Quarterly report pursuant to Section 13 or 15(d)

Temporary Equity and Stockholders' Equity

v3.21.2
Temporary Equity and Stockholders' Equity
 9 Months Ended
Sep. 30, 2021
Stockholders' Equity Note [Abstract]  
Temporary Equity and Stockholders' Equity
NOTE 9 – TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
The Company operates subject to the terms and conditions of the Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) dated September 30, 2021. 
Capital Stock
As of September 30, 2021; the Company authorized up to 350,000,000 shares of capital stock, consisting of 315,000,000 shares of common stock and 35,000,000 shares of preferred stock. As of September 30, 2021, 71,810,419 shares of common stock and zero shares of preferred stock were issued and outstanding.
Series A Preferred Stock
The Board authorized up to 7,765,229 Series A preferred shares. As of September 30, 2021 and December 31, 2020, there were zero and 7,756,158 Series A preferred shares issued and outstanding, respectively. The shares were issued at a discount of 2%. Series A preferred shareholders are entitled to receive a cumulative preferred dividend at the rate of thirteen percent (13%) per year on the sum of the par value plus unpaid preferred dividends through the date of such distribution on a pari passu basis with Series
A-1
and Series B shareholders and in preference to all other shareholders. The Company had the option to redeem the Series A preferred shares for par value plus unpaid preferred dividends. Series A preferred shareholders had an option to put the shares back to the Company for par value plus unpaid preferred dividends on or after April 11, 2027. The Company determined that the put option is a redemption event not solely within the control of the Company. Therefore, the Series A preferred stock is classified outside of permanent equity (i.e., temporary equity) and presented at its redemption value. Upon closing of the Business Combination, all Series A preferred shares were settled with a redemption value of $85.2 
million in cash. The Company no longer had shares of Series A Preferred Stock authorized, issued or outstanding as of September 30, 2021. The terms and rights of the Series A Preferred Stock described previously represent the terms and rights prior to the closing of the Business Combination. 
Series
A-1
Preferred Stock
The Board authorized up to 10,480,538 Series
A-1
preferred shares. As of September 30, 2021 and December 31, 2020, there were zero and 7,862,107 Series
A-1
preferred shares issued and outstanding, respectively. The shares were issued at a discount of 2%. Series
A-1
preferred shareholders are entitled to receive a cumulative preferred dividend at the rate of thirteen-point seven five percent (13.75%) per year on the sum of the par value plus unpaid preferred dividends through the date of such distribution on a pari passu basis with Series A and Series B shareholders and in preference to all other shareholders. The Company had the option to redeem the Series
A-1
Preferred shares for par value plus unpaid preferred dividends subject to a current redemption premium of 1%. Series
A-1
preferred shareholders had an option to put the shares back to the Company for par value plus unpaid preferred dividends on or after April 11, 2027. The Company determined that the put option is a redemption event not solely within the control of the Company. Therefore, the Series
A-1
Preferred Stock is classified outside of permanent equity (i.e., temporary equity) and presented at its redemption value. Upon closing of the Business Combination, all Series
A-1
preferred shares were settled with a redemption value of $86.9 
million. Certain Series A-1 preferred shareholders elected to received shares of common stock of the Company in lieu of cash. The Company no longer had shares of Series A-1 Preferred Stock authorized, issued or outstanding as of September 30, 2021. The terms and rights of the Series A-1 Preferred Stock described previously represent the terms and rights prior to the closing of the Business Combination. 
 
Series B Preferred Stock
The Board authorized up to 9,090,975 Series B preferred shares. As of September 30, 2021 and December 31, 2020, there were zero and 9,090,975 Series B preferred shares issued and outstanding, respectively. Series B preferred shareholders are entitled to receive a cumulative preferred dividend at the rate of ten percent (10%) per year on the sum of the unreturned par value plus unpaid preferred dividends through the date of such distribution on a pari passu basis with Series A and Series
A-1
shareholders and in preference to all other shareholders. On or after October 11, 2018, the Company has the option to redeem the Series B Preferred shares for par value plus unpaid preferred dividends. Because the controlling shareholder is the majority holder of Series B preferred shares, the Company redemption option functions as a holder put option. Accordingly, the Company determined that the option could result in a redemption that is not solely within the control of the Company. Therefore, the Series B Preferred stock is classified outside of permanent equity (i.e., temporary equity) and presented at its redemption value each period. Upon closing of the Business Combination, all Series B preferred shares were settled with a redemption value of $97.8 
million. Certain Series B preferred shareholders elected to received shares of common stock of the Company in lieu of cash. The Company no longer had shares of Series B Preferred Stock authorized, issued or outstanding as of
September 30, 2021. The terms and rights of the Series B Preferred Stock described previously represent the terms and rights prior to the closing of the Business Combination. 
A summary of the accumulated but unpaid preferred dividends for the Series A, Series
A-1
and Series B preferred shares as of March 31, June 30, and September 30, 2021 and March 31, June 30, and September 30, 2020, is as follows:
 
                                                                            
(in ‘000)
   
Series A
     
Series
A-1
     
Series B
  
Accumulated and unpaid, December 31, 2020
   
$
34,812
 
   
$
18,608
 
   
$
33,910
 
Accumulated
   
 
2,486
 
   
 
2,666
 
   
 
2,241
 
Distributed
   
 
—  
 
   
 
—  
 
   
 
—  
 
    
 
 
     
 
 
     
 
 
  
Accumulated and unpaid, March 31, 2021
   
$
37,298
 
   
$
21,274
 
   
$
36,151
 
    
 
 
     
 
 
     
 
 
  
Accumulated
   
 
2,514
 
   
 
2,695
 
   
 
2,323
 
    
 
 
     
 
 
     
 
 
  
Distributed
   
 
—  
 
   
 
—  
 
   
 
—  
 
    
 
 
     
 
 
     
 
 
  
Accumulated and unpaid, June 30, 2021
   
$
39,812
 
   
$
23,969
 
   
$
38,474
 
    
 
 
     
 
 
     
 
 
  
Accumulated
   
 
2,656
 
   
 
2,880
 
   
 
2,361
 
    
 
 
     
 
 
     
 
 
  
Distributed
   
 
(42,468
) 
   
 
(26,849
) 
   
 
(40,835
) 
    
 
 
     
 
 
     
 
 
  
Accumulated and unpaid, September 30, 2021
   
$
—  
 
   
$
—  
 
   
$
—  
 
    
 
 
     
 
 
     
 
 
  
 
                                                                            
(in ‘000)
   
Series A
     
Series A-1
     
Series B
  
Accumulated and unpaid, December 31, 2019
   
$
25,610
 
   
$
8,794
 
   
$
25,338
 
Accumulated
   
 
2,216
 
   
 
2,359
 
   
 
2,053
 
Distributed
   
 
—  
 
   
 
—  
 
   
 
—  
 
    
 
 
     
 
 
     
 
 
  
Accumulated and unpaid, March 31, 2020
   
$
27,826
 
   
$
11,153
 
   
$
27,391
 
    
 
 
     
 
 
     
 
 
  
Accumulated
   
 
2,215
 
   
 
2,359
 
   
 
2,104
 
    
 
 
     
 
 
     
 
 
  
Distributed
   
 
—  
 
   
 
—  
 
   
 
—  
 
    
 
 
     
 
 
     
 
 
  
Accumulated and unpaid, June 30, 2020
   
$
30,041
 
   
$
13,512
 
   
$
29,495
 
    
 
 
     
 
 
     
 
 
  
Accumulated
   
 
2,385
 
   
 
2,548
 
   
 
2,180
 
    
 
 
     
 
 
     
 
 
  
Distributed
   
 
—  
 
   
 
—  
 
   
 
—  
 
    
 
 
     
 
 
     
 
 
  
Accumulated and unpaid, September 30, 2020
   
 
32,426
 
   
 
16,060
 
   
 
31,675
 
    
 
 
     
 
 
     
 
 
  
 
The redemption value of Series A, Series
A-1
and Series B preferred stock is equal to the par value of $1,000 per share plus the above accumulated unpaid dividends and any applicable redemption premium.
Series C Convertible Preferred Stock
The Board authorized up to 6,872,894 Series C convertible preferred
shares
. As of September 30, 2021 and December 31, 2020, there were zero and 2,566,186 Series C convertible preferred shares issued and outstanding, respectively. Subordinate to the payment of dividends to Series A, Series
A-1
and Series B preferred shareholders, the Series C shareholders are entitled to receive dividends equal to 1.5X initial investment in conjunction with common stock, then subject to a
catch-up,
followed by pro rata sharing thereafter. Series C convertible preferred shareholders have a de facto option to put the shares back to the Company for liquidation value. The Company determined that the option could result in a deemed liquidation that is not solely within the control of the Company. Therefore, the Series C convertible preferred stock is classified outside of permanent equity (i.e., temporary equity).
Series C convertible preferred shares are convertible at any time, at the option of the holder, into common stock at a rate of 1 to 1 initially, subject to adjustments for dilution.
Upon closing of the Business Combination,
 
16,802
 shares of Series C Convertible Preferred Stock
(pre-combination)
converted into 
2,520,368
 shares of common stock of the Company. The Company no longer had Series C Convertible Preferred Stock authorized, issued or outstanding as of
September 30, 2021. The terms and rights of the Series C Convertible Preferred Stock described previously represent the terms and rights prior to the closing of the Business Combination
.