Redeemable Convertible Preferred Stock

9 Months Ended

Sep. 30, 2019

Temporary Equity Disclosure [Abstract]

Upon completion of the IPO, all shares of Series A, Series B, and Series C redeemable convertible preferred stock then outstanding, totaling 134,276,690 shares, were automatically converted into an equivalent number of shares of Class B common stock on a one-to-one basis and all shares of Series D redeemable convertible preferred stock outstanding, totaling 31,381,152 shares, were automatically converted into an equivalent number of shares of Class A common stock on a one-to-one basis. The carrying value of $331.5 million was reclassified into stockholders' equity (deficit). As of September 30, 2019, there were no shares of redeemable convertible preferred stock issued and outstanding.

In connection with the IPO, the Company's amended and restated certificate of incorporation became effective, which authorized the issuance of 225,000,000 shares of preferred stock with a par value of $0.001 per share with rights and preferences, including voting rights, designated from time to time by the Company's board of directors.

Redeemable Convertible Preferred Stock Warrants

In connection with the terms of a loan and security agreement entered into by the Company in April 2011, the Company issued a warrant to purchase 59,140 shares of Series B redeemable convertible preferred stock upon execution of the agreement, an additional warrant to purchase 94,510 shares of Series B redeemable convertible preferred stock in connection with the Company’s drawdown of $1.6 million under the facility during October 2011, and a warrant to purchase 23,760 shares of Series B redeemable convertible preferred stock in connection with the final drawdown of $0.4 million in January 2012. The warrants had an exercise price of $0.34 per share. The warrants were considered a liability and carried at fair value with any changes in fair value recognized in other income (expense), net in the condensed consolidated statements of operations. Upon completion of the IPO, the warrants to purchase Series B redeemable convertible preferred stock were automatically converted to warrants to

purchase an equal number of shares of Class B common stock. As a result, the warrant liability was remeasured and reclassified to additional paid-in capital within stockholders' equity (deficit).

During the three months ended September 30, 2019 and 2018, the Company recorded a loss of $1.2 million and $1.0 million, respectively, and during the nine months ended September 30, 2019 and 2018 the Company recorded a loss of $1.5 million and $1.2 million, respectively, related to the change in fair value of the redeemable convertible preferred stock warrants.

The fair value of the redeemable convertible preferred stock warrants was determined using the following assumptions:


	September 17, 2019		December 31, 2018


Remaining contractual life (in years)	1.6		2.3
Expected volatility	38.8	%	39.2	%
Risk-free interest rate	1.8	%	2.5	%
Expected dividend rate	—		—

In the three and nine months ended September 30, 2019, the warrants were exercised and such shares were settled via the net settlement method, resulting in the issuance of 174,347 shares of the Company's Class B common stock.