Warrant and Earnout Liabilities |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant and Earnout Liabilities |
20. Warrant and Earnout Liabilities
The Company’s warrant and earnouts are classified and accounted for as liabilities at fair value, with changes if fair value recorded in the Consolidated Statement of Operations and Other Comprehensive Loss in Fair Value Remeasurement. The following table displays the number of warrant and earnouts in issue as of December 31, 2022:
Alkuri Warrants
As of December 31, 2022 there were no Alkuri Warrants outstanding related to the Merger. At the date of the Merger, the warrants entitled the holder to purchase one Class A ordinary share of Babylon Holdings Limited at an exercise price of $287.50 per share. Until warrant holders acquire the Company’s ordinary shares upon exercise of such warrants, they have no rights with respect to the Company’s ordinary shares. The warrants expire on October 21, 2026, or earlier upon redemption or liquidation in accordance with their terms. The initial and subsequent measurement of the fair value of the Alkuri Warrants on the date of issuance and at each reporting period end date, respectively, is determined by using the prevailing market price for warrants that are trading on the NYSE under the ticker BBLN.W.
In June 2022, the Company completed a registered exchange offer of the Company's 582,333 outstanding Alkuri Warrants (“Warrant Exchange”). In connection therewith, the Company exchanged 535,517 warrants tendered for shares of the Company’s Class A ordinary shares at an exchange ratio of 0.295 shares for each warrant. As a result, at closing, the Company issued 157,978 Class A ordinary shares. The fair value of Class A ordinary shares issued in excess of the Warrant liability at settlement date of $2.4 million, including transaction costs, was recorded as a Loss on settlement of warrants in the Consolidated Statement of Operations and Other Comprehensive Loss.
In July 2022, in accordance with the Warrant Amendment, the Company exercised its right to exchange the remaining outstanding Alkuri Warrants for the Company’s Class A ordinary shares, at an exchange ratio of 0.2655 shares for each
warrant. As a result of the transaction, 46,816 warrants were converted into 12,430 Class A ordinary shares. In addition, the Alkuri Warrants that were previously traded on the NYSE under the ticker symbol BBLN.W were delisted in July 2022, as no such Alkuri warrants remained outstanding.
AlbaCore Warrants and Additional Albacore Warrants
As of December 31, 2022 there were a combined total of 105,449 Albacore Warrants and Additional Albacore Warrants outstanding representing the entire outstanding warrants as of December 31, 2022. The warrants entitle the holder to purchase one Class A ordinary share at a subscription price of $0.001 per share upon occurrence of an exercise event. Until warrant holders acquire the Company’s Class A ordinary shares upon exercise of such warrants, they have no rights with respect to the Company’s ordinary shares. The warrants expire on November 4, 2026, or earlier upon redemption or liquidation in accordance with their terms. The initial and subsequent measurements of fair value are derived using a Monte Carlo simulation. Refer to Note 22 for the fair value movements of this instrument through the period resulting with an ending liability balance of $0.7 million as of December 31, 2022.
Earnout Shares
As of December 31, 2022 there were 1,603,750 Earnout Shares outstanding consisting of 1,552,000 Class A ordinary shares to its Founder and Chief Executive Officer (“Stockholder Earnout”) and 51,750 Class A ordinary shares to Alkuri’s sponsor (“Sponsor Earnout Shares”). Originally, the Stockholder Earnout shares were entitled the Founder and Chief Executive Officer to a right to receive Class B ordinary shares upon achieving the milestones described in Note 3. However, as part of the Conversion described in Note 19, this converted to a right to receive Class A ordinary shares. As discussed in Note 3, the Earnout Shares are classified as a liability and recognized at fair value. The initial and subsequent measurements of fair value are derived using a Monte Carlo simulation. Refer to Note 22 for the fair value movements of this instrument through the period resulting with an ending liability balance of $0.7 million in the aggregate for both Stockholder and Sponsor earnouts, as of December 31, 2022.
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