XML 23 R13.htm IDEA: XBRL DOCUMENT v3.22.2.2
Warrants and Stockholders’ Equity (Deficit)
9 Months Ended
Sep. 30, 2022
Equity [Abstract]  
Warrants and Stockholders’ Equity (Deficit) Warrants and Stockholders’ Equity (Deficit)
The condensed consolidated statements of mezzanine equity and stockholders’ equity (deficit) reflect the closing of the Business Combination on January 18, 2022. As Legacy Sonder was deemed the accounting acquirer in the Business Combination with GMII, all periods prior to the closing date reflect the balances and activity of Legacy Sonder. The balances at December 31, 2021 from the consolidated financial statements of Legacy Sonder as of that date, share activity (redeemable convertible preferred stock, exchangeable shares, and common stock), and per share amounts were retroactively adjusted, where applicable, using the recapitalization exchange ratio of 1.4686. All redeemable convertible preferred stock classified as mezzanine equity was converted into common stock, and reclassified into permanent equity as a result of the Business Combination.

Preferred Stock Warrants

The Company had the following preferred stock warrants outstanding at December 31, 2021 (number outstanding and exercise price are prior to the application of the recapitalization exchange ratio discussed above):
Type of WarrantNumber OutstandingIssuance DateExercise PriceExpiration Date
Series A59,440 10/20/2016$1.36 10/20/2026
Series B57,696 1/30/2018$2.40 1/30/2028
Series C218,417 12/28/2018$5.04 12/28/2025
Series D71,456 2/21/2020$10.50 2/21/2027
Upon the closing of the Business Combination, (i) the Series A and Series B preferred stock warrants were converted into 150,092 post-combination shares of the Company’s common stock for a value of $1.2 million, and (ii) the Series C and Series D preferred stock warrants automatically converted into warrants to purchase shares of the Company’s common stock.
The Series C and Series D preferred stock warrants are accounted for as equity in accordance with ASC 815-40, Derivatives and Hedging – Contracts on an Entity’s Own Equity (“ASC 815-40”). Upon the closing of the Business Combination, the Company reclassified $2.0 million related to such warrants from other non-current liabilities to equity in the condensed consolidated balance sheet.
Common Stock Warrants

Delayed Draw Warrants: The Delayed Draw Warrants are accounted for as equity-classified warrants in accordance with ASC 815-40. Upon the closing of the Business Combination, the value of the Delayed Draw Warrants was $5.6 million and was recorded within additional paid-in capital in the condensed consolidated balance sheets. The purchasers of the Delayed Draw Notes were also provided with customary registration rights for the shares issuable upon exercise of the Delayed Draw Warrants.

Public Warrants: The Public Warrants remained outstanding at the closing of the Business Combination and became exercisable for whole shares of common stock. No fractional Public Warrants were issued upon separation of the units and only whole Public Warrants trade. Accordingly, unless a registered holder purchased at least five units, they were not able to receive or trade a whole Public Warrant. The Public Warrants will expire on January 18, 2027, or earlier upon redemption or liquidation.

The Public Warrants are accounted for as liabilities, as there are certain terms and features of the warrants that do not qualify for equity classification in accordance with ASC 815-40. The fair value of the Public Warrants upon the closing of the Business Combination was a liability of $23.6 million, and was recorded in other non-current liabilities in the condensed consolidated balance sheet. At September 30, 2022, the fair value was $1.1 million and was recorded in other non-current liabilities in the condensed consolidated balance sheet. The change in fair value of $0.8 million and $22.5 million for the three and nine months ended September 30, 2022, respectively, is reflected as other income in the condensed consolidated statements of operations and comprehensive loss.

Private Placement Warrants: The Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants, except that the Private Placement Warrants may be physical (cash) or net share (cashless) settled and are not redeemable, so long as they are held by Gores Metropoulos Sponsor II, LLC (the “Sponsor”) or its permitted transferees, and are entitled to certain registration rights. The sale of the Private Placement Warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

The Private Placement Warrants are accounted for as liabilities, as there are certain terms and features that do not qualify for equity classification in accordance with ASC 815-40. The fair value of the Private Placement Warrants upon the closing of the Business Combination was a liability of $14.5 million, which was recorded in other non-current liabilities in the condensed consolidated balance sheet. At September 30, 2022, the fair value was $0.7 million and was recorded in other non-current liabilities in the condensed consolidated balance sheet. The change in fair value of $0.5 million and $13.8 million for the three and nine months ended September 30, 2022, respectively, is reflected as other income in the condensed consolidated statements of operations and comprehensive loss.

Exchangeable Stock
Upon the closing of the Business Combination, each share of Sonder Canada Inc., a corporation existing under the laws of the province of Québec (“Legacy Sonder Canada”) exchangeable common stock (“Legacy Sonder Canada Exchangeable Stock” and collectively, “Legacy Sonder Canada Exchangeable Shares”) was exchanged into a new series of the same class of virtually identical Legacy Sonder Canada Exchangeable Common Stock (“Post-Combination Exchangeable Common Stock” and collectively, “Post-Combination Exchangeable Shares”) exchangeable for the Company’s common stock. At September 30, 2022, the Company had the following authorized and outstanding Post-Combination Exchangeable Common Stock (in thousands except per share amounts):

Shares
Authorized
Shares
Issued and
Outstanding
Issuance
Price
 Per Share
Net
 Carrying
Value
Aggregate
Liquidation
Preference
Post-Combination Exchangeable Common Stock40,000,000 20,834,164 $1.54 $32,081 $32,081 
The net carrying value of the Post-Combination Exchangeable Shares is included in additional paid-in capital in the condensed consolidated balance sheets.
At December 31, 2021, the Company had the following authorized and outstanding Exchangeable Shares, prior to the application of the recapitalization exchange ratio discussed above (in thousands except shares and per share amounts):
 Shares
Authorized
Shares
Issued and
Outstanding
Issuance
Price
Per Share
Net
Carrying
Value
Aggregate
Liquidation
Preference
Series AA Common22,517,608 9,421,190 $— $— $— 
Series Seed 12,588,866 2,588,866 $0.53 $1,359 $1,372 
Series Seed 21,209,160 1,209,160 $0.50 $606 $605 
Series Seed 3704,380 704,380 $1.09 $787 $768 
Series A183,420 183,420 $1.36 $250 $250 
Series B2,335,500 2,335,500 $2.40 $5,610 $5,605 
Series C3,175,207 3,175,207 $5.04 $15,991 $16,003 
Series D2,057,926 1,953,125 $10.50 $20,600 $20,600 
Series E420,570 420,570 $10.77 $4,530 $4,530 
Total exchangeable shares35,192,637 21,991,418 $— $49,733 $49,733 
Upon the closing of the Business Combination, all the Exchangeable Shares were automatically converted into 32,296,539 Post-Combination Exchangeable Shares for a value of $49.7 million (or 21,991,418 shares prior to the application of the recapitalization exchange ratio discussed above).

Redeemable Convertible Preferred Stock

The Company had the following authorized and outstanding redeemable convertible preferred stock at December 31, 2021, prior to the application of the recapitalization exchange ratio discussed above (in thousands except per share amounts):
Shares
Authorized
Shares
Issued and
Outstanding
Issuance
Price
 Per Share
Net
 Carrying
Value
Aggregate
Liquidation
Preference
Series Seed 13,702,526 785,420$0.53 $269 $416 
Series Seed 1-A3,702,526 328,2400.53 $174 $174 
Series Seed 21,719,560 470,9940.50 $222 $235 
Series Seed 2-A1,719,560 39,4060.50 $20 $20 
Series Seed 3704,380 1.09 $— $— 
Series Seed 3-A704,380 1.09 $— $— 
Series A7,023,193 6,780,3331.36 $9,241 $9,221 
Series A-17,023,193 1.36 $— $— 
Series B15,611,276 13,218,0802.40 $27,105 $31,723 
Series B-115,611,276 2.40 $— $— 
Series C19,070,648 12,143,6315.04 $56,496 $61,204 
Series C-119,070,648 3,513,5365.04 $17,708 $17,708 
Series D21,603,476 3,481,89310.50 $35,808 $36,560 
Series D-121,603,476 16,049,36510.50 $168,518 $168,518 
Series E34,932,992 18,956,18410.77 $203,189 $204,159 
Total redeemable convertible preferred stock173,803,110 75,767,082— $518,750 $529,938 
Upon the closing of the Business Combination, all the shares of redeemable convertible preferred stock were automatically converted into shares of post-combination common stock for a value of $518.8 million.
Common and Preferred Stock
The Company’s amended and restated certificate of incorporation following the Business Combination authorizes the issuance of 690,000,000 shares, consisting of: (a) 440,000,000 shares of general common stock (“General Common Stock”), including: (i) 400,000,000 shares of common stock, and (ii) 40,000,000 shares of Special Voting Common Stock (“Special Voting Common Stock”), and (b) 250,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”).
As of September 30, 2022, the Company had reserved the following shares of common stock for future issuance:
September 30, 2022
Conversion of exchangeable shares20,873,522 
Outstanding stock options32,655,185 
Outstanding restricted stock units (“RSUs”)26,337,247 
Outstanding market stock units (“MSUs”)14,499,972 
Outstanding warrants liability14,499,966 
Shares issuable pursuant to Earn Out liability14,500,000 
Outstanding Delayed Draw Note warrants liability2,475,000 
Shares available for grant under the Employee Stock Purchase Plan5,251,225 
Shares available for grant under the 2021 Equity Incentive Plan13,466,630 
Total common stock reserved for future issuance144,558,747 
As of December 31, 2021, the Company reserved the following shares of common stock for future issuance:
December 31, 2021
Conversion of preferred stock and exchangeable shares(1)
208,995,747 
Outstanding stock options
19,865,244 
Options available for grant under the 2019 Equity Incentive Plan
1,859,784 
Total common stock reserved for future issuance
230,720,775 
____________
(1)Includes the warrants reclassified to equity as of December 31, 2021 and those issued in connection with the 2018 Loan and Security Agreement and related amendment as of December 31, 2021.