Delaware |
5961 |
88-2840659 | ||
(State or Other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☒ |
Smaller reporting company |
☒ | |||
Emerging growth company |
☒ |
• | the ability to recognize the anticipated benefits of the Merger (as defined herein), which may be affected by, among other things, competition and the ability of the combined business to grow and manage growth profitably; |
• | expansion plans and opportunities, including future acquisitions or additional business combinations; |
• | costs related to the Merger; |
• | litigation, complaints, and/or adverse publicity; |
• | the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, demographic trends, and employee availability; |
• | privacy and data protection laws, privacy or data breaches, or the loss of data; |
• | our financial and business performance following the Merger, including financial projections and business metrics; |
• | changes in the market for the Company’s products, and expansion plans and opportunities; |
• | anticipated customer retention by the Company; |
• | the extent to which the Company is able to protect its intellectual property rights and not infringe on the intellectual property rights of others; |
• | new or adverse regulatory developments relating to automatic renewal laws; and |
• | the effect of COVID-19 on the foregoing, including its effect on the business and financial conditions of the Company. |
• |
Risks Related to Our Business |
• | Our significant growth may not be indicative of our future growth and, if we continue to grow rapidly, we may not be able to effectively manage our growth or evaluate our future prospects. If we fail to effectively manage our future growth, our business could be adversely affected. |
• | We have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to generate sufficient revenue to achieve and maintain profitability. |
• | Grove’s independent registered public accounting firm has expressed substantial doubt about Grove’s ability to continue as a going concern, and if we are unable to generate significant revenue or secure additional financing, we may be unable to implement our business plan and grow our business. |
• | We will require additional financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce our investments in advertising and other strategic initiatives planned for future growth. |
• | Competition in the natural and sustainable consumer products market presents an ongoing threat to the success of our business. |
• | We must find sustainable solutions that support our brand and long-term growth. |
• | If we fail to cost-effectively acquire new consumers or retain our existing consumers, our business could be adversely affected. |
• | Our brand and reputation may be diminished due to real or perceived quality, safety, efficacy or environmental impact issues with our products, which could have an adverse effect on our business, financial condition, results of operations and prospects. |
• | Failure to introduce new products that meet the expectations of our customers may adversely affect our ability to continue to grow. |
• | We pursue acquisitions to expand our business, and if any of those acquisitions are unsuccessful, our business may be harmed. |
• | We are dependent on our management team, and the loss of one or more key employees or groups could harm our business and prevent us from implementing our business plan in a timely manner. |
• | If we cannot successfully manage the unique challenges presented by international markets, we may not be successful in expanding our operations outside of the United States. |
• | Our business, including our costs and supply chain, is subject to risks associated with sourcing, manufacturing, warehousing, distribution, infrastructure and logistics to third-party providers, and the loss of any of our key suppliers or logistical service providers could negatively impact our business. |
• | If we or our distribution partners do not successfully optimize, operate and manage the expansion of the capacity of our warehouse fulfillment centers, our business, financial condition, results of operations and prospects could be adversely affected. |
• | Risks associated with the outsourcing of our fulfillment process and other technology-related functions could materially and adversely affect our business, financial condition, and results of operations. |
• | We have only recently expanded to offer our own branded products in retail stores and our inability to secure, maintain and increase our presence in retail stores could adversely impact our revenue. |
• | We may be unable to adequately obtain, maintain, protect, defend and enforce our intellectual property rights. |
• | We rely on trademark, copyright, and patent law, trade secret protection, and confidentiality and/or license agreements with our employees, customers, and others to protect our proprietary rights. |
• | Indemnity provisions in various agreements to which we are party potentially expose us to substantial liability for infringement, misappropriation or other violation of intellectual property rights. |
• | If we (or our vendors) are unable to protect against or adequately respond to mitigate the impacts of a service interruption, data corruption, or cybersecurity attack, our operations could be disrupted, our reputation may be harmed and we could face significant costs to remediate the incident and defend against claims by business partners, customers, or regulators. Such security breaches or other cybersecurity incidents may harm our reputation and expose us to loss of consumers and business. |
• | The actual or perceived failure by us or our vendors to comply with applicable privacy and data protection laws, regulations or industry standards could have an adverse effect on our business, financial condition, results of operations and prospects. |
• | Advertising inaccuracies or product mislabeling may have an adverse effect on our business by exposing us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings. |
• | We may become subject to product liability claims, which could harm our reputation, financial condition, and liquidity if Grove is not able to successfully defend or insure against such claims. |
• |
Risks Relating to Ownership of Company Securities |
• | The price of Class A Common Stock and our warrants may be volatile. |
• | Warrants will become exercisable for Class A Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. |
• | The Public Warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 65% of the then-outstanding Public Warrants approve of such amendment. |
• | We may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your Public Warrants worthless. |
• | Our dual-class structure may impact the stock price of Class A Common Stock. |
Issuer |
Grove Collaborative Holdings, Inc. |
Shares of Class A Common Stock offered by the Selling Holders |
Up to 101,635,900 shares of Class A Common Stock, consisting of 6,700,000 shares of Class A Common Stock underlying the Private Placement Warrants, 8,607,500 shares of Class A Common Stock issued in connection with the PIPE Investment, 4,421,524 shares of Class A Common Stock issued in connection with the Backstop Subscription Agreement, 3,875,028 shares of Class A Common Stock underlying the Backstop Warrants, 10,062,500 shares of Class A Common Stock held by the Sponsor, 756,370 shares of Class A common stock held by certain Selling Holders, and 67,212,978 shares of Class A Common Stock issuable upon conversion (on a one-for-one |
Warrants Offered by the Selling Holders |
Up to 6,700,000 Private Placement Warrants. |
Shares of Class A Common Stock offered by the Company |
14,750,000 shares of Class A Common Stock, consisting of 8,050,000 shares of Class A Common Stock issuable upon exercise of the Public Warrants and 6,700,000 shares of Class A Common Stock issuable upon the exercise of the Private Placement Warrants following their public resale by the Selling Holders. |
Shares of Class A Common Stock outstanding prior to exercise of all Warrants |
45,570,178 shares of Class A Common Stock (as of July 14, 2022). 13,999,960 of these shares of Class A Common Stock constitute Earn-Out Shares, which will no longer be subject to lock-up restrictions upon the achievement of certain stock price thresholds or, if earlier, certain liquidation events. |
Shares of Class A Common Stock outstanding assuming exercise of all Warrants |
60,320,178 (based on total shares of Class A Common Stock outstanding as of July 14, 2022). |
Use of Proceeds |
We will not receive any proceeds from the sale of shares of Class A Common Stock by the Selling Holders. We will receive up to an aggregate of approximately $169,625,000.00 from the exercise of the Warrants, assuming the exercise in full of all of the Warrants for cash. We expect to use the net proceeds from the exercise of the Warrants for general corporate purposes. See “ Use of Proceeds |
Redemption |
The Warrants are redeemable in certain circumstances. See “ Description of Securities – Redeemable Warrants |
Market for Class A Common Stock and Warrants |
Class A Common Stock and Public Warrants are currently traded on NYSE under the symbols “GROV” and “GROV.WS,” respectively. |
Risk Factors |
See “ Risk Factors |
• | The FDA regulates product labels and other product claims for the consumer products subject to its jurisdiction and has the authority to challenge product labels and claims that it believes are non-compliant or false or misleading, through the use of a variety of enforcement tools (e.g., Warning Letters, untitled letters, and seizure actions). In limited circumstances, the FDA has taken regulatory action against products labeled “natural” but that nonetheless contain synthetic ingredients or components. |
• | The FTC has the authority to challenge claims made in product advertising and requires that such claims are adequately substantiated prior to use. The FTC similarly has enforcement tools that it uses to challenge advertising claims that it deems non-compliant with the law. |
• | The USDA enforces federal standards for organic production and use of the term “organic” on product labeling. These laws prohibit a company from selling or labeling products as organic unless they are produced and handled in accordance with the applicable federal law. Failure to comply with these requirements may subject us to liability or regulatory enforcement. Consumers may also pursue state law claims challenging use of the organic label as being intentionally mislabeled or misleading or deceptive to consumers. |
• | In addition, certain products, including the disinfectant products, we sell may require approval from and registration with the EPA and state regulatory agencies prior to sale. Products that expressly or impliedly claim to control microorganisms that pose a threat to human health may be subject by additional regulatory scrutiny and need to be supported by additional efficacy data. Should we advertise or market these regulated products with claims that are not permitted by the terms of their registration or are otherwise false or misleading, the EPA and states may be authorized to take enforcement action to prevent the sale or distribution of disinfectant products. |
• | changes in the industries in which we and our customers operate; |
• | variations in our operating performance and the performance of our competitors in general; |
• | material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy; |
• | actual or anticipated fluctuations in our quarterly or annual results of operation; |
• | publication of research reports by securities analysts about us or our competitors or our industry; |
• | the public’s reaction to our press releases, our other public announcements, and our filings with the SEC; |
• | our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; |
• | additions and departures of key personnel; |
• | changes in laws and regulations affecting our business; |
• | commencement of, or involvement in, litigation involving us; |
• | changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of shares of Class A Common Stock available for public sale; |
• | sales of shares of Class A Common Stock by the PIPE Investors; and |
• | general economic and political conditions such as recessions, interest rates, fuel prices and general inflationary pressures, foreign currency fluctuations, international tariffs, social, political, and economic risks, and acts of war or terrorism. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Class A Common Stock is a “penny stock” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | a classified board of directors; |
• | the dual-class structure that provides for Class B Common Stock being entitled to ten votes per share; |
• | the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | the limitation of the liability of, and the indemnification of, our directors and officers; |
• | the requirement that a special meeting of stockholders may only be called by a majority of the entire Board, the Chairman of the Board, or our Chief Executive Officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; |
• | controlling the procedures for the conduct and scheduling of Board and stockholder meetings; |
• | the ability of the Board to amend the Bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and |
• | advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us. |
• | the (a) historical audited condensed financial statements of VGAC II as of December 31, 2021 and for the period from January 13, 2021 (inception) to December 31, 2021, included in this registration statement and (b) historical unaudited condensed financial statements of VGAC II as of and for the three months ended March 31, 2022 included in this registration statement; |
• | the (a) historical audited financial statements of Grove as of and for the years ended December 31, 2019, 2020 and 2021 included in this registration statement, and (b) historical unaudited condensed financial statements of Grove as of and for the three months ended March 31, 2022 included in this registration statement; and |
• | other information relating to Grove and VGAC II included in this registration statement. |
(A) | VGAC II’s name was changed to “Grove Collaborative Holdings, Inc.” (“ New Grove” ), |
(B) | each then-issued and outstanding Class A ordinary share of VGAC II converted automatically into one share of Class A common stock of New Grove (the “ New Grove Class A Common Stock” ), |
(C) | each then-issued and outstanding Class B ordinary share of VGAC II converted automatically into one share of New Grove Class A Common Stock, |
(D) | each then-issued and outstanding warrant to purchase Class A ordinary shares of VGAC II (“ Public Warrant” ) converted automatically into one warrant to purchase one share of New Grove Class A Common Stock, and |
(E) | each then-issued and outstanding units that had not previously separated into the underlying Class A ordinary shares and underlying Public Warrants were canceled and entitled the holder thereof to one share of New Grove Class A Common Stock and one-fifth of one warrant to purchase one share of New Grove Class A Common Stock. |
(A) | the conversion of each issued and outstanding share of Grove’s common stock (other than the Backstop Tranche 1 Shares) and Grove’s preferred stock (on an as-converted to Grove common stock basis) (other than dissenting shares) into (i) a number of shares of New Grove Class B Common Stock as determined pursuant to the Exchange Ratio and (ii) a number of restricted shares of New Grove Class B Common Stock that will vest upon the achievement of certain earnout thresholds prior to the tenth anniversary of Closing (as further described below, the “Earnout Shares” ); |
(B) | the conversion of all outstanding Grove warrants, excluding 275,631 warrants to purchase Grove common stock that were net settled prior to the consummation of the Business Combination, into (i) warrants exercisable for shares of New Grove Class B Common Stock with the same terms except for the number of shares exercisable and the exercise price, each of which was adjusted using the Exchange Ratio, and (ii) a number of Earnout Shares; |
(C) | the conversion of all outstanding vested and unvested Grove stock options into (i) New Grove stock options exercisable for shares of New Grove Class B Common Stock with the same terms except for the number of shares exercisable and the exercise price, each of which was adjusted using the Exchange Ratio, and (ii) a number of Earnout Shares; |
(D) | the conversion of all outstanding Grove restricted stock units into (i) New Grove restricted stock units with the same terms that each represent the right to receive the number of shares of New Grove Class B Common Stock adjusted using the Exchange Ratio and (ii) a number of Earnout Shares; and |
(E) | the conversion of each issued and outstanding Backstop Tranche 1 Share (as defined below) into the right to receive a number of shares of New Grove Class B Common Stock equal to the Exchange Ratio (which were immediately exchanged on a one-for-one basis for shares of New Grove Class A Common Stock). |
(i) | The Backstop Investor purchased, and Grove sold to the Backstop Investor, on the date of the Subscription Agreement, a number of shares of Grove common stock equal to the quotient of $27,500,000 and $11.70, for an aggregate purchase price of $27,500,000 (such shares of Grove common stock, together with any other shares of Grove common stock issued to the Backstop Investor prior to the closing of the Business Combination, the “Backstop Tranche 1 Shares”). |
(ii) | The Backstop Investor subscribed for and purchased, on the Closing Date, 1,671,524 shares of New Grove Class A Common Stock at a purchase price of $10.00 per share (the “Backstop Tranche 2 Shares”), for aggregate gross proceeds of $16,715,240. |
(i) | Immediately following the closing of the Business Combination: |
(A) | each share of New Grove Class B Common Stock issued to the Backstop Investor pursuant to the Merger Agreement as consideration for the Backstop Tranche 1 Shares was exchanged for one share of New Grove Class A Common Stock (the “Backstop Share Exchange”), and |
(B) | New Grove issued to the Backstop Investor warrants to purchase 3,875,028 shares of New Grove Class A Common Stock (each warrant exercisable to purchase one share of New Grove Class A Common Stock for $0.01) (such warrants, the “Backstop Warrants”). Such warrants shall be exercisable by Subscriber at any time for a period of five years from the date of issuance. |
(ii) | For additional shares of New Grove Class A Common Stock to be issued to the Backstop Investor if the volume weighted average price of New Grove Class A Common Stock is less than $10.00 during the 10 trading days commencing on the first trading day after New Grove’s first quarterly earnings call for the fiscal quarter ending June 30, 2022 (“Additional Shares”). The Backstop Investor shall be entitled to receive additional VGAC Class A Common Shares equal to the lesser of (i) the product of (x) the sum of (1) the VGAC Class B Common Shares issued to Subscriber at the Business Combination Closing pursuant to the Business Combination Agreement as consideration for the Tranche 1 Shares and (2) the Tranche 2 Shares, if any, multiplied by (y) a fraction, (A) the numerator of which is $10.00 (as adjusted for any stock split, reverse stock split or similar adjustment following the Business Combination Closing) minus the Measurement Period VWAP, and (B) the denominator of which is the Measurement Period VWAP and (ii) the number of Post-Combination VGAC Shares outstanding as of immediately following the Business Combination Closing. |
• | 2,338,352 shares of Backstop Tranche 1 shares were exchanged for 2,750,000 shares of New Grove Class B Common Stock, which was immediately exchanged on a one-for-one basis for shares of New Grove Class A Common Stock. |
• | Backstop Investor purchased 1,671,524 shares of Backstop Tranche 2 Shares for aggregate gross proceeds in an amount equal to $16,715,524; and |
• | Backstop Investor received 3,875,028 Backstop Warrants. |
• | 7,000,173 shares earned if the share price of New Grove Class A Common Stock is greater than or equal to $12.50 over any 20 trading days within any consecutive 30 trading day period during the Earnout Period; |
• | 6,999,787 shares earned, including the shares subject to the $12.50 threshold if not previously vested, if the share price of New Grove Class A Common Stock is greater than or equal to $15.00 over any 20 trading days within any 30 consecutive trading day period during the Earnout Period; and |
• | If, during the Earnout Period, there is a Change of Control Transaction (as defined in the Merger Agreement), then all remaining triggering events that have not previously occurred and the related vesting conditions shall be deemed to have occurred. |
• | Current Grove stockholders will have a relative majority of the voting power of New Grove; |
• | The New Grove Board will have nine members (such members currently consisting of eight members and one vacant board seat) of whom one individual shall be designated by VGAC II and of whom eight individuals shall be designated by Grove; |
• | Grove’s senior management will comprise the senior management roles of New Grove and be responsible for the day-to-day |
• | New Grove will assume the Grove name; and |
• | The intended strategy and operations of New Grove will continue Grove’s current strategy. |
• | Grove Earnout Shares—The Grove Earnout Shares, excluding those allocated to the unvested Grove options and restricted stock units, are expected to be accounted for as a long-term liability classified as equity-linked contracts that are earned upon achieving the triggering events, which include events that are not indexed to the common stock of New Grove. The Company has concluded that liability classification for the Grove Earnout Shares is appropriate and as such, the liability will be recognized at fair value upon the Merger closing and remeasured in future reporting periods through the statement of operations. The preliminary fair value of the Grove Earnout Shares was determined using the most reliable information currently available. The Grove Earnout Shares attributed to the unvested Grove options and restricted stock units are expected to be accounted for as stock-based compensation due to the continued service requirement and will be equity- classified. Any compensation expense related to such Grove Earnout Shares will be recognized over the respective service periods in future reporting periods and has not been reflected in the unaudited pro forma condensed combined statement of operations. |
• | Public Warrants and Private Placement Warrants—The Company has concluded that liability classification for the Public Warrants and Private Placement Warrants is appropriate and as such, the liability will be recognized at fair value upon the Merger closing and remeasured in future reporting periods through the statement of operations. |
• | Direct and Incremental Transaction Costs—Estimates are necessary to finalize the allocation of direct and incremental transaction costs between instruments issued or assumed in the Business Combination. The Company has preliminarily allocated such costs on a relative fair value basis between the VGAC II ordinary shares, PIPE Shares, Public Warrants, Private Placement Warrants, Grove Earnout Shares, Downside Protection feature and Backstop Warrants based on estimates that are available. Direct and incremental transaction costs allocated to equity-classified instruments have been preliminarily recorded within equity in the unaudited pro forma condensed combined financial statements. Direct and incremental transaction costs allocated to liability-classified equity instruments were expensed in the unaudited pro forma condensed combined financial statements. |
• | Backstop Subscription Agreement—The Company has determined there is a freestanding instrument related to the Downside Protection feature under the Backstop Subscription Agreement. Such feature is required to be bifurcated and classified as a liability. A separate valuation has not yet been completed and therefore the fair value of this freestanding instrument has not been reflected in the unaudited pro forma condensed combined financial statements. The Company has preliminarily classified the entire proceeds from the Tranche 1 financing within the equity section of the pro forma balance sheet as of March 31, 2022. |
Number of Shares |
% Ownership |
|||||||
Former VGAC II shareholders (1)(2) |
667,955 | 0.4 | % | |||||
Sponsor |
9,972,500 | 6.1 | % | |||||
PIPE Investors |
8,607,500 | 5.3 | % | |||||
Grove Shareholders (3) |
127,851,594 | 78.6 | % | |||||
Employee Stock Grants |
32,300 | — | % | |||||
Tranche 2 Backstop Shares |
1,671,524 | 1.0 | % | |||||
Grove Earnout |
13,999,960 | 8.6 | % | |||||
|
|
|
|
|||||
Total shares of New Grove Common Stock outstanding at closing of the Merger |
162,803,333 | 100.0 | % | |||||
|
|
|
|
(1) | The Exchange Ratio is calculated as of the close of the Merger. The number of shares outstanding for both VGAC II and Grove are calculated as of the close of the Merger. |
(2) | Includes 90,000 of Class B ordinary shares which were transferred from the Sponsor to three independent directors, each receiving 30,000 Class B ordinary shares. |
(3) | Includes Backstop Tranche 1 Shares issued in accordance with the Backstop Agreement. |
Number of Shares |
% Ownership |
|||||||
Former VGAC II shareholders (1)(2) |
667,955 | 0.3 | % | |||||
Sponsor |
9,972,500 | 4.7 | % | |||||
PIPE Investors |
8,607,500 | 4.0 | % | |||||
Grove Shareholders (3) |
127,851,594 | 60.2 | % | |||||
Employee Stock Grants |
32,300 | — | % | |||||
Tranche 2 Backstop Shares |
1,671,524 | 0.8 | % | |||||
Grove Earnout |
13,999,960 | 6.6 | % | |||||
Private Placement Warrants |
6,700,000 | 3.1 | % | |||||
Public Warrants |
8,050,000 | 3.8 | % | |||||
Grove equity holders (options) |
24,691,735 | 11.6 | % | |||||
Grove equity holders (RSUs) |
5,716,862 | 2.7 | % | |||||
Grove equity holders (warrants) |
923,857 | 0.4 | % | |||||
Backstop Warrants |
3,875,028 | 1.8 | % | |||||
|
|
|
|
|||||
Pro forma shares outstanding, diluted |
212,760,815 | 100.0 | % | |||||
|
|
|
|
(1) | The Exchange Ratio is calculated as of the close of the Mergers. The number of shares outstanding for both VGAC II and Grove are calculated as of the close of the Mergers. |
(2) | Includes 90,000 of Class B ordinary shares which were transferred from the Sponsor to three independent directors, each receiving 30,000 Class B ordinary shares. |
(3) | Includes Backstop Tranche 1 Shares issued in accordance with the Backstop Agreement. |
Virgin Group II (Historical) |
Grove (Historical) |
Transaction Accounting Adjustments (Note 3) |
Notes |
Pro Forma Combined |
||||||||||||||
Stockholders’ equity (deficit): |
||||||||||||||||||
Grove Common stock |
— | 1 | (1 | ) | J | — | ||||||||||||
Preferred stock (VGII) |
— | — | ||||||||||||||||
VGII Class A Ordinary Shares |
— | — | ||||||||||||||||
VGII Class B Ordinary Shares |
1 | (1 | ) | E | — | |||||||||||||
New Grove Class A common stock |
— | 1 | B | 2 | ||||||||||||||
5 | E | |||||||||||||||||
(4 | ) | F | ||||||||||||||||
New Grove Class B common stock |
— | 1 | J | 11 | ||||||||||||||
10 | I | |||||||||||||||||
Additional paid-in capital |
— | 38,660 | 86,074 | B | 558,596 | |||||||||||||
(17,790 | ) | D | ||||||||||||||||
402,496 | E | |||||||||||||||||
(396,716 | ) | F | ||||||||||||||||
(66,265 | ) | G | ||||||||||||||||
(53,094 | ) | H | ||||||||||||||||
487,908 | I | |||||||||||||||||
2,901 | K | |||||||||||||||||
27,473 | L | |||||||||||||||||
16,715 | M | |||||||||||||||||
30,234 | N | |||||||||||||||||
Accumulated deficit |
(53,094 | ) | (537,527 | ) | 53,094 | H | (542,737 | ) | ||||||||||
(5,210 | ) | D | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total stockholders’ (deficit) equity |
(53,093 | ) | (498,866 | ) | 567,831 | 15,872 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) |
$ | 403,261 | $ | 178,367 | $ | (333,573 | ) | $ | 248,055 | |||||||||
|
|
|
|
|
|
|
|
For the Three Months ended March 31, 2022 VGII (Historical) |
For the Three Months ended March 31, 2022 Grove (Historical) |
Transaction Accounting Adjustments (Note 3) |
Notes |
Pro Forma Combined |
||||||||||||||||
Revenue, net |
$ | — | 90,479 | $ | — | 90,479 | ||||||||||||||
Cost of goods sold |
— | 47,742 | — | 47,742 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
— | 42,737 | — | 42,737 | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||
Advertising |
— | 32,793 | — | 32,793 | ||||||||||||||||
Product development |
— | 6,240 | — | 6,240 | ||||||||||||||||
Selling, general and administrative |
— | 50,970 | — | 50,970 | ||||||||||||||||
Formation and operating costs |
1,008 | — | 1,008 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Operating loss |
(1,008 | ) | (47,266 | ) | — | (48,274 | ) | |||||||||||||
Interest income earned on investments held in Trust Account |
(36 | ) | 36 | EE | — | |||||||||||||||
Change in fair value of warrant liabilities |
(7,654 | ) | — | (7,654 | ) | |||||||||||||||
Interest expense |
— | 2,087 | — | 2,087 | ||||||||||||||||
Other expense (income), net |
— | (1,992 | ) | (1,886 | ) | FF | (3,878 | ) | ||||||||||||
Initial measurement of derivative liability |
30,234 | (30,234 | ) | GG | — | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Interest and other expense (income), net |
22,544 | 95 | (32,084 | ) | (9,445 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income (Loss) before provision for income taxes |
(23,552 | ) | (47,361 | ) | 32,084 | (38,829 | ) | |||||||||||||
Provision for income taxes |
— | 23 | — | 23 | ||||||||||||||||
|
|
|||||||||||||||||||
Net income (loss) |
(23,552 | ) | (47,384 | ) | 32,084 | (38,852 | ) | |||||||||||||
|
|
|||||||||||||||||||
Net loss attributable to common stockholders, basic and diluted |
(23,552 | ) | (47,384 | ) | 32,084 | (38,852 | ) | |||||||||||||
|
|
|||||||||||||||||||
Weighted average shares outstanding of New Grove Class A and B Common Stock—basic and diluted |
HH | 152,218,639 | ||||||||||||||||||
|
|
|||||||||||||||||||
Net loss per share of New Grove Class A and B Common Stock—basic and diluted |
(0.26 | ) | ||||||||||||||||||
|
|
|||||||||||||||||||
Weighted average shares outstanding of Grove common stock—basic and diluted |
7,981,994 | |||||||||||||||||||
|
|
For the Three Months ended March 31, 2022 VGII (Historical) |
For the Three Months ended March 31, 2022 Grove (Historical) |
Transaction Accounting Adjustments (Note 3) |
Notes |
Pro Forma Combined |
||||||||||||||||
Net loss per share of Grove common stock—basic and diluted |
$ | (5.94 | ) | |||||||||||||||||
|
|
|||||||||||||||||||
Weighted average shares outstanding of VGII Class A ordinary shares—basic and diluted |
40,250,000 | |||||||||||||||||||
|
|
|||||||||||||||||||
Net loss per share of VGII Class A ordinary shares—basic and diluted |
10,062,500 | |||||||||||||||||||
|
|
|||||||||||||||||||
Weighted average shares outstanding of VGII Class B ordinary shares—basic and diluted |
$ | (0.47 | ) | |||||||||||||||||
|
|
|||||||||||||||||||
Net loss per share of VGII Class B ordinary shares—basic and diluted |
$ | (0.47 | ) | |||||||||||||||||
|
|
For the period from January 13, 2021 (inception) to December 31, 2021 VGII (Historical) |
For the Year Ended December 31, 2021 Grove (Historical) |
Transaction Accounting Adjustments (Note 3) |
Notes |
Pro Forma Combined |
||||||||||||||||
Revenue, net |
$ | — | $ | 383,685 | $ | — | $ | 383,685 | ||||||||||||
Cost of goods sold |
— | 195,181 | — | 195,181 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
— | 188,504 | — | 188,504 | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||
Advertising |
— | 107,313 | — | 107,313 | ||||||||||||||||
Product development |
— | 23,408 | — | 23,408 | ||||||||||||||||
Selling, general and administrative |
— | 186,638 | 5,210 | AA | 191,848 | |||||||||||||||
Formation and operating costs |
3,573 | — | — | 3,573 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Operating loss |
(3,573 | ) | (128,855 | ) | (5,210 | ) | (137,638 | ) | ||||||||||||
Interest income earned on investments held in Trust Account |
(31 | ) | — | 31 | BB | — | ||||||||||||||
Offering costs allocated to warrants |
570 | — | — | 570 | ||||||||||||||||
Change in fair value of warrant liabilities |
(6,811 | ) | — | — | (6,811 | ) | ||||||||||||||
Interest expense |
— | 5,202 | — | 5,202 | ||||||||||||||||
Loss on extinguishment of debt |
— | 1,027 | — | 1,027 | ||||||||||||||||
Other expense (income), net |
— | 760 | (1,234 | ) | CC | (474 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Interest and other expense (income), net |
(6,272 | ) | 6,989 | (1,203 | ) | (486 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income (Loss) before provision for income taxes |
2,699 | (135,844 | ) | (4,007 | ) | (137,152 | ) | |||||||||||||
Provision for income taxes |
— | 52 | — | 52 | ||||||||||||||||
|
|
|||||||||||||||||||
Net income (loss) |
2,699 | (135,896 | ) | (4,007 | ) | (137,204 | ) | |||||||||||||
|
|
|||||||||||||||||||
Net loss attributable to common stockholders, basic and diluted |
2,699 | (135,896 | ) | (4,007 | ) | (137,204 | ) | |||||||||||||
|
|
|||||||||||||||||||
Weighted average shares outstanding of New Grove Class A and B Common Stock—basic and diluted |
DD | 151,402,644 | ||||||||||||||||||
|
|
|||||||||||||||||||
Net loss per share of New Grove Class A and B Common Stock—basic and diluted |
$ | (0.91 | ) | |||||||||||||||||
|
|
|||||||||||||||||||
Weighted average shares outstanding of Grove common stock—basic and diluted |
7,288,145 | |||||||||||||||||||
|
|
For the period from January 13, 2021 (inception) to December 31, 2021 VGII (Historical) |
For the Year Ended December 31, 2021 Grove (Historical) |
Transaction Accounting Adjustments (Note 3) |
Notes |
Pro Forma Combined |
||||||||||||||||
Net loss per share of Grove common stock—basic and diluted |
$ | (18.65 | ) | |||||||||||||||||
|
|
|||||||||||||||||||
Weighted average shares outstanding of VGII Class A ordinary shares—basic and diluted |
32,705,669 | |||||||||||||||||||
Net loss per share of VGII Class A ordinary shares—basic and diluted |
$ | 0.06 | ||||||||||||||||||
|
|
|||||||||||||||||||
Weighted average shares outstanding of VGII Class B ordinary shares—basic and diluted |
10,062,500 | |||||||||||||||||||
|
|
|||||||||||||||||||
Net loss per share of VGII Class B ordinary shares – basic and diluted |
$ | 0.06 | ||||||||||||||||||
|
|
• | the (a) historical audited condensed financial statements of VGAC II as of December 31, 2021 and for the period from January 13, 2021 (inception) to December 31, 2021, and (b) historical unaudited condensed financial statements of VGAC II for the three months ended March 31, 2022; |
• | the (a) historical audited financial statements of Grove as of and for the years ended December 31, 2019, 2020 and 2021, and (b) historical unaudited condensed financial statements of Grove for the three months ended March 31, 2022; and |
• | other information relating to Grove and VGAC II included in this registration statement; |
(A) | The reclassification of $402.6 million of cash and investments held in the VGAC II Trust Account that became available at closing of the Business Combination. See adjustment note (F) for actual redemptions in connection with the Merger closing |
(B) | In connection with the signing of the Merger Agreement, VGAC II entered into subscription agreements with certain investors (the “ PIPE Investors” ). Pursuant to the Subscription Agreements, the |
PIPE Investors purchased, and VGAC II issued and sold to such investors 8.6 million shares of New Grove Class A Common Stock with par value of $0.0001, resulting in gross proceeds of $86.1 million. The costs related to the issuance of the PIPE Financing are adjusted against additional paid in capital (see adjustment D below). |
(C) | Reflects the cash settlement of the $14.1 million liability for VGAC II’s deferred underwriting commissions related to its initial public offering. |
(D) | Represents the preliminary estimated direct and incremental transaction costs incurred by Grove related to the Business Combination, including underwriting/banking, legal, accounting and other fees, of which $17.8 million is allocated to equity-classified instruments consisting of the VGAC II ordinary shares, PIPE Shares, and the Backstop Warrants, and reflected in the unaudited pro forma condensed combined balance sheet as a direct reduction to New Grove’s additional paid-in capital and are assumed to be cash settled. The direct and incremental costs related to liability-classified instruments totaling $5.2 million is expensed as of January 1, 2021 (see adjustment AA below). As of March 31, 2022, Grove had deferred transaction costs incurred of $4.2 million, of which $2.6 million was unpaid. |
(E) | Reflects the recapitalization of VGAC II Class A ordinary shares subject to possible redemption and VGAC II Class B ordinary shares into New Grove Class A Common Stock at $0.0001 par value. |
(F) | Reflects the cash disbursed to redeem 39,672,045 shares of VGAC II common stock for $396.7 million at a redemption price of $10.00 per share and allocated to New Grove Class A Common Stock and additional paid-in capital using par value of $0.0001 per share |
(G) | Reflects the preliminary estimated fair value of contingently returnable Grove Earnout Shares, excluding those allocated to the unvested Grove options and restricted stock units, that are expected to be accounted for as liability classified equity instruments that are earned upon achieving the triggering events, which include events that are not indexed to the common stock of New Grove. The preliminary fair value of the Grove Earnout Shares was determined using the most reliable information currently available. Refer to Note 5 for more information. |
(H) | Reflects the elimination of VGAC II’s historical accumulated deficit with a corresponding adjustment to additional paid-in capital for New Grove in connection with the reverse recapitalization upon closing of the Business Combination. |
(I) | Reflects the conversion of Grove convertible preferred stock into shares of Grove common stock, and such shares were converted into the right to receive shares of New Grove Class B Common Stock pursuant to the Exchange Ratio concurrent with the closing of the Business Combination. |
(J) | Reflects the conversion of Grove Common Stock into shares of New Grove Class B Common Stock pursuant to the Exchange Ratio concurrent with the closing of the Business Combination. |
(K) | Reflects the reclassification of Grove warrants from liability to equity classification as the warrants became exercisable for shares of New Grove Class B Common Stock rather than Grove convertible preferred stock upon closing of the Business Combination. |
(L) | Reflects the reclassification of 2,750,000 shares of Tranche 1 Shares from mezzanine equity to permanent equity and allocated to New Grove Class A Common Stock and additional paid-in capital using par value of $0.0001 per share |
(M) | Reflects the cash proceeds of $16.7 million for the purchase of 1,671,524 shares of Backstop Tranche 2 consisting of New Grove common stock by the Backstop Investor |
(N) | Reflects the elimination of the backstop derivative liability as recorded on VGAC II historical balance sheet |
(AA) | Represents the preliminary estimated direct and incremental transaction costs incurred by Grove related to the Business Combination, including underwriting/banking, legal, accounting and other fees, of which $5.2 million is allocated to the Downside Protection Feature, Grove Earnout, Public Warrants and Private Placement Warrants that are expected to be liability-classified and expensed. |
(BB) | Reflects the elimination of interest income related to the investments held in the trust account for the period from January 13, 2021 through December 31, 2021. |
(CC) | Reflects the elimination of remeasurement losses on the Grove convertible preferred stock warrant liability. |
(DD) | As the Business Combination is being reflected as if it had occurred on January 1, 2021, the calculation of weighted average shares outstanding for pro forma basic and diluted net income per share assumes that the shares issuable in connection with the Business Combination, the PIPE Financing, Tranche 1 and Tranche 2 of the Backstop Subscription Agreement and the Backstop Warrants have been outstanding for the entirety of the period presented. The calculation is retroactively adjusted to eliminate all VGAC II Class A ordinary shares redeemed as if such redemption occurred on January 1, 2021. |
(EE) | Reflects the elimination of interest income related to the investments held in the VGAC II trust account for the three months ended March 31, 2022. |
(FF) | Reflects the elimination of remeasurement losses on the Grove convertible preferred stock warrant liability for the three months ended March 31, 2022 |
(GG) | Reflects the elimination of initial measurement of the Backstop Derivative Liability on the VGAC II income statement for the three months ended March 31, 2022 |
(HH) | As the Business Combination is being reflected as if it had occurred on January 1, 2021, the calculation of weighted average shares outstanding for pro forma basic and diluted net income per share assumes that the shares issuable in connection with the Business Combination, the PIPE Financing, Tranche 1 and Tranche 2 of the Backstop Subscription Agreement and the Backstop Warrants have been outstanding for the entirety of the period presented. The calculation is retroactively adjusted to eliminate all VGAC II Class A ordinary shares redeemed as if such redemption occurred on January 1, 2021. |
Year Ended December 31, 2021 |
Three Months Ended March 31, 2021 |
|||||||
Pro Forma net loss |
$ | (137,204 | ) | $ | (38,852 | ) | ||
Basic weighted average shares outstanding |
151,402,644 | 152,218,639 | ||||||
Pro forma net loss per share, basic and diluted (1) |
$ | (0.91 | ) | $ | (0.26 | ) |
(1) | The pro forma basic and diluted shares include 3,875,028 shares underlying the Backstop Warrants (each warrant exercisable to purchase one VGAC II class A common share for $0.01) |
Year Ended December 31, 2021 |
Three Months Ended March 31, 2022 |
|||||||
Private Placement Warrants (1) |
6,700,000 | 6,700,000 | ||||||
Public Warrants |
8,050,000 | 8,050,000 | ||||||
Grove common stock options (2) |
27,882,520 | 25,691,329 | ||||||
Grove restricted stock units (2) |
1,777,183 | 3,224,181 | ||||||
Grove common stock warrants |
1,424,108 | 1,148,477 | ||||||
Grove common stock issued upon early exercise of options |
81,750 | 16,539 | ||||||
Grove Earnout Shares (3) |
13,999,960 | 13,999,960 | ||||||
|
|
|
|
|||||
Total |
59,915,521 | 58,830,486 | ||||||
|
|
|
|
(1) | One whole warrant entitles the holder to purchase one share of New Grove Class A Common Stock at a price of $11.50 per share. New Grove’s warrants are anti-dilutive on a pro forma basis and have been excluded from the diluted number of New Grove’s shares outstanding at the time of closing. |
(2) | All outstanding Grove options and restricted stock units at the closing, whether vested or unvested, will convert into options or rights to purchase a number of shares of New Grove Class B Common Stock, determined in accordance with the Exchange Ratio. Additionally, holders of Grove options and restricted stock units will receive a pro rata share of the Grove Earnout Shares. |
(3) | Grove Earnout Shares are subject to certain vesting and forfeiture conditions as described herein. |
Years Ended December 31, |
Three Months Ended March 31, |
|||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
2022 |
||||||||||||||||
Financial and Operating Data |
||||||||||||||||||||
Grove Brands % Net Revenue |
37 | % | 45 | % | 49 | % | 51 | % | 52 | % | ||||||||||
DTC Total Orders |
5,618 | 6,860 | 6,659 | 1,786 | 1,558 | |||||||||||||||
DTC Active Customers |
1,696 | 1,732 | 1,640 | 1,774 | 1,653 | |||||||||||||||
DTC Net Revenue Per Order |
$ | 41 | $ | 53 | $ | 56 | $ | 56 | $ | 55 |
Year Ended December 31, |
Three Months Ended March 31, |
|||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
2022 |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Reconciliation of Net Loss to Adjusted EBITDA |
||||||||||||||||||||
Net loss |
$ | (161,470 | ) | $ | (72,260 | ) | $ | (135,896 | ) | $ | (37,895 | ) | $ | (47,384 | ) | |||||
Stock-based compensation |
11,960 | 7,762 | 14,610 | 3,460 | 4,460 | |||||||||||||||
Depreciation and amortization |
2,361 | 4,115 | 4,992 | 1,128 | 1,410 | |||||||||||||||
Remeasurement of convertible preferred stock warrant liability |
430 | 964 | 1,234 | 932 | (1,886 | ) | ||||||||||||||
Interest expense |
2,052 | 5,607 | 5,202 | 963 | 2,087 | |||||||||||||||
Restructuring expenses |
— | — | — | — | 1,636 | |||||||||||||||
Loss on extinguishment of debt |
— | — | 1,027 | — | — | |||||||||||||||
Provision for income taxes |
12 | 41 | 52 | 12 | 23 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Adjusted EBITDA |
$ | (144,655 | ) | $ | (53,771 | ) | $ | (108,779 | ) | $ | (31,400 | ) | $ | (39,654 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss margin |
(69 | )% | (20 | )% | (35 | )% | (37.1 | )% | (52.4 | )% | ||||||||||
Adjusted EBITDA margin |
(62 | )% | (15 | )% | (28 | )% | (30.7 | )% | (43.8 | )% |
Year Ended December 31, |
Three Months Ended March 31, |
|||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
2022 |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Revenue, net |
$ | 233,116 | $ | 364,271 | $ | 383,685 | $ | 102,220 | $ | 90,479 | ||||||||||
Cost of goods sold |
149,681 | 188,267 | 195,181 | 50,028 | 47,742 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross profit |
83,435 | 176,004 | 188,504 | 52,192 | 42,737 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating expenses: |
||||||||||||||||||||
Advertising |
77,842 | 55,547 | 107,313 | 35,636 | 32,793 | |||||||||||||||
Product development |
13,604 | 18,655 | 23,408 | 5,162 | 6,240 | |||||||||||||||
Selling, general and administrative |
155,158 | 168,295 | 186,638 | 47,538 | 50,970 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating loss |
(163,169 | ) | (66,493 | ) | (128,855 | ) | (36,144 | ) | (47,266 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest expense |
2,052 | 5,607 | 5,202 | 963 | 2,087 | |||||||||||||||
Loss on extinguishment of debt |
— | — | 1,027 | — | — | |||||||||||||||
Other expense (income), net |
(3,763 | ) | 119 | 760 | 776 | (1,992 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest and other expense (income), net |
(1,711 | ) | 5,726 | 6,989 | 1,739 | 95 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss before provision for income taxes |
(161,458 | ) | (72,219 | ) | (135,844 | ) | (37,883 | ) | (47,361 | ) | ||||||||||
Provision for income taxes |
12 | 41 | 52 | 12 | 23 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
$ | (161,470 | ) | $ | (72,260 | ) | $ | (135,896 | ) | $ | (37,895 | ) | $ | (47,384 | ) | |||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
Three Months Ended March 31, |
|||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
2022 |
||||||||||||||||
(as a percentage of revenue) |
||||||||||||||||||||
Revenue, net |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Cost of goods sold |
64 | 52 | 51 | 49 | 53 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross profit |
36 | 48 | 49 | 51 | 47 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating expenses: |
||||||||||||||||||||
Advertising |
33 | 15 | 28 | 35 | 36 | |||||||||||||||
Product development |
6 | 5 | 6 | 5 | 7 | |||||||||||||||
Selling, general and administrative |
67 | 46 | 49 | 47 | 56 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating loss |
(70 | ) | (18 | ) | (34 | ) | (35 | ) | (52 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest expense |
1 | 2 | 1 | 1 | 2 | |||||||||||||||
Loss on extinguishment of debt |
— | — | — | — | — | |||||||||||||||
Other expense (income), net |
(2 | ) | — | — | 1 | (2 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest and other expense (income), net |
(1 | ) | 2 | 1 | 2 | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss before provision for income taxes |
(69 | ) | (20 | ) | (35 | ) | (37 | ) | (52 | ) | ||||||||||
Provision for income taxes |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(69 | )% | (20 | )% | (35 | )% | (37 | )% | (52 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Change |
|||||||||||||||
2021 |
2022 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Revenue, net: |
||||||||||||||||
Grove Brands |
$ | 52,285 | $ | 46,796 | $ | (5,489 | ) | (10 | )% | |||||||
Third-party products |
49,935 | 43,683 | (6,252 | ) | (13 | )% | ||||||||||
|
|
|
|
|||||||||||||
Total revenue, net |
$ | 102,220 | $ | 90,479 | $ | (11,741 | ) | (11 | )% | |||||||
|
|
|
|
Three Months Ended March 31, |
Change |
|||||||||||||||
2021 |
2022 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Cost of goods sold |
$ | 50,028 | $ | 47,742 | $ | (2,286 | ) | (5 | )% | |||||||
Gross profit |
52,192 | 42,737 | (9,455 | ) | (18 | )% | ||||||||||
Gross margin |
51 | % | 47 | % | (4 | )% |
Three Months Ended March 31, |
Change |
|||||||||||||||
2021 |
2022 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Advertising |
$ | 35,636 | $ | 32,793 | $ | (2,843 | ) | (8 | )% |
Three Months Ended March 31, |
Change |
|||||||||||||||
2021 |
2022 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Product development |
$ | 5,162 | $ | 6,240 | $ | 1,078 | 21 | % |
Three Months Ended March 31, |
Change |
|||||||||||||||
2021 |
2022 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Selling, general and administrative |
$ | 47,538 | $ | 50,970 | $ | 3,432 | 7 | % |
Three Months Ended March 31, |
Change |
|||||||||||||||
2021 |
2022 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Interest expense |
$ | 963 | $ | 2,087 | $ | 1,124 | 117 | % |
Three Months Ended March 31, |
Change |
|||||||||||||||
2021 |
2022 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Other expense (income), net |
$ | 776 | $ | (1,992 | ) | $ | (2,768 | ) | * |
* | Percentage change not meaningful. |
Year Ended December 31, |
Change |
|||||||||||||||
2020 |
2021 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Revenue, net: |
||||||||||||||||
Grove Brands |
$ | 164,372 | $ | 187,055 | $ | 22,683 | 14 | % | ||||||||
Third-party products |
199,899 | 196,630 | (3,269 | ) | (2 | )% | ||||||||||
|
|
|
|
|
|
|||||||||||
Total revenue, net |
$ | 364,271 | $ | 383,685 | $ | 19,414 | 5 | % | ||||||||
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
2020 |
2021 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Cost of goods sold |
$ | 188,267 | $ | 195,181 | $ | 6,914 | 4 | % | ||||||||
Gross profit |
176,004 | 188,504 | 12,500 | 7 | % | |||||||||||
Gross margin |
48 | % | 49 | % | 1 | % |
Year Ended December 31, |
Change |
|||||||||||||||
2020 |
2021 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Advertising |
$ | 55,547 | $ | 107,313 | $ | 51,766 | 93 | % |
Year Ended December 31, |
Change |
|||||||||||||||
2020 |
2021 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Product development |
$ | 18,655 | $ | 23,408 | $ | 4,753 | 25 | % |
Year Ended December 31, |
Change |
|||||||||||||||
2020 |
2021 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Selling, general and administrative |
$ | 168,295 | $ | 186,638 | $ | 18,343 | 11 | % |
Year Ended December 31, |
Change |
|||||||||||||||
2020 |
2021 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Interest expense |
$ | 5,607 | $ | 5,202 | $ | (405 | ) | (7 | )% |
Year Ended December 31, |
Change |
|||||||||||||||
2020 |
2021 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Loss on extinguishment of debt |
$ | — | $ | 1,027 | $ | 1,027 | * |
* | Percentage change not meaningful. |
Year Ended December 31, |
Change |
|||||||||||||||
2020 |
2021 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Other expense, net |
$ | 119 | $ | 760 | $ | 641 | * |
* | Percentage change not meaningful. |
Year Ended December 31, |
Change |
|||||||||||||||
2019 |
2020 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Revenue, net: |
||||||||||||||||
Grove Brands |
$ | 86,717 | $ | 164,372 | $ | 77,655 | 90 | % | ||||||||
Third-party products |
146,399 | 199,899 | 53,500 | 37 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
Total revenue, net |
$ | 233,116 | $ | 364,271 | $ | 131,155 | 56 | % | ||||||||
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
2019 |
2020 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Cost of goods sold |
$ | 149,681 | $ | 188,267 | $ | 38,586 | 26 | % | ||||||||
Gross profit |
83,435 | 176,004 | 92,569 | 111 | % | |||||||||||
Gross margin |
36 | % | 48 | % | 12 | % |
Year Ended December 31, |
Change |
|||||||||||||||
2019 |
2020 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Advertising |
$ | 77,842 | $ | 55,547 | $ | (22,295 | ) | (29 | )% |
Year Ended December 31, |
Change |
|||||||||||||||
2019 |
2020 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Product development |
$ | 13,604 | $ | 18,655 | $ | 5,051 | 37 | % |
Year Ended December 31, |
Change |
|||||||||||||||
2019 |
2020 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Selling, general and administrative |
$ | 155,158 | $ | 168,295 | $ | 13,137 | 8 | % |
Year Ended December 31, |
Change |
|||||||||||||||
2019 |
2020 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Interest expense |
$ | 2,052 | $ | 5,607 | $ | 3,555 | 173 | % |
Year Ended December 31, |
Change |
|||||||||||||||
2019 |
2020 |
Amount |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Other expense (income), net |
$ | (3,763 | ) | $ | 119 | $ | 3,882 | (103 | )% |
Three Months Ended March 31, |
||||||||
2021 |
2022 |
|||||||
(in thousands) |
||||||||
Net cash used in operating activities |
$ | (27,952 | ) | $ | (29,503 | ) | ||
Net cash used in investing activities |
(1,262 | ) | (1,352 | ) | ||||
Net cash provided by (used in) financing activities |
(840 | ) | 26,907 | |||||
|
|
|
|
|||||
Net decrease in cash and cash equivalents |
$ | (30,054 | ) | $ | (3,948 | ) | ||
|
|
|
|
Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
(in thousands) |
||||||||||||
Net cash used in operating activities |
$ | (124,805 | ) | $ | (83,656 | ) | $ | (127,089 | ) | |||
Net cash used in investing activities |
(12,307 | ) | (4,820 | ) | (5,768 | ) | ||||||
Net cash provided by financing activities |
107,447 | 228,170 | 34,710 | |||||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in cash and cash equivalents |
$ | (29,665 | ) | $ | 139,694 | $ | (98,147 | ) | ||||
|
|
|
|
|
|
• | independent third-party valuations of our common stock; |
• | the rights, preferences and privileges of our redeemable convertible preferred stock relative to our common stock; |
• | our operating results, financial position and capital resources; |
• | our stage of development and current business conditions and projections, including the introduction of new products; |
• | the lack of marketability of our common stock; |
• | the hiring of key personnel and the experience of our management; |
• | the likelihood of achieving a liquidity event, such as an initial public offering or a sale of our company given the prevailing market conditions; |
• | and the nature and history of our business; |
• | industry trends and competitive environment; |
• | trends in consumer spending, including consumer confidence; and |
• | the overall economic, regulatory and capital market conditions. |
• | We can test market acceptance of product attributes prior to or as part of product launch, including fragrance, price point, marketing messaging, sustainability and more. We can assess market acceptance of products on our DTC platform prior to a product ready date to determine consumer interest via our waitlist feature. |
• | We can quickly gather consumer feedback by including samples in existing shipments, conducting online focus groups, and asking our consumers directly. We can then improve the products where possible and relaunch or drop underperforming SKUs at very little cost. |
• | We can launch products on our DTC platform at any point, without the constraints of retailer shelf reset timelines. |
• | We have a deep understanding of our consumers based on historical purchasing behavior, demographic information, and the ways in which they engage with our community and platform. |
I. |
Plastic single-use plastic packaging. As consumers awaken to the reality of the plastic pollution crisis, they are urgently and increasingly demanding bold new solutions. |
• | Plastic Neutral: |
• | Plastic-Free by the End of 2025: |
II. |
Forests: |
• | One Million Trees: |
• | Tree-Free Paper: ® |
III. |
Carbon: |
• | CarbonNeutral ® Certified Company: ® company as of 2021—meaning that we have purchased carbon offsets to neutralize all of the emissions related to the business activities that are under our direct control, which excludes manufacturing and supply chain. In order to maintain this certification, we are required to continue to reduce or offset the carbon emissions generated by our business activities, consumer shipments and several other areas of our company indicated by the CarbonNeutral® protocol. This codifies our commitment to maintain our values as our business grows. |
• | Net Zero by 2030 1-3 (which include all business activities, product manufacturing and our supply chain). We plan to achieve this through a primary focus on mitigation, with nature-based offsets augmenting the effort. We will disclose our annual progress towards achieving these goals in our annual sustainability report. |
• | Science-Based Targets: With a priority on reducing our emissions as much as possible, we have set Science-Based Targets for emissions reduction across Scopes 1-3. We are currently on track to meet these goals as detailed in our annual sustainability report and will continue to report on that progress. |
• | DTC non-subscription options. Customers can subscribe to individual products at appropriate cadences to make sure they never run out. We leverage data to further enhance the customer experience by personalizing pages to better fit the customers shopping needs. Our DTC shoppers can reach out to our Grove Guides team for any questions pertaining to their orders. Customers can call, chat, text, or email our Grove Guides team to modify orders, ask about new products, request a refund, or learn more about our sustainability practices. All of our shipments are carbon neutral and all plastic sold is offset through our partnerships with rePurpose Global and Plastic Bank. |
• | Retail brick-and-mortar exclusive-for-Target |
1. | Build a vibrant and engaged online community of consumers who care deeply about both home and planet. In our customer insights surveys, we found that while 61% of consumers self-identify as buying some natural products (across home, personal care, beauty and food), many are unfamiliar with natural and sustainable brands and are only buying products from a small handful of brands, or in one or two categories. They are early on in their journey of switching to natural and sustainable products, and recommendations from friends, family, influencers and other shoppers are especially powerful. On an average day, our community will comment, share or post thousands of times. This vibrant and ever-evolving dialogue has been instrumental in breaking down barriers to trial. |
2. | Efficiently acquire new customers using performance marketing across a wide variety of digital and offline marketing channels. We pair insights and content sourced directly from our community with sophisticated in-house media measurement and optimization capabilities. This combination has enabled |
us to efficiently acquire a large customer base and build both interest and desire for our Grove Brands and product lines. |
3. | Enable customers to try a variety of natural and/or sustainable products, starting with their first order. This emphasis on product and brand discovery differentiates us from many other brands in the natural and sustainable market who offer a limited selection, or only have a presence in one part of the home. The natural and sustainable products industry is highly fragmented, with no clear market leader, forcing consumers to spend time and energy to research and discover new products. By moving beyond a single category, we provide our customers with a whole-home solution that not only matches their values, but is also easy, affordable, and low-risk (due to our price matching policy and 100% Happiness Guarantee, in which we commit to respond to customer service inquiries within 24 hours, and allow customers to return products within 30 days of delivery, or cancel their subscriptions at any time if they are not completely satisfied). |
• | Large & Unique Data Asset speed-to-insight brick-and-mortar |
• | The Right People on-site buying trends in near real time, and modify on-site presentation of products to drive success in key campaigns. |
• | Pragmatic Algorithms on-site and in-app recommendations to encourage product discovery and drive higher average order value. |
• | Data Privacy and Cybersecurity |
any material findings and incidents to the audit committee. Our data privacy practices are designed to ensure security, compliance, and privacy while collecting, storing, and creating insights from the data. |
• | Subscription Engine |
• | Flexible Monthly Shipments Feature |
• | Marketing Campaigns Software-as-a-Service |
Name |
Age |
Position | ||||
Executive Officers |
||||||
Stuart Landesberg |
37 | Chief Executive Officer and Director | ||||
Sergio Cervantes |
51 | Chief Financial Officer | ||||
Christopher Clark |
37 | Chief Technology Officer and Director | ||||
Delida Costin |
52 | Chief Legal and People Officer; Secretary | ||||
Jennie Perry |
55 | Chief Marketing Officer | ||||
Jon Silverman |
49 | Senior Vice President, Physical Goods | ||||
Non-Employee Directors |
||||||
David Glazer |
38 | Director | ||||
John Replogle |
56 | Director | ||||
Kristine Miller |
58 | Director | ||||
Naytri Shroff Sramek |
32 | Director | ||||
Rayhan Arif |
35 | Director | ||||
Fumbi Chima |
48 | Director |
• | Stu Landesberg, Chief Executive Officer; |
• | Delida Costin, Chief Legal and People Officer; and |
• | Jennie Perry, Chief Marketing Officer |
Name and Principal Position |
Year |
Salary ($) (1) |
Bonus ($) |
Option Awards ($) (2) |
Stock Awards ($) (3) |
Non-Equity Incentive Plan Compensation ($) |
All Other Compensation ($) |
Total ($) |
||||||||||||||||||||||||
Stuart Landesberg |
2021 | 255,000 | — | 18,387,940 | — | — | — | 18,642,940 | ||||||||||||||||||||||||
Chief Executive Officer and President |
||||||||||||||||||||||||||||||||
Delida Costin |
2021 | 425,000 | — | 1,854,572 | 436,500 | — | — | 2,716,072 | ||||||||||||||||||||||||
Chief Legal and People Officer |
||||||||||||||||||||||||||||||||
Jennie Perry |
2021 | 404,134 | — | 2,897,846 | — | — | — | 3,301,980 | ||||||||||||||||||||||||
Chief Marketing Officer |
(1) | Ms. Perry jointed Grove on February 8, 2021. Amounts reported in this column for Ms. Perry reflect a base salary of $450,000 prorated to her start date. |
(2) | Amounts reported in this column for Mr. Landesberg and Mses. Costin and Perry reflect the aggregate grant date fair value of stock options awarded in 2021, computed in accordance with FASB ASC Topic 718, Compensation—Stock Compensation based on the following assumptions: risk-free interest rate of 0.67%—0.69%; expected volatility of 73.66%—73.74%; expected term of 6.0 – 6.1 years; and expected dividend rate of 0.00%. As noted above, 864,910 of the stock options granted to Mr. Landesberg vest based on market conditions. The fair value for Mr. Landesberg’s stock options with a market based vesting condition |
was determined using the probability weighted expected term method (“PWERM”), which involves the estimation of future potential outcomes as well as values and probabilities associated with each potential outcome. Two potential scenarios were used in the PWERM that utilized 1) the value of the Company’s common equity, and 2) a Monte Carlo simulation to specifically value the award. The total grant date fair value of the award, based on the probable satisfaction of the market-based vesting conditions, was determined to be $5.5 million. Under FASB ASC Topic 718, due to the vesting conditions related to Mr. Landesberg’s 864,910 stock options, there is no grant date fair value below or in excess of the amount reflected in the table above for Mr. Landesberg that could be calculated and disclosed based on the achievement of the underlying conditions. |
(3) | The amount reported in this column for Ms. Costin reflects the grant date fair value of $8.73 for her RSUs, computed in accordance with FASB ASC Topic 718, calculated based on the Company’s most recent Section 409A valuation available prior to the grant date. |
Option Awards |
Equity Incentive Plan Awards |
|||||||||||||||||||||||||||||||||||
Name |
Grant Date |
Vesting Commencement Date |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
|||||||||||||||||||||||||||
Stuart Landesberg |
3/30/2018 | (2) | 12/18/2017 | 2,256,324 | — | — | 0.75 | 3/29/2028 | — | — | ||||||||||||||||||||||||||
5/31/2019 | (3) | 12/21/2018 | 3,638,130 | — | — | 2.25 | 5/30/2029 | — | — | |||||||||||||||||||||||||||
2/15/2021 | (4) | 1/1/2021 | 586,309 | 2,540,673 | — | 4.43 | 2/14/2031 | — | — | |||||||||||||||||||||||||||
2/15/2021 | (5) | (5 | ) | — | — | 864,910 | 4.43 | 2/14/2031 | — | — | ||||||||||||||||||||||||||
Delida Costin |
5/31/2019 | (6) | 5/20/2019 | 205,000 | 150,000 | — | 2.25 | 5/30/2029 | — | — | ||||||||||||||||||||||||||
1/15/2020 | (7) | 1/7/2020 | 110,000 | — | — | 2.25 | 1/14/2030 | — | — | |||||||||||||||||||||||||||
2/15/2021 | (8) | 1/1/2021 | 84,375 | 365,625 | — | 4.43 | 2/14/2031 | — | — | |||||||||||||||||||||||||||
9/22/2021 | (9) | N/A | — | — | — | — | — | 50,000 | 436,500 | |||||||||||||||||||||||||||
Jennie Perry |
2/15/2021 | (10) | 2/8/2021 | — | 700,000 | — | 4.43 | 2/14/2031 | — | — |
(1) | As of December 31, 2021, Grove’s equity was not publicly traded and, therefore, there was no ascertainable public market value for the equity on such date. The market value reported in this table is based upon a Section 409A valuation analysis of Grove’s equity as of August 31, 2021, the most recent report available. |
(2) | This option vests 25% on the first anniversary of the vesting commencement date and then vests quarterly for the next 36 months, subject to Mr. Landesberg’s continuous employment through each applicable vesting date, with accelerated vesting if Mr. Landesberg’s employment is terminated by the Company without cause or he resigns for good reason. Because these options may be early exercised for restricted stock, they are reported in this table as “Exercisable.” |
(3) | This option vests 25% on the first anniversary of the vesting commencement date and then vests quarterly for the next 36 months, subject to Mr. Landesberg’s continuous employment through each applicable vesting date, with accelerated vesting if Mr. Landesberg’s employment is terminated by the Company |
without cause or he resigns for good reason. Because these options may be early exercised for restricted stock, they are reported in this table as “Exercisable.” |
(4) | This option vests on the earlier of (i) if the Company’s shares are not publicly traded, such time as the Company closes a preferred or common equity financing in the amount of at least $25.0 million at a price per share of at least $15.03, (ii) if the Company’s shares (or its successor’s shares) are publicly traded, such time as the 20-day trading day volume-weighted average price is at least $15.03 per share, or (iii) immediately prior to the consummation of certain corporate transactions in which the holders of shares of the Company’s common stock will receive, in exchange for such shares, cash or other consideration the aggregate amount of $15.03 per share, subject to Mr. Landesberg’s continuous employment on the date of such milestone. |
(5) | This option vests 25% on the first anniversary of the vesting commencement date and then vests quarterly for the next 36 months, subject to Ms. Costin’s continuous employment through each applicable vesting date, with accelerated vesting following a change in control if Ms. Costin’s employment is terminated by the Company without cause or she resigns for good reason. |
(6) | This option vests 25% on the first anniversary of the vesting commencement date and then vests quarterly for the next 36 months, subject to Ms. Costin’s continuous employment through each applicable vesting date, with accelerated vesting following a change in control if Ms. Costin’s employment is terminated by the Company without cause or she resigns for good reason. Because these options may be early exercised for restricted stock, they are reported in this table as “Exercisable.” |
(7) | This option vests 25% on the first anniversary of the vesting commencement date and then vests quarterly for the next 36 months, subject to Ms. Costin’s continuous employment through each applicable vesting date, with accelerated vesting following a change in control if Ms. Costin’s employment is terminated by the Company without cause or she resigns for good reason. Because these options may be early exercised for restricted stock, they are reported in this table as “Exercisable.” |
(8) | This option vests quarterly for 48 months starting with the first quarter following the vesting commencement date, subject to Ms. Costin’s continuous employment through each applicable vesting date, with accelerated vesting following a change in control if Ms. Costin’s employment is terminated by the Company without cause or she resigns for good reason. |
(9) | The vesting the RSUs requires the satisfaction of both of two conditions: an event condition and a service condition. The event condition will be satisfied if a liquidity event occurs prior to the expiration date (five years from the grant date) subject to Ms. Costin’s continuous employment through the date of such liquidity event. The service condition is satisfied with respect to 3/8th of the RSUs on the date of the liquidity event and quarterly thereafter, subject to Ms. Costin’s continuous employment through the applicable vesting date. Any RSU for which both conditions are satisfied shall become vested. The vesting of the RSUs accelerate following a change in control if Ms. Costin’s employment is terminated by the Company without cause or she resigns for good reason. The consummation of the business combination constituted a liquidity event for purposes of the RSUs and the RSUs remain subject to the service-based vesting requirements set forth in the award agreements. |
(10) | This option vests 25% on the first anniversary of the vesting commencement date and then vests quarterly for the next 36 months, with accelerated vesting following a change in control if Ms. Perry’s employment is terminated by the Company without cause or she resigns for good reason. |
Name |
Stock Awards ($) (1) |
Option Awards ($) (1) |
Total ($) |
|||||||||
David Glazer |
659,290 | 1,141,388 | 1,800,678 | |||||||||
John Replogle |
1,640,790 | 2,853,561 | 4,494,351 |
(1) | The amount reported in this column for Messrs. Glazer and Replogle reflects the grant date fair value of $8.56 for RSUs awarded in 2021, computed in accordance with FASB ASC Topic 718, calculated based on the Company’s most recent Section 409A valuation available prior to the grant date. As of December 31, 2021, Messrs. Glazer and Replogle held outstanding RSUs with respect to 133,333 and 333,343 shares of Grove common stock, respectively. |
(2) | Amounts reported in this column for Messrs. Glazer and Replogle reflect the aggregate grant date fair value of stock options awarded in 2021, computed in accordance with FASB ASC Topic 718, Compensation—Stock Compensation based on the following assumptions: risk-free interest rate of 1.16%—1.21%; expected volatility of 63.5%—63.6%; expected term of 6.02 – 6.08 years; and expected dividend rate of 0.00%. As of December 31, 2021, Messrs. Glazer and Replogle held outstanding options with respect to 333,343 and 372,576 shares of Grove common stock, respectively. |
Name |
Number of Shares of Series E Preferred Stock |
Aggregate Purchase Price ($) |
||||||
SCM GC Investments Limited *(1) |
5,021,189 | $ | 49,999,995.83 |
* | Owners, together with their affiliates, of more than 5% of Grove Collaborative capital stock |
(1) | Additional details regarding this stockholder and its equity holdings are provided in this registration statement under the section “ Principal Securityholders |
Name |
Number of Shares of Series D-2 Preferred Stock |
Aggregate Purchase Price ($) |
||||||
SCM GC Investments Limited *(1) |
2,749,595 | $ | 20,000,004.11 | |||||
General Atlantic (GC), L.P. *(1) |
1,374,798 | $ | 10,000,005.69 | |||||
Norwest Venture Partners XIII, LP *(1) |
1,374,798 | $ | 10,000,005.69 | |||||
Lone Cypress, Ltd. *(1) |
766,175 | $ | 5,573,003.72 | |||||
Lone Cascade, L.P. *(1) |
528,610 | $ | 3,845,003.42 | |||||
Mayfield Select, a Cayman Islands Exempted Partnership *(1) |
274,960 | $ | 2,000,004.05 | |||||
MHS Capital Partners II, L.P. *(1) |
137,480 | $ | 1,000,002.02 | |||||
Lone Monterey Master Fund, Ltd. *(1) |
38,219 | $ | 277,997.37 | |||||
Lone Sierra, L.P. *(1) |
26,809 | $ | 195,003.31 | |||||
Lone Spruce, L.P. *(1) |
14,985 | $ | 108,997.90 | |||||
Weatherspoon Costin Family Trust (2) |
13,748 | $ | 100,000.20 | |||||
Andy Rendich |
6,874 | $ | 50,000.10 |
* | Owners, together with their affiliates, of more than 5% of Grove Collaborative capital stock |
(1) | Additional details regarding this stockholder and its equity holdings are provided in this registration statement under the section “ Principal Securityholders |
(2) | Weatherspoon Costin Family Trust is an affiliate of Delida Costin, Grove Collaborative’s Secretary and Chief Legal and People Officer. |
Name |
Number of Shares of Series D-1 Preferred Stock |
Aggregate Purchase Price ($) |
||||||
General Atlantic (GC), L.P. *(1) |
937,180 | $ | 9,999,991.76 | |||||
Norwest Ventures Partners XIII, LP *(1) |
374,872 | $ | 3,999,996.72 | |||||
Lone Cypress, Ltd. *(1) |
349,716 | $ | 3,731,574.64 | |||||
Mayfield Select, a Cayman Islands Exempted Limited Partnership *(1) |
93,718 | $ | 999,999.18 | |||||
Lone Spruce, L.P. *(1) |
6,410 | $ | 68,396.63 |
* | Owners, together with their affiliates, of more than 5% of Grove Collaborative capital stock |
(1) | Additional details regarding this stockholder and its equity holdings are provided in this registration statement under the section “ Principal Securityholders |
Name |
Number of Shares of Series D Preferred Stock |
Aggregate Purchase Price ($) |
||||||
Lone Cypress, Ltd. *(1) |
6,534,759 | $ | 53,899,999.19 | |||||
General Atlantic (GC), L.P. *(1) |
5,823,008 | $ | 48,029,994.45 | |||||
Norwest Venture Partners XIII, LP *(1) |
1,382,119 | $ | 11,399,993.93 | |||||
MHS Capital Partners G2, LLC *(1) |
373,414 | $ | 3,079,993.37 | |||||
Mayfield Select, a Cayman Islands Exempted Limited Partnership *(1) |
121,238 | $ | 999,995.28 | |||||
OBV Rooted, LLC (2) |
50,920 | $ | 419,998.35 | |||||
MHS Capital Partners II, L.P. *(1) |
26,672 | $ | 219,996.00 |
* | Owners, together with their affiliates, of more than 5% of Grove Collaborative capital stock |
(1) | Additional details regarding this stockholder and its equity holdings are provided in this registration statement under the section “ Principal Securityholders |
(2) | OBV Rooted, LLC is an affiliate of John Replogle, a member of Grove Collaborative’s board of directors. |
• | each person known by the Company to be the beneficial owner of more than 5% of outstanding Class A Common Stock; |
• | each of the Company’s current named executive officers and directors; and |
• | all current executive officers and directors of the Company as a group. |
Name and Address of Beneficial Owners |
Number of Shares of Class A Common Stock(2) |
% |
Number of Shares of Class B Common Stock |
% |
||||||||||||
Directors and current named executive officers(1): |
||||||||||||||||
Stu Landesberg(3) |
9,807,070 | (4) | 17.7 | % | 9,804,370 | 7.8 | % | |||||||||
Fumbi Chima |
— | — | — | — | ||||||||||||
Chris Clark |
1,814,554 | (5) | 3.9 | % | 1,486,717 | 1.3 | % | |||||||||
Delida Costin(6) |
953,493 | (7) | 2.1 | % | 144,866 | * | ||||||||||
Jennie Perry |
521,039 | (8) | 1.1 | % | 521,039 | * | ||||||||||
David Glazer |
33,672 | (9) | * | 30,672 | * | |||||||||||
John Replogle(10) |
316,906 | (11) | * | 90,436 | * | |||||||||||
Rayhan Arif |
— | — | — | — | ||||||||||||
Kristine Miller |
— | — | — | — | ||||||||||||
Naytri Shroff Sramek |
— | — | — | — | ||||||||||||
All directors and executive officers of the Company as a group (12 persons) |
14,357,837 | 24.2 | % | 12,225,467 | 9.1 | % | ||||||||||
Entities associated with Virgin(12) |
29,969,052 | 53.4 | % | — | — | |||||||||||
Entities associated with Mayfield(13) |
15,867,361 | (14) | 25.9 | % | 15,667,361 | 13.4 | % | |||||||||
Norwest Venture Partners XIII, LP(15) |
15,990,008 | (16) | 19.9 | % | 15,489,908 | 13.2 | % | |||||||||
General Atlantic (GC), L.P.(17) |
13,436,978 | (18) | 9.9 | % | 12,936,878 | 11.0 | % | |||||||||
Entities associated with Lone Pine Capital(19) |
11,397,381 | (20) | 9.9 | % | 10,897,381 | 9.3 | % | |||||||||
Entities associated with MHS Capital(21) |
10,535,912 | (22) | 18.8 | % | 10,435,612 | 8.9 | % | |||||||||
SCM GC Investments Limited(23) |
10,893,484 | (24) | 19.6 | % | 9,956,536 | 8.5 | % | |||||||||
Entities associated with NextView Ventures(24) |
7,030,563 | (25) | 13.4 | % | 6,980,263 | 6.0 | % |
1 | The business address of each of Stuart Landesberg, Fumbi Chima, Chris Clark, Delida Costin, Jennie Perry, David Glazer, John Replogle, Rayhan Arif, Kristine Miller and Naytri Shroff Sramek 1301 Sansome Street, San Francisco, CA 94111. |
2 | The beneficial ownership of the Company as of July 14, 2022 is based on (A) 45,570,178 shares of Class A Common Stock outstanding as of as of such date and (B) 117,233,055 shares of Class B Common Stock as of such date. |
3 | Includes 679,357 shares of Class B Common Stock and 100 shares of Class A Common Stock that are held by the Landesberg Living Trust. Mr. Landesberg may be deemed to have voting and dispositive investment power with respect to the shares held by the Landesberg Living Trust. |
4 | Includes 9,904,370 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
5 | Includes 1,486,717 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
6 | Consists of 17,515 shares of Class B Common Stock and 100 shares of Class A Common Stock that are held by the Weatherspoon Costin Family Trust. Ms. Costin may be deemed to have voting and dispositive investment power with respect to the shares held by the Weatherspoon Costin Family Trust. |
7 | Includes 144,866 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
8 | Includes 521,039 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
9 | Includes 30,672 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
10 | Consists of 24 shares of Class B Common Stock and 267 shares of Class A Common Stock that are held by the Replogle Family LLC. Mr. Replogle serves as the manager of Replogle Family LLC may be deemed to have voting and dispositive investment power with respect to the shares held by the Replogle Family LLC. |
11 | Includes 90,436 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
12 | Includes 9,972,500 shares of Class A Common Stock held of record by the Sponsor, 6,700,000 warrants to acquire Class A Common Stock held of record by the Sponsor, 9,421,524 shares of Class A Common Stock held of record by the Backstop Investor, and 3,875,028 warrants to acquire Class A Common Stock held of record by the Backstop Investor. The Backstop Investor is the sole managing member and manager of the Sponsor, and is wholly owned by Virgin Group Holdings Limited (“Virgin Group Holdings”). Virgin Group Holdings is owned by Sir Richard Branson, and he has the ability to appoint and remove the management of Virgin Group Holdings and, as such, may indirectly control the decisions of Virgin Group Holdings, regarding the voting and disposition of securities held by Virgin Group Holdings. Therefore, Sir Richard Branson may be deemed to have indirect beneficial ownership of the shares held by the Sponsor and the Backstop Investor. The address of Virgin Group Holdings Limited is Craigmuir Chambers, Road Town, Tortola, VG1110, British Virgin Islands and the address of the Backstop Investor is Craigmuir Chambers, Road Town, Tortola, VG1110, British Virgin Islands. |
13 | Consists of 13,312,440 shares of Class B Common Stock held by Mayfield XV, a Cayman Islands Exempted Limited Partnership (“MF XV”) and 2,354,921 shares of Class B Common Stock and 200,000 shares of Class A Common Stock held by Mayfield Select, a Cayman Islands Exempted Limited Partnership (“MF Select”). Mayfield XV Management (UGP), Ltd., a Cayman Islands Exempted Company (“MF XV UGP)” is the general partner of Mayfield XV Management (EGP), L.P., a Cayman Islands Exempted Limited Partnership, which is the general partner of MF XV. Rajeev Batra, Navin Chaddha and Urshit Parikh are the directors of MF XV UGP. As a result, each of the foregoing entities and individuals may be deemed to share beneficial ownership of the shares owned by MF XV, but each of the individuals disclaims such beneficial ownership. Mayfield Select Management (UGP), Ltd., a Cayman Islands Exempted Company (“MF Select UGP”) is the general partner of Mayfield Select Management (EGP), L.P., a Cayman Islands Exempted Limited Partnership, which is the general partner of MF Select. Rajeev Batra, Navin Chaddha and Urshit Parikh are the directors of MF Select UGP. As a result, each of the foregoing entities and individuals may be deemed to share beneficial ownership of the shares owned by MF Select, but |
each of the individuals disclaims such beneficial ownership. The address for each of these entities and individuals is c/o Mayfield, 2484 Sand Hill Road, Menlo Park, CA 94025. |
14 | Includes 15,667,361 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
15 | Includes 15,489,908 shares of Class B Common Stock and 500,100 shares of Class A Common Stock held of record by Norwest Venture Partners XIII, LP (“NVP XIII”). However, pursuant to a letter agreement between NVP XIII and Grove, NVP XIII has relinquished its right to convert shares of Class B Common Stock held of record by the NVP XIII into shares of Class A Common Stock to the extent that, after giving effect to such conversion, the NVP XIII, together with any other holder whose ownership may aggregated with that of the NVP XIII, collectively would beneficially own in excess of 19.99%. Genesis VC Partners XIII, LLC is the general partner of NVP XIII, and NVP Associates, LLC is the managing member of Genesis VC Partners XIII, LLC. Each of Promod Haque, Jeffrey Crowe, and Jon Kossow, who are co-chief executive officers of NVP Associates, LLC, may be deemed to share voting and dispositive power over the shares held by NVP XIII. Mr. Crowe disclaims beneficial ownership of all such shares, except to the extent of his pecuniary interest therein, if any. The address for each of these entities and individuals is c/o 525 University Avenue, #800, Palo Alto, California 94301. |
16 | Includes 15,489,908 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
17 | Includes 12,936,878 shares of Class B Common Stock and 500,100 shares of Class A Common Stock held of record by General Atlantic (GC), L.P. (“GA GC”). However, pursuant to a letter agreement between GA GC and Grove, GA GC has relinquished its right to convert shares of Class B Common Stock held of record by GA GC into shares of Class A Common Stock to the extent that, after giving effect to such conversion, GA GC, together with any other holder whose ownership may aggregated with that of GA GC, collectively would beneficially own in excess of 9.99%. The limited partners that share beneficial ownership of the shares held by GA GC are the following General Atlantic investment funds (the “GA Funds”): General Atlantic Partners 100, L.P. (“GAP 100”), General Atlantic Partners (Bermuda) EU, L.P. (“GAP Bermuda EU”), GAP Coinvestments III, LLC (“GAPCO III”), GAP Coinvestments IV, LLC (“GAPCO IV”), GAP Coinvestments V, LLC (“GAPCO V”) and GAP Coinvestments CDA, L.P. (“GAPCO CDA”). The general partner of GA GC is General Atlantic (SPV) GP, LLC (“GA SPV”). The general partner of GAP 100 is ultimately controlled by General Atlantic, L.P. (“GA LP”), which is controlled by the Management Committee of GASC MGP, LLC (the “Management Committee”). The general partner of GAP Bermuda EU is ultimately controlled by GAP (Bermuda) L.P. (“GAP Bermuda”), which is also controlled by the Management Committee. GA LP is the managing member of GAPCO III, GAPCO IV and GAPCO V, the general partner of GAPCO CDA and is the sole member of GA SPV. There are nine members of the Management Committee. GA GC, GA LP, GAP Bermuda, GA SPV and the GA Funds (collectively, the “GA Group”) are a “group” within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934, as amended. The mailing address of the foregoing General Atlantic entities, other than GAP Bermuda EU and GAP Bermuda, is c/o General Atlantic Service Company, L.P., 55 East 52nd Street, 33rd Floor, New York, NY 10055. The mailing address of GAP Bermuda EU and GAP Bermuda is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. Each of the members of the Management Committee disclaims ownership of the shares except to the extent that he has a pecuniary interest therein. |
18 | Includes 12,936,878 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
19 | Includes 9,330,505 shares of Class B Common Stock and 166,825 shares of Class A Common Stock held of record by Lone Cypress, Ltd., 1,144,864 shares of Class B Common Stock and 309,643 shares of Class A Common Stock held of record by Lone Cascade, L.P., 391,171 shares of Class B Common Stock and 2,713 shares of Class A Common Stock held of record by Lone Spruce, L.P, 12,641 shares of Class B Common Stock and 11,236 shares of Class A Common Stock held of record by Lone Monterey Master Fund, Ltd., and 18,200 shares of Class B Common Stock and 9,583 shares of Class A Common Stock held of record by Lone Sierra, L.P. However, pursuant to a letter agreement between Lone Pine Capital and Grove, Lone Pine Capital has relinquished its right to convert shares of Class B Common Stock held of record by the Long Pine Funds into shares of Class A Common Stock to the extent that, after giving effect to such conversion, |
the Lone Pine Funds, together with any other holder whose ownership may aggregated with that of the Lone Pine Funds, collectively would beneficially own in excess of 9.99%. Lone Pine Capital LLC, a Delaware limited liability company (“Lone Pine Capital”), serves as investment manager to Lone Cypress, Ltd., a Cayman Islands exempted company, Lone Cascade, L.P., a Delaware limited partnership, Lone Monterey Master Fund, Ltd., a Cayman Islands exempted company, Lone Spruce, L.P., a Delaware limited partnership, Lone Sierra, L.P., a Delaware limited partnership (collectively, the “Lone Pine Funds”), with respect to the securities of the Company directly held by each of the Lone Pine Funds and has the authority to dispose of and vote the securities of the Company directly held by the Lone Pine Funds. Each of David F. Craver, Brian F. Doherty, Kelly A. Granat and Kerry A. Tyler is an Executive Committee Member of Lone Pine Managing Member LLC, which is the Managing Member of Lone Pine Capital, with respect to the securities directly held by each of the Lone Pine Funds. Stephen F. Mandel, Jr. is the Managing Member of Lone Pine Managing Member LLC, which is the Managing Member of Lone Pine Capital, with respect to the securities directly held by each of the Lone Pine Funds. Each of David F. Craver, Brian F. Doherty, Kelly A. Granat, Kerry A. Tyler, and Stephen F. Mandel, Jr. may be deemed to beneficially own the securities held by the Lone Pine Funds and each of them disclaims beneficial ownership of these securities. The business address of Lone Pine Capital LLC and the Executive Committee Members is Two Greenwich Plaza, Greenwich, Connecticut 06830. |
20 | Includes 10,897,381 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
21 | Includes 8,093,070 shares of Class B Common Stock and 100,100 shares of Class A Common Stock held of record by MHS Capital Partners II, L.P., 1,857,640 shares of Class B Common Stock and 100 shares of Class A Common Stock held of record by MHS Capital Partners G, LLC, and 484,902 shares of Class B Common Stock and 100 shares of Class A Common Stock held of record by MHS Capital Partners G2, LLC. MHS Capital Management, LLC is the general partner of MHS Capital Partners, LP. MHS Capital Management II, LLC is the Managing Member of MHS Capital Partners G, LLC and MHS Capital Partners G2, LLC. Mark Sugarman, who is the Manager of MHS Capital Management, LLC, and MHS Capital Management II, LLC may be deemed to share voting and dispositive power over the shares held by MHS Capital Partners, LP, MHS Capital Partners G, LLC and MHS Capital Partners G2, LLC. Mr. Sugarman disclaims beneficial ownership of all such shares, except to the extent of his pecuniary interest therein, if any. The address for each of these entities and individuals is c/o 2121 S. El Camino Real, Ste 200, San Mateo, CA 94403. |
22 | Includes 10,435,612 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
23 | Includes 9,956,536 shares of Class B Common Stock and 100 shares of Class A Common Stock held of record by SCM GC Investments Limited (“SCMGC”), 65,150 shares of Class A Common Stock held by Sculptor Enhanced Master Fund, Ltd. (“SCEN”) and 434,850 shares of Class A Common Stock held by Sculptor Master Fund, Ltd. (“SCMF”). Additionally, based on the information provided to the Company on or prior to May 13, 2022, this number also includes 238,534 shares of Class A Common Stock and 48,633 warrants to acquire Class A Common Stock held of record by Sculptor Special Funding, LP (“NRMD”), a Cayman Islands company, 54,605 shares of Class A Common Stock and 10,921 warrants to acquire Class A Common Stock held of record by Sculptor Credit Opportunities Master Fund, Ltd. (“SCCO”), a Cayman Islands company, 16,296 shares of Class A Common Stock and 2,333 warrants to acquire Class A Common Stock held of record by SCEN, a Cayman Islands company, and 54,605 shares of Class A Common Stock and 10,921 warrants to acquire Class A Common Stock held of record by Sculptor SC II, LP (“SCII”), a Delaware company. Sculptor Capital LP (“Sculptor”), a Delaware limited partnership, is the investment adviser to NRMD, SCCO, SCEN, and SCMF and thus may be deemed a beneficial owner of the shares in the accounts managed by Sculptor. Sculptor Capital II LP (“Sculptor II”), a Delaware limited partnership, is the investment adviser to SCII, and thus may be deemed a beneficial owner of the shares in the accounts managed by Sculptor II. Sculptor Capital Holding Corporation, a Delaware corporation (“SCHC”), serves as the sole general partner of Sculptor and Sculptor II. As such, SCHC may be deemed to control Sculptor and Sculptor II and, therefore, may be deemed a beneficial owner of the shares in the accounts managed by Sculptor and Sculptor II. Sculptor Capital Management, Inc. (“SCU”), a Delaware corporation, is the sole |
shareholder of SCHC, and may be deemed a beneficial owner of the shares in the accounts managed by Sculptor and Sculptor II. SCMGC is beneficially owned by SCMF and SCEN, and may be deemed a beneficial owner of the shares. The business address of NRMD, SCCO, SCEN, SCII, Sculptor, Sculptor II, SCHC, SCMF, SCMGC and SCU is 9 West 57 Street, 39 Floor, New York, NY 10019. |
24 | Includes 9,956,536 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
25 | Consists of 4,684,890 shares of Class B Common Stock and 50,100 shares of Class A Common Stock held of record by NextView Ventures II, L.P, 1,749,024 shares of Class B Common Stock and 100 shares of Class A Common Stock held of record by NextView Ventures II-A, L.P. and 546,349 shares of Class B Common Stock and 100 shares of Class A Common Stock held of record by NextView Ventures I Co-Invest Fund, L.P. Lee Hower, David Beisel and Rob Go as Managing Members of Nextview Capital Partners II, LLC, the General Partner of NextView Ventures II, L.P. exercise voting and investment power with respect to the securities and may be deemed to be the beneficial owner of the securities held by NextView Ventures II, L.P. NextView Ventures II, L.P.’s business address is 179 Lincoln Street, Suite 404, Boston, MA 02111. |
26 | Includes 6,980,263 shares of Class B Common Stock that are convertible into shares of Class A Common Stock on a one-for-one |
Name of Selling Holder |
Class A Common Stock Beneficially Owned Prior to the Offering |
Number of Shares of Class A Common Stock Being Offered |
Number of Shares of Class A Common Stock Beneficially Owned After the Offered Shares of Common Stock are Sold |
Percentage of Outstanding Class A Common Stock Beneficially Owned After the Offered Shares of Common Stock are Sold |
||||||||||||
Number of Shares |
Number of Shares |
Number of Shares |
% | |||||||||||||
PIPE Investors |
||||||||||||||||
Bullpen Capital III, L.P. 1 |
5,981,985 | 10,000 | 5,971,985 | 13.0 | % | |||||||||||
Cendana Investments II, LP 2 |
611,395 | 10,000 | 601,395 | 1.3 | % | |||||||||||
Deepen Shah 3 |
10,000 | 10,000 | — | — | ||||||||||||
NextView Ventures II, L.P. 4 |
7,030,563 | 50,000 | 6,980,563 | 13.3 | % | |||||||||||
SMALLCAP World Fund, Inc. 5 |
4,095,474 | 750,000 | 3,345,474 | 7.4 | % | |||||||||||
Glynn Emerging Opportunity Fund II, L.P. 6 |
1,173,253 | 15,329 | 1,157,924 | 2.5 | % | |||||||||||
Glynn Emerging Opportunity Fund II-A, L.P.7 |
967,729 | 9,671 | 958,058 | 2.1 | % | |||||||||||
StepStone VC Secondaries Fund III, L.P. 8 |
1,886,726 | 150,000 | 1,736,726 | 3.7 | % | |||||||||||
Inherent ESG Private, LP 9 |
2,286,132 | 100,000 | 2,186,132 | 4.6 | % | |||||||||||
Entities associated with Lone Pine Capital 10 |
11,397,381 | 500,000 | 10,897,381 | 9.9 | % | |||||||||||
Norwest Venture Partners XIII, LP 11 |
15,990,008 | 15,990,008 | — | — | ||||||||||||
Manatu Holdings Limited 12 |
100,000 | 100,000 | — | — | ||||||||||||
7th & Union Development Company Inc. 13 |
100,000 | 100,000 | — | — | ||||||||||||
General Atlantic (GC), L.P. 14 |
13,436,978 | 13,436,978 | — | — | ||||||||||||
Entities associated with MHS Capital 15 |
10,535,912 | 10,535,912 | — | — | ||||||||||||
Entities associated with Mayfield 16 |
15,867,361 | 15,867,361 | — | — | ||||||||||||
SCM GC Investments Limited 17 |
10,595,576 | 10,456,636 | 138,940 | * | ||||||||||||
Sponsor Investors |
||||||||||||||||
Virgin Group Acquisition Sponsor II LLC 18 |
16,672,500 | 16,672,500 | — | — | ||||||||||||
Corvina Holdings Limited 19 |
29,969,052 | 13,296,552 | — | — | ||||||||||||
Directors and Executive Officers |
||||||||||||||||
Stuart Landesberg 20 |
9,807,070 | 2,030,724 | 7,776,346 | 14.6 | % | |||||||||||
Fumbi Chima |
— | — | — | — | ||||||||||||
Chris Clark 21 |
1,814,554 | 518,431 | 1,296,123 | 2.8 | % | |||||||||||
Delida Costin 22 |
953,493 | 144,966 | 808,527 | 1.7 | % | |||||||||||
Jennie Perry 23 |
521,039 | 94,724 | 426,315 | * | ||||||||||||
David Glazer 24 |
33,672 | 33,672 | — | — | ||||||||||||
John Replogle 25 |
316,906 | 316,906 | — | — | ||||||||||||
Rayhan Arif |
— | — | — | — | ||||||||||||
Kristine Miller |
— | — | — | — | ||||||||||||
Naytri Shroff Sramek |
— | — | — | — | ||||||||||||
Jon Silverman 26 |
848,044 | 282,381 | 565,663 | 1.2 | % | |||||||||||
Sergio Cervantes 27 |
63,149 | 63,149 | — | — | ||||||||||||
Other Selling Holders |
||||||||||||||||
Jeff Crowe |
— | — | — | — |
Name of Selling Holder |
Class A Common Stock Beneficially Owned Prior to the Offering |
Number of Shares of Class A Common Stock Being Offered |
Number of Shares of Class A Common Stock Beneficially Owned After the Offered Shares of Common Stock are Sold |
Percentage of Outstanding Class A Common Stock Beneficially Owned After the Offered Shares of Common Stock are Sold |
||||||||||||
Number of Shares |
Number of Shares |
Number of Shares |
% | |||||||||||||
Mark Sugarman |
— | — | — | — | ||||||||||||
Tim Chang |
— | — | — | — | ||||||||||||
Chris Burggraeve |
30,000 | 30,000 | — | — | ||||||||||||
Elizabeth Nelson |
30,000 | 30,000 | — | — | ||||||||||||
Latif Peracha |
30,000 | 30,000 | — | — |
Warrants |
||||||||||||||||
Name of Selling Holder |
Warrants Beneficially Owned Prior to the Offering |
Warrants to be Sold in the Offering |
Warrants Beneficially Owned After the Offering |
Percentage of Outstanding Warrants Beneficially Owned After the Offered Warrants are Sold |
||||||||||||
Number of Warrants |
Number of Warrants |
Number of Warrants |
% | |||||||||||||
Virgin Group Acquisition Sponsor II LLC 28 |
6,700,000 | 6,700,000 | — | — |
* | Less than 1% |
1 |
Consists of 10,000 shares of Class A Common Stock issued in the PIPE Investment, 401,373 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock, and 4,484,892 shares of Class A Common Stock held of record by Bullpen Capital III, L.P. and 89,184 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 996,536 shares of Class A Common Stock held of record by Bullpen Playoff Fund, L.P. Paul Martino, Duncan Davidson and Eric Wiesen, as Managing Members of Bullpen Associates III, LLC, the General Partner of Bullpen Capital III, L.P. exercise voting and investment power with respect to the securities and may be deemed to be the beneficial owner of the securities held by Bullpen Capital III, L.P. Bullpen Capital III, L.P.’s business address is 38 Keyes Ave., Suite 100, San Francisco, CA 94219. |
2 |
Consists of 10,000 shares of Class A Common Stock issued in the PIPE Investment, 601,295 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock, and 100 shares of Class A Common Stock held of record by Cendana Investments II, LP. Michael Kim, as Manager of Cendana Investments II GP, LLC, the General Partner of Cendana Investments II, LP exercises voting and investment power with respect to the securities and may be deemed to be the beneficial owner of the securities held by Cendana Investments II, LP. Cendana Investments II, LP’s business address is 3990 Washington Street, San Francisco, CA 94118. |
3 |
Consists of 10,000 shares of Class A Common Stock issued in the PIPE Investment held directly by Mr. Shah. |
4 |
Consists of 50,000 shares of Class A Common Stock issued in the PIPE Investment, 4,684,890 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock, and 100 shares of Class A Common Stock held of record by NextView Ventures II, L.P, 1,749,024 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock held of record by NextView Ventures II-A, L.P. and 546,349 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock held of record by NextView Ventures I Co-Invest Fund, L.P. Lee Hower, David Beisel and Rob Go as Managing Members of |
Nextview Capital Partners II, LLC, the General Partner of NextView Ventures II, L.P. exercise voting and investment power with respect to the securities and may be deemed to be the beneficial owner of the securities held by NextView Ventures II, L.P. NextView Ventures II, L.P.’s business address is 179 Lincoln Street, Suite 404, Boston, MA 02111. |
5 |
Consists of 750,000 shares of Class A Common Stock issued in the PIPE Investment and 274,807 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held of record by SMALLCAP World Fund, Inc. (“SCWF”), and 3,070,667 shares of Class A Common Stock held of record by SCWF. Capital Research and Management Company (“CRMC”) is the investment adviser for SCWF. CRMC and Capital World Investors (“CWI”) may be deemed to be the beneficial owner of the shares of common stock held by SCWF; however, each of CRMC and CWI expressly disclaims that it is, in fact, the beneficial owner of such securities. Brady L. Enright, Julian N. Abdey, Jonathan Knowles, Gregory W. Wendt, Peter Eliot, Bradford F. Freer, Leo Hee, Roz Hongsaranagon, Harold H. La, Dimitrije Mitrinovic, Aidan O’Connell, Samir Parekh, Andraz Razen, Renaud H. Samyn, Arun Swaminathan, Thatcher Thompson, Michael Beckwith, and Shlok Melwani, as portfolio managers, have voting and investment powers over the shares held by SCWF. The address for SCWF is c/o Capital Research and Management Company, 333 S. Hope St., 55th Floor, Los Angeles, California 90071. SCWF acquired the securities being registered hereby in the ordinary course of its business. |
6 |
Consists of 15,329 shares of Class A Common Stock issued in the PIPE Investment, 1,157,824 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock held of record by Glynn Emerging Opportunity Fund II, L.P. David Glynn as Managing Member of Glynn Emerging Opportunity Fund II, L.P. exercises voting and investment power with respect to the securities and may be deemed to be the beneficial owner of the securities held by Glynn Emerging Opportunity Fund II, L.P. The address for Glynn Emerging Opportunity Fund II, L.P. is 3000 Sand Hill Rd., #3-230, Menlo Park, CA 94025. |
7 |
Consists of 9,671 shares of Class A Common Stock issued in the PIPE Investment, 957,958 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock held of record by Glynn Emerging Opportunity Fund II-A, L.P. David Glynn as Managing Member of Glynn Emerging Opportunity Fund II-A, L.P. exercises voting and investment power with respect to the securities and may be deemed to be the beneficial owner of the securities held by Glynn Emerging Opportunity Fund II-A, L.P. The address for Glynn Emerging Opportunity Fund II-A, L.P. is 3000 Sand Hill Rd., #3-230, Menlo Park, CA 94025. |
8 |
Consists of 150,000 shares of Class A Common Stock issued in the PIPE Investment, 1,736,626 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock, and 100 shares of Class A Common Stock held of record by StepStone VC Secondaries Fund III, L.P. Eric Thompson and other individuals exercise voting and investment power with respect to the securities and may be deemed to be the beneficial owner of the securities held by StepStone VC Secondaries Fund III, L.P. StepStone VC Secondaries Fund III, L.P.’s business address is 100 Painters Mill Road, Suite 700, Owings Mills, MD 21117. |
9 |
Consists of 100,000 shares of Class A Common Stock issued in the PIPE Investment, 100 shares of Class A Common Stock and 2,186,032 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held of record by Inherent ESG Private, LP. Inherent ESG Private, LP is controlled by its general partner Inherent Capital, LLC, whose sole member is Inherent Group, LP, which is controlled by its general partner Inherent Group GP, LLC, whose sole member is Anthony L. Davis, a natural person. Inherent ESG Private, LP’s business address is 530 Fifth Avenue, Suite 702, New York, NY 10036. |
10 |
Includes 9,330,505 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 166,825 shares of Class A Common Stock issued in the PIPE Investment held of record by Lone Cypress, Ltd., 1,144,864 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 309,643 shares of Class A Common Stock issued in the PIPE Investment held of record by Lone Cascade, L.P., 391,171 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 2,713 shares of Class A Common Stock issued in the PIPE Investment held of record by Lone Spruce, L.P, 12,641 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 11,236 shares of Class A Common Stock issued in the PIPE Investment held of record |
by Lone Monterey Master Fund, Ltd., and 18,200 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 9,583 shares of Class A Common Stock issued in the PIPE Investment held of record by Lone Sierra, L.P. However, pursuant to a letter agreement between Lone Pine Capital and the Company, Lone Pine Capital has relinquished its right to convert shares of Class B Common Stock held of record by the Long Pine Funds into shares of Class A Common Stock to the extent that, after giving effect to such conversion, the Lone Pine Funds, together with any other holder whose ownership may aggregated with that of the Lone Pine Funds, collectively would beneficially own in excess of 9.99%. Lone Pine Capital LLC, a Delaware limited liability company (“Lone Pine Capital”), serves as investment manager to Lone Cypress, Ltd., a Cayman Islands exempted company, Lone Cascade, L.P., a Delaware limited partnership, Lone Monterey Master Fund, Ltd., a Cayman Islands exempted company, Lone Spruce, L.P., a Delaware limited partnership, Lone Sierra, L.P., a Delaware limited partnership (collectively, the “Lone Pine Funds”), with respect to the securities of the Company directly held by each of the Lone Pine Funds and has the authority to dispose of and vote the securities of the Company directly held by the Lone Pine Funds. Each of David F. Craver, Brian F. Doherty, Kelly A. Granat and Kerry A. Tyler is an Executive Committee Member of Lone Pine Managing Member LLC, which is the Managing Member of Lone Pine Capital, with respect to the securities directly held by each of the Lone Pine Funds. Stephen F. Mandel, Jr. is the Managing Member of Lone Pine Managing Member LLC, which is the Managing Member of Lone Pine Capital, with respect to the securities directly held by each of the Lone Pine Funds. Each of David F. Craver, Brian F. Doherty, Kelly A. Granat, Kerry A. Tyler, and Stephen F. Mandel, Jr. may be deemed to beneficially own the securities held by the Lone Pine Funds and each of them disclaims beneficial ownership of these securities. The business address of Lone Pine Capital LLC and the Executive Committee Members is Two Greenwich Plaza, Greenwich, Connecticut 06830. |
11 |
Consists of 500,000 shares of Class A Common Stock issued in the PIPE Investment, 15,489,908 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock held of record by Norwest Venture Partners XIII, LP. However, pursuant to a letter agreement between NVP XIII and the Company, NVP XIII has relinquished its right to convert shares of Class B Common Stock held of record by the NVP XIII into shares of Class A Common Stock to the extent that, after giving effect to such conversion, the NVP XIII, together with any other holder whose ownership may aggregated with that of the NVP XIII, collectively would beneficially own in excess of 19.99%. Genesis VC Partners XIII, LLC is the general partner of Norwest Venture Partners XIII, LP, and NVP Associates, LLC is the managing member of Genesis VC Partners XIII, LLC. Each of Promod Haque, Jeffrey Crowe, and Jon Kossow, who are co-chief executive officers of NVP Associates, LLC, may be deemed to share voting and dispositive power over the shares held by Norwest Venture Partners XIII, LP. Mr. Crowe disclaims beneficial ownership of all such shares, except to the extent of his pecuniary interest therein, if any. The address for each of these entities and individuals is c/o 525 University Avenue, #800, Palo Alto, California 94301. |
12 |
Consists of 100,000 shares of Class A Common Stock issued in the PIPE Investment. Accuro Fiduciary Services (Jersey) Ltd and Accuro Corporate Services (Jersey) Ltd, as corporate directors, exercise voting and dispositive power over the shares held by Manatu Holdings Limited. Manatu Holdings Limited’s business address is 2nd Floor, One The Esplanade, St. Helier, Jersey JE2 3QA. |
13 |
Consists of 100,000 shares of Class A Common Stock issued in the PIPE Investment. David I. Solomon, as President Real Estate and Alternative Investments Drew Bauer, as Chief Financial Officer, and Brian O’Neill as Executive Vice President exercise voting and investment power with respect to the securities and may be deemed to be the beneficial owner of the securities held by 7th & Union Development Company Inc. 7th & Union Development Company Inc.’s business address is 15 Enterprise Avenue, Suite 100, Aliso Viejo, CA 92656. |
14 |
Consists of 500,000 shares of Class A Common Stock issued in the PIPE Investment, 100 shares of Class A Common Stock and 12,936,878 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held of record by General Atlantic (GC), L.P. (“GA GC”). However, pursuant to a letter agreement between GA GC and the Company, GA GC has relinquished its right to convert shares of Class B Common Stock held of record by GA GC into shares of Class A Common Stock to the extent that, after giving effect to such conversion, GA GC, together with any other holder whose ownership may aggregated |
with that of GA GC, collectively would beneficially own in excess of 9.99%. The limited partners that share beneficial ownership of the shares held by GA GC are the following General Atlantic investment funds (the “GA Funds”): General Atlantic Partners 100, L.P. (“GAP 100”), General Atlantic Partners (Bermuda) EU, L.P. (“GAP Bermuda EU”), GAP Coinvestments III, LLC (“GAPCO III”), GAP Coinvestments IV, LLC (“GAPCO IV”), GAP Coinvestments V, LLC (“GAPCO V”) and GAP Coinvestments CDA, L.P. (“GAPCO CDA”). The general partner of GA GC is General Atlantic (SPV) GP, LLC (“GA SPV”). The general partner of GAP 100 is ultimately controlled by General Atlantic, L.P. (“GA LP”), which is controlled by the Management Committee of GASC MGP, LLC (the “Management Committee”). The general partner of GAP Bermuda EU is ultimately controlled by GAP (Bermuda) L.P. (“GAP Bermuda”), which is also controlled by the Management Committee. GA LP is the managing member of GAPCO III, GAPCO IV and GAPCO V, the general partner of GAPCO CDA and is the sole member of GA SPV. There are nine members of the Management Committee. GA GC, GA LP, GAP Bermuda, GA SPV and the GA Funds (collectively, the “GA Group”) are a “group” within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934, as amended. The mailing address of the foregoing General Atlantic entities, other than GAP Bermuda EU and GAP Bermuda, is c/o General Atlantic Service Company, L.P., 55 East 52nd Street, 33rd Floor, New York, NY 10055. The mailing address of GAP Bermuda EU and GAP Bermuda is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. Each of the members of the Management Committee disclaims ownership of the shares except to the extent that he has a pecuniary interest therein. |
15 |
Consists of 100,000 shares of Class A Common Stock issued in the PIPE Investment, 100 shares of Class A Common Stock and 8,093,070 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held of record by MHS Capital Partners II, L.P., 1,857,640 shares of A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock held of record by MHS Capital Partners G, LLC, and 484,902 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock held of record by MHS Capital Partners G2, LLC. MHS Capital Management, LLC is the general partner of MHS Capital Partners, LP. MHS Capital Management II, LLC is the Managing Member of MHS Capital Partners G, LLC and MHS Capital Partners G2, LLC. Mark Sugarman, who is the Manager of MHS Capital Management, LLC, and MHS Capital Management II, LLC may be deemed to share voting and dispositive power over the shares held by MHS Capital Partners, LP, MHS Capital Partners G, LLC and MHS Capital Partners G2, LLC. Mr. Sugarman disclaims beneficial ownership of all such shares, except to the extent of his pecuniary interest therein, if any. The address for each of these entities and individuals is c/o 2121 S. El Camino Real, Ste 200, San Mateo, CA 94403. |
16 |
Consists of 200,000 shares of Class A Common Stock issued in the PIPE Investment and 2,354,921 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held by Mayfield Select, a Cayman Islands Exempted Limited Partnership (“MF Select”) and 13,312,440 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held by Mayfield XV, a Cayman Islands Exempted Limited Partnership (“MF XV”). Mayfield XV Management (UGP), Ltd., a Cayman Islands Exempted Company (“MF XV UGP)” is the general partner of Mayfield XV Management (EGP), L.P., a Cayman Islands Exempted Limited Partnership, which is the general partner of MF XV. Rajeev Batra, Navin Chaddha and Urshit Parikh are the directors of MF XV UGP. As a result, each of the foregoing entities and individuals may be deemed to share beneficial ownership of the shares owned by MF XV, but each of the individuals disclaims such beneficial ownership. Mayfield Select Management (UGP), Ltd., a Cayman Islands Exempted Company (“MF Select UGP) is the general partner of Mayfield Select Management (EGP), L.P., a Cayman Islands Exempted Limited Partnership, which is the general partner of MF Select. Rajeev Batra, Navin Chaddha and Urshit Parikh are the directors of MF Select UGP. As a result, each of the foregoing entities and individuals may be deemed to share beneficial ownership of the shares owned by MF Select, but each of the individuals disclaims such beneficial ownership. The address for each of these entities and individuals is c/o Mayfield, 2484 Sand Hill Road, Menlo Park, CA 94025. |
17 |
Consists of 9,956,436 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock held of record by SCM GC Investments Limited, 65,150 shares of Class A Common Stock purchased in the PIPE Financing held of record by Sculptor Enhanced Master Fund, Ltd. and 434,850 shares of Class A Common Stock purchased in the PIPE Financing held of |
record by Sculptor Master Fund, Ltd. This number also includes 91,105 shares of Class A Common Stock held by Sculptor Special Funding, LP, 20,855 shares of Class A Common Stock held by Sculptor Credit Opportunities Master Fund, Ltd., 6,225 shares of Class A Common Stock held by Sculptor Enhanced Master Fund Ltd., and 20,855 shares of Class A Common Stock held by Sculptor SC II LP. SCM GC Investments Limited is wholly-owned by Sculptor Master Fund Ltd. and Sculptor Enhanced Master Fund Ltd. Sculptor Capital LP is the investment adviser to Sculptor Special Funding, LP, Sculptor Credit Opportunities Master Fund, Ltd., Sculptor Enhanced Master Fund Ltd. and Sculptor Master Fund, Ltd. Sculptor II LP is the investment adviser to Sculptor SC II LP. Sculptor Capital Holding Corporation serves as the sole general partner of Sculptor Capital LP. Sculptor Capital Holding II LLC serves as the sole general partner of Sculptor Capital II LP. Sculptor Capital Management, Inc. is a holding company that is the sole shareholder of Sculptor Capital Holding Corporation and the sole member of Sculptor Capital Holding II LLC. The business address of SCM GC Investments Limited is 9 West 57 Street, 39 Floor, New York, NY 10019. |
18 |
Consists of 9,972,500 shares of Class A Common Stock held of record by the Sponsor and 6,700,000 shares of Class A Common Stock which can be acquired upon the exercise of the Private Placement Warrants. Corvina Holdings Limited, a British Virgin Islands exempted company, is the sole managing member and manager of the Sponsor, and has voting and investment discretion with respect to the securities held of record by the Sponsor. Corvina Holdings Limited is wholly owned by Virgin Group Holdings Limited. Virgin Group Holdings Limited is owned by Sir Richard Branson, and he has the ability to appoint and remove the management of Virgin Group Holdings Limited and, as such, may indirectly control the decisions of Virgin Group Holdings Limited, regarding the voting and disposition of securities held by Virgin Group Holdings Limited. Therefore, Sir Richard Branson may be deemed to have indirect beneficial ownership of the shares held by the Sponsor. The address of Corvina Holdings Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The address of Virgin Group Holdings Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The address of Sir Richard Branson is Branson Villa, Necker Beach Estate, Necker Island, VG 1150 British Virgin Islands. The business address of the Sponsor is 65 Bleecker Street, 6th Floor, New York, New York 10012. |
19 |
Consists of (i) 5,000,000 shares of Class A Common Stock issued in the PIPE Investment, 4,421,524 shares of Class A Common Stock issued pursuant to the Backstop Subscription Agreement, 3,875,028 shares of Class A Common Stock issuable upon the exercise of the Backstop Warrants held of record by Corvina Holdings Limited and (ii) 6,700,000 shares of Class A Common Stock which can be acquired upon the exercise of the Private Placement Warrants and 9,972,500 shares of Class A Common Stock held of record by the Sponsor. Corvina Holdings Limited is wholly owned by Virgin Group Holdings Limited. Virgin Group Holdings Limited is owned by Sir Richard Branson, and he has the ability to appoint and remove the management of Virgin Group Holdings Limited and, as such, may indirectly control the decisions of Virgin Group Holdings Limited, regarding the voting and disposition of securities held by Virgin Group Holdings Limited. Therefore, Sir Richard Branson may be deemed to have indirect beneficial ownership of securities held by Corvina Holdings Limited. The address of Corvina Holdings Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The address of Sir Richard Branson is Branson Villa, Necker Beach Estate, Necker Island, VG 1150, British Virgin Islands. |
20 |
Includes (i) 2,500 shares of Class A Common Stock issued in the PIPE Investment, 100 shares of Class A Common Stock, 1,336,907 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock, 11,760 shares of Class A Common Stock that may be obtained upon the exercise of warrants to purchase shares of Class B Common Stock and subsequent conversion of those shares of Class B Common Stock to shares of Class A Common Stock, and 7,776,346 shares of Class B Common Stock issuable upon exercise of options granted to Mr. Landesberg that are currently exercisable or exercisable within 60 days of July 14, 2022, in each case held directly by Mr. Landesberg and (ii) 679,357 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock that are held by the Landesberg Living Trust. Mr. Landesberg may be deemed to have voting and dispositive investment power with respect to the shares held by the Landesberg Living Trust. |
21 |
Consists of 327,837 shares of Class A Common Stock, 190,006 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock, 588 shares of Class A Common Stock that may be obtained upon the exercise of warrants to purchase shares of Class B Common Stock and subsequent conversion of those shares of Class B Common Stock to shares of Class A Common Stock, 1,208,450 shares of Class B Common Stock issuable upon exercise of options granted to Mr. Clark that are currently exercisable or exercisable within 60 days of July 14, 2022 and 87,673 restricted shares of Class B Common Stock, in each case held directly by Mr. Clark. |
22 |
Consists of 127,351 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock, 661,522 shares of Class B Common Stock issuable upon exercise of options granted to Ms. Costin that are currently exercisable or exercisable within 60 days of July 14, 2022, and 147,005 restricted shares of Class B Common Stock held directly by Ms. Costin. This also includes 17,515 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock and 100 shares of Class A Common Stock held by the Weatherspoon Costin Family Trust, for which Ms. Costin and her spouse serve as co-trustees. Ms. Costin may be deemed to have voting and dispositive investment power with respect to the shares held by the Weatherspoon Costin Family Trust. |
23 |
Consists of 94,724 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock, 308,711 shares of Class B Common Stock issuable upon exercise of options granted to Ms. Perry that are currently exercisable or exercisable within 60 days of July 14, 2022 and 117,604 restricted shares of Class B Common Stock held directly by Ms. Perry. |
24 |
Consists of 3,000 shares of Class A Common Stock and 30,672 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held directly by Mr. Glazer. |
25 |
Consists of 226,203 shares of Class A Common Stock and 90,412 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held directly by Mr. Replogle. This also includes 267 shares of Class A Common Stock and 24 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held by Replogle Family LLC. Mr. Replogle serves as manager of Replogle Family LLC and may be deemed to be the beneficial owner of the securities held by Replogle Family LLC. |
26 |
Consists of 198,163 shares of Class A Common Stock, 84,218 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock, 506,332 shares of Class A Common Stock issuable upon exercise of options granted to Mr. Silverman that are currently exercisable or exercisable within 60 days of July 14, 2022 and 59,331 restricted shares of Class A Common Stock, in each case held directly by Mr. Silverman. |
27 |
Consists of 63,149 shares of Class A Common Stock issuable upon the conversion of Class B Common Stock held directly by Mr. Cervantes. |
28 |
Corvina Holdings Limited, a British Virgin Islands exempted company, is the sole managing member and manager of Virgin Group Acquisition Sponsor II LLC, and has voting and investment discretion with respect to the securities held of record by Virgin Group Acquisition Sponsor II LLC. Corvina Holdings Limited is wholly owned by Virgin Group Holdings Limited. Virgin Group Holdings Limited is owned by Sir Richard Branson, and he has the ability to appoint and remove the management of Virgin Group Holdings Limited and, as such, may indirectly control the decisions of Virgin Group Holdings Limited, regarding the voting and disposition of securities held by Virgin Group Holdings Limited. Therefore, Sir Richard Branson may be deemed to have indirect beneficial ownership of the warrants held by Virgin Group Acquisition Sponsor II LLC. The address of Corvina Holdings Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The address of Virgin Group Holdings Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The address of Sir Richard Branson is Branson Villa, Necker Beach Estate, Necker Island, VG 1150 British Virgin Islands. The business address of Virgin Group Acquisition Sponsor II LLC is 65 Bleecker Street, 6th Floor, New York, New York 10012. |
(1) | the board of directors approves the acquisition of stock or the merger transaction before the time that the person becomes an interested stockholder; |
(2) | the interested stockholder owns at least 85% of the outstanding voting stock of the corporation at the time the merger transaction commences (excluding voting stock owned by directors who are also officers and certain employee stock plans); or |
(3) | the merger transaction is approved by the board of directors and at a meeting of stockholders, not by written consent, by the affirmative vote of 2/3 of the outstanding voting stock which is not owned by the interested stockholder. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the last reported sale price of the Class A Common Stock for any 20 trading days within a 30-trading-day |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of Class A Common Stock (as defined below); |
• | if, and only if, the Reference Value (as defined above under “ Redemption of Warrants When the Price per Class A Common Stock Equals or Exceeds $18.00 sub-divisions, share dividends, reorganizations, reclassifications, recapitalizations, and the like); and |
• | if the Reference Value is less than $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations, and the like) the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above. |
Redemption Date (period to expiration of warrants) |
$Fair Market Value of Class A Ordinary Shares |
|||||||||||||||||||||||||||||||||||
≥ $10.00 |
$11.00 |
$12.00 |
$13.00 |
$14.00 |
$15.00 |
$16.00 |
$17.00 |
≥ $18.00 |
||||||||||||||||||||||||||||
60 months |
0.261 | 0.281 | 0.297 | 0.311 | 0.324 | 0.377 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.365 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.365 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.365 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.365 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.365 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.364 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.364 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.364 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.364 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.364 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.364 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.364 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.364 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.363 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.363 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.363 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.362 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.362 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months |
— | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
• | purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus; |
• | ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
• | block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
• | an over-the-counter |
• | through trading plans entered into by a Selling Holder pursuant to Rule 10b5-1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans; |
• | to or through underwriters or broker-dealers; |
• | in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents; |
• | in privately negotiated transactions; |
• | in options transactions; |
• | through a combination of any of the above methods of sale; or |
• | any other method permitted pursuant to applicable law. |
• | 1% of the total number of shares of our common stock then outstanding; or |
• | the average weekly reported trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | an individual who is a United States citizen or resident of the United States; |
• | a corporation or other entity treated as a corporation for United States federal income tax purposes created in, or organized under the law of, the United States or any state or political subdivision thereof; |
• | an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source; or |
• | a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person. |
• | the gain is effectively connected with the conduct of a trade or business by the non-U.S. Holder within the United States (and, if an applicable tax treaty so requires, is attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. Holder); |
• | the non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or |
• | we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes. |
Page |
||||
Virgin Group Acquisition Corp. II - Index to Audited Financial Statements |
||||
F-2 | ||||
Financial Statements: |
||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 to F-21 | ||||
F-22 | ||||
F-23 | ||||
F-24 | ||||
F-25 | ||||
F-26 to F-44 | ||||
Grove Collaborative, Inc. - Index to Audited Financial Statements |
||||
F-45 | ||||
Financial Statements: |
||||
F-46 | ||||
F-47 | ||||
F-48 | ||||
F-49 | ||||
F-51 to F-76 |
||||
Unaudited Condensed Financial Statements: |
||||
F-77 | ||||
F-78 | ||||
F-79 | ||||
F-80 | ||||
F-81 to F-97 |
ASSETS: |
| |||
Current Assets: |
| |||
Cash |
$ | 507,233 | ||
Prepaid expenses |
629,106 | |||
|
|
|||
Total current assets |
1,136,339 |
|||
Prepaid expenses – non-current portion |
141,333 | |||
Cash and investments held in trust account |
402,530,526 | |||
|
|
|||
TOTAL ASSETS |
$ |
403,808,198 |
||
|
|
|||
LIABILITIES, REDEEMABLE ORDINARY SHARES AND SHAREHOLDERS’ DEFICIT |
||||
Current liabilities: |
||||
Accrued costs and expenses |
$ | 2,419,324 | ||
Due to related party |
1,667 | |||
Promissory note – related party |
1,000,000 | |||
|
|
|||
Total current liabilities |
3,420,991 |
|||
Derivative warrant liabilities |
13,340,010 | |||
Deferred underwriters’ discount |
14,087,500 | |||
|
|
|||
Total liabilities |
30,848,501 |
|||
Commitments and Contingencies (Note 7) |
||||
Class A ordinary shares, $0.001 par value; 200,000,000 shares authorized; 40,250,000 shares subject to possible redemption at a redemption value of $10.00 per share |
402,500,000 | |||
Shareholders’ Deficit: |
||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding |
— | |||
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized 10,062,500 shares issued and outstanding |
1,006 | |||
Additional paid-in capital |
— | |||
Accumulated deficit |
(29,541,309 | ) | ||
|
|
|||
Total Shareholders’ deficit |
(29,540,303 |
) | ||
|
|
|||
TOTAL LIABILITIES, REDEEMABLE ORDINARY SHARES AND SHAREHOLDERS’ DEFICIT |
$ |
403,808,198 |
||
|
|
Formation and operating costs |
$ | 3,572,794 | ||
|
|
|||
Loss from operations |
(3,572,794 |
) | ||
|
|
|||
Other income (expense) |
||||
Interest income earned on cash and investments held in trust account |
30,526 | |||
Offering costs allocated to warrants |
(570,496 | ) | ||
Change in fair value of warrant liabilities |
6,811,133 | |||
|
|
|||
Total other income |
6,271,163 |
|||
|
|
|||
Net income |
$ | 2,698,369 |
||
|
|
|||
Basic and diluted weighted average shares outstanding, Class A ordinary shares |
32,705,669 | |||
|
|
|||
Basic and diluted net income per ordinary share, Class A ordinary shares |
$ | 0.06 | ||
|
|
|||
Basic and diluted weighted average shares outstanding, Class B ordinary shares |
10,062,500 | |||
|
|
|||
Basic and diluted net income per ordinary share, Class B ordinary shares |
$ | 0.06 | ||
|
|
Class B Ordinary Shares |
||||||||||||||||||||
Shares |
Amount |
Additional Paid In Capital |
Accumulated Deficit |
Total Shareholders’ Deficit |
||||||||||||||||
Balance as of January 13, 2021 (inception) |
— | $ | — | $ | — | $ | — | $ | — | |||||||||||
Issuance of Class B Ordinary shares to Sponsor |
10,062,500 | 1,006 | 23,994 | — | 25,000 | |||||||||||||||
Accretion for Class A Ordinary Shares to redemption amount |
(23,994 | ) | (32,239,678 | ) | (32,263,672 | ) | ||||||||||||||
Net incom e |
— | — | — | 2,698,369 | 2,698,369 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2021 |
10,062,500 |
$ |
1,006 |
$ |
— |
$ |
(29,541,309 |
) |
$ |
(29,540,303 |
) | |||||||||
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
||||
Net income |
$ | 2,698,369 | ||
Adjustments to reconcile net income to net cash used in operating activities: |
||||
Interest income on cash and investments held in Trust Account |
(30,526 | ) | ||
Offering costs allocated to derivative warrant liabilities |
570,496 | |||
Change in fair value of derivative warrant liabilities |
(6,811,133 | ) | ||
Changes in operating assets and liabilities: |
||||
Prepaid assets |
(770,439 | ) | ||
Accrued costs and expenses |
2,419,324 | |||
Due to related party |
1,667 | |||
|
|
|||
Net cash used in operating activities |
(1,922,242 |
) | ||
|
|
|||
Cash Flows from Investing Activities: |
||||
Investment of cash in Trust Account |
(402,500,000 | ) | ||
|
|
|||
Net cash used in investing activities |
(402,500,000 |
) | ||
|
|
|||
Cash flows from financing activities: |
||||
Proceeds from purchase of Class B shares by initial shareholder |
25,000 | |||
Proceeds from initial public offering, net of underwriters’ discount |
394,450,000 | |||
Proceeds from private placement |
10,050,000 | |||
Proceeds from notes payable—related party |
1,000,000 | |||
Payment of offering costs |
(595,525 | ) | ||
|
|
|||
Net cash provided by financing activities |
404,929,475 |
|||
|
|
|||
Net change in cash |
507,233 | |||
Cash, beginning of the period |
— | |||
|
|
|||
Cash, end of the period |
$ | 507,233 | ||
|
|
|||
Supplemental disclosure of cash flow information: |
||||
Deferred underwriting commissions charged to temporary equity |
$ | 14,087,500 | ||
|
|
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For the period from January 13, 2021 (inception) to December 31, 2021 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net income per share: |
||||||||
Numerator: |
||||||||
Allocation of net income |
$ | 2,063,496 | $ | 634,873 | ||||
Denominator: |
||||||||
Weighted-average shares outstanding including shares subject to redemption |
32,705,669 | 10,062,500 | ||||||
Basic and diluted net income per share |
$ | 0.06 | $ | 0.06 | ||||
|
|
|
|
Gross proceeds from IPO |
$ | 402,500,000 | ||
Less: |
||||
Proceeds allocated to Public Warrants |
(10,101,143 | ) | ||
Ordinary share issuance costs |
(22,162,529 | ) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
32,263,672 | |||
Contingently redeemable ordinary shares |
$ | 402,500,000 |
December 31, 2021 |
Quoted Prices In Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||||||
Assets: |
||||||||||||||||
Mutual Fund held in Trust Account |
$ | 402,530,526 | 402,530,526 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Derivative warrant liability –Public Warrants |
$ | 6,731,959 | $ | 6,731,959 | $ | — | $ | — | ||||||||
Derivative warrant liability –Private Warrants |
6,608,051 | — | — | 6,608,051 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative warrant liabilities |
$ | 13,340,010 | $ | 6,731,959 | $ | — | $ | 6,608,051 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2021 |
||||
Strike price |
$ | 11.50 | ||
Share price |
$ | 9.59 | ||
Volatility |
40 | % | ||
Risk-free rate |
1.28 | % | ||
Expected term (years) |
5 |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the reported closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders. |
Private Placement Warrants |
Public Warrants |
Warrant Liabilities |
||||||||||
Derivative warrant liabilities – initial measurement |
$ | 10,087,924 | $ | 10,101,143 | $ | 20,189,067 | ||||||
Transfer to Level 1 |
— | (10,338,960 | ) | (10,338,960 | ) | |||||||
Change in fair value of derivative warrant liabilities |
(3,479,873 | ) | 237,817 | (3,242,056 | ) | |||||||
|
|
|
|
|
|
|||||||
Derivative warrant liabilities at December 31, 2021 |
$ | 6,608,051 | $ | — | $ | 6,608,051 | ||||||
|
|
|
|
|
|
For the Three Months Ended March 31, 2022 |
For the period from January 13, 2021 (inception) through March 31, 2021 |
|||||||
Formation and operating costs |
$ | 1,008,046 | $ | 27,356 | ||||
|
|
|
|
|||||
Loss from operations |
(1,008,046 |
) |
(27,356 |
) | ||||
|
|
|
|
|||||
Other income (expense) |
||||||||
Interest income earned on cash and investments held in trust account |
35,883 | 1,444 | ||||||
Offering costs allocated to warrants |
— | (497,634 | ) | |||||
Change in fair value of derivative warrant liabilities |
7,654,280 | (208,793 | ) | |||||
Initial measurement of backstop derivative liabilit y |
|
|
(30,234,314 |
) |
|
|
|
|
|
|
|
|
|||||
Total other expense, net |
(22,544,151 |
) |
(704,983 |
) | ||||
|
|
|
|
|||||
Net loss |
$ |
(23,552,197 |
) |
$ |
(732,339 |
) | ||
|
|
|
|
|||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares, subject to possible redemption |
40,250,000 | 3,141,026 | ||||||
|
|
|
|
|||||
Basic and diluted net loss per ordinary share, Class A ordinary shares, subject to possible redemption |
$ | (0.47 | ) | $ | (0.06 | ) | ||
|
|
|
|
|||||
Basic and diluted weighted average shares outstanding, Class B ordinary shares |
10,062,500 | 8,750,000 | ||||||
|
|
|
|
|||||
Basic and diluted net loss per ordinary share, Class B ordinary shares |
$ | (0.47 | ) | $ | (0.06 | ) | ||
|
|
|
|
Ordinary Shares |
Additional |
Accumulated |
Total Shareholders’ |
|||||||||||||||||||||||||
Class A |
Class B |
|||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Paid-In Capital |
Deficit |
Deficit |
||||||||||||||||||||||
Balance as of December 31, 2021 |
— |
$ |
— |
10,062,500 |
$ |
1,006 |
$ | — | $ |
(29,541,309 |
) |
$ |
(29,540,303 |
) | ||||||||||||||
Net loss |
— | — | — | — | — | (23,552,197 | ) | (23,552,197 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of March 31, 2022, (unaudited) |
— |
$ |
— |
10,062,500 |
$ |
1,006 |
$ |
— |
(53,093,506 |
) | $ |
(53,092,500 |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
Class B |
Additional |
Total |
|||||||||||||||||||||||||
Ordinary Shares |
Ordinary Shares |
Paid-in |
Accumulated |
Shareholders’ |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
||||||||||||||||||||||
B alance as of January 13, 2021 (inception) |
— |
$ |
— | — |
$ |
— | $ |
— | $ |
— | $ |
— | ||||||||||||||||
Issuance of Class B Ordinary shares to Sponsor |
— |
— |
10,062,500 | 1,006 | 23,994 | — | 25,000 | |||||||||||||||||||||
Accretion for Class A Ordinary Shares to redemption amount |
— |
|
— | — |
— |
(23,994 | ) | (28,100,284) |
(28,124,278 | ) | ||||||||||||||||||
Net loss |
— | — |
— |
— |
— |
(732,339 | ) | (732,339 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of March 31, 2021, (unaudited) |
— |
$ |
— |
10,062,500 |
$ |
1,006 |
$ | — | $ |
(28,832,623 |
) | $ |
(28,831,617 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2022 |
For the period from January 13, 2021 (inception) through March 31, 2021 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (23,552,197 | ) | $ | (732,339 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Interest income on investments held in Trust Account |
(35,883 | ) | (1,444 | ) | ||||
Offering costs allocated to derivative warrant liabilities |
— | 497,634 | ||||||
Change in fair value of derivative warrant liabilities |
(7,654,280 | ) | 208,793 | |||||
Initial measurement of backstop derivative liability |
|
|
30,234,314 |
|
|
|
|
|
Changes in operating assets and liabilities: |
||||||||
Prepaid assets |
155,123 | (1,244,423 | ) | |||||
Accrued costs and expenses |
395,513 | 1,266,779 | ||||||
Due to related party |
30,000 | — | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
(427,410 |
) |
(5,000 |
) | ||||
|
|
|
|
|||||
Cash flows from investing activity: |
||||||||
Investment of cash in Trust Account |
— | (350,000,000 | ) | |||||
|
|
|
|
|||||
Net cash used in investing activity |
— |
(350,000,000 |
) | |||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from purchase of Class B shares by initial shareholder |
— | |||||||
Proceeds from initial public offering, net of underwriters’ discount |
— | 343,000,000 | ||||||
Proceeds from private placement |
— | 9,000,000 | ||||||
Payment of offering costs |
— | (595,525 | ) | |||||
|
|
|
|
|||||
Net cash provided by financing activities |
— |
351,429,475 |
||||||
|
|
|
|
|||||
Net change in cash |
(427,410 | ) | 1,424,475 | |||||
Cash, beginning of the period |
507,233 | — | ||||||
|
|
|
|
|||||
Cash, end of the period |
$ |
79,823 |
$ |
1,424,475 |
||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information: |
||||||||
Deferred underwriting commissions charged to temporary equity |
$ | — | $ | 12,250,000 | ||||
|
|
|
|
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For the three months ended March 31, 2022 |
For the period from January 13, 2021 (inception) through March 31, 2021 |
|||||||||||||||
Class A |
Class B |
Class A |
Class B |
|||||||||||||
Basic and diluted net loss per ordinary share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of loss |
$ | (18,841,758 | ) | $ | (4,710,439 | ) | $ | (193,448 | ) | $ | (538,891 | ) | ||||
Denominator: |
||||||||||||||||
Weighted-average shares outstanding including shares subject to redemption |
40,250,000 | 10,062,500 | 3,141,026 | 8,750,000 | ||||||||||||
Basic and diluted loss per ordinary share |
$ | (0.47 | ) | $ | (0.47 | ) | $ | (0.06 | ) | $ | (0.06 | ) | ||||
|
|
|
|
|
|
|
|
Gross proceeds from IPO |
$ | 402,500,000 | ||
Less: |
||||
Proceeds allocated to Public Warrants |
(10,101,143 | ) | ||
Ordinary share issuance costs |
(22,162,529 | ) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
32,263,672 | |||
|
|
|||
Contingently redeemable ordinary shares |
$ |
402,500,000 |
||
|
|
March 31, 2022 |
Quoted Prices In Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||||||
Assets: |
||||||||||||||||
Mutual Fund held in Trust Account |
$ | 402,566,409 | $ | 402,566,409 | $ |
— |
$ |
— |
||||||||
Liabilities: |
||||||||||||||||
Derivative warrant liability – Public Warrants |
$ | 3,048,919 | $ | 3,048,919 | $ |
— |
$ |
— |
||||||||
Derivative warrant liability – Private Warrants |
2,636,811 | — |
— |
2,636,811 | ||||||||||||
Backstop derivative liability |
30,234,314 | — |
— |
30,234,314 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative liabilities |
$ | 35,920,044 | $ | 3,048,919 | $ |
— |
$ | 32,871,125 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2021 |
Quoted Prices In Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||||||
Assets: |
||||||||||||||||
Mutual Fund held in Trust Account |
$ | 402,530,526 | $ | 402,530,526 | $ |
— |
$ |
— |
||||||||
Liabilities: |
||||||||||||||||
Derivative warrant liability – Public Warrants |
$ | 6,731,959 | $ | 6,731,959 | $ |
— |
$ |
— |
||||||||
Derivative warrant liability – Private Warrants |
6,608,051 | — |
— |
6,608,051 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative warrant liabilities |
$ | 13,340,010 | $ | 6,731,959 | $ |
— |
$ | 6,608,051 | ||||||||
|
|
|
|
|
|
|
|
Private Placement Warrants |
Public Warrants |
Warrant Liabilities |
||||||||||
Derivative warrant liability – initial measurement on March 25, 2021 |
$ |
9,020,019 |
$ |
8,776,387 |
$ |
17,796,406 |
||||||
Change in fair value of derivative warrant liabilities |
133,454 |
55,320 |
188,774 |
|||||||||
|
|
|
|
|
|
|||||||
Derivative warrant liabilities at March 31, 2021 |
$ |
9,153,473 |
$ |
8,831,707 |
$ |
17,985,180 |
||||||
|
|
|
|
|
|
Private Placement Warrants |
Public Warrants |
Warrant Liabilities |
||||||||||
Derivative warrant liabilities at December 31, 2021 |
$ |
6,608,051 |
$ |
— |
$ |
6,608,051 |
||||||
Change in fair value of derivative warrant liabilities |
(3,971,240 |
) |
— |
(3,971,240 |
) | |||||||
|
|
|
|
|
|
|||||||
Derivative warrant liabilities at March 31, 2022 |
$ |
2,636,811 |
$ |
— |
$ |
2,636,811 |
||||||
|
|
|
|
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
Strike price |
$ | 11.50 | $ | 11.50 | ||||
Share price |
$ | 5.95 | $ | 9.59 | ||||
Volatility |
25 | % | 40 | % | ||||
Risk-free rate |
2.40 | % | 1.28 | % | ||||
Expected term (years) |
5 | 5 |
Share price |
$ | 5.95 | ||
Volatility |
25 | % | ||
Risk-free rate |
2.40 | % | ||
Minimum Redemption Percentage |
92 | % | ||
Maximum Redemption Percentage |
100 | % |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the reported closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination, and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share |
redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. |
December 31, |
||||||||
2020 |
2021 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 176,523 | $ | 78,376 | ||||
Inventory, net |
46,580 | 54,453 | ||||||
Prepaid expenses and other current assets |
4,828 | 8,104 | ||||||
|
|
|
|
|||||
Total current assets |
227,931 | 140,933 | ||||||
Property and equipment, net |
15,100 | 15,932 | ||||||
Operating lease right-of-use |
24,234 | 21,214 | ||||||
Other long-term assets |
2,453 | 4,394 | ||||||
|
|
|
|
|||||
Total assets |
$ | 269,718 | $ | 182,473 | ||||
|
|
|
|
|||||
Liabilities, Convertible Preferred Stock and Stockholders’ Deficit |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 23,814 | $ | 21,346 | ||||
Accrued expenses |
19,810 | 20,651 | ||||||
Deferred revenue |
11,119 | 11,267 | ||||||
Operating lease liabilities, current |
2,955 | 3,550 | ||||||
Other current liabilities |
3,522 | 1,650 | ||||||
Debt, current |
1,918 | 10,750 | ||||||
|
|
|
|
|||||
Total current liabilities |
63,138 | 69,214 | ||||||
Debt, noncurrent |
29,782 | 56,183 | ||||||
Operating lease liabilities, noncurrent |
23,579 | 20,029 | ||||||
Other long-term liabilities |
4,942 | 5,408 | ||||||
|
|
|
|
|||||
Total liabilities |
121,441 | 150,834 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 8) |
||||||||
Convertible preferred stock, $0.0001 par value – 98,234,236 shares authorized at December 31, 2020 and 2021; 97,611,343 shares issued and outstanding at December 31, 2020 and 2021 |
487,918 | 487,918 | ||||||
Stockholders’ deficit: |
||||||||
Common stock, $0.0001 par value – 165,000,000 shares authorized at December 31, 2020 and 2021; 7,200,243 and 7,965,857 shares issued and outstanding at December 31, 2020 and December 31, 2021, respectively |
1 | 1 | ||||||
Additional paid-in capital |
14,605 | 33,863 | ||||||
Accumulated deficit |
(354,247 | ) | (490,143 | ) | ||||
|
|
|
|
|||||
Total stockholders’ deficit |
(339,641 | ) | (456,279 | ) | ||||
|
|
|
|
|||||
Total liabilities, convertible preferred stock and stockholders’ deficit |
$ | 269,718 | $ | 182,473 | ||||
|
|
|
|
Convertible Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||
Balance at December 31, 2018 |
61,010 | $ | 167,675 | 4,657 | $ | — | $ | 1,585 | $ | (120,301 | ) | $ | (118,716 | ) | ||||||||||||||||||
Issuance of Series D convertible preferred stock, net of issuance costs of $50 |
5,887 | 48,505 | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of Series D-1 convertible preferred stock, net of issuance costs of $70 |
4,519 | 48,146 | — | — | — | — | — | |||||||||||||||||||||||||
Exchange of common stock, Series Seed convertible preferred stock and Series A convertible preferred stock for Series D convertible preferred stock, inclusive of deemed dividend of $1,801 |
43 | 1,801 | (43 | ) | — | (1,585 | ) | (216 | ) | (1,801 | ) | |||||||||||||||||||||
Exchange of common stock for Series D convertible preferred stock, inclusive of stock-based compensation of $7,285 |
1,226 | 7,285 | (1,228 | ) | — | — | — | — | ||||||||||||||||||||||||
Issuance of common stock for business and asset acquisitions |
— | — | 178 | — | 530 | — | 530 | |||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | 373 | — | 140 | — | 140 | |||||||||||||||||||||||||
Vesting of early exercise of options |
— | — | — | — | 49 | — | 49 | |||||||||||||||||||||||||
Stock-based compensation associated with stock options |
— | — | — | — | 4,716 | — | 4,716 | |||||||||||||||||||||||||
Net loss |
— | — | — | — | — | (161,470 | ) | (161,470 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2019 |
72,685 | 273,412 | 3,937 | — | 5,435 | (281,987 | ) | (276,552 | ) | |||||||||||||||||||||||
Issuance of Series D-2 convertible preferred stock, net of issuance costs of $362 |
12,373 | 89,638 | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of Series E convertible preferred stock, net of issuance costs of $132 |
12,553 | 124,868 | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of common stock for an asset acquisition |
— | — | 30 | — | 67 | — | 67 | |||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options, net of amount related to early exercised options of $2,080 |
— | — | 3,233 | 1 | 1,183 | — | 1,184 | |||||||||||||||||||||||||
Vesting of early exercise of options |
— | — | — | — | 68 | — | 68 | |||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | 7,852 | — | 7,852 | |||||||||||||||||||||||||
Net loss |
— | — | — | — | — | (72,260 | ) | (72,260 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2020 |
97,611 | $ | 487,918 | 7,200 | $ | 1 | $ | 14,605 | $ | (354,247 | ) | $ | (339,641 | ) | ||||||||||||||||||
Issuance of common stock for services |
— | — | 8 | — | 49 | — | 49 | |||||||||||||||||||||||||
Issuance of common stock warrants |
— | — | — | — | 1,622 | — | 1,622 | |||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants |
— | — | 243 | — | 150 | — | 150 | |||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options, net of amount related to early exercised options of $8 |
— | — | 646 | — | 1,051 | — | 1,051 | |||||||||||||||||||||||||
Vesting of early exercise of options |
— | — | — | — | 1,577 | — | 1,577 | |||||||||||||||||||||||||
Repurchase of early exercised options |
— | — | (131 | ) | — | — | — | — | ||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | 14,809 | — | 14,809 | |||||||||||||||||||||||||
Net loss |
— | — | — | — | — | (135,896 | ) | (135,896 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2021 |
97,611 | $ | 487,918 | 7,966 | $ | 1 | $ | 33,863 | $ | (490,143 | ) | $ | (456,279 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Cash Flows from Operating Activities |
||||||||||||
Net loss |
$ | (161,470 | ) | $ | (72,260 | ) | $ | (135,896 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||
Remeasurement of convertible preferred stock warrant liability |
430 | 964 | 1,234 | |||||||||
Stock-based compensation |
11,960 | 7,762 | 14,610 | |||||||||
Depreciation and amortization |
2,361 | 4,115 | 4,992 | |||||||||
Non-cash interest expense |
848 | 917 | 704 | |||||||||
Gain on purchase of a business |
(2,670 | ) | — | — | ||||||||
Inventory reserve |
349 | 1,820 | 4,725 | |||||||||
Loss on extinguishment of debt |
— | — | 1,027 | |||||||||
Other non-cash expenses |
215 | 401 | 1,274 | |||||||||
Changes in operating assets and liabilities: |
||||||||||||
Inventory |
(1,661 | ) | (18,611 | ) | (12,598 | ) | ||||||
Prepaids and other assets |
(194 | ) | (1,437 | ) | (3,294 | ) | ||||||
Accounts payable |
19,286 | (16,250 | ) | (2,489 | ) | |||||||
Accrued expenses |
(1,829 | ) | 5,582 | (817 | ) | |||||||
Deferred revenue |
4,603 | 2,102 | 148 | |||||||||
Operating lease right-of-use |
— | 278 | 65 | |||||||||
Other liabilities |
2,967 | 961 | (774 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net cash used in operating activities |
(124,805 | ) | (83,656 | ) | (127,089 | ) | ||||||
|
|
|
|
|
|
|||||||
Cash Flows from Investing Activities |
||||||||||||
Purchase of investments |
(8,640 | ) | — | — | ||||||||
Proceeds from maturities of investments |
8,700 | — | — | |||||||||
Purchase of property and equipment |
(10,744 | ) | (4,820 | ) | (5,768 | ) | ||||||
Purchase of intangible assets |
(873 | ) | — | — | ||||||||
Acquisition of a business |
(750 | ) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
(12,307 | ) | (4,820 | ) | (5,768 | ) | ||||||
|
|
|
|
|
|
|||||||
Cash Flows from Financing Activities |
||||||||||||
Proceeds from issuance of convertible preferred stock, net of issuance costs |
96,529 | 214,790 | — | |||||||||
Payment of deferred offering and convertible preferred stock issuance costs |
— | — | (1,396 | ) | ||||||||
Proceeds from issuance of debt |
17,172 | 43,513 | 60,000 | |||||||||
Repayment of debt |
(6,029 | ) | (33,118 | ) | (21,932 | ) | ||||||
Payment of debt extinguishment |
— | — | (2,499 | ) | ||||||||
Payment of debt issuance costs |
(365 | ) | (279 | ) | (375 | ) | ||||||
Proceeds from exercise of stock options and warrants |
140 | 3,264 | 1,209 | |||||||||
Repurchase of common stock |
— | — | (297 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities |
107,447 | 228,170 | 34,710 | |||||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in cash and cash equivalents |
(29,665 | ) | 139,694 | (98,147 | ) | |||||||
Cash and cash equivalents at beginning of year |
66,494 | 36,829 | 176,523 | |||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at end of year |
$ | 36,829 | $ | 176,523 | $ | 78,376 | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Supplemental Disclosure |
||||||||||||
Cash paid for income taxes |
$ | 1 | $ |
4 | $ |
52 | ||||||
Cash paid for interest |
1,153 | 3,887 | 4,472 | |||||||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities |
||||||||||||
Purchases of property and equipment included in accounts payable and accrued liabilities |
$ |
408 | $ |
86 | $ |
112 | ||||||
Issuance of common stock for business and asset acquisitions |
530 | 67 | — | |||||||||
Deferred offering and convertible preferred stock issuance costs included in accounts payable and accrued liabilities |
— |
284 | 1,928 | |||||||||
Debt issuance costs recorded with an offset to convertible preferred stock warrant liability |
374 | 323 | — |
|||||||||
Initial measurement of common stock warrants recorded as debt issuance costs |
— |
— |
1,622 | |||||||||
Vesting of early exercised stock options |
49 | 68 | 1,577 |
1. |
Description of Business |
2. |
Summary of Significant Accounting Policies |
Computer equipment |
3 - 5 years |
|||
Furniture and fixtures |
5 years | |||
Machinery and warehouse equipment |
7 - 10 years |
|||
Leasehold improvements |
|
or lease term |
|
Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Revenue, net: |
||||||||||||
Grove Brands |
$ | 86,717 | $ | 164,372 | $ | 187,055 | ||||||
Third-party products |
146,399 | 199,899 | 196,630 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue, net |
$ | 233,116 | $ | 364,271 | $ | 383,685 | ||||||
|
|
|
|
|
|
3. |
Fair Value Measurements and Fair Value of Financial Instruments |
December 31, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Financial Assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | 173,315 | $ | — | $ | — | $ | 173,315 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 173,315 | $ | — | $ | — | $ | 173,315 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial Liabilities: |
||||||||||||||||
Convertible preferred stock warrant liability |
$ | — | $ | — | $ | 3,553 | $ | 3,553 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | — | $ | — | $ | 3,553 | $ | 3,553 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2021 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Financial Assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | 77,771 | $ | — | $ | — | $ | 77,771 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 77,771 | $ | — | $ | — | $ | 77,771 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial Liabilities: |
||||||||||||||||
Convertible preferred stock warrant liability |
$ | — | $ | — | $ | 4,787 | $ | 4,787 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | — | $ | — | $ | 4,787 | $ | 4,787 | ||||||||
|
|
|
|
|
|
|
|
Balance at December 31, 2020 |
$ | 3,553 | ||
Change in fair value |
1,234 | |||
|
|
|||
Balance at December 31, 2021 |
$ | 4,787 | ||
|
|
December 31, 2020 |
||||||||||||||||
Series A Convertible Preferred Stock Warrants |
Series B Convertible Preferred Stock Warrants |
Series C Convertible Preferred Stock Warrants |
Series D Convertible Preferred Stock Warrants |
|||||||||||||
Expected term (in years) |
2.0 | 2.0 | 2.0 | 2.0 | ||||||||||||
Fair value of underlying shares |
7.43 | 7.63 | 7.97 | 9.82 | ||||||||||||
Volatility |
88.04 | % | 88.04 | % | 88.04 | % | 88.04 | % | ||||||||
Risk-free interest rate |
0.13 | % | 0.13 | % | 0.13 | % | 0.13 | % | ||||||||
Dividend yield |
— | — | — | — |
December 31, 2021 |
||||||||||||||||
Series A Convertible Preferred Stock Warrants |
Series B Convertible Preferred Stock Warrants |
Series C Convertible Preferred Stock Warrants |
Series D Convertible Preferred Stock Warrants |
|||||||||||||
Expected term (in years) |
3.72 | 4.11 | 4.59 | 3.38 | ||||||||||||
Fair value of underlying shares |
10.00 | 10.08 | 10.23 | 11.11 | ||||||||||||
Volatility |
65.07 | % | 64.90 | % | 64.83 | % | 65.29 | % | ||||||||
Risk-free interest rate |
1.01 | % | 1.04 | % | 1.09 | % | 0.96 | % | ||||||||
Dividend yield |
— | — | — | — |
4. |
Other Financial Statement Information |
December 31, |
||||||||
2020 |
2021 |
|||||||
Machinery and warehouse equipment |
$ | 7,133 | $ | 7,252 | ||||
Internally developed software |
8,044 | 12,593 | ||||||
Computer equipment |
2,880 | 3,330 | ||||||
Leasehold improvements hold Improvements |
1,763 | 2,164 | ||||||
Furniture and fixtures |
1,241 | 1,184 | ||||||
Construction in progress |
471 | 25 | ||||||
|
|
|
|
|||||
Total property and equipment |
21,532 | 26,548 | ||||||
Less: accumulated depreciation |
(6,432 | ) | (10,616 | ) | ||||
|
|
|
|
|||||
Property and equipment, net |
$ | 15,100 | $ | 15,932 | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2021 |
|||||||
Inventory purchases |
$ | 6,285 | $ | 4,659 | ||||
Advertising costs |
1,936 | 2,363 | ||||||
Compensation and benefits |
1,545 | 2,072 | ||||||
Sales taxes |
1,999 | 1,812 | ||||||
Fulfillment costs |
1,156 | 1,120 | ||||||
Other accrued expenses |
6,889 | 8,625 | ||||||
|
|
|
|
|||||
Total accrued expenses |
$ | 19,810 | $ | 20,651 | ||||
|
|
|
|
5. |
Business Combination |
6. |
Debt and Convertible Preferred Stock Warrants |
December 31, |
||||||||
2020 |
2021 |
|||||||
Silicon Valley Bank Loan Revolver |
$ | 5,947 | $ | 5,947 | ||||
Silicon Valley Bank Term Loan |
2,586 | — | ||||||
Silicon Valley Bank and Hercules Mezzanine Term Loan |
— | 59,237 | ||||||
Triplepoint Loan Facility 4 |
19,933 | — | ||||||
Atel Loan Facility Draw 1 |
358 | — | ||||||
Atel Loan Facility Draw 2 |
165 | — | ||||||
Atel Loan Facility Draw 3 |
2,315 | 1,489 | ||||||
Atel Loan Facility Draw 4 |
396 | 260 | ||||||
|
|
|
|
|||||
Total debt |
31,700 | 66,933 | ||||||
Less: debt, current |
(1,918 | ) | (10,750 | ) | ||||
|
|
|
|
|||||
Total debt, noncurrent |
$ | 29,782 | $ | 56,183 | ||||
|
|
|
|
Year Ended December 31, |
||||
2022 |
$ | 11,127 | ||
2023 |
24,576 | |||
2024 |
24,000 | |||
2025 |
8,000 | |||
2026 |
— | |||
Thereafter |
— | |||
|
|
|||
Total principal debt payments |
67,703 | |||
Less: debt discount |
(770 | ) | ||
|
|
|||
Total debt |
$ | 66,933 | ||
|
|
December 31, 2021 | ||||||||||||||
Lenders |
Exercise Price Per Share |
Number of Shares |
Expiration Date | |||||||||||
Series A warrants |
SVB | $ | 0.62 | 51,617 | December 2026 | |||||||||
Series B warrants |
SVB | 1.46 | 107,093 | July to November 2027 | ||||||||||
Series C warrants |
TriplePoint | 2.84 | 264,140 | April 2028 | ||||||||||
Series D warrants |
TriplePoint | 8.25 | 200,043 | June 2026 to May 2029 |
7. |
Leases |
Year Ended December 31, |
Operating Lease |
|||
2022 |
$ | 6,823 | ||
2023 |
6,546 | |||
2024 |
5,881 | |||
2025 |
5,371 | |||
2026 |
5,523 | |||
Thereafter |
4,367 | |||
Total undiscounted lease payments |
34,511 | |||
Less: Imputed interest |
(10,932 | ) | ||
Present value of lease liabilities |
23,579 | |||
Less: Operating lease liabilities, current |
3,550 | |||
Operating lease liabilities, noncurrent |
$ | 20,029 | ||
8. |
Commitments and Contingencies |
9. |
Convertible Preferred Stock |
Original Issue Price |
Shares Authorized |
Shares Outstanding |
Net Carrying Value |
Liquidation Preference |
||||||||||||||||
Series Seed |
$ | 0.6168 | 8,242,152 | 8,242,152 | $ | 3,943 | $ | 5,084 | ||||||||||||
Series A |
0.6168 | 12,015,184 | 11,963,567 | 5,240 | 7,379 | |||||||||||||||
Series B |
1.4642 | 10,789,890 | 10,682,797 | 15,545 | 15,642 | |||||||||||||||
Series C |
2.8394 | 13,295,062 | 13,030,922 | 36,917 | 37,000 | |||||||||||||||
Series C-1 |
3.7244 | 7,273,640 | 7,273,640 | 27,003 | 27,090 | |||||||||||||||
Series D |
8.2482 | 17,173,437 | 16,973,394 | 136,618 | 140,000 | |||||||||||||||
Series D-1 |
10.6703 | 4,518,724 | 4,518,724 | 48,146 | 48,216 | |||||||||||||||
Series D-2 |
7.2738 | 12,373,174 | 12,373,174 | 89,638 | 90,000 | |||||||||||||||
Series E |
9.9578 | 12,552,973 | 12,552,973 | 124,868 | 125,000 | |||||||||||||||
Total |
98,234,236 | 97,611,343 | $ | 487,918 | $ | 495,411 | ||||||||||||||
10. |
Stock-Based Compensation |
Options Outstanding |
||||||||||||||||
Number of Options |
Weighted– Average Exercise Price |
Weighted- Average Remaining Contractual Life (years) |
Aggregate Intrinsic Value |
|||||||||||||
Balance – December 31, 2020 |
15,925,992 | $ | 1.74 | 8.15 | $ | 52,909 | ||||||||||
Granted |
9,922,446 | 5.08 | ||||||||||||||
Exercised |
(646,711 | ) | 1.66 | |||||||||||||
Forfeited and expired |
(1,492,770 | ) | 3.14 | |||||||||||||
|
|
|||||||||||||||
Balance – December 31, 2021 |
23,708,957 | 3.05 | 7.99 | $ | 125,429 | |||||||||||
|
|
|||||||||||||||
Options vested and exercisable – December 31, 2021 |
11,372,994 | $ | 1.84 | 7.16 | $ | 73,885 | ||||||||||
|
|
Number of Options |
Weighted– Average Exercise Price |
|||||||
Outstanding and unvested as of December 31, 2020 |
1,049,034 | $ | 1.93 | |||||
Issued |
9,375 | 0.89 | ||||||
Vested |
(857,077 | ) | 1.84 | |||||
Repurchased |
(131,819 | ) | 2.25 | |||||
|
|
|||||||
Outstanding and unvested as of December 31, 2021 |
69,513 | $ | 2.25 | |||||
|
|
Year Ended December 31, | ||||||
2019 |
2020 |
2021 | ||||
Fair value of common stock |
$3.41 – 3.84 | $3.48 – 4.15 | $5.95 – 8.56 | |||
Expected term (in years) |
5.00 – 6.11 | 5.00 – 6.11 | 5.00 – 6.28 | |||
Volatility |
58.49% – 59.39% | 61.12% – 74.34% | 62.33% – 75.19% | |||
Risk-free interest rate |
1.72% – 1.98% | 0.21% – 1.66% | 0.50% – 1.21% | |||
Dividend yield |
— % | — % | — % |
11. |
Provision for Income Taxes |
Years Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Federal statutory rate |
21.0 | % | 21.0 | % | 21.0 | % | ||||||
Change in valuation allowance |
(19.5 | )% | (19.5 | )% | (20.2 | )% | ||||||
Stock-based compensation |
(1.4 | )% | (1.7 | )% | (0.6 | )% | ||||||
Other |
(0.1 | )% | (0.2 | )% | (0.2 | )% | ||||||
|
|
|
|
|
|
|||||||
Provision for income taxes |
— | % | — | % | — | % | ||||||
|
|
|
|
|
|
December 31, |
||||||||
2020 |
2021 |
|||||||
Deferred tax assets: |
||||||||
Net operating loss carryforwards |
$ | 69,486 | $ | 95,311 | ||||
Deferred revenue |
2,532 | 2,665 | ||||||
Inventory reserve and uniform capitalization |
2,067 | 2,795 | ||||||
Operating lease liabilities |
6,042 | 5,576 | ||||||
Accruals and other reserves |
1,794 | 1,908 | ||||||
Stock-based compensation |
240 | 4,339 | ||||||
Other |
1,637 | 3,103 | ||||||
|
|
|
|
|||||
Total deferred tax assets |
83,798 | 115,697 | ||||||
Less: valuation allowance |
75,061 | 107,300 | ||||||
|
|
|
|
|||||
Total deferred tax assets, net of valuation allowance |
8,737 | 8,397 | ||||||
|
|
|
|
|||||
Deferred tax liabilities: |
||||||||
Operating lease right-of-use |
(5,518 | ) | (5,017 | ) | ||||
Depreciation and amortization |
(3,219 | ) | (3,380 | ) | ||||
|
|
|
|
|||||
Total deferred tax liabilities |
(8,737 | ) | (8,397 | ) | ||||
|
|
|
|
|||||
Net deferred tax assets |
$ | — | $ | — | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2021 |
|||||||
Valuation allowance, as of beginning of year |
$ | 59,634 | $ | 75,061 | ||||
Valuation allowance established |
15,499 | 32,511 | ||||||
Changes to existing valuation allowances |
(72 | ) | (272 | ) | ||||
|
|
|
|
|||||
Valuation allowance, as of end of year |
$ | 75,061 | $ | 107,300 | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2021 |
|||||||
Balance at beginning of year |
$ | 530 | $ | 35 | ||||
Decrease related to prior period tax positions |
(505 | ) | — | |||||
Increase related to current year tax positions |
10 | 5 | ||||||
|
|
|
|
|||||
Balance at end of year |
$ | 35 | $ | 40 | ||||
|
|
|
|
12. |
Net Loss Per Share Attributable to Common Stockholders |
Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Convertible preferred stock |
72,685,196 | 98,029,647 | 98,029,647 | |||||||||
Common stock options |
15,466,163 | 15,925,992 | 23,708,957 | |||||||||
Restricted stock units |
— | — | 1,511,191 | |||||||||
Convertible preferred stock warrants |
561,851 | 625,629 | 625,629 | |||||||||
Common stock warrants |
531,965 | 561,851 | 585,321 | |||||||||
Shares subject to repurchase |
22,300 | 1,049,034 | 69,513 | |||||||||
|
|
|
|
|
|
|||||||
Total |
89,267,475 | 116,192,153 | 124,530,258 | |||||||||
|
|
|
|
|
|
13. |
Subsequent Events |
Events |
Subsequent to Original Available to be Issued Date of Financial Statements (unaudited) |
December 31, |
March 31, |
|||||||
2021 |
2022 |
|||||||
(Unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 78,376 | $ | 74,428 | ||||
Inventory, net |
54,453 | 50,559 | ||||||
Prepaid expenses and other current assets |
8,104 | 11,264 | ||||||
|
|
|
|
|||||
Total current assets |
140,933 | 136,251 | ||||||
Property and equipment, net |
15,932 | 16,095 | ||||||
Operating lease right-of-use |
21,214 | 20,471 | ||||||
Other long-term assets |
4,394 | 5,550 | ||||||
|
|
|
|
|||||
Total assets |
$ | 182,473 | $ | 178,367 | ||||
|
|
|
|
|||||
Liabilities, Convertible Preferred Stock, Contingently Redeemable Convertible Common Stock and Stockholders’ Deficit |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 21,346 | $ | 31,822 | ||||
Accrued expenses |
20,651 | 24,208 | ||||||
Deferred revenue |
11,267 | 11,426 | ||||||
Operating lease liabilities, current |
3,550 | 3,724 | ||||||
Other current liabilities |
1,650 | 894 | ||||||
Debt, current |
10,750 | 16,720 | ||||||
|
|
|
|
|||||
Total current liabilities |
69,214 | 88,794 | ||||||
Debt, noncurrent |
56,183 | 50,034 | ||||||
Operating lease liabilities, noncurrent |
20,029 | 19,090 | ||||||
Other long-term liabilities |
5,408 | 3,924 | ||||||
|
|
|
|
|||||
Total liabilities |
150,834 | 161,842 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 6) |
||||||||
Convertible preferred stock, $0.0001 par value – 98,234,236 shares authorized at December 31, 2021 and March 31, 2022; 97,611,343 shares issued and outstanding at December 31, 2021 and March 31, 2022 |
487,918 | 487,918 | ||||||
Contingently redeemable convertible common stock – no and 2,350,427 shares issued and outstanding at December 31, 2021 and March 31, 2022, respectively |
— | 27,473 | ||||||
Stockholders’ deficit: |
||||||||
Common stock, $0.0001 par value – 165,000,000 shares authorized at December 31, 2021 and March 31, 2022; 7,965,857 and 8,039,777 shares issued and outstanding at December 31, 2021, and March 31, 2022, respectively |
1 | 1 | ||||||
Additional paid-in capital |
33,863 | 38,660 | ||||||
Accumulated deficit |
(490,143 | ) | (537,527 | ) | ||||
|
|
|
|
|||||
Total stockholders’ deficit |
(456,279 | ) | (498,866 | ) | ||||
|
|
|
|
|||||
Total liabilities, convertible preferred stock, contingently redeemable convertible common stock and stockholders’ deficit |
$ | 182,473 | $ | 178,367 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2022 |
|||||||
Revenue, net |
$ | 102,220 | $ | 90,479 | ||||
Cost of goods sold |
50,028 | 47,742 | ||||||
|
|
|
|
|||||
Gross profit |
52,192 | 42,737 | ||||||
|
|
|
|
|||||
Operating expenses: |
||||||||
Advertising |
35,636 | 32,793 | ||||||
Product development |
5,162 | 6,240 | ||||||
Selling, general and administrative |
47,538 | 50,970 | ||||||
|
|
|
|
|||||
Operating loss |
(36,144 | ) | (47,266 | ) | ||||
Interest expense |
963 | 2,087 | ||||||
Other expense (income), net |
776 | (1,992 | ) | |||||
|
|
|
|
|||||
Interest and other expense, net |
1,739 | 95 | ||||||
|
|
|
|
|||||
Loss before provision for income taxes |
(37,883 | ) | (47,361 | ) | ||||
Provision for income taxes |
12 | 23 | ||||||
|
|
|
|
|||||
Net loss |
$ | (37,895 | ) | $ | (47,384 | ) | ||
|
|
|
|
|||||
Net loss per share attributable to common stockholders, basic and diluted |
$ | (5.72 | ) | $ | (5.94 | ) | ||
|
|
|
|
|||||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted |
6,621,414 | 7,981,994 | ||||||
|
|
|
|
Convertible Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||
Balance at December 31, 2020 |
97,611 | $ | 487,918 | 7,200 | $ | 1 | $ | 14,605 | $ | (354,247 | ) | $ | (339,641 | ) | ||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | 260 | — | 290 | — | 290 | |||||||||||||||||||||||
Vesting of early exercise of options |
— | — | — | — | 1,024 | — | 1,024 | |||||||||||||||||||||||
Repurchase of early exercised options |
— | — | (131 | ) | — | — | — | — | ||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | 3,483 | — | 3,483 | |||||||||||||||||||||||
Net loss |
— | — | — | — | — | (37,895 | ) | (37,895 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at March 31, 2021 (Unaudited) |
97,611 | $ | 487,918 | 7,329 | $ | 1 | $ | 19,402 | $ | (392,142 | ) | $ | (372,739 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Contingently Redeemable Convertible Common Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||
Balance at December 31, 2021 |
97,611 | $ | 487,918 | — | $ | — | 7,966 | $ | 1 | $ | 33,863 | $ | (490,143 | ) | $ | (456,279 | ) | |||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | — | — | 74 | — | 171 | — | 171 | |||||||||||||||||||||||||||||
Issuance of contingently redeemable convertible common stock, net of issuance costs of $27 |
— | — | 2,350 | 27,473 | — | — | — | — | — | |||||||||||||||||||||||||||||
Vesting of early exercise of options |
— | — | — | — | — | — | 125 | — | 125 | |||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | 4,501 | — | 4,501 | |||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | (47,384 | ) | (47,384 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at March 31, 2022 (Unaudited) |
97,611 | $ | 487,918 | 2,350 | $ | 27,473 | 8,040 | $ | 1 | $ | 38,660 | $ | (537,527 | ) | $ | (498,866 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2022 |
|||||||
Cash Flows from Operating Activities |
||||||||
Net loss |
$ | (37,895 | ) | $ | (47,384 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Remeasurement of convertible preferred stock warrant liability |
932 | (1,886 | ) | |||||
Stock-based compensation |
3,460 | 4,460 | ||||||
Depreciation and amortization |
1,128 | 1,410 | ||||||
Non-cash interest expense |
97 | 195 | ||||||
Inventory reserve |
383 | 856 | ||||||
Other non-cash expenses |
— | 8 | ||||||
Changes in operating assets and liabilities: |
||||||||
Inventory |
(8,996 | ) | 3,038 | |||||
Prepaids and other assets |
(2,889 | ) | (3,312 | ) | ||||
Accounts payable |
7,181 | 10,287 | ||||||
Accrued expenses |
6,024 | 2,917 | ||||||
Deferred revenue |
2,442 | 159 | ||||||
Operating lease right-of-use |
26 | (22 | ) | |||||
Other liabilities |
155 | (229 | ) | |||||
|
|
|
|
|||||
Net cash used in operating activities |
(27,952 | ) | (29,503 | ) | ||||
|
|
|
|
|||||
Cash Flows from Investing Activities |
||||||||
Purchase of property and equipment |
(1,262 | ) | (1,352 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(1,262 | ) | (1,352 | ) | ||||
|
|
|
|
|||||
Cash Flows from Financing Activities |
||||||||
Proceeds from issuance of contingently redeemable convertible common stock |
— | 27,500 | ||||||
Payment of deferred offering and convertible preferred stock issuance costs |
(151 | ) | (489 | ) | ||||
Repayment of debt |
(682 | ) | (275 | ) | ||||
Proceeds from exercise of stock options |
290 | 171 | ||||||
Repurchase of common stock |
(297 | ) | — | |||||
|
|
|
|
|||||
Net cash provided (used in) by financing activities |
(840 | ) | 26,907 | |||||
|
|
|
|
|||||
Net decrease in cash and cash equivalents |
(30,054 | ) | (3,948 | ) | ||||
Cash and cash equivalents at beginning of period |
176,523 | 78,376 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 146,469 | $ | 74,428 | ||||
|
|
|
|
|||||
Supplemental Disclosure |
||||||||
Cash paid for taxes |
$ | — | $ | 21 | ||||
Cash paid for interest |
673 | 1,461 | ||||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities |
||||||||
Purchases of property and equipment included in accounts payable and accrued liabilities |
$ | 50 | $ | 286 | ||||
Deferred offering, convertible preferred stock and contingently redeemable convertible common stock issuance costs included in accounts payable and accrued liabilities |
334 | 2,582 | ||||||
Vesting of early exercised stock options |
1,024 | 125 |
1. |
Description of Business |
2. |
Summary of Significant Accounting Policies |
Three Months Ended March 31, |
||||||||
2021 |
2022 |
|||||||
Revenue, net: |
||||||||
Grove Brands |
$ | 52,285 | $ | 46,796 | ||||
Third-party products |
49,935 | 43,683 | ||||||
|
|
|
|
|||||
Total revenue, net |
$ | 102,220 | $ | 90,479 | ||||
|
|
|
|
3. |
Fair Value Measurements and Fair Value of Financial Instruments |
December 31, 2021 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Financial Assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | 77,771 | $ | — | $ | — | $ | 77,771 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 77,771 | $ | — | $ | — | $ | 77,771 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial Liabilities: |
||||||||||||||||
Convertible preferred stock warrant liability |
$ | — | $ | — | $ | 4,787 | $ | 4,787 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | — | $ | — | $ | 4,787 | $ | 4,787 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
March 31, 2022 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Financial Assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | 42,728 | $ | — | $ | — | $ | 42,728 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 42,728 | $ | — | $ | — | $ | 42,728 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial Liabilities: |
||||||||||||||||
Convertible preferred stock warrant liability |
$ | — | $ | — | $ | 2,901 | $ | 2,901 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | — | $ | — | $ | 2,901 | $ | 2,901 | ||||||||
|
|
|
|
|
|
|
|
Balance at December 31, 2021 |
$ | 4,787 | ||
Change in fair value |
(1,886 | ) | ||
|
|
|||
Balance at March 31, 2022 |
$ | 2,901 | ||
|
|
December 31, 2021 |
||||||||||||||||
Series A Convertible Preferred Stock Warrants |
Series B Convertible Preferred Stock Warrants |
Series C Convertible Preferred Stock Warrants |
Series D Convertible Preferred Stock Warrants |
|||||||||||||
Expected term (in years) |
3.72 | 4.11 | 4.59 | 3.38 | ||||||||||||
Fair value of underlying shares |
10.00 | 10.08 | 10.23 | 11.11 | ||||||||||||
Volatility |
65.07 | % | 64.90 | % | 64.83 | % | 65.29 | % | ||||||||
Risk-free interest rate |
1.01 | % | 1.04 | % | 1.09 | % | 0.96 | % | ||||||||
Dividend yield |
— | — | — | — | ||||||||||||
March 31, 2022 |
||||||||||||||||
Series A Convertible Preferred Stock Warrants |
Series B Convertible Preferred Stock Warrants |
Series C Convertible Preferred Stock Warrants |
Series D Convertible Preferred Stock Warrants |
|||||||||||||
Expected term (in years) |
4.67 | 5.28 | 6.00 | 4.14 | ||||||||||||
Fair value of underlying shares |
6.59 | 6.59 | 6.59 | 6.59 | ||||||||||||
Volatility |
68.14 | % | 67.75 | % | 67.43 | % | 68.75 | % | ||||||||
Risk-free interest rate |
2.42 | % | 2.42 | % | 2.41 | % | 2.43 | % | ||||||||
Dividend yield |
— | — | — | — |
4. |
Accrued Expenses |
December 31, |
March 31, |
|||||||
2021 |
2022 |
|||||||
Inventory purchases |
$ | 4,659 | $ | 4,258 | ||||
Compensation and benefits |
2,072 | 3,759 | ||||||
Advertising costs |
2,363 | 2,927 | ||||||
Fulfillment costs |
1,120 | 1,900 | ||||||
Sales taxes |
1,812 | 1,762 | ||||||
Other accrued expenses |
8,625 | 9,602 | ||||||
|
|
|
|
|||||
Total accrued expenses |
$ | 20,651 | $ | 24,208 | ||||
|
|
|
|
5. |
Debt and Convertible Preferred Stock and Common Stock Warrants |
December 31, |
March 31, |
|||||||
2021 |
2022 |
|||||||
Silicon Valley Bank Loan Revolver |
$ | 5,947 | $ | 5,947 | ||||
Silicon Valley Bank and Hercules Mezzanine Term Loan |
59,237 | 59,331 | ||||||
Atel Loan Facility Draw 3 |
1,489 | 1,255 | ||||||
Atel Loan Facility Draw 4 |
260 | 221 | ||||||
|
|
|
|
|||||
Total debt |
66,933 | 66,754 | ||||||
Less: debt, current |
(10,750 | ) | (16,720 | ) | ||||
|
|
|
|
|||||
Total debt, noncurrent |
$ | 56,183 | $ | 50,034 | ||||
|
|
|
|
March 31, 2022 | ||||||||||||
Lenders |
Exercise Price Per Share |
Number of Shares |
Expiration Date | |||||||||
Series A warrants |
SVB | $ | 0.62 | 51,617 | December 2026 | |||||||
Series B warrants |
SVB | 1.46 | 107,093 | July 2027 | ||||||||
Series C warrants |
TriplePoint | 2.84 | 264,140 | April 2028 | ||||||||
Series D warrants |
TriplePoint | 8.25 | 200,043 | May 2026 |
6. |
Commitments and Contingencies |
7. |
Convertible Preferred Stock |
Original Issue Price |
Shares Authorized |
Shares Outstanding |
Net Carrying Value |
Liquidation Preference |
||||||||||||||||
Series Seed |
$ | 0.6168 | 8,242,152 | 8,242,152 | $ | 3,943 | $ | 5,084 | ||||||||||||
Series A |
0.6168 | 12,015,184 | 11,963,567 | 5,240 | 7,379 | |||||||||||||||
Series B |
1.4642 | 10,789,890 | 10,682,797 | 15,545 | 15,642 | |||||||||||||||
Series C |
2.8394 | 13,295,062 | 13,030,922 | 36,917 | 37,000 | |||||||||||||||
Series C-1 |
3.7244 | 7,273,640 | 7,273,640 | 27,003 | 27,090 | |||||||||||||||
Series D |
8.2482 | 17,173,437 | 16,973,394 | 136,618 | 140,000 | |||||||||||||||
Series D-1 |
10.6703 | 4,518,724 | 4,518,724 | 48,146 | 48,216 | |||||||||||||||
Series D-2 |
7.2738 | 12,373,174 | 12,373,174 | 89,638 | 90,000 | |||||||||||||||
Series E |
9.9578 | 12,552,973 | 12,552,973 | 124,868 | 125,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total |
98,234,236 | 97,611,343 | $ | 487,918 | $ | 495,411 | ||||||||||||||
|
|
|
|
|
|
|
|
8. |
Backstop Funding Agreement and Contingently Redeemable Convertible Common Stock |
9. |
Stock-Based Compensation |
Options Outstanding |
||||||||||||||||
Number of Options |
Weighted– Average Exercise Price |
Weighted- Average Remaining Contractual Life (years) |
Aggregate Intrinsic Value |
|||||||||||||
Balance – December 31, 2021 |
23,708,957 | $ | 3.05 | 7.99 | $ | 125,429 | ||||||||||
Exercised |
(73,920 | ) | $ | 2.35 | ||||||||||||
Forfeited and expired |
(1,789,281 | ) | $ | 3.27 | ||||||||||||
|
|
|||||||||||||||
Balance – March 31, 2022 |
21,845,756 | $ | 3.03 | 7.70 | $ | 78,980 | ||||||||||
|
|
|||||||||||||||
Options vested and exercisable – March 31, 2022 |
12,539,154 | $ | 2.00 | 7.03 | $ | 57,573 | ||||||||||
|
|
Number of Options |
Weighted– Average Exercise Price |
|||||||
Outstanding and unvested as of December 31, 2021 |
69,513 | $ | 2.25 | |||||
Vested |
(55,450 | ) | 2.25 | |||||
|
|
|||||||
Outstanding and unvested as of March 31, 2022 |
14,063 | $ | 2.25 | |||||
|
|
Three Months Ended March 31, | ||
2021 | ||
Fair value of common stock |
$5.95 | |
Expected term (in years) |
5.0 – 6.10 | |
Volatility |
73.66% – 75.19% | |
Risk-free interest rate |
0.50% – 0.69% | |
Dividend yield |
— |
Number of shares |
Weighted– Average Grant Date Fair Value Per Share |
|||||||
Unvested – December 31, 2021 |
1,511,191 | $ | 8.62 | |||||
Granted |
1,802,790 | 7.19 | ||||||
Forfeited |
(572,335 | ) | 8.25 | |||||
|
|
|||||||
Unvested – March 31, 2022 |
2,741,646 | $ | 7.76 | |||||
|
|
10. |
Net Loss Per Share Attributable to Common Stockholders |
Three Months Ended March 31, |
||||||||
2021 |
2022 |
|||||||
Convertible preferred stock |
98,029,647 | 98,029,647 | ||||||
Contingently redeemable convertible common stock |
— | 2,350,427 | ||||||
Common stock options |
22,273,364 | 21,845,756 | ||||||
Restricted stock units |
— | 2,741,646 | ||||||
Convertible preferred stock warrants |
625,629 | 625,629 | ||||||
Common stock warrants |
561,851 | 585,321 | ||||||
Shares subject to repurchase |
468,764 | 14,063 | ||||||
|
|
|
|
|||||
Total |
121,959,255 | 126,192,489 | ||||||
|
|
|
|
11. |
Subsequent Events |
Events |
Subsequent to Original Available to be Issued date of Financial Statements |
Amount | ||
SEC registration fee |
$64,622.59 | |
Legal fees and expenses |
* | |
Accounting fees and expenses |
* | |
Miscellaneous |
* | |
Total |
* |
* | These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be defined at this time. |
+ | Indicates management contract or compensatory plan or arrangement. |
† | Schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. |
†† | The Registrant has redacted provisions or terms of this Exhibit pursuant to Regulation S-K Item 601(b)(10)(iv). The Registrant agrees to furnish an unredacted copy of the Exhibit to the SEC upon its request. |
* | Filed herewith. |
A. | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by section 10(a)(3) of the Securities Act; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
B. | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
C. | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
D. | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
E. | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
F. | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
GROVE COLLABORATIVE HOLDINGS, INC. | ||
By: | /s/ Stuart Landesberg | |
Stuart Landesberg | ||
Chief Executive Officer |
Name |
Title |
Date | ||
/s/ Stuart Landesberg Stuart Landesberg |
Chief Executive Officer and Director (principal executive officer) |
July 18, 2022 | ||
/s/ Sergio Cervantes Sergio Cervantes |
Chief Financial Officer (principal financial and accounting officer) |
July 18, 2022 | ||
/s/ Christopher Clark Christopher Clark |
Director | July 18, 2022 | ||
/s/ David Glazer David Glazer |
Director | July 18, 2022 | ||
/s/ John Replogle John Replogle |
Director | July 18, 2022 | ||
/s/ Kristine Miller Kristine Miller |
Director | July 18, 2022 | ||
/s/ Naytri Shroff Sramek Naytri Shroff Sramek |
Director | July 18, 2022 |
Name |
Title |
Date | ||
/s/ Rayhan Arif Rayhan Arif |
Director | July 18, 2022 | ||
/s/ Fumbi Chima Fumbi Chima |
Director | July 18, 2022 |
Exhibit 5.1
![]() |
SIDLEY AUSTIN LLP 1001 PAGE MILL ROAD BUILDING 1 PALO ALTO, CA 94304 +1 650 565 7000 +1 650 565 7100 FAX
AMERICA ASIA PACIFIC EUROPE |
July 18, 2022
Grove Collaborative Holdings, Inc.
1301 Sansome Street
San Francisco, California 94111
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-1 (the Registration Statement) being filed by Grove Collaborative Holdings, Inc., a Delaware public benefit corporation (the Company), with the Securities and Exchange Commission (the SEC) under the Securities Act of 1933, as amended (the Securities Act), covering the registration of (a) the offering and sale by the Company of up to 14,750,000 shares of Class A common stock, par value $0.0001 per share (Class A Common Stock), upon the exercise of warrants (the Warrants) issued pursuant to the Warrant Agreement, dated as of March 22, 2021 (including the form of Warrant Certificate included therein, the Warrant Agreement), between Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent and the Company (such shares, the Warrant Shares), and (b) the resale by the selling stockholders described in the Registration Statement (the Selling Holders) of (i) up to 6,700,000 Warrants held by the Selling Holders (the Secondary Warrants), (ii) up to 6,700,000 Warrant Shares issuable upon exercise of the Secondary Warrants, (iii) up to 27,722,922 shares of Class A Common Stock held by the Selling Holders (the Issued Shares), and (iv) up to 67,212,978 shares of Class A Common Stock (the Conversion Shares) issuable upon conversion (on a one-for-one basis) of shares of Class B common stock, par value $0.0001 per share (Class B Shares), held by the Selling Holders. The Issued Shares and the Class B Shares were issued pursuant to the following agreements (the Agreements): (i) the Securities Purchase Agreement, dated January 22, 2021, between the Company and VG Acquisition Sponsor II LLC (the Sponsor); (ii) the Agreement and Plan of Merger, dated December 7, 2021, as amended and restated on March 31, 2022, by and among VGAC II, Treehouse Merger Sub, Inc., a Delaware corporation and wholly owned direct subsidiary of VGAC II, Treehouse Merger Sub II, LLC, a Delaware limited liability company and wholly owned direct subsidiary of VGAC II, and Grove Collaborative, Inc., a Delaware public benefit corporation; (iii) those certain Subscription Agreements, dated December 7, 2021, entered into between the Company and certain Selling Holders; and (iv) the Subscription Agreement, dated March 31, 2022, by and among VGAC II, Grove Collaborative, Inc. and Corvina Holdings Limited, an affiliate of the Sponsor.
Grove Collaborative Holdings, Inc.
July 18, 2022
Page 2
This opinion letter is being delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
We have examined the Registration Statement, the Companys Certificate of Incorporation, dated June 15, 2022 (the Certificate of Incorporation), the Amended and Restated Bylaws, dated June 16, 2022 (the Bylaws), of the Company, the Warrant Agreement and the Agreements and resolutions adopted by the board of directors of the Company relating to the Registration Statement, the Warrant Agreement, the issuance of the Warrants, the Warrant Shares, the Issued Shares and the Conversion Shares by the Company. We have also examined originals, or copies of originals certified to our satisfaction, of such agreements, documents, certificates and statements of the Company and other corporate documents and instruments, and have examined such questions of law, as we have considered relevant and necessary as a basis for this opinion letter. We have assumed the authenticity of all documents submitted to or obtained by us as originals, the genuineness of all signatures, the legal capacity of all persons and the conformity with the original documents of any copies thereof submitted to or obtained by us for examination. As to facts relevant to the opinions expressed herein, we have relied without independent investigation or verification upon, and assumed the accuracy and completeness of, certificates, letters and oral and written statements and representations of public officials, officers and other representatives of the Company, and others.
Based on the foregoing and subject to the other qualifications and limitations set forth herein, we are of the opinion that:
1. | The Issued Shares are validly issued, fully paid and non-assessable. |
2. | The Secondary Warrants constitute valid and binding obligations of the Company. |
3. | The Warrant Shares will be validly issued, fully paid and non-assessable when: (i) the Registration Statement, as finally amended, shall have been declared effective under the Securities Act and (ii) certificates representing the Warrant Shares shall have been duly executed, countersigned and registered and duly delivered to the purchasers thereof against payment of the exercise price or, if any of the Warrant Shares are to be issued in uncertificated form, the Companys books shall reflect the issuance of such Warrant Shares to the purchasers thereof against payment of the exercise price therefor, all in accordance with the Warrants and the Warrant Agreement. |
4. | The Conversion Shares have been duly authorized by all requisite corporate action on the part of the Company under the Delaware General Corporation Law (the DGCL) and, upon conversion of Class B Shares in accordance with the Certificate of Incorporation, when the Conversion Shares are issued and delivered by the Company to the Selling Holders, in the manner contemplated by the Registration Statement, will be validly issued, fully paid and non-assessable. |
Grove Collaborative Holdings, Inc.
July 18, 2022
Page 3
With respect to each instrument or agreement referred to in or otherwise relevant to the opinions set forth herein (each, an Instrument), we have assumed, to the extent relevant to the opinions set forth herein, that (i) each party to such Instrument (if not a natural person) was duly organized or formed, as the case may be, and was at all relevant times and is validly existing and in good standing under the laws of its jurisdiction of organization or formation, as the case may be, and had at all relevant times and has full right, power and authority to execute, deliver and perform its obligations under such Instrument and (ii) such Instrument has been duly authorized, executed and delivered by, and was at all relevant times and is a valid, binding and enforceable agreement or obligation, as the case may be, of, each party thereto.
We express no opinion as to any provision of any instrument, agreement or other document (i) regarding severability of the provisions thereof; or (ii) providing that the assertion or employment of any right or remedy shall not prevent the concurrent assertion or employment of any other right or remedy, or that every right and remedy shall be cumulative and in addition to every other right and remedy, or that any delay or omission to exercise any right or remedy shall not impair any right or remedy or constitute a waiver thereof.
Our opinions are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer and other similar laws relating to or affecting creditors rights generally and to general equitable principles (regardless of whether considered in a proceeding in equity or at law), including concepts of commercial reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief.
For the purposes of this letter, we have assumed that, at the time of the issuance, sale and delivery of any of the Warrant Shares: (i) the Warrant Shares will be issued and sold as contemplated in the Registration Statement and the prospectus relating thereto; and (ii) the Certificate of Incorporation and the Bylaws, each as currently in effect, will not have been modified or amended and will be in full force and effect.
In rendering the opinion set forth in paragraph (3) above, we have assumed that at the time the Warrant Shares are to be issued upon exercise of the Warrant Agreement there will be a sufficient number of shares of Class A Common Stock authorized and then available for issuance under the Certificate of Incorporation as then in effect.
In rendering the opinion set forth in paragraph (4) above, we have assumed that at the time of the conversion of the Conversion Shares there will be a sufficient number of shares of Class A Common Stock authorized and then available for issuance under the Certificate of Incorporation as then in effect.
Grove Collaborative Holdings, Inc.
July 18, 2022
Page 4
This opinion letter is limited to the General Corporation Law of the State of Delaware and the laws of the State of New York. We express no opinion as to the laws, rules or regulations of any other jurisdiction, including, without limitation, the federal laws of the United States of America or any state securities or blue sky laws, or as to the municipal laws or the laws, rules or regulations of any local agencies or governmental authorities of or within the State of New York.
We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to all references to our Firm included in or made a part of the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Sidley Austin LLP
Exhibit 10.22
STANDBY EQUITY PURCHASE AGREEMENT
THIS STANDBY EQUITY PURCHASE AGREEMENT (this Agreement) dated as of July 18, 2022 is made by and between YA II PN, LTD., a Cayman Islands exempt limited partnership (the Investor), and GROVE COLLABORATIVE HOLDINGS, INC., a public benefit company incorporated under the laws of the State of Delaware (the Company).
WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company, up to $100 million of the Companys shares of Class A common stock, par value $0.0001 per share (the Common Shares); and
WHEREAS, the Common Shares are listed for trading on the New York Stock Exchange under the symbol GROV; and
WHEREAS, the offer and sale of the Common Shares issuable hereunder will be made in reliance upon Section 4(a)(2) under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the Securities Act), or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the transactions to be made hereunder.
NOW, THEREFORE, the parties hereto agree as follows:
Article I. Certain Definitions
Additional Shares shall have the meaning set forth in Section 2.01(d)(ii).
Adjusted Advance Amount shall have the meaning set forth in Section 2.01(d)(i).
Advance shall mean any issuance and sale of Advance Shares from the Company to the Investor pursuant to Article II hereof.
Advance Date shall mean the 1st Trading Day after expiration of the applicable Pricing Period for each Advance.
Advance Notice shall mean a written notice in the form of Exhibit A attached hereto to the Investor executed by an officer of the Company and setting forth the number of Advance Shares that the Company desires to issue and sell to the Investor.
Advance Notice Date shall mean each date the Company is deemed to have delivered (in accordance with Section 2.01(b) of this Agreement) an Advance Notice to the Investor, subject to the terms of this Agreement.
Advance Shares shall mean the Common Shares that the Company shall issue and sell to the Investor pursuant to Article II hereof.
Affiliate shall have the meaning set forth in Section 3.07.
Agreement shall have the meaning set forth in the preamble of this Agreement.
Applicable Laws shall mean all applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls, including the United States Foreign Corrupt Practices Act of 1977, and (iii) any Sanctions laws.
Black Out Period shall have the meaning set forth in Section 6.02
Class B Common Stock means the Companys Class B common stock, par value $0.0001 per share.
Closing shall have the meaning set forth in Section 2.02.
Commitment Amount shall mean $100,000,000 of Advance Shares, provided that, the Company shall not affect any sales under this Agreement and the Investor shall not have the obligation to purchase the Common Shares under this Agreement to the extent (but only to the extent) that after giving effect to such purchase and sale the aggregate number of Common Shares issued under this Agreement would exceed 19.99% of the voting power or number of shares of issued and outstanding Common Shares and Class B Common Stock as of the date of this Agreement, in each case calculated in accordance with the applicable rules of the Principal Market (the Exchange Cap) provided further that, the Exchange Cap will not apply if (a) the Companys stockholders have approved issuances in excess of the Exchange Cap in accordance with the rules of the Principal Market or (b) all applicable sales of Shares hereunder equal or exceed the Minimum Price (as defined in Section 312.04 of the NYSE Listed Company Manual) or (c) as to any Advance, the issuance of Advance Shares in respect of such Advance would be excluded from the Exchange Cap under the rules of the Principal Market (or interpretive guidance provided by the Principal Market with respect thereto) in effect as of the date of determination of whether this clause (c) applies. For avoidance of doubt, the Company may, but shall be under no obligation to, request its stockholders to approve the issuance of Shares as contemplated by this Agreement; provided that, if stockholder approval is not obtained in accordance with this Agreement, the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated hereby at all times during the term of this Agreement.
Commitment Period shall mean the period commencing on the date hereof and expiring upon the date of termination of this Agreement in accordance with Section 10.01.
Common Shares shall have the meaning set forth in the recitals of this Agreement.
- 2 -
Company shall have the meaning set forth in the preamble of this Agreement.
Company Indemnitees shall have the meaning set forth in Section 5.02.
Condition Satisfaction Date shall have the meaning set forth in Section 7.01.
Environmental Laws shall have the meaning set forth in Section 4.13.
Exchange Act shall mean the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Exchange Cap shall have the meaning set forth in the definition of Commitment Amount.
Excluded Day shall have the meaning set forth in Section 2.01(d)(i).
Hazardous Materials shall have the meaning set forth in Section 4.13.
Indemnified Liabilities shall have the meaning set forth in Section 5.01.
Investor shall have the meaning set forth in the preamble of this Agreement.
Investor Indemnitees shall have the meaning set forth in Section 5.01.
Market Price shall mean the average of the VWAP of the Common Shares during each Trading Day of the relevant Pricing Period, other than the VWAP on any Excluded Days.
Material Adverse Effect shall mean any event, occurrence or condition that has had or would reasonably be expected to have (i) a material adverse effect on the legality, validity or enforceability of this Agreement or the transactions contemplated herein, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Companys ability to perform in any material respect on a timely basis its obligations under this Agreement.
Material Outside Event shall have the meaning set forth in Section 6.08.
Maximum Advance Amount in respect of each Advance Notice means a number of Common Shares with a value equal to $25,000,000, unless otherwise agreed by the parties.
Minimum Acceptable Price or MAP shall mean the minimum price notified by the Company to the Investor in each Advance Notice, if applicable.
OFAC shall have the meaning set forth in Section 4.29.
Ownership Limitation shall have the meaning set forth in Section 2.01(c)(i).
- 3 -
Person shall mean an individual, a corporation, a partnership, a limited liability company, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
Plan of Distribution shall mean the section of a Registration Statement disclosing the plan of distribution of the Shares.
Pricing Period shall mean the three (3) consecutive Trading Days commencing on the Advance Notice Date.
Principal Market shall mean the New York Stock Exchange; provided however, that in the event the Companys Common Shares are ever listed or traded on the Nasdaq Global Market, the Nasdaq Capital Market, or the NYSE American, then the Principal Market shall mean such other market or exchange on which the Companys Common Shares are then listed or traded to the extent such other market or exchange is the principal trading market or exchange for the Common Shares.
Prospectus shall mean any prospectus (including, without limitation, all amendments and supplements thereto) used by the Company in connection with a Registration Statement.
Prospectus Supplement shall mean any prospectus supplement to a Prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act, including, without limitation, any prospectus supplement to be filed in accordance with Section 6.01 hereof.
Purchase Price shall mean the price per Advance Share obtained by multiplying the Market Price by 97.55%.
Registrable Securities shall mean (i) the Shares, and (ii) any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise.
Registration Limitation shall have the meaning set forth in Section 2.01(c)(ii).
Registration Statement shall mean a registration statement on Form S-1 or Form S-3 or on such other form promulgated by the SEC for which the Company then qualifies and which counsel for the Company shall deem appropriate, and which form shall be available for the registration of the resale by the Investor of the Registrable Securities under the Securities Act, which registration statement provides for the resale from time to time of the Shares as provided herein.
Regulation D shall mean the provisions of Regulation D promulgated under the Securities Act.
Sanctions shall have the meaning set forth in Section 4.29.
Sanctioned Countries shall have the meaning set forth in Section 4.29.
- 4 -
SEC shall mean the U.S. Securities and Exchange Commission.
SEC Documents shall have the meaning set forth in Section 4.05.
Securities Act shall have the meaning set forth in the recitals of this Agreement.
Settlement Document shall have the meaning set forth in Section 2.02(a).
Shares shall mean the Common Shares to be issued from time to time hereunder pursuant to an Advance.
Subsidiaries shall mean any Person in which the Company, directly or indirectly, (x) owns a majority of the outstanding capital stock or holds a majority of the equity or similar interest of such Person or (y) controls or operates all or substantially all of the business, operations or administration of such Person, and the foregoing are collectively referred to herein as Subsidiaries.
Trading Day shall mean any day during which the Principal Market shall be open for business.
Transaction Documents shall have the meaning set forth in Section 4.02.
VWAP shall mean for any Trading Day, the daily volume weighted average price of the Common Shares for such Trading Day on the Principal Market during regular trading hours as reported by Bloomberg L.P.
Article II. Advances
Section 2.01 Advances; Mechanics. Upon the terms and subject to the conditions of this Agreement, during the Commitment Period, the Company, at its sole discretion, shall have the right, but not the obligation, to issue and sell to the Investor, and the Investor shall purchase from the Company, Advance Shares by the delivery to the Investor of Advance Notices on the following terms:
(a) | Advance Notice. At any time during the Commitment Period the Company may require the Investor to purchase Shares by delivering an Advance Notice to the Investor, subject to the satisfaction or waiver by the Investor of the conditions set forth in Section 7.01, and in accordance with the following provisions: |
(i) | The Company shall, in its sole discretion, select the number of Advance Shares, not to exceed the Maximum Advance Amount, it desires to issue and sell to the Investor in each Advance Notice and the time it desires to deliver each Advance Notice. |
(ii) | There shall be no mandatory minimum Advances and no non-usages fee for not utilizing the Commitment Amount or any part thereof. |
- 5 -
(b) | Date of Delivery of Advance Notice. Advance Notices shall be delivered in accordance with the instructions set forth on the bottom of Exhibit A. An Advance Notice shall be deemed delivered on (i) the day it is received by the Investor if such notice is received by email on or before 8:30 a.m. Eastern Time (or later if waived by the Investor in its sole discretion), or (ii) the immediately succeeding day if it is received by email after 8:30 a.m. Eastern Time, in each case in accordance with the instructions set forth on the bottom of Exhibit A. |
(c) | Advance Limitations. Regardless of the number of Advance Shares requested by the Company in the Advance Notice, the final number of Advance Shares to be issued and sold pursuant to an Advance Notice shall be reduced (if at all) in accordance with each of the following limitations: |
(i) | Ownership Limitation; Commitment Amount. Notwithstanding anything to the contrary contained in this Agreement, the Investor shall not be obligated to purchase or acquire, and shall not purchase or acquire, any Common Shares under this Agreement which, when aggregated with all other Common Shares beneficially owned by the Investor and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Investor and its affiliates (on an aggregated basis) to exceed 9.99% of the outstanding voting power or number of then issued and outstanding Common Shares (the Ownership Limitation). Upon the written request of the Investor, the Company shall promptly (but no later than the next business day on which the transfer agent for the Common Shares is open for business) confirm orally or in writing to the Investor the number of Common Shares then outstanding. In connection with each Advance Notice delivered by the Company, any portion of the Advance that would (i) cause the Investor to exceed the Ownership Limitation or (ii) cause the aggregate number of Shares issued and sold to the Investor hereunder to exceed the Commitment Amount shall automatically be withdrawn with no further action required by the Company, and such Advance Notice shall be deemed automatically modified to reduce the number of Advance Shares requested by an amount equal to such withdrawn portion; provided that in the event of any such automatic withdrawal and automatic modification, Investor will promptly notify the Company of such event. |
(ii) | Registration Limitation and Exchange Cap. In no event shall an Advance exceed the amount registered under the Registration Statement then in effect (the Registration Limitation) or the Exchange Cap, to the extent applicable. In connection with each Advance Notice, any portion of an Advance that would exceed the Registration Limitation or the Exchange Cap shall automatically be withdrawn with no further action required by the Company and such Advance Notice shall be deemed automatically modified to reduce the aggregate amount of the requested Advance by an amount equal to such withdrawn portion in respect of each Advance Notice; provided that in the event of any such automatic withdrawal and automatic modification, Investor will promptly notify the Company of such event. |
- 6 -
(d) | Minimum Acceptable Price. |
(i) | With respect to each Advance Notice, the Company may notify the Investor of the MAP with respect to such Advance by indicating a MAP on such Advance Notice. If no MAP is specified in an Advance Notice, then no MAP shall be in effect in connection with such Advance. Each Trading Day during a Pricing Period for which (A) with respect to each Advance Notice with a MAP, the VWAP of the Common Shares is below the MAP in effect with respect to such Advance Notice, or (B) there is no VWAP (each such day, an Excluded Day), shall result in an automatic reduction to the number of Advance Shares set forth in such Advance Notice by one third (the resulting amount of each Advance being the Adjusted Advance Amount), and each Excluded Day shall be excluded from the Pricing Period for purposes of determining the Market Price. |
(ii) | The total Advance Shares in respect of each Advance (after reductions have been made to arrive at the Adjusted Advance Amount, if any) shall be automatically increased by such number of Common Shares (the Additional Shares) equal to the number of Common Shares sold by the Investor on such Excluded Day, if any, and the price paid per share for each Additional Share shall be equal to the MAP in effect with respect to such Advance Notice (without any further discount), provided that this increase shall not cause the total Advance Shares to exceed the amount set forth in the original Advance Notice or any limitations set forth in Section 2.01(c). |
(e) | Unconditional Contract. Notwithstanding any other provision in this Agreement, the Company and the Investor acknowledge and agree that upon the Investors receipt of a valid Advance Notice from the Company, the parties shall be deemed to have entered into an unconditional contract binding on both parties for the purchase and sale of Advance Shares pursuant to such Advance Notice in accordance with the terms of this Agreement and (i) subject to Applicable Laws and (ii) subject to Section 3.08 (Trading Activities), the Investor may sell Common Shares during the Pricing Period. |
Section 2.02 Closings. The closing of each Advance and each sale and purchase of Advance Shares (each, a Closing) shall take place as soon as practicable on or after each Advance Date in accordance with the procedures set forth below. The parties acknowledge that the Purchase Price is not known at the time the Advance Notice is delivered (at which time the Investor is irrevocably bound) but shall be determined on each Closing based on the daily prices of the Common Shares that are the inputs to the determination of the Purchase Price as set forth further below. In connection with each Closing, the Company and the Investor shall fulfill each of its obligations as set forth below:
- 7 -
(a) | On each Advance Date, the Investor shall deliver to the Company a written document, in the form attached hereto as Exhibit B (each a Settlement Document), setting forth the final number of Shares to be purchased by the Investor (taking into account any adjustments pursuant to Section 2.01), the Market Price, the Purchase Price, the aggregate proceeds to be paid by the Investor to the Company, and a report by Bloomberg, L.P. indicating the VWAP for each of the Trading Days during the Pricing Period (or, if not reported on Bloomberg, L.P., another reporting service reasonably agreed to by the parties), in each case in accordance with the terms and conditions of this Agreement. |
(b) | Promptly after receipt of the Settlement Document with respect to each Advance (and, in any event, not later than one Trading Day after such receipt), the Company will, or will cause its transfer agent to, electronically transfer such number of Advance Shares to be purchased by the Investor (as set forth in the Settlement Document) by crediting the Investors account or its designees account at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto, and transmit notification to the Investor that such share transfer has been requested. Promptly upon receipt of such notification, the Investor shall pay to the Company the aggregate purchase price of the Shares (as set forth in the Settlement Document) in cash in immediately available funds to an account designated by the Company in writing and transmit notification to the Company that such funds transfer has been requested. No fractional shares shall be issued, and any fractional amounts shall be rounded to the next higher whole number of shares. |
(c) | On or prior to the Advance Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings expressly required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein. |
(d) | Notwithstanding anything to the contrary in this Agreement, if on any day during the Pricing Period (i) the Company notifies Investor that a Material Outside Event has occurred, or (ii) the Company notifies the Investor of a Black Out Period, the parties agree that the pending Advance shall end and the final number of Advance Shares to be purchased by the Investor at the Closing for such Advance shall be equal to the number of Common Shares sold by the Investor during the applicable Pricing Period prior to the notification from the Company of a Material Outside Event or Black Out Period. |
Section 2.03 Hardship.
(a) | In the event the Investor sells Common Shares after receipt of an Advance Notice and the Company fails to perform its obligations as mandated in Section 2.02, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Investor is entitled at law or in equity, including, without limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to Applicable Laws and the rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement. |
- 8 -
(b) | In the event the Company provides an Advance Notice and the Investor fails to perform its obligations as mandated in Section 2.02, the Investor agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Company is entitled at law or in equity, including, without limitation, specific performance, it will hold the Company harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Investor and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Company shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to Applicable Laws and the rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement. |
Section 2.04 Completion of Resale Pursuant to the Registration Statement. The Company will be under no further obligation to maintain the effectiveness of the Registration Statement after the earlier to occur of (a) the date on which the Investor has purchased the full Commitment Amount and has completed the subsequent resale of the full Commitment Amount pursuant to the Registration Statement, Investor will notify the Company that all subsequent resales are completed, (b) the 180th day following the date on which the Investor has purchased the full Commitment Amount, or (c) the 180th day following the termination of this Agreement in accordance with its terms.
Article III. Representations and Warranties of Investor
The Investor represents and warrants to the Company, as of the date hereof, as of each Advance Notice Date and each Advance Date that:
Section 3.01 Organization and Authorization. The Investor is duly organized, validly existing and in good standing under the laws of the Cayman Islands and has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to purchase or acquire Shares in accordance with the terms hereof. The decision to invest and the execution and delivery of this Agreement by the Investor, the performance by the Investor of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby have been duly authorized and require no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver this Agreement and all other instruments on behalf of the Investor or its shareholders. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.
- 9 -
Section 3.02 Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Common Shares of the Company and of protecting its interests in connection with the transactions contemplated hereby. The Investor acknowledges and agrees that its investment in the Company involves a high degree of risk, and that the Investor may lose all or a part of its investment.
Section 3.03 No Legal, Investment or Tax Advice from the Company. The Investor acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of the Companys representatives or agents for legal, tax, investment or other advice with respect to the Investors acquisition of Common Shares hereunder, the transactions contemplated by this Agreement or the laws of any jurisdiction, and the Investor acknowledges that the Investor may lose all or a part of its investment.
Section 3.04 Investment Purpose. The Investor is acquiring the Common Shares for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, in violation of the Securities Act or any applicable state securities laws; provided, however, that by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance with, or pursuant to, a Registration Statement filed pursuant to this Agreement or an applicable exemption under the Securities Act. The Investor does not presently have any agreement or understanding, directly or indirectly, with any Person to sell or distribute any of the Shares. The Investor is acquiring the Shares hereunder in the ordinary course of its business. The Investor acknowledges that it will be disclosed as an underwriter and a selling stockholder in each Registration Statement and in any prospectus contained therein.
Section 3.05 Accredited Investor. The Investor is an Accredited Investor as that term is defined in Rule 501(a)(3) of Regulation D.
Section 3.06 Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information the Investor deemed material to making an informed investment decision. The Investor and its advisors (and its counsel), if any, have been afforded the opportunity to ask questions of the Company and its management and have received answers to such questions. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors (and its counsel), if any, or its representatives shall modify, amend or affect the Investors right to rely on the Companys representations and warranties contained in this Agreement. The Investor acknowledges and agrees that the Company has not made to the Investor, and the Investor acknowledges and agrees it has not relied upon, any representations and warranties of the Company, its employees or any third party other than the representations and warranties of the Company contained in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect to the transactions contemplated hereby.
- 10 -
Section 3.07 Not an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any Affiliate of the Company (as that term is defined in Rule 405 promulgated under the Securities Act).
Section 3.08 No Prior Short Sales. At no time prior to the date of this Agreement has the Investor, its sole member, any of their respective officers, or any entity managed or controlled by the Investor or its sole member, engaged in or effected, in any manner whatsoever, directly or indirectly, for its own principal account, any (i) short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Shares or (ii) hedging transaction, which establishes a net short position with respect to the Common Shares that remains in effect as of the date of this Agreement.
Section 3.09 General Solicitation. Neither the Investor, nor any of its affiliates, nor any person acting on its or their behalf, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Common Shares by the Investor.
Section 3.10 Resale of Shares. The Investor represents, warrants and covenants that it will resell the Shares only pursuant to the Registration Statement in which the resale of such Shares is registered under the Securities Act, in a manner described under the caption Plan of Distribution in such Registration Statement, and in a manner in compliance with all applicable federal and state securities laws, rules and regulations, or pursuant to an exception for the registration provisions of the Securities Act, if applicable.
Article IV. Representations and Warranties of the Company
Except as set forth in the SEC Documents, the Company represents and warrants to the Investor, as of the date hereof, each Advance Notice Date and each Advance Date (other than representations and warranties which address matters only as of a certain date, which shall be true and correct as written as of such certain date), that:
Section 4.01 Organization and Qualification. Each of the Company and its Subsidiaries (as defined below) is an entity duly organized and validly existing under the laws of their respective jurisdiction of organization, and has the requisite power and authority to own its properties and to carry on its business as now being conducted. Each of the Company and its Subsidiaries is duly qualified to do business and is in good standing (to the extent applicable) in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.
- 11 -
Section 4.02 Authorization, Enforcement, Compliance with Other Instruments. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Shares in accordance with the terms hereof and thereof. The execution and delivery by the Company of this Agreement and the other Transaction Documents, and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Common Shares) have been or (with respect to consummation) will be duly authorized by the Companys board of directors and no further consent or authorization will be required by the Company, its board of directors or its shareholders. This Agreement and the other Transaction Documents to which it is a party have been (or, when executed and delivered, will be) duly executed and delivered by the Company and, assuming the execution and delivery thereof and acceptance by the Investor, constitute (or, when duly executed and delivered, will be) the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws relating to, or affecting generally, the enforcement of applicable creditors rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. Transaction Documents means, collectively, this Agreement and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
Section 4.03 Authorization of the Shares. The Shares to be issued under this Agreement have been, or with respect to Shares to be purchased by the Investor pursuant to an Advance Notice, will be, when issued and delivered pursuant to the terms approved by the board of directors of the Company or a duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein, duly and validly authorized and issued and fully paid and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, including any statutory or contractual preemptive rights, resale rights, rights of first refusal or other similar rights, and will be registered pursuant to Section 12 of the Exchange Act. The Shares, when issued, will conform to the description thereof set forth in or incorporated into the Prospectus.
Section 4.04 No Conflict. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Common Shares) will not (i) result in a violation of the articles of incorporation or other organizational documents of the Company or its Subsidiaries (with respect to consummation, as the same may be amended prior to the date on which any of the transactions contemplated hereby are consummated), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or its Subsidiaries or by which any property or asset of the Company or its Subsidiaries is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations that would not reasonably be expected to have a Material Adverse Effect.
- 12 -
Section 4.05 SEC Documents; Financial Statements. The Company has filed (giving effect to permissible extensions in accordance with Rule 12b-25 under the Exchange Act) all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the Exchange Act since June 16, 2021 (such filings, and amendments of such filings after the date hereof, or filed after the date hereof, and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, and all registration statements filed by the Company under the Securities Act (including any Registration statements filed hereunder), being hereinafter referred to as the SEC Documents). The Company has delivered or made available to the Investor through the SECs website at http://www.sec.gov, true and complete copies of the SEC Documents.
Section 4.06 Financial Statements. The consolidated financial statements of the Company included or incorporated by reference in SEC Documents, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and the Subsidiaries as of the dates indicated and the consolidated results of operations, cash flows and changes in stockholders equity of the Company for the periods specified and have been prepared in compliance with the requirements of the Securities Act and Exchange Act and in conformity with generally accepted accounting principles in the United States (GAAP) applied on a consistent basis (except for (i) such adjustments to accounting standards and practices as are noted therein, (ii) in the case of unaudited interim financial statements, to the extent such financial statements may not include footnotes required by GAAP or may be condensed or summary statements and (iii) such adjustments which will not be material, either individually or in the aggregate) during the periods involved; the other financial and statistical data with respect to the Company and the Subsidiaries (as defined below) contained or incorporated by reference in the SEC Documents are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the SEC Documents that are not included or incorporated by reference as required; the Company and the Subsidiaries (as defined below) do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the SEC Documents (excluding the exhibits thereto); and all disclosures contained or incorporated by reference in the SEC Documents regarding non-GAAP financial measures (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the SEC Documents fairly presents the information called for in all material respects and has been prepared in accordance with the SECs rules and guidelines applicable thereto.
Section 4.07 Registration Statement and Prospectus. Each Registration Statement and the offer and sale of Shares as contemplated hereby will meet the requirements of Rule 415 under the Securities Act and comply in all material respects with said Rule. Any statutes, regulations, contracts or other documents that are required to be described in a Registration Statement or a Prospectus, or to be filed as exhibits to a Registration Statement have been so described or filed. Copies of each Registration Statement, any Prospectus, and any such amendments or supplements thereto and all documents incorporated by reference therein that were filed with the Commission
- 13 -
on or prior to the date of this Agreement have been delivered, or are available through EDGAR, to the Investor and its counsel. The Company has not distributed and, prior to the later to occur of each Settlement Date and completion of the distribution of the Shares, will not distribute any offering material in connection with the offering or sale of the Shares other than a Registration Statement and the Prospectus and any Issuer Free Writing Prospectus (as defined below) to which the Investor has consented, other than as required by Applicable Laws.
Section 4.08 No Misstatement or Omission. Each Registration Statement, when it became or becomes effective, and any Prospectus, on the date of such Prospectus or amendment or supplement, conformed and will conform in all material respects with the requirements of the Securities Act. At each Advance Date, the Registration Statement, and the Prospectus, as of such date, will conform in all material respects with the requirements of the Securities Act. Each Registration Statement, when it became or becomes effective, did not, and will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Each Prospectus did not, or will not, include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The documents incorporated by reference in a Prospectus or any Prospectus Supplement did not, and any further documents filed and incorporated by reference therein will not, when filed with the Commission, contain an untrue statement of a material fact or omit to state a material fact required to be stated in such document or necessary to make the statements in such document, in light of the circumstances under which they were made, not misleading. The foregoing shall not apply to statements in, or omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company by the Investor specifically for use in the preparation thereof.
Section 4.09 Conformity with Securities Act and Exchange Act. Each Registration Statement, each Prospectus, or any amendment or supplement thereto, and the documents incorporated by reference in each Registration Statement, Prospectus or any amendment or supplement thereto, when such documents were or are filed with the SEC under the Securities Act or the Exchange Act or became or become effective under the Securities Act, as the case may be, conformed or will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable.
Section 4.10 Equity Capitalization. As of the date hereof, the authorized capital of the Company consists of 900,000,000 shares of capital stock, each with a par value of $0.0001, of which 600,000,000 shares are designated as Class A Common Stock, 200,000,000 shares are designated as Class B Common Stock, and 100,000,000 shares are preferred stock (the Preferred Stock). As of June 30, 2022, the Company had 41,241,356 shares of Class A Common Stock outstanding, 121,561,877 shares of Class B Common Stock outstanding, and no shares of Preferred Stock outstanding.
The Common Shares are registered pursuant to Section 12(b) of the Exchange Act and is currently listed on a Principal Market under the trading symbol GROV. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act, delisting the Common Shares from the Principal Market, nor has the Company received any notification that the Commission or the Principal Market is contemplating terminating such registration or listing. To the Companys knowledge, it is in compliance with all applicable listing requirements of the Principal Market.
- 14 -
Section 4.11 Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights, if any, necessary to conduct their respective businesses as now conducted, except as would not cause a Material Adverse Effect. The Company and its Subsidiaries have not received written notice of any infringement by the Company or its Subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, or trade secrets, except as would not cause a Material Adverse Effect. To the knowledge of the Company, there is no claim, action or proceeding being made or brought against, or to the Companys knowledge, being threatened against the Company or its Subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement, except as would not cause a Material Adverse Effect.
Section 4.12 Employee Relations. Neither the Company nor any of its Subsidiaries is involved in any labor dispute nor, to the knowledge of the Company or any of its Subsidiaries, is any such dispute threatened, in each case which is reasonably likely to cause a Material Adverse Effect.
Section 4.13 Environmental Laws. The Company and its Subsidiaries (i) have not received written notice alleging any failure to comply in all material respects with all Environmental Laws (as defined below), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) have not received written notice alleging any failure to comply with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term Environmental Laws means all applicable federal, state and local laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, Hazardous Materials) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
Section 4.14 Title. Except as would not cause a Material Adverse Effect, the Company (or its Subsidiaries) have indefeasible fee simple or leasehold title to its properties and material assets owned by it, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than such as are not material to the business of the Company. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.
- 15 -
Section 4.15 Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
Section 4.16 Regulatory Permits. Except as would not cause a Material Adverse Effect, the Company and its Subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to own their respective businesses, and neither the Company nor any such Subsidiary has received any written notice of proceedings relating to the revocation or modification of any such certificate, authorization or permits.
Section 4.17 Internal Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with managements general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
Section 4.18 Absence of Litigation. Except as disclosed to the Investor, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, the Common Shares or any of the Companys Subsidiaries, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.
Section 4.19 Subsidiaries. The Company does not, as of the date of this Agreement, have any Subsidiaries.
Section 4.20 Tax Status. Except as would not have a Material Adverse Effect, each of the Company and its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. The Company has not received written notification any unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for any such claim where failure to pay would cause a Material Adverse Effect.
- 16 -
Section 4.21 Certain Transactions. Except as not required to be disclosed pursuant to Applicable Laws, none of the officers or directors of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer or director, or to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer or director has a substantial interest or is an officer, director, trustee or partner.
Section 4.22 Rights of First Refusal. The Company is not obligated to offer the Common Shares offered hereunder on a right of first refusal basis or otherwise to any third parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third parties.
Section 4.23 Dilution. The Company is aware and acknowledges that issuance of Common Shares hereunder could cause dilution to existing shareholders and could significantly increase the outstanding number of Common Shares.
Section 4.24 Acknowledgment Regarding Investors Purchase of Shares. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arms length investor with respect to this Agreement and the transactions contemplated hereunder. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereunder and any advice given by the Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to the Investors purchase of the Shares hereunder. The Company is aware and acknowledges that it shall not be able to request Advances under this Agreement if the Registration Statement is not effective or if any issuances of Common Shares pursuant to any Advances would violate any rules of the Principal Market.
Section 4.25 Finders Fees. Neither the Company nor any of the Subsidiaries has incurred any liability for any finders fees, brokerage commissions or similar payments in connection with the transactions herein contemplated.
Section 4.26 Relationship of the Parties. Neither the Company, nor any of its subsidiaries, affiliates, nor any person acting on its or their behalf is a client or customer of the Investor or any of its affiliates and neither the Investor nor any of its affiliates has provided, or will provide, any services to the Company or any of its affiliates, its subsidiaries, or any person acting on its or their behalf. The Investors relationship to Company is solely as investor as provided for in the Transaction Documents.
Section 4.27 Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement or a Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
- 17 -
Section 4.28 Compliance with Laws. The Company and each of its Subsidiaries are in material compliance with Applicable Laws; to the knowledge of the Company, the Company has not received a notice of non-compliance that any director or officer, or employee of the Company or any Subsidiary nor, to the Companys knowledge, any agent, affiliate or other person acting on behalf of the Company or any Subsidiary has, has not complied with Applicable Laws, and is not aware of any pending change or contemplated change to any applicable law or regulation or governmental position; in each case that would have a Material Adverse Effect.
Section 4.29 Sanctions Matters. Neither the Company nor any of its Subsidiaries or, to the knowledge of the Company, any director, officer or controlled affiliate of the Company or any director or officer of any Subsidiary, is a Person that is, or is owned or controlled by a Person that is (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasurys Office of Foreign Asset Control (OFAC), the United Nations Security Council, the European Union, Her Majestys Treasury, or other relevant sanctions authorities, including, without limitation, designation on OFACs Specially Designated Nationals and Blocked Persons List or OFACs Foreign Sanctions Evaders List or other relevant sanctions authority (collectively, Sanctions), or (ii) located, organized or resident in a country or territory that is the subject of Sanctions that broadly prohibit dealings with that country or territory (including, without limitation, the Crimea region, the Donetsk Peoples Republic and Luhansk Peoples Republic in Ukraine, Cuba, Iran, North Korea, Sudan and Syria (the Sanctioned Countries)). Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds from the sale of Advance Shares, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person (a) for the purpose of funding or facilitating any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions or is a Sanctioned Country, or (b) in any other manner that will result in a violation of Sanctions or Applicable Laws by any Person (including any Person participating in the transactions contemplated by this Agreement, whether as underwriter, advisor, investor or otherwise). For the past five years, neither the Company nor any of its Subsidiaries has engaged in, and is now not engaged in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions or was a Sanctioned Country.
Article V. Indemnification
The Investor and the Company represent to the other the following with respect to itself:
Section 5.01 Indemnification by the Company. In consideration of the Investors execution and delivery of this Agreement and acquiring the Shares hereunder, and in addition to all of the Companys other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the Investor and its investment manager, Yorkville Advisors Global, LP, and each of their respective officers, directors, partners, employees and agents (including, without
- 18 -
limitation, those retained in connection with the transactions contemplated by this Agreement) and each person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the Investor Indemnitees) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable and documented expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys fees and disbursements (the Indemnified Liabilities), incurred by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for inclusion therein; (b) any material misrepresentation or breach of any material representation or material warranty made by the Company in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; or (c) any material breach of any material covenant, material agreement or material obligation of the Company contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby. To the extent that the foregoing undertaking by the Company may be unenforceable under Applicable Law, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under Applicable Law.
Section 5.02 Indemnification by the Investor. In consideration of the Companys execution and delivery of this Agreement, and in addition to all of the Investors other obligations under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the Company and all of its officers, directors, shareholders, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) and each person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the Company Indemnitees) from and against any and all Indemnified Liabilities incurred by the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Investor will only be liable for written information relating to the Investor furnished to the Company by or on behalf of the Investor specifically for inclusion in the documents referred to in the foregoing indemnity, and will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Investor by or on behalf of the
- 19 -
Company specifically for inclusion therein; (b) any misrepresentation or breach of any representation or warranty made by the Investor in this Agreement or any instrument or document contemplated hereby or thereby executed by the Investor; or (c) any breach of any covenant, agreement or obligation of the Investor contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby executed by the Investor. To the extent that the foregoing undertaking by the Investor may be unenforceable under Applicable Laws, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under Applicable Laws.
Section 5.03 Notice of Claim. Promptly after receipt by an Investor Indemnitee or Company Indemnitee of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Investor Indemnitee or Company Indemnitee, as applicable, shall, if a claim for an Indemnified Liability in respect thereof is to be made against any indemnifying party under this Article V, deliver to the indemnifying party a written notice of the commencement thereof; but the failure to so notify the indemnifying party will not relieve it of liability under this Article V except to the extent the indemnifying party is prejudiced by such failure. The indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually reasonably satisfactory to the indemnifying party and the Investor Indemnitee or Company Indemnitee, as the case may be; provided, however, that an Investor Indemnitee or Company Indemnitee shall have the right to retain its own counsel with the actual and reasonable third party fees and expenses of not more than one counsel for such Investor Indemnitee or Company Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Investor Indemnitee or Company Indemnitee and the indemnifying party would be inappropriate due to actual or potential differing interests between such Investor Indemnitee or Company Indemnitee and any other party represented by such counsel in such proceeding. The Investor Indemnitee or Company Indemnitee shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Investor Indemnitee or Company Indemnitee which relates to such action or claim. The indemnifying party shall keep the Investor Indemnitee or Company Indemnitee reasonably apprised as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor Indemnitee or Company Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Investor Indemnitee or Company Indemnitee of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Investor Indemnitee or Company Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The indemnification required by this Article V shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received and payment therefor is due.
- 20 -
Section 5.04 Remedies. The remedies provided for in this Article V are not exclusive and shall not limit any right or remedy which may be available to any indemnified person at law or equity. The obligations of the parties to indemnify or make contribution under this Article V shall survive expiration or termination of this Agreement.
Section 5.05 Limitation of liability. Notwithstanding the foregoing, no party shall be entitled to recover from the other party for punitive, indirect, incidental or consequential damages.
Article VI.
Covenants
The Company covenants with the Investor, and the Investor covenants with the Company, as follows, which covenants of one party are for the benefit of the other party, during the Commitment Period:
Section 6.01 Registration Statement.
(a) | Filing of a Registration Statement. The Company shall prepare and file with the SEC a Registration Statement, or multiple Registration Statements for the resale by the Investor of the Registrable Securities. The Company in its sole discretion may choose when to file such Registration Statements; provided, however, that the Company shall not have the ability to request any Advances until the effectiveness of a Registration Statement. |
(b) | Maintaining a Registration Statement. The Company shall use commercially reasonable efforts to maintain the effectiveness of any Registration Statement with respect to the Shares that has been declared effective at all times during the Commitment Period, provided, however, that if the Company has received notification pursuant to Section 2.04 that the Investor has completed resales pursuant to the Registration Statement for the full Commitment Amount, then the Company shall be under no further obligation to maintain the effectiveness of the Registration Statement. Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when filed, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with such Registration Statement shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading. During the Commitment Period, the Company shall notify the Investor promptly if (i) the Registration Statement shall cease to be effective under the Securities Act, (ii) the Common Shares shall cease to be authorized for listing on the Principal Market, (iii) the Common Shares cease to be registered under Section 12(b) or Section 12(g) of the Exchange Act or (iv) the Company fails to file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act. |
- 21 -
(c) | Filing Procedures. The Company shall (A) permit counsel to the Investor an opportunity to review and comment upon (i) each Registration Statement prior to its filing with the SEC and (ii) all amendments and supplements to each Registration Statement (including, without limitation, the Prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports or Prospectus Supplements the contents of which is limited to that set forth in such reports) within a reasonable number of days prior to their filing with the SEC, and (B) shall reasonably consider any comments of the Investor and its counsel on any such Registration Statement or amendment or supplement thereto or to any Prospectus contained therein. The Company shall promptly furnish to the Investor, without charge, (i) electronic copies of any correspondence from the SEC or the Staff to the Company or its representatives relating to each Registration Statement (which correspondence shall be redacted to exclude any material, non-public information regarding the Company or any of its Subsidiaries), (ii) after the same is prepared and filed with the SEC, one (1) electronic copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by the Investor, and all exhibits and (iii) upon the effectiveness of each Registration Statement, one (1) electronic copy of the Prospectus included in such Registration Statement and all amendments and supplements thereto; provided, however, the Company shall not be required to furnish any document to the extent such document is available on EDGAR). |
(d) | Amendments and Other Filings. The Company shall (i) prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the related prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Commitment Period, and prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) during the Commitment Period, cause the related prospectus to be amended or supplemented by any required prospectus supplement (subject to the terms of this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424 promulgated under the Securities Act; (iii) during the Commitment Period, provide the Investor copies of all correspondence from and to the SEC relating to a Registration Statement (provided that the Company may excise any information contained therein which would constitute material non-public information), and (iv) during the Commitment Period, comply with the provisions of the Securities Act with respect to the disposition of all Common Shares of the Company covered by such Registration Statement until such time as all of such Common Shares shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 6.01(d) by reason of the Companys filing a report on Form 10-K, Form 10-Q, or Form 8-K or any analogous report under the Exchange Act, the Company shall |
- 22 -
file such report in a prospectus supplement filed pursuant to Rule 424 promulgated under the Securities Act to incorporate such filing into the Registration Statement, if applicable, or shall file such amendments or supplements with the SEC either on the day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement the Registration Statement, if feasible, or shall otherwise use its commercially reasonable efforts to file it promptly thereafter. |
(e) | Blue-Sky. The Company shall use its commercially reasonable efforts to, if required by Applicable Laws, (i) register and qualify the Common Shares covered by a Registration Statement under such other securities or blue sky laws of such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Commitment Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Commitment Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Common Shares for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (w) make any change to its Articles of Incorporation or Bylaws or any other organizational documents of the Company or any of its Subsidiaries, (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6.01, (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Common Shares for sale under the securities or blue sky laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threat of any proceeding for such purpose. |
Section 6.02 Suspension of Registration Statement.
(a) | Establishment of a Black Out Period. During the Commitment Period, the Company from time to time may suspend the use of the Registration Statement by written notice to the Investor in the event that the Company determines in its sole discretion in good faith that such suspension is necessary to (A) delay the disclosure of material nonpublic information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the Registration Statement or Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (a Black Out Period). |
(b) | No Sales by Investor During the Black Out Period. During such Black Out Period, the Investor agrees not to sell any Common Shares of the Company. |
- 23 -
(c) | Limitations on the Black Out Period. The Company shall not impose any Black Out Period that is longer than 45 days or in a manner that is more restrictive (including, without limitation, as to duration) than the comparable restrictions that the Company may impose on transfers of the Companys equity securities by its directors and senior executive officers. In addition, the Company shall not deliver any Advance Notice during any Black Out Period. If the public announcement of such material, nonpublic information is made during a Black Out Period, the Black Out Period shall terminate immediately after such announcement, and the Company shall immediately notify the Investor of the termination of the Black Out Period. |
Section 6.03 Listing of Common Shares. As of each Advance Date, the Shares to be sold by the Company from time to time hereunder will have been registered under Section 12(b) of the Exchange Act and approved for listing on the Principal Market, subject to official notice of issuance.
Section 6.04 Opinion of Counsel. Prior to the date of the delivery by the Company of the first Advance Notice, the Investor shall have received an opinion letter from counsel to the Company in form and substance reasonably satisfactory to the Investor.
Section 6.05 Exchange Act Registration. The Company will file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act and will not take any action or file any document (whether or not permitted by Exchange Act or the rules thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act.
Section 6.06 Transfer Agent Instructions. For any time while there is a Registration Statement in effect for this transaction, the Company shall (if required by the transfer agent for the Common Shares) cause legal counsel for the Company to deliver to the transfer agent for the Common Shares (with a copy to the Investor) instructions to issue Common Shares to the Investor free of restrictive legends upon each Advance if the delivery of such instructions are consistent with Applicable Law; provided that legal counsel for the Company shall have been furnished with such documents as they may require for the purposes of enabling them to render the opinions or make the statements requested by the transfer agent, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the covenants, obligations or conditions, contained herein.
Section 6.07 Corporate Existence. The Company will use commercially reasonable efforts to preserve and continue the corporate existence of the Company during the Commitment Period.
Section 6.08 Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance. During the Commitment Period, the Company will promptly notify the Investor, and confirm in writing, upon its becoming aware of the occurrence of any of the following events in respect of a Registration Statement or related Prospectus (in each of which cases the information provided to Investor will be kept strictly confidential): (i) except for requests made in connection with SEC investigations disclosed in the SEC Documents, receipt of any request for additional information by the SEC or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement or any request for amendments or supplements to the Registration Statement or related Prospectus; (ii) the issuance by the SEC or any other Federal governmental authority of any stop order suspending the effectiveness of the Registration
- 24 -
Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Common Shares for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or of the necessity to amend the Registration Statement or supplement a related Prospectus to comply with the Securities Act or any other law; (v) the Companys reasonable determination that a post-effective amendment to the Registration Statement would be required and the Company will promptly make available to the Investor any such supplement or amendment to the related Prospectus; (vi) the Common Shares shall cease to be authorized for listing on the Principal Market; or (vii) the Company fails to file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act. The Company shall not deliver to the Investor any Advance Notice, and the Company shall not sell any Shares pursuant to any pending Advance Notice (other than as required pursuant to Section 2.02(d)), during the continuation of any of the foregoing events (each of the events described in the immediately preceding clauses (i) through (vii), inclusive, a Material Outside Event).
Section 6.09 Consolidation. If an Advance Notice has been delivered to the Investor, then the Company shall not effect any consolidation of the Company with or into, or a transfer of all or substantially all the assets of the Company to another entity before the transaction contemplated in such Advance Notice has been closed in accordance with Section 2.02 hereof, and all Shares in connection with such Advance have been received by the Investor.
Section 6.10 Issuance of the Companys Common Shares. The issuance and sale of the Common Shares hereunder shall be made in accordance with the provisions and requirements of Section 4(a)(2) of the Securities Act and any applicable state securities law.
Section 6.11 Expenses. The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all expenses incident to the performance of its obligations hereunder, including but not limited to (i) the preparation, printing and filing of the Registration Statement and each amendment and supplement thereto, of each prospectus and of each amendment and supplement thereto; (ii) the preparation, issuance and delivery of any Shares issued pursuant to this Agreement, (iii) all fees and disbursements of the Companys counsel, accountants and other advisors (but not, for the avoidance doubt, the fees and disbursements of Investors counsel, accountants and other advisors), (iv) the qualification of the Shares under securities laws in accordance with the provisions of this Agreement, including filing fees in connection therewith, (v) the printing and delivery of copies of any prospectus and any amendments or supplements thereto, (vi) the fees and expenses incurred in connection with the listing or qualification of the Shares for trading on the Principal Market, or (vii) filing fees of the SEC and the Principal Market.
- 25 -
Section 6.12 Current Report. The Company shall, not later than 5:30 p.m., New York City time, on the fourth business day after the date of this Agreement, file with the SEC a Current Report on Form 8-K disclosing the execution of this Agreement by the Company and the Investor (including any exhibits thereto, the Current Report). The Company shall provide the Investor and its legal counsel a reasonable opportunity to comment on a draft of the Current Report prior to filing the Current Report with the SEC and shall give due consideration to all such comments. From and after the filing of the Current Report with the SEC, the Company shall have publicly disclosed all material, nonpublic information delivered to the Investor (or the Investors representatives or agents) by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees, agents or representatives (if any) in connection with the transactions contemplated by the Transaction Documents. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not to, provide the Investor with any material, non-public information regarding the Company or any of its Subsidiaries without the express prior written consent of the Investor (which may be granted or withheld in the Investors sole discretion); it being understood that the mere notification of Investor required pursuant to Section 6.08(iv) hereof shall not in and of itself be deemed to be material non-public information. Notwithstanding anything contained in this Agreement to the contrary, the Company expressly agrees that it shall publicly disclose in the Current Report any information communicated to the Investor by or, to the knowledge of the Company, on behalf of the Company in connection with the transactions contemplated herein, which, following the date hereof would, if not so disclosed, constitute material, non-public information regarding the Company or its Subsidiaries. The Company understands and confirms that the Investor will reply on the foregoing representations in effecting resales of Shares under the Registration Statement.
Section 6.13 Advance Notice Limitation. The Company shall not deliver an Advance Notice if a shareholder meeting or corporate action date, or the record date for any shareholder meeting or any corporate action, would fall during the period beginning two Trading Days prior to the date of delivery of such Advance Notice and ending two Trading Days following the Closing of such Advance.
Section 6.14 Use of Proceeds. The proceeds from the sale of the Shares by the Company to Investor shall be used by the Company in the manner as will be set forth in the Prospectus included in any Registration Statement (and any post-effective amendment thereto) and any Prospectus Supplement thereto filed pursuant to this Agreement.
Section 6.15 Compliance with Laws. The Company shall comply in all material respects with all Applicable Laws.
Section 6.16 Market Activities. Neither the Company, nor any Subsidiary, nor any of their respective officers, directors or controlling persons will, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute or result, in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Shares or (ii) sell, bid for, or purchase Common Shares in violation of Regulation M, or pay anyone any compensation for soliciting purchases of the Shares.
- 26 -
Section 6.17 Trading Information. Upon the Companys request, the Investor agrees to provide the Company with trading reports setting forth the number and average sales prices of shares of Common Shares sold by the Investor during the prior trading week.
Section 6.18 Selling Restrictions. (i) Except as expressly set forth below, the Investor covenants that from and after the date hereof through and including the Trading Day next following the expiration or termination of this Agreement as provided in Section 11.01 (the Restricted Period), none of the Investor any of its officers, or any entity managed or controlled by the Investor (collectively, the Restricted Persons and each of the foregoing is referred to herein as a Restricted Person) shall, directly or indirectly, engage in any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Shares or (ii) hedging transaction, which establishes a net short position with respect to any securities of the Company (including the Common Shares), with respect to each of clauses (i) and (ii) hereof, either for its own principal account or for the principal account of any other Restricted Person. Notwithstanding the foregoing, it is expressly understood and agreed that nothing contained herein shall (without implication that the contrary would otherwise be true) prohibit any Restricted Person during the Restricted Period from: (1) selling long (as defined under Rule 200 promulgated under Regulation SHO) the Shares; or (2) selling a number of Common Shares equal to the number of Advance Shares that such Restricted Person is unconditionally obligated to purchase under a pending Advance Notice but has not yet received from the Company or the transfer agent pursuant to this Agreement.
Section 6.19 Assignment. Neither this Agreement nor any rights or obligations of the parties hereto may be assigned to any other Person.
Section 6.20 Non-Public Information. The Company covenants and agrees that, other than as expressly required by Section 6.08 hereof, or, with the Investors consent pursuant to Section 6.13, it shall refrain from disclosing, and shall cause its officers, directors, employees and agents to refrain from disclosing, any material non-public information (as determined under the Securities Act, the Exchange Act, or the rules and regulations of the SEC) to the Investor without also disseminating such information to the public, unless prior to disclosure of such information the Company identifies such information as being material non-public information and provides the Investor with the opportunity to accept or refuse to accept such material non-public information for review. Unless specifically agreed to in writing, in no event shall the Investor have a duty of confidentiality or be deemed to have agreed to maintain information in confidence, with respect to the delivery of any Advance Notices.
- 27 -
Article VII.
Conditions for Delivery of Advance Notice
Section 7.01 Conditions Precedent to the Right of the Company to Deliver an Advance Notice. The right of the Company to deliver an Advance Notice and the obligations of the Investor hereunder with respect to an Advance are subject to the satisfaction or waiver, on each Advance Notice Date (a Condition Satisfaction Date), of each of the following conditions:
(a) | Accuracy of the Companys Representations and Warranties. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects. |
(b) | Registration of the Common Shares with the SEC. There is an effective Registration Statement pursuant to which the Investor is permitted to utilize the prospectus thereunder to resell all of the Common Shares issuable pursuant to such Advance Notice. |
(c) | Authority. The Company shall have obtained all permits and qualifications required by any applicable state for the offer and sale of all the Common Shares issuable pursuant to such Advance Notice, or shall have the availability of exemptions therefrom. The sale and issuance of such Common Shares shall be legally permitted by all laws and regulations to which the Company is subject. |
(d) | No Material Outside Event. No Material Outside Event shall have occurred and be continuing. |
(e) | Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior the applicable Condition Satisfaction Date. |
(f) | No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or directly, materially and adversely affects any of the transactions contemplated by this Agreement. |
(g) | No Suspension of Trading in or Delisting of Common Shares. The Common Shares are quoted for trading on the Principal Market and all of the Shares issuable pursuant to such Advance Notice will be listed or quoted for trading on the Principal Market. The issuance of Common Shares with respect to the applicable Advance Notice will not violate the shareholder approval requirements of the Principal Market. The Company shall not have received any written notice that is then still pending threatening the continued quotation of the Common Shares on the Principal Market. |
(h) | Authorized. There shall be a sufficient number of authorized but unissued and otherwise unreserved Common Shares for the issuance of all of the Shares issuable pursuant to such Advance Notice. |
(i) | Executed Advance Notice. The representations contained in the applicable Advance Notice shall be true and correct in all material respects as of the applicable Condition Satisfaction Date. |
- 28 -
(j) | Consecutive Advance Notices. Except with respect to the first Advance Notice, the Company shall have delivered all Shares relating to all prior Advances. |
Article VIII.
Non Exclusive Agreement
Notwithstanding anything contained herein, this Agreement and the rights awarded to the Investor hereunder are non-exclusive, and the Company may, at any time throughout the term of this Agreement and thereafter, issue and allot, or undertake to issue and allot, any shares and/or securities and/or convertible notes, bonds, debentures, options to acquire shares or other securities and/or other facilities which may be converted into or replaced by Common Shares or other securities of the Company, and to extend, renew and/or recycle any bonds and/or debentures, and/or grant any rights with respect to its existing and/or future share capital.
Article IX.
Choice of Law/Jurisdiction
This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard in New York County, New York, and expressly consent to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County, New York and the United States District Court of the Southern District of New York, sitting in New York, New York, for the adjudication of any civil action asserted pursuant to this Agreement.
Article X. Termination
Section 10.01 Termination.
(a) | Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest of (i) the first day of the month next following the 36-month anniversary of the date hereof or (ii) the date on which the Investor shall have made payment of Advances pursuant to this Agreement for Common Shares equal to the Commitment Amount. |
(b) | The Company may terminate this Agreement effective upon five Trading Days prior written notice to the Investor; provided that (i) there are no outstanding Advance Notices, the Common Shares under which have yet to be issued, and (ii) the Company has paid all amounts owed to the Investor pursuant to this Agreement. This Agreement may be terminated at any time by the mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided in such written consent. |
(c) | Nothing in this Section 10.01 shall be deemed to release the Company or the Investor from any liability for any breach under this Agreement, or to impair the rights of the Company and the Investor to compel specific performance by the other party of its obligations under this Agreement. The indemnification provisions contained in Article V shall survive termination hereunder. |
- 29 -
Article XI. Notices
Other than with respect to Advance Notices, which must be in writing and will be deemed delivered on the day set forth in Section 2.01(b), any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or e-mail if sent on a Trading Day, or, if not sent on a Trading Day, on the immediately following Trading Day; (iii) 5 days after being sent by U.S. certified mail, return receipt requested, (iv) 1 day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications (except for Advance Notices which shall be delivered in accordance with Exhibit A hereof) shall be:
If to the Company, to: | Grove Collaborative Holdings, Inc. 1301 Sansome Street San Francisco, CA 94111 | |
Attention: Stuart Landesberg | ||
Email: [*****] | ||
With a copy to (which shall not constitute notice or delivery of process) to: |
||
Grove Collaborative Holdings, Inc. 1301 Sansome Street San Francisco, CA 94111 Attention: Delida Costin Email: [*****] | ||
and
Sidley Austin LLP 1001 Page Mill Road, Building 1 Palo Alto, CA 94304 Attention: Martin A. Wellington Email: [*****] | ||
If to the Investor(s): | YA II PN, Ltd. | |
1012 Springfield Avenue | ||
Mountainside, NJ 07092 | ||
Attention: Mark Angelo | ||
Portfolio Manager |
Telephone: [*****] | ||
Email:[*****] |
- 30 -
With a Copy (which shall not constitute notice
or delivery of process) to: David Fine, Esq. 1012 Springfield Avenue Mountainside, NJ 07092 or at such other address and/or e-mail and/or to the attention of such other person as
the recipient party has specified by written notice given to each other party three Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other
communication, (ii) electronically generated by the senders email service provider containing the time, date, recipient email address or (iii) provided by a nationally recognized overnight delivery service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively. Article XII. Miscellaneous Section 12.01 Counterparts. This Agreement may be executed in identical counterparts, both which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. Facsimile or other electronically scanned and delivered signatures (including any electronic signature covered by the U.S. federal ESIGN
Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com), including by e-mail attachment, shall be deemed to have been
duly and validly delivered and be valid and effective for all purposes of this Agreement. Section 12.02 Entire Agreement; Amendments. This
Agreement supersedes all other prior oral or written agreements between the Investor, the Company, their respective affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement contains the entire
understanding of the parties with respect to the matters covered herein and, except as specifically set forth herein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No
provision of this Agreement may be waived or amended other than by an instrument in writing signed by the parties to this Agreement. Section 12.03
Reporting Entity for the Common Shares. The reporting entity relied upon for the determination of the trading price or trading volume of the Common Shares on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or
any successor thereto. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity. - 31 -
Section 12.04 Commitment and Structuring Fee. Each of the parties shall pay its own fees and
expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby, except that the Company has paid to YA Global II SPV, LLC, a
subsidiary of the Investor, a structuring fee in the amount of $10,000, which the Investor acknowledges has been received prior to the date hereof. Section 12.05 Brokerage. Each of the parties hereto represents that it has had no dealings in connection with this transaction with any finder or
broker who will demand payment of any fee or commission from the other party. The Company on the one hand, and the Investor, on the other hand, agree to indemnify the other against and hold the other harmless from any and all liabilities to any
person claiming brokerage commissions or finders fees on account of services purported to have been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions contemplated hereby. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] - 32 -
IN WITNESS WHEREOF, the parties hereto have caused this STANDBY EQUITY PURCHASE
AGREEMENT to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above. /s/ Stuart Landesberg /s/ Matt Beckman - 33 -
EXHIBIT A FORM OF ADVANCE NOTICE VIA EMAIL
GROVE COLLABORATIVE HOLDINGS, INC. Dated:
______________
Advance Notice Number: ____
The undersigned, _______________________, hereby certifies, with respect to the sale of shares of Class A Common Stock, par
value $0.0001 per share, of GROVE COLLABORATIVE HOLDINGS, INC. (the Company) issuable in connection with this Advance Notice, delivered pursuant to that certain STANDBY EQUITY PURCHASE AGREEMENT, dated as of July 18, 2022
(the Agreement), as follows (with capitalized terms used herein without definition having the same meanings as given to them in the Agreement): 1. The undersigned is the duly elected ______________ of the Company. 2. There are no fundamental changes to the information set forth in the Registration Statement which would require the Company to file a
post-effective amendment to the Registration Statement. 3. The Company has performed in all material respects all covenants and agreements
to be performed by the Company contained in this Agreement on or prior to the Advance Notice Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof. 4. The number of Advance Shares the Company is requesting is _____________________. 5. The Minimum Acceptable Price with respect to this Advance Notice is _________ (if left blank then no Minimum Acceptable Price will be
applicable to this Advance). 6. The number of shares of Class A Common Stock of the Company outstanding as of the date hereof is
___________. The undersigned has executed this Advance Notice as of the date first set forth above. Please deliver this Advance Notice by email to: Email: [*****] Attention:
Trading Department and Compliance Officer Confirmation Telephone Number: [*****]
EXHIBIT B FORM OF SETTLEMENT DOCUMENT VIA
EMAIL GROVE COLLABORATIVE HOLDINGS, INC. (the Company) Attn: Email: Please issue the number of Advance Shares due to the Investor to the account of the Investor as follows: INVESTORS DTC PARTICIPANT #: ACCOUNT
NAME: ACCOUNT NUMBER: ADDRESS:
CITY: COUNTRY: CONTACT PERSON: NUMBER AND/OR EMAIL:
Telephone: [*****]
Email: [*****]
COMPANY:
GROVE COLLABORATIVE HOLDINGS, INC.
By:
Name: Stuart Landesberg
Title: CEO
INVESTOR:
YA II PN, LTD.
By:
Yorkville Advisors Global, LP
Its:
Investment Manager
By:
Yorkville Advisors Global II, LLC
Its:
General Partner
By:
Name:
Matt Beckman
Title: Member
GROVE COLLABORATIVE HOLDINGS, INC.
By:
Name:
Title:
Below please find the settlement information with respect to the Advance Notice Date of:
1.
Advance requested in the Advance Notice
2.
Minimum Acceptable Price for this Advance (if any)
3.
Number of Excluded Days (if any)
4.
Adjusted Advance Amount (after taking into account any adjustments pursuant to Section 2.01):
5.
Market Price
6.
Purchase Price (Market Price x 97.55%) per share
7.
Number of Advance Shares due to Investor
If there were any Excluded Days then add the following (see Section 2.01(d)):
8.
Number of Additional Shares to be issued to Investor
9.
Additional amount to be paid to the Company by the Investor (Additional Shares in number 8 x Minimum Acceptable Price)
10.
Total Amount to be paid to Company (Purchase Price in number 6 + Additional amount in number 9):
11.
Total Shares to be issued to Investor (Shares due to Investor in number 7 + Additional Shares in number 8):
Sincerely,
YA II PN, LTD.
Name:
Title:
Agreed and Approved:
GROVE COLLABORATIVE HOLDINGS, INC.:
Name:
Title:
Exhibit 21.1
List of Subsidiaries
of
Grove Collaborative Holdings, Inc.
1. | Grove Collaborative, Inc. |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in the Prospectus constituting a part of this Registration Statement on Form S-1 of our report dated February 24, 2022, relating to the financial statements of Virgin Group Acquisition Corp II. which is contained in that Prospectus. We also consent to the reference to our firm under the caption Experts in the Prospectus.
/s/ WithumSmith+Brown, PC |
New York, New York |
July 18, 2022 |
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption Experts and to the use of our report dated March 10, 2022, in the Registration Statement on Form S-1 and related Prospectus of Grove Collaborative Holdings, Inc. for the registration of its Class A Common Stock and Warrants.
/s/ Ernst & Young LLP
Redwood City, California
July 18, 2022
Exhibit 107
Calculation of Filing Fee Table
S-1
(Form Type)
Grove Collaborative Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward Securities
Security Type |
Security Class Title |
Fee Calculation or Carry Forward Rule |
Amount (6) |
Proposed Maximum Offering Price Per Unit |
Maximum Aggregate Offering Price |
Fee Rate |
Amount of Registration Fee |
Carry Forward Form Type |
Carry Forward File Number |
Carry Forward Initial effective date |
Filing Fee Previously Paid In Connection with Unsold Securities to be Carried Forward | |||||||||||||
Newly Registered Securities | ||||||||||||||||||||||||
Fees to Be Paid | Equity | Class A common stock, par value $0.0001 per share(1) |
Rule 457(c) | 14,750,000 | $11.50(2) | $169,625,000.00(2) | .0000927 | $15,724.24(2) | | | | | ||||||||||||
Fees to Be Paid | Equity | Class A common stock, par value $0.0001 per share(3) |
Rule 457(c) | 101,635,900 | $5.19(4) | $527,490,321.00(4) | .0000927 | $48,898.35(4) | | | | | ||||||||||||
Fees to Be Paid | Other | Warrants to purchase Class A common stock(5) |
Rule 457(c) | 6,700,000 | | | | | | | | | ||||||||||||
Carry Forward Securities | ||||||||||||||||||||||||
Carry Forward Securities | ||||||||||||||||||||||||
Total Offering Amounts | $697,115,321.00 | $64,622.59 | ||||||||||||||||||||||
Total Fees Previously Paid | | |||||||||||||||||||||||
Total Fee Offsets | | |||||||||||||||||||||||
Net Fee Due | $64,622.59 |
(1) | Consists of: (i) 8,050,000 shares of Class A common stock that may be issued upon exercise of the outstanding warrants issued in connection with the registrants initial public offering (the Public Warrants); and (ii) 6,700,000 shares of Class A common stock that may be issued upon exercise of the outstanding warrants issued in a private placement concurrently with the registrants initial public offering (the Private Placement Warrants and, collectively with the Public Warrants, the Warrants) following the public resale of the Private Placement Warrants. The aggregate number of shares of Class A common stock shall be adjusted to include any additional shares of Class A common stock that may become issuable as a result of any stock dividend, stock split, recapitalization or other similar transaction in accordance with the terms of the Warrants. |
(2) | Based upon the $11.50 exercise price per share of Class A common stock issuable upon exercise of the Warrants. |
(3) | Consists of the following shares of Class A common stock registered for resale by the selling holders named in this registration statement (the Selling Holders): (i) 6,700,000 shares of Class A common stock underlying the Private Placement Warrants; (ii) 10,062,500 Founder Shares; (iii) 8,607,500 PIPE Shares; (iv) 4,421,524 Backstop Shares; (v) 3,875,028 shares of Class A Common Stock that may be obtained upon the exercise of the Backstop Warrants, (vi) 756,370 shares of Class A Common Stock held by certain Selling Holders and (vii) 67,212,978 shares of Class A Common Stock issuable upon conversion (on a one-for-one basis) of shares of our Class B common stock held by certain Selling Holders (including shares of Class A common stock that may be obtained upon the exercise of warrants to purchase shares of Class B common stock and subsequent conversion of those shares). The aggregate number of shares of Class A common stock shall be adjusted to include any additional shares of Class A common stock that may become issuable as a result of any stock dividend, stock split, recapitalization or other similar transaction. |
(4) | Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Class A Common Stock of Grove Collaborative Holdings, Inc. on the New York Stock Exchange on July 15, 2022 ($5.19 per share of Class A Common Stock). This calculation is in accordance with Rule 457(c) of the Securities Act of 1933, as amended (the Securities Act). |
(5) | Consists of the 6,700,000 outstanding Private Placement Warrants. |
(6) | Pursuant to Rule 416(a) of the Securities Act, there are also being registered an indeterminable number of additional securities as may become issuable as a result of any stock dividend, stock split, recapitalization or other similar transaction. |