Pandora 2012 Annual Report Download - page 103

Table of Contents
Pandora Media, Inc.
Notes to Consolidated Financial Statements - Continued
Conversion Rights. Each share of redeemable convertible preferred stock was convertible, at the option of its holder, into the number of fully paid and
non-assessable shares of common stock which result from dividing the applicable original issue price per share by the applicable conversion price per share at
the time of conversion. The following table sets forth the original issue price, conversion price and conversion rate per share in effect for each series of
redeemable convertible preferred stock as of the date of the Company's IPO:
Issue Price Conversion Price Conversion Rate
Series A $ 4.0000 $ 4.0000 1:1
Series B 0.3766 0.3766 1:1
Series C 0.5100 0.5100 1:1
Series D 1.1484 1.04327 1.10077:1
Series E 1.7007 1.44028 1.18081:1
Series F 0.7745 0.7745 1:1
Series G 2.7370 2.737 1:1
The conversion price of each series of redeemable convertible preferred stock, which was initially set at an amount equal to the issue price, was subject
to adjustment for stock dividends, stock splits, recapitalization and upon the occurrence of certain triggering events related to anti-dilution protection rights.
The conversion prices for the Series D and Series E shares were reduced at the time the Series F was issued because the Series F shares were issued at a lower
price than the Series D and Series E conversion prices that were applicable at the time of the Series F issuance. Upon the adjustment of the Series D and
Series E conversion prices a deemed dividend was recorded to increase the carrying value of the Series D and Series E based upon the value of the
incremental common shares to which the Series D and Series E holders are entitled upon conversion.
All shares of redeemable convertible preferred stock were to convert automatically to common stock at the then-effective conversion price upon the sale
of the Company's common stock in a public offering at a price of not less than $1.93625 per share (as adjusted for stock splits, combinations or the like) and
which was to have resulted in net cash proceeds to the Company of at least $25.0 million (a "Qualified IPO"). Each series of redeemable convertible preferred
stock was to have automatically converted to common stock at its then-effective conversion price upon the vote of a majority of such series, voting as a
separate class; provided, that with respect to the Series D, (i) conversion upon the vote of a majority was conditioned upon all shares of Series A, Series B and
Series C being similarly converted and (ii) if such conversion were effected in connection with (x) a liquidation transaction in which the price per share
received by the holders of the Series D was less than $1.1484 per share (as adjusted for stock splits, combinations or the like) or (y) a public offering of
common stock that was not a Qualified IPO, then the approval of the holders of at least 66-2/3% of the then outstanding shares of the Series D would have
been required for such conversion. In addition, all shares of Series A, Series B and Series C automatically were to have converted to common stock at the
then-effective conversion price upon the vote of the holders of at least 60% of the then outstanding shares of Series A, Series B, and Series C, voting together
as a single class on an as-if converted to common stock basis. At the date of the Company's IPO the conversion price was $16.00.
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