Convertible Notes, Convertible Preferred Stock and Common and Preferred Stock Warrants

8% Convertible Promissory Notes (8% Notes)

In July 2018, the $221.6 million including principal and accrued interest of outstanding 8% Notes automatically converted into shares of Class B common stock. See Note 6 - Outstanding Loans and Security Agreements for details. Upon the Company's IPO, the original 8% Notes converted to shares of Series G convertible preferred stock at a conversion price of $38.64 per share and, concurrently, each such share of Series G convertible preferred stock converted automatically into one share of Class B common stock. Upon IPO, the Company issued 5,734,440 shares of Class B common stock were issued as a result of the note conversions. The Company recorded the debt retirement with a charge of $221.6 million to additional paid-in capital.

Convertible Preferred Stock

The following table summarizes the Company’s convertible preferred stock as of the conversion date (in thousands, except share data):



	Shares Authorized	Shares Issued and Outstanding	Carrying Value at Conversion

Series A preferred	9,374,101	9,374,101	$	8,956
Series B preferred	7,868,854	7,868,854	11,941
Series C preferred	5,979,062	5,979,062	44,928
Series D preferred	6,443,818	6,443,818	102,648
Series E preferred	9,486,362	9,486,362	198,264
Series F preferred	14,597,248	13,885,893	376,962
Series G preferred	26,712,107	18,702,072	722,142
	80,461,552	71,740,162	$	1,465,841

The shares of the Company's convertible preferred stock were convertible into an equal number of shares of Class B common stock upon the completion of the IPO and the Company issued 71,740,162 shares of Class B common stock. As of September 30, 2018, there were no convertible preferred stock shares outstanding.

Preferred Stock Warrants

The following table summarizes the warrants outstanding, together with their respective fair values, as of the respective dates (in thousands, except warrants outstanding):



	September 30, 2018			December 31, 2017
	Warrants Outstanding	Fair Value of Warrants		Warrants Outstanding	Fair Value of Warrants

Series F	—	$	—	581,182	$	8,378
Series G	—	—		279,606	1,447
	—	$	—	860,788	$	9,825

The Company accounted for its preferred stock warrant liability at fair value. The Company recorded a gain of $1,487 during the three months ended September 30, 2018 due to the change in warrant's fair value. The Company recorded a gain of a gain of $8,943 during the nine months ended September 30, 2018 attributable to the change in warrant's fair value. These gains and losses were included in other income (expense), net in the consolidated statement of operations.

The warrants for the Company's convertible preferred stock were exercisable into an equal number of shares of Class B common stock upon the completion of the IPO in July 2018. The 860,788 preferred stock warrants were converted to common stock warrants of Class B shares and the warrant liability of $0.9 million was eliminated from the consolidated balance sheets with a charge to additional paid-in capital as a result of the conversion.

Common Stock Warrants

CPPIB Common Stock Warrants - During 2016, in connection with the 6% Convertible Promissory Notes entered in December 2015 and September 2016, the Company recorded a $9.2 million warrant expense for convertible redeemable common stock warrants issued to J.P. Morgan and CPPIB, to purchase the Company’s common stock up to a maximum of 146,666 shares and 166,222 shares, respectively. During 2017, the fair value of the right to common stock warrants was re-measured and $0.2 million in warrant expenses was charged to the consolidated statement of operations. On August 31, 2017, J.P. Morgan assigned their warrants to CPPIB and all 312,888 warrant shares were issued to CPPIB and the Company reclassified the $9.4 million of accrued warrant liabilities to additional paid-in capital. The warrants were not subject to further remeasurement for fair value.

Effective with the IPO, the 312,888 CPPIB warrants were net exercised for 312,575 shares of Class B common stock.

Other Common Stock Warrants - During 2014 and in connection with a dispute settlement with the principals of a securities placement agent, the Company issued warrants to purchase 33,333 shares of the Company’s common stock at $38.64 per share. The fair value of $3.3 million was recorded as expense in the consolidated statements of operations in 2013 when it was determined that the obligation became probable. The common stock warrants were immediately exercisable for Class B common shares effective with the IPO, subject to the debt repayment requirements in the settlement agreement, and have not been exercised.