Redeemable Convertible Preferred Stock

12 Months Ended

Mar. 31, 2022

Temporary Equity Disclosure [Abstract]

As of March 31, 2021, there were three outstanding series of redeemable convertible preferred stock, each with a par value of $0.001 per share. Upon completion of the IPO in June 2021, all shares of the Company’s redeemable convertible preferred stock outstanding, totaling 76,286,618, were automatically converted into an equivalent number of shares of Class B common stock on a one-to-one basis. The carrying value of redeemable convertible preferred stock of $81.5 million was reclassified into stockholders’ equity. As of March 31, 2022, there were no shares of redeemable convertible preferred stock issued or outstanding.

A summary of the redeemable convertible preferred stock outstanding as of March 31, 2021 and other related information is as follows (in thousands):


Series	Shares Authorized	Shares Issued and Outstanding	Carrying Value		Liquidation Preference
A	27,636	27,636	$	10,677	$	10,756
B	26,314	26,314	17,014		17,075
C	22,400	22,337	53,767		53,841
Total	76,350	76,287	$	81,458	$	81,672

The rights, preferences, privileges, restrictions, and other matters relating to the redeemable convertible preferred stock are summarized as follows:

Liquidation Preference—In the event of any liquidation event, either voluntary or involuntary, the holders of Series A, Series B, and Series C redeemable convertible preferred stock were entitled to receive, in priority and preference to common stockholders’ liquidation preference, $0.3892, $0.6488925 and $2.4104 per share, respectively.

After paying the holders of the redeemable convertible preferred stock of their full respective preferential amounts, all of the remaining assets of the Company would be distributed on a pro rata basis among the holders of common stock.

Redemption—The redeemable convertible preferred stock was classified as mezzanine equity on the consolidated balance sheets. The redeemable convertible preferred stock was not mandatorily redeemable; however, upon the event of a voluntary or involuntary liquidation, dissolution, change in control, or winding up of the Company, holders of the redeemable convertible preferred stock may have had the right to receive their liquidation preference under the terms of the preferred stockholder agreements. Accordingly, the preferred stockholders were entitled to redemption features that were not solely within the control of the Company.

Dividends—The holders of Series A, Series B, and Series C redeemable convertible preferred stock were entitled to receive noncumulative dividends at the per annum rate of $0.03115, $0.0519, and $0.19285 per share, respectively, in preference and priority to any common stockholder, when and if declared by the board of directors. If, after such dividends above were paid or set apart for payment in any fiscal year, the board of directors declared additional dividends out of funds legally available, then such additional dividends would be set aside or paid among the holders of the redeemable convertible preferred stock and common stock on a pro-rata basis. No dividends on redeemable convertible preferred stock or common

stock were declared by the board of directors from inception through the date the redeemable convertible preferred stock was converted into Class B common stock in June 2021.

Voting—The holders of redeemable convertible preferred stock had the same voting rights as the holders of common stock. The holders of common stock and redeemable convertible preferred stock voted together as a single class. Each holder of common stock was entitled to one vote for each share of common stock held and each holder of redeemable convertible preferred stock was entitled to the number of votes equal to the number of shares of common stock into which such shares of redeemable convertible preferred stock could then be converted. So long as at least 2,000,000 shares of redeemable convertible preferred stock remained outstanding, the holders of redeemable convertible preferred stock were entitled to elect two members of the board of directors. The holders of a majority of the common stock were entitled to elect two members of the board of directors. Any additional member of the board of directors was elected by the holders of a majority of the then outstanding redeemable convertible preferred stock and common stock, each voting as separate classes (and, with respected to redeemable convertible preferred stock, on an as-converted basis).

Conversion—Each share of redeemable convertible preferred stock was convertible to common stock at the option of the holder. Such conversion was determined by dividing the original issue price by the then effective conversion price (adjusted for any stock dividends, combinations, or splits with respect to such shares).

Each share of redeemable convertible preferred stock would be automatically converted into shares of common stock at the conversion rate at the time in effect for such series of redeemable convertible preferred stock immediately upon the earlier of (i) the Company’s sale of its common stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act of 1933, as amended, with a price per share of at least $2.41 (adjusted for any stock dividends, combinations, or splits with respect to such shares) and an aggregate offering price of at least $50 million or (ii) the date specified by written consent or agreement of the majority of the holders of redeemable convertible preferred stock, voting together as a single class on an as-converted basis.

Redeemable Convertible Preferred Stock Warrants—In August 2012, the Company issued warrants to purchase 38,322 shares of Series B redeemable convertible preferred stock at an exercise price of $0.65 per share. The warrants were issued to investors in connection with the Series B redeemable convertible preferred stock warrants financing. The fair value of the warrants at issuance was $14,000 based on the Black-Scholes option-pricing model using the assumptions of dividend yield of 0%, volatility of 55%, risk-free interest rate of 1.13%, and contractual life of seven years. The warrants were exercised during the fiscal year ended March 31, 2020.