Item 2. Unregistered Sales of Equity Securities
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) Recent Sales of Unregistered Equity Securities
From April 1, 2025 to (but not including) June 12, 2025 (the date of the filing of our Registration Statement on Form S-8), we granted an aggregate of 7,213,334 RSUs, including performance-based and market-based PSUs, under our 2012 Equity Incentive Plan to our employees to be settled in shares of our Class A common stock.
On June 13, 2025, we exchanged a total of 32,182,289 shares of Class A common stock held by Christopher Britt, our co-founder, Chairperson, and Chief Executive Officer; Ryan King, our co-founder and a member of our board of directors; and certain related entities for an equivalent number of shares of Class B common stock pursuant to the terms of certain exchange agreements. No additional consideration was paid in connection with the exchange. We believe the offers, sales, and issuances of the above securities were exempt from registration under the Securities Act pursuant to Section 3(a)(9) of the Securities Act because our securities were exchanged by us with our existing security holders exclusively where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange.
None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe the offers, sales and issuances of the above securities were exempt from registration under the Securities Act (or Regulation D or Regulation S promulgated thereunder) by virtue of Section 4(a)(2) of the Securities Act because the issuance of securities to the recipients did not involve a public offering, or in reliance on Rule 701 because the transactions were pursuant to compensatory benefit plans or contracts relating to compensation as provided under such rule. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.
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(b) Use of Proceeds
On June 13, 2025, the Company closed its initial public offering (“IPO”) of 36,800,000 shares of Class A common stock, including 6,099,235 shares sold by selling stockholders and 4,800,000 shares sold by the Company pursuant to the exercise of the option granted to the underwriters, at a public offering price of $27.00 per share. The total net proceeds the Company received in the IPO were approximately $770.6 million after deducting underwriting discounts and commissions of $43.5 million and offering expenses of $14.8 million. The shares of Class A common stock sold in the IPO were registered under the Securities Act pursuant to our Registration Statement on Form S-1, as amended (File No. 333-287223), which was declared effective by the SEC on June 11, 2025. The shares of common stock were sold at an IPO price of $27.00 per share, which generated aggregate gross proceeds of $828.9 million to us and $164.7 million to the selling stockholders. The representatives of the underwriters of our IPO were Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC.
We received net proceeds from the IPO of approximately $770.6 million, after deducting underwriting discounts of $43.5 million and offering expenses of $14.8 million. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates.
The net proceeds from our IPO were used to satisfy our tax withholding and remittance obligations related to the settlement of certain equity awards in connection with the IPO. There has been no material change in the expected use of the net proceeds from our IPO as described in the final prospectus filed with the SEC on June 12, 2025, pursuant to Rule 424(b) of the Securities Act.
ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Mine Safety Disclosures
Not applicable.