an aggregate consideration of In May 2021, the Company issued 21,264,750 Series D+ redeemable convertible preferred shares to certain investors for an aggregate consideration of Upon the completion of the Company’s IPO in June 2021, all the issued and outstanding Preferred Shares were automatically converted into 250,826,100 Class A Ordinary Shares. The key terms of the Series D+, Series D, Series C1, Series B4, Series B4-1, Pre-A, Conversion rights Each holder of the Preferred Shares has the right, at the sole discretion of the holder, to convert at any time and from time to time, all or any portion of the Preferred Shares into ordinary shares based on the then-effective Conversion Price. The initial conversion ratio shall be on a one for one basis, subject to certain anti-dilution adjustments, as adjusted for the Share Subdivision. The Preferred Shares are converted automatically into ordinary shares at the then effective applicable conversion price, as adjusted for the Share Subdivision in the event of a Qualified IPO. Redemption rights Prior to the issuance of the Series C1 preferred shares in April 2020, all of the Preferred Shares are redeemable at the holders’ option at any time after the occurrence of (i) a Qualified IPO or a Qualified Trade Sale of the Company has not occurred on December 31, 2024; or (ii) the occurrence of certain events including breach or violation of applicable laws or regulations by the Founder. Upon the issuance of the Series C1 preferred shares, all of the Preferred Shares are redeemable at the holders’ option at any time after the occurrence of (i) a Qualified IPO or a Qualified Trade Sale of the Company has not occurred on March 31, 2025; or (ii) the occurrence of certain events including breach or violation of applicable laws or regulations by the Founder. Upon the issuance of the Series D preferred shares in March 2021, all of the Preferred Shares are redeemable at the holders’ option at any time after the occurrence of (i) a Qualified IPO or a Qualified Trade Sale of the Company has not occurred on March 31, 2026; or (ii) the occurrence of certain events including breach or violation of applicable laws or regulations by the Founder. Upon the issuance of the Series D+ preferred shares in May 2021, all of the Preferred Shares are redeemable at the holders’ option at any time after the occurrence of (i) a Qualified IPO or a Qualified Trade Sale of the Company has not occurred on May 11, 2026; or (ii) the occurrence of certain events including breach or violation of applicable laws or regulations by the Founder. The redemption price of each preferred share other than the Series Angel preferred share and Series Angel+ preferred share equals to (i) the original issue price as adjusted for the Share Subdivision, plus (ii) % annual compound interest calculated from the actual payment date of the original issue price, plus (iii) all accrued but unpaid dividends. The redemption price of the Series Angel preferred share and the Series Angel+ preferred share equals to the original issue price as adjusted for the Share Subdivision, plus % annual simple interest calculated from the actual payment date of the original issue price. Voting rights Each Preferred Shareholder is entitled to the number of votes equal to the number of ordinary shares into which such Preferred Shares could be converted at the voting date. Preferred shareholders will vote together with ordinary shareholders, and not as a separate class or series, on all matters put before the shareholders. Dividend rights Each preferred shareholder shall be entitled to receive dividends at a rate no less than the rate at which dividends are paid on any ordinary share for each Preferred Shares held by such holders, payable in cash. All accrued but unpaid dividends shall be paid in cash when and as such cash becomes legally available to the holders of the Preferred Shares immediately prior to the closing of a Qualified IPO. In the event the Company shall declare a dividend or distribution other than in cash, each p For the years ended December 31, 2019, 2020 and 2021, dividends were declared by the Company’s Board of Directors on the Preferred Shares. Liquidation rights In the event of any liquidation, dissolution or winding up of the Company, the assets of the Company legally available for distribution to the shareholders shall be distributed in the following manner and order: Preferred shareholders of Series D+, Series D, Series C1, Series B4, Series B4-1, Pre-A Preferred shareholders of Series Angel+ and Series Angel shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Company to the holders of any previous preferred shares and ordinary shares, the amount equal to 100% of the original issue price as adjusted for the Share Subdivision on each preferred share. The liquidation preference amount will paid to the preferred shareholders in the following order: first to holders of Series D+ preferred shares, second to holders of Series D preferred shares, third to holders of Series C1 preferred shares, forth to holders of Series B4 preferred shares, fifth to holders of Series B4-1 Pre-A Initial measurement and subsequent accounting for Preferred Shares The Preferred Shares are initially classified as mezzanine equity in the consolidated balance sheets as these Preferred Shares may be redeemed at the options of the holders on or after an agreed upon date outside the sole control of the Group. The holders of the Preferred Shares have the ability to convert the instrument into the Company’s ordinary shares. The Preferred Shares are recognized at their respective fair value at the date of issuance, net of issuance costs. The issuance costs for Series B, Series B2, Series B3, Series B4, Series C1, Series D preferred shares and Series D+ preferred shares were million (US$3.0 million), million (US$6.1 million) and million (US$3.3 million) respectively. In 2019, the Company received total cash proceeds, net of issuance costs of The Group evaluated the embedded conversion option in the Preferred Shares to determine if there were any embedded derivatives requiring bifurcation and to determine if there were any beneficial conversion features (“BCF”). The conversion option of the Preferred Shares is not bifurcated because the conversion option is clearly and closely related to the host equity instrument. The contingent redemption options of the Preferred Shares are not bifurcated because the underlying ordinary shares are not net settable since the Preferred Shares were neither publicly traded nor readily convertible into cash. There were no other embedded derivatives that are required to be bifurcated. Beneficial conversion features (“BCF”) exist when the conversion price of the Preferred Shares is lower than the fair value of the ordinary shares at the commitment date, which is the issuance date of the Preferred Shares. No BCF was recognized for the Preferred Shares as the fair value per ordinary share at the commitment date was less than the respective most favorable conversion price, as adjusted for the Share Subdivision. The Group determined the fair value of the Company’s ordinary shares with the assistance of an independent third-party valuation firm. The contingent conversion price adjustment is accounted for as a contingent BCF. In accordance with ASC 470-20-35-1, As the Preferred Shares will become redeemable solely based on the passage of time should the contingent events not occur, the Company chose to recognize the changes in redemption value as they occur over the period from the date of issuance to the earliest redemption date to equal the redemption value of the Preferred Shares at each reporting period. Accretion charges were recorded as an increase to the net loss attributable to ordinary shareholders and were RMB74.6 million, RMB320.3 million and RMB288.4 million (US$45.3 million) for the years ended December 31, 2019, 2020 and 2021, respectively. Modification and Extinguishment of Preferred Shares Upon the issuance of the Series C1 preferred shares in March 2020, Series D preferred shares in March 2021 and Series D+ preferred shares in May 2021, the redemption term of any previously issued series of preferred shares were modified to be the same as the redemption term of the Series C1, Series D and Series D+ preferred shares. As a result, the earliest redemption date was extended from December 31, 2024 to March 31, 2025 upon issuance of the Series C1 preferred shares, from March 31, 2025 to March 31, 2026 upon issuance of the Series D preferred share and from March 31, 2026 to May 11, 2026 upon issuance of the Series D+ preferred shares, in the event the Company does not complete a Qualified IPO. Further, as part of the Reorganization described in Note 1, the shareholders of Shanghai 100me surrendered their equity interests in Shanghai 100me in exchange for the Company’s redeemable convertible preferred shares in proportion to their ownership interests in Shanghai 100me at a price equal to their original investment principal in Shanghai 100me. The terms of the Company’s redeemable convertible preferred shares equity interests were substantially similar to the terms of the equity interests held by the shareholders of Shanghai 100me. The Company assessed whether there was a change in fair value of each modification of preferred shares exceeding 10% immediately after the change in terms compared to the fair value of the preferred shares immediately before the amendment at each modification date. A change in fair value exceeding 10% would result in extinguishment accounting, while a change in fair value not exceeding 10% would be considered non-substantive The Company accounts for modifications that result in an increase to the fair value of the modified preferred shares as a deemed dividend reconciling net loss to net loss attributable to ordinary shareholders as there is a transfer of value from the ordinary shareholders to the preferred shareholders. With the assistance of an independent third-party valuation firm, the Company determined that the change in fair value for each modification did not exceed 10% and did not result in any substantial increase to the fair value of the modified preferred shares. Therefore, there was no financial impact recognized for the preferred share modifications in the periods presented. The Company’s preferred shares activities for the years ended December 31, 2019, 2020 ad 2021, respectively, are summarized below:
Series Angel Series Angel+ Series Pre-A Series A Preferred Series A+ Preferred Series B Preferred
(in thousands of RMB and US$, except for number of shares)
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
Balance as of 5,910,100 10,800 — — 8,985,050 47,004 22,096,550 122,088 1,060,200 12,272 17,140,700 277,706
Issuance of Preferred — — — — — — — — — — 2,332,400 37,159
Re-designation — — 7,803,400 18,577 — — — — — — — —
Accretion of Preferred — 864 — (37,233 ) — 3,760 — 9,767 — 982 — 25,369
Deemed dividend — — — 46,168 — — — —
Balance as of 5,910,100 11,664 7,803,400 27,512 8,985,050 50,764 22,096,550 131,855 1,060,200 13,254 19,473,100 340,234
Balance as of 5,910,100 11,664 7,803,400 27,512 8,985,050 50,764 22,096,550 131,855 1,060,200 13,254 19,473,100 340,234
Issuance of Preferred — — 465,550 10,967 — — — — — — — —
Accretion of Preferred — 736 — 2,207 — 4,032 — 10,482 — 1,054 — 24,185
Balance as of 5,910,100 12,400 8,268,950 40,686 8,985,050 54,796 22,096,550 142,337 1,060,200 14,308 19,473,100 364,419
Balance as of 5,910,100 12,400 8,268,950 40,686 8,985,050 54,796 22,096,550 142,337 1,060,200 14,308 19,473,100 364,419
Issuance of Preferred
Accretion of Preferred — 396 — 1,151 — 2,126 — 5,521 — 555 — 17,949
Automatic conversion of IPO (5,910,100 ) (12,796 ) (8,268,950 ) (41,837 ) (8,985,050 ) (56,922 ) (22,096,550 ) (147,858 ) (1,060,200 ) (14,863 ) (19,473,100 ) (382,368 )
Balance as of — — — — — — — — — — — —
Balance as of — — — — — —
Series B2 Series B3 Series B4-1 Series B4 Series C1 Series D Series D+
(in thousands of RMB and US$, except for number of shares)
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
Balance as of — — — — — — — — — — — — — —
Issuance of 11,072,800 203,707 28,013,200 737,920 — — 6,989,700 195,952 — — — — — —
Accretion of — 16,323 — 45,884 — — — 8,842 — — — — — —
Balance as of 11,072,800 220,030 28,013,200 783,804 — — 6,989,700 204,794 — — — — — —
Balance as of 11,072,800 220,030 28,013,200 783,804 — — 6,989,700 204,794 — — — — — —
Issuance of — — — — 7,269,600 259,914 — — 51,329,600 2,799,817 — — — —
Accretion of — 16,109 — 57,341 — 24,171 — 15,697 — 164,287 — — — —
Balance as of 11,072,800 236,139 28,013,200 841,145 7,269,600 284,085 6,989,700 220,491 51,329,600 2,964,104 — — — —
Balance as of 11,072,800 236,139 28,013,200 841,145 7,269,600 284,085 6,989,700 220,491 51,329,600 2,964,104 — — — —
Issuance of — — — — — — 6,989,750 359,832 2,895,100 158,507 49,207,650 4,547,263 21,264,750 2,099,195
Accretion of — 11,702 — 39,479 — 3,871 — (99,577 ) — 133,863 — 128,382 — 42,962
Automatic (11,072,800 ) (247,841 ) (28,013,200 ) (880,624 ) (7,269,600 ) (287,956 ) (13,979,450 ) (480,746 ) (54,224,700 ) (3,256,474 ) (49,207,650 ) (4,675,645 ) (21,264,750 ) (2,142,157 )
Balance as of — — — — — — — — — — — — — —
Balance as of — — — — — — — |
