Warrant and Earnout Liabilities
|3 Months Ended|
Mar. 31, 2023
|Derivative Instruments and Hedging Activities Disclosure [Abstract]|
|Warrant and Earnout Liabilities||
15. Warrant and Earnout Liabilities
The Company’s warrant and earnout shares 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 earnout shares in issue as of March 31, 2023:
AlbaCore Warrants and Additional AlbaCore Warrants
As a condition to closing the Bridge Facility (Note 12), all of the outstanding AlbaCore Warrants, consisting of 70,299 initial AlbaCore Warrants and 35,150 Additional AlbaCore Warrants, were deemed automatically and irrevocably exercised on March 15, 2023. These AlbaCore Warrants were exercised by means of a cashless exercise, reducing the number of shares issued upon exercise to cover the aggregate subscription price owed to the Company, and resulted in the distribution of 105,431 Class A ordinary shares (“Warrant Shares”) associated with this exercise. The aggregate fair value of Warrant Shares issued upon exercise was $0.8 million. As a result of this transaction, there are no warrants are outstanding as of March 31, 2023.
As of March 31, 2023, there were 1,603,750 Earnout Shares outstanding, consisting of 1,552,000 Class A ordinary shares owned by the Company’s Founder and Chief Executive Officer (“Stockholder Earnout”) and 51,750 Class A ordinary shares owned by Alkuri’s sponsor (the “Sponsor Earnout Shares”). The Earnout Shares are classified as a liability and recognized at fair value and each reporting period end date. The initial and subsequent measurements of fair value are derived using a Monte Carlo simulation. Refer to Note 17 for the fair value movements of this instrument through the period resulting with an ending liability balance of $0.3 million in the aggregate for both Stockholder and Sponsor Earnout Shares, as of March 31, 2023.
The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef