10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on November 10, 2021
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 3, 2021, there were
Table of Contents
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Page |
PART I. |
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Item 1. |
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4 |
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Condensed Consolidated Statements of Comprehensive Income (Loss) |
5 |
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6 |
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7 |
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9 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
10 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
Item 3. |
37 |
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Item 4. |
37 |
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PART II. |
38 |
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Item 1. |
38 |
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Item 1A. |
38 |
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Item 2. |
64 |
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Item 3. |
64 |
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Item 4. |
64 |
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Item 5. |
64 |
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Item 6. |
65 |
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67 |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
You should not rely on forward-looking statements as predictions of future events. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described under the header “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained herein. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
1
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made, and we undertake no obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
Unless the context otherwise indicates, references in this report to the terms “ACV Auctions,” “ACV,” “the Company,” “we,” “our” and “us” refer to ACV Auctions Inc. and its subsidiaries.
We may announce material business and financial information to our investors using our investor relations website (www.investors.acvauto.com). We therefore encourage investors and others interested in ACV to review the information that we make available on our website, in addition to following our filings with the Securities and Exchange Commission, webcasts, press releases and conference calls.
2
SUMMARY RISK FACTORS
Investing in our Class A Common Stock involves numerous risks, including the risks described in “Part II—Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q. Below are some of our principal risks, any one of which could materially adversely affect our business, financial condition, results of operations and prospects
3
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
ACV AUCTIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data)
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For the three months |
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For the nine months |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenue: |
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Marketplace and service revenue |
$ |
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$ |
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$ |
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$ |
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Customer assurance revenue |
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Total revenue |
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Operating expenses: |
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Marketplace and service cost of revenue |
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Customer assurance cost of revenue |
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Operations and technology |
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Selling, general, and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Income (loss) from operations |
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( |
) |
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( |
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( |
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Other income (expense): |
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Interest income |
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Interest expense |
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( |
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( |
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( |
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( |
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Total other income (expense) |
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( |
) |
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( |
) |
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( |
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Income (loss) before income taxes |
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( |
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( |
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( |
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Provision for income taxes |
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Net income (loss) |
$ |
( |
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$ |
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$ |
( |
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$ |
( |
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Weighted-average shares |
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Basic |
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Diluted |
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Net earnings (loss) per share |
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Basic |
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( |
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( |
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( |
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Diluted |
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( |
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( |
) |
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( |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
ACV AUCTIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(in thousands)
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For the three months ended September 30, |
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For the nine months ended September 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Net income (loss) |
$ |
( |
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$ |
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$ |
( |
) |
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$ |
( |
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Other comprehensive income (loss): |
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Foreign currency translation (loss) gain |
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( |
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( |
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Comprehensive income (loss) |
$ |
( |
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$ |
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$ |
( |
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$ |
( |
) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
ACV AUCTIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except share data)
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September 30, 2021 |
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December 31, |
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Assets |
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Current Assets : |
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Cash and cash equivalents |
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$ |
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$ |
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Trade receivables (net of allowance of $ |
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Finance receivables (net of allowance of $ |
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Other current assets |
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Total current assets |
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Property and equipment (net of accumulated depreciation of $ |
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Goodwill |
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Acquired intangible assets (net of amortization of $ |
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Internal-use software costs (net of amortization of $ |
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Operating lease right-of-use assets |
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Other assets |
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Total assets |
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Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit) |
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Current Liabilities : |
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Accounts payable |
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Accrued payroll |
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Accrued other liabilities |
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Deferred revenue |
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Operating lease liabilities |
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Total current liabilities |
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Long-term operating lease liabilities |
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Long-term debt |
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Other long-term liabilities |
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Total liabilities |
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$ |
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$ |
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) |
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Convertible Preferred Stock : |
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Convertible preferred stock; $ |
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Stockholders' Equity (Deficit) : |
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Preferred Stock; $ |
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Common stock; $ |
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Common stock - Class A; $ |
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Common Stock - Class B; $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
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Accumulated other comprehensive loss |
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( |
) |
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( |
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Total stockholders' equity (deficit) |
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( |
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Total liabilities, convertible preferred stock and stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
ACV AUCTIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND
STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited)
(in thousands, except share data)
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Three months ended September 30, 2021 |
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Common Stock Class A |
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Common Stock Class B |
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Accumulated |
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Total |
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Additional |
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Other |
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Stockholders' |
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Par |
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Par |
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Paid-In |
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Accumulated |
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Comprehensive |
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Equity |
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Shares |
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Value |
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Shares |
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Value |
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Capital |
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Deficit |
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Loss |
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(Deficit) |
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Balance, June 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Other offering costs in connection with |
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Issuance of common stock from the |
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Stock-based compensation |
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Issuance of common stock for vested restricted stock units |
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( |
) |
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( |
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Conversion of Class B common stock to Class A |
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( |
) |
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( |
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Other comprehensive income (loss) |
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( |
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( |
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Net loss |
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( |
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( |
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Balance as of September 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Nine months ended September 30, 2021 |
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Convertible Preferred Stock |
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Common Stock |
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Common Stock Class A |
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Common Stock Class B |
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Accumulated |
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Total |
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Additional |
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Other |
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Stockholders' |
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Par |
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Par |
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Par |
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Paid-In |
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Accumulated |
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Comprehensive |
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Equity |
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Shares |
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Amount |
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Shares |
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Value |
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Shares |
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Value |
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Shares |
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Value |
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Capital |
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Deficit |
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Loss |
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(Deficit) |
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Balance, December 31, 2020 |
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$ |
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$ |
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- |
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$ |
- |
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- |
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$ |
- |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Issuance of common stock in |
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Issuance of common stock from the |
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Stock-based compensation |
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Issuance of common stock for vested restricted stock units |
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( |
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( |
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Conversion of redeemable |
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( |
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$ |
( |
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Sale of Class B common stock to |
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( |
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( |
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Reclassification of common stock to |
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( |
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( |
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Conversion of Class B common |
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( |
) |
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( |
) |
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Other comprehensive income |
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Net loss |
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( |
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( |
) |
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Balance as of September 30, 2021 |
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$ |
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|
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$ |
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|
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
|
7
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|
Three months ended September 30, 2020 |
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Convertible Preferred Stock |
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Common Stock |