10. CONVERTIBLE PREFERRED STOCK

Upon the closing of the Company’s IPO on July 22, 2014, all shares of convertible preferred stock then outstanding converted into 6,048,220 shares of common stock, and a subordinated convertible note previously issued by the Company in the principal amount of $5.0 million converted into 510,777 shares of common stock.

Convertible preferred stock as of December 31, 2013 consisted of the following:


	Shares
Series	Authorized		Outstanding		Carrying Value		Liquidation Value
A		79,708		16,930	$	267,000	$	290,000
B		145,221		16,065		826,143		853,143
C		850,899		829,209		14,139,373		14,200,373
D		965,672		877,880		18,459,000		20,024,985
E		857,323		835,547		26,423,000		26,499,984
F		1,463,859		1,441,053		50,443,000		50,541,097
G		2,055,272		1,138,989		24,644,515		24,811,238

Total		6,417,954		5,155,673	$	135,202,031	$	137,220,820

At December 31, 2013, the convertible preferred stock was classified as temporary equity on the Company’s balance sheets. These shares were contingently redeemable upon events that were outside of the control of the Company, including a liquidation, sale or transfer of control. Prior to the automatic conversion of the convertible preferred stock to common stock upon the IPO in July 2014, the Company did not adjust the carrying values of its convertible preferred stock to their redemption values since it was uncertain whether or when a redemption event would occur.

Dividends

Prior to conversion of all convertible preferred stock into common stock upon the Company’s IPO, holders of Series A, Series B, Series C, Series D, Series E, Series F, and Series G convertible preferred stock were entitled to noncumulative dividends of $1.199, $3.720, $1.199, $1.596, $2.219, $2.459, and $1.528 per share, respectively, if and when declared by the Board of Directors. These dividends were to be paid in advance of any distributions to common stockholders. No dividends were declared prior to the conversion of the convertible preferred stock into common stock upon the IPO.

Conversion

At December 31, 2013, each share of Series A, Series C, Series D, Series E, Series F, and Series G convertible preferred stock was convertible, at the option of the holder, into one share of common stock. Each share of Series B convertible preferred stock was convertible at the option of the holder into 0.18611 shares of common stock. The initial conversion prices for shares of Series A, Series B, Series C, Series D, Series E, Series F, and Series G convertible preferred stock were $17.12, $13.43, $17.12, $21.78, $21.78, $21.78, and $21.78 per share, respectively. Upon the Company’s IPO, all shares of convertible preferred stock were converted into shares of common stock.

Liquidation Preference

Prior to conversion of all convertible preferred stock into common stock upon the Company’s IPO, in the event of the liquidation or dissolution of the Company, the Series A, Series B, Series C, Series D, Series E, Series F, and Series G convertible preferred stock carried liquidation preferences of $17.12, $53.09, $17.12, $22.81, $31.72, $35.07, and $21.78 per share, respectively, plus all declared but unpaid dividends. Holders of Series D and Series E convertible preferred stock had liquidation preference subsequent to the holders of Series F and Series G convertible stock. Holders of Series F convertible preferred stock had liquidation preference subsequent to holders of Series G convertible stock. Holders of Series A, Series B, and Series C convertible preferred stock had liquidation preference subsequent to the holders of Series D, Series E, Series F, and Series G convertible preferred stock. After liquidation preferences to all convertible preferred stockholders have been paid, the remaining assets of the Company shall be distributed among the holders of common stock.

Voting Rights

Prior to conversion of all convertible preferred stock into common stock upon the Company’s IPO, each holder of shares of Series A, Series B, Series C, Series D, Series E, Series F, and Series G convertible preferred stock was entitled to voting rights equivalent to the number of shares of common stock into which their respective shares were convertible. So long as 14,599 shares of Series C convertible preferred stock remained outstanding, the holders of Series C convertible preferred stock were entitled to elect three members to the Company’s Board of Directors. So long as 14,599 shares of Series D and Series E convertible preferred stock remained outstanding, the holders of Series D and Series E convertible preferred stock were entitled to elect one member to the Board of Directors. So long as 14,599 shares of Series F and Series G convertible preferred stock remained outstanding, the holders of Series F and Series G convertible preferred stock were entitled to elect one member to the Company’s Board of Directors. The holders of Series A and B convertible preferred stock and the holders of common stock, voting together as a single class, were entitled to elect three members to the Board of Directors.