Convertible Preferred Stock

In March 2018, upon completion of our IPO, all shares of convertible preferred stock then outstanding, totaling 72,500,750 shares, were automatically converted into an equivalent number of shares of common stock on a one-to-one basis. Additionally, the carrying amount of the redeemable convertible preferred stock of $207.3 million, inclusive of accretion of Series C and D redeemable convertible preferred stock of $24.7 million, was reclassified to stockholders’ equity (deficit). In connection with the IPO, we filed an Amended and Restated Certificate of Incorporation which authorizes the issuance of 200,000,000 shares of undesignated preferred stock with a par value of $0.001 with rights and preferences, including voting rights, designated from time to time by our board of directors. We did not have shares of convertible preferred stock issued and outstanding as of July 31, 2018.

Convertible preferred stock consisted of the following as of July 31, 2017:



	Shares Authorized	Issued and Outstanding	Carrying Value		Liquidation Preference		Issue Price per Share
	(in thousands, except per share data)
Series A	28,000	28,000	$	5,000	$	5,000	$	0.18
Series B	25,000	24,856	30,095		30,200		$	1.22
Series C	7,500	7,375	37,897		37,980		$	5.15
Series D	12,600	12,270	127,985		128,196		$	8.97
Total	73,100	72,501	$	200,977	$	201,376

In September 2015, we amended our Amended and Restated Certificate of Incorporation and increased the number of Series D preferred stock authorized for sale and issuance to 12,492,749 shares. We also amended our Series D preferred stock purchase agreement to permit the sale of an additional 2,788,560 shares of Series D redeemable convertible preferred stock at $8.9652 per share for total gross proceeds of $25.0 million.

The holders of our convertible preferred stock had various rights, preferences and privileges, which are summarized as follows:

Conversion Rights

Each share of our preferred stock was convertible, at the option of its holder, into the number of fully paid and non-assessable shares of common stock, which results from dividing the applicable original issue price per share by the applicable conversion price per share on the date that the share certificate is surrendered for conversion. As of July 31, 2017, the conversion prices per share for all shares of preferred stock were equal to the original issue prices, and the rate at which each share would convert into common stock was one-for-one. As discussed above, upon completion of our IPO, all our outstanding shares of convertible preferred stock were automatically converted to common stock.

Dividend Rights

Each holder of the Series A, B, C and D convertible preferred stock was entitled to receive, out of any funds legally available, noncumulative dividends at the rate of $0.0142875, $0.0972, $0.412305 and $0.71721 per share, respectively, per annum, payable in preference and priority to any payment of any dividends on common stock when and if declared by our board of directors. The right to receive dividends on shares of preferred stock was not cumulative. No dividends were declared through the date our convertible preferred stock was automatically converted to common stock upon completion of our IPO.

Liquidation Rights

In the event of any liquidation, dissolution or winding up of the Company, holders of Series A, B, C and D convertible preferred stock were entitled to receive, in preference to holders of the common stock, an amount per share equal to the greater of (a) the sum of the liquidation preference, which was $0.178575 for a Series A share, $1.215 for a Series B share, $5.14965 for a Series C share and $8.9652 plus 8% compounded annually from the initial issuance date for a Series D share, plus all declared but unpaid dividends or (b) the amount that would be received on such share of redeemable convertible preferred stock if such share were converted to a share of common stock immediately prior to such liquidation event. All remaining assets would then be distributed pro rata to holders of common stock. A liquidation event was deemed to be outside of our control.

Voting Rights

The holders of Series A, B, C and D convertible preferred stock were entitled to the number of votes equal to the number of shares of common stock into which such preferred stock was convertible. The holders of the preferred stock were entitled to vote on all matters on which the common stockholders are entitled to vote. So long as at least 1,333,333 shares (as adjusted for recapitalization) of each of the Series A, B, C and D convertible preferred stock remained outstanding, the holders of each of the Series A, B, C and D convertible preferred stock, voting as a separate class, were entitled to select one member of our board of directors.

Redemption Rights

Series C redeemable convertible preferred stock was redeemable at any time after the sixth anniversary of the initial issuance of the Series D redeemable convertible preferred stock. Series D redeemable convertible preferred stock was redeemable at any time after its sixth anniversary. The redemption price per share for Series C was equal to its original issue price of $5.14965 plus all declared and unpaid dividends. The redemption price per share for Series D was equal to the original issue price of $8.9652 plus 8% per annum, compounded annually, from the issuance date through its redemption date. As the redemption of Series C and D was not solely within our control and was contingent only on the passage of time, we considered probable that the instruments would become redeemable. Accordingly, both Series C and D redeemable convertible preferred stock were accreted to their redemption prices utilizing the effective interest method through their automatic conversion to common stock upon completion of our IPO. While Series A, B, C and D convertible preferred stock did not have mandatory redemption provisions, they were contingently redeemable upon a deemed liquidation event.

We recognized accretion to the redemption price of Series C and D redeemable convertible preferred stock of $6.3 million, $9.6 million and $8.6 million in fiscal 2018, 2017 and 2016, respectively. Accretion was recognized as a reduction of additional paid-in capital with a corresponding increase to the carrying amount of Series C and D redeemable convertible preferred stock, which is presented within redeemable convertible preferred stock in the consolidated balance sheets. As described above, upon completion of our IPO, the accretion rights of Series C and D redeemable convertible preferred stock were terminated and their carrying amount of $207.3 million, inclusive of cumulative accretion of $24.7 million, was reclassified to stockholders' equity (deficit).

Classification of Convertible Preferred Stock

The redemption provisions of the Series C and Series D redeemable convertible preferred stock were considered provisions that were not solely within our control. Also, the deemed liquidation preference provisions of the Series A, B, C and D convertible preferred stock were considered contingent redemption provisions that were not solely within our control. Accordingly, our convertible preferred stock had been presented outside of permanent equity in the mezzanine section of the consolidated balance sheet as of July 31, 2017.