Equity Warrants Classified as Derivative Liabilities

v3.23.1

Equity Warrants Classified as Derivative Liabilities	3 Months Ended
	Mar. 31, 2023
Equity [Abstract]
Equity Warrants Classified as Derivative Liabilities	8. Equity Warrants Classified as Derivative Liabilities Warrant Issuances In March 2023, the Company completed the closing of a private placement whereby the Company issued warrants to purchase up to 16.4 million shares of Class A common stock. The purchase price of each share and associated warrant was $1.79. Including the issuance of Company’s Class A common stock (see Note 10), the aggregate gross proceeds to the Company from the private placement were $29.4 million, before deducting the placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the private placement for general corporate purposes, including working capital. The warrants have an exercise price of $2.20 per share of Class A common stock, and are exercisable beginning on September 8, 2023 until September 8, 2028. The March 2023 private placement warrants provide that a holder of warrants will not have the right to exercise any portion of its warrants if such holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise; provided, however, that each holder may increase or decrease the beneficial ownership limitation by giving notice to the Company; but not to any percentage in excess of 9.99%. The Company incurred transaction costs which consisted of legal fees, accounting fees, placement agent fees, and other third-party costs directly related to the March 2023 private placement. The transaction costs of $0.9 million related to the 2023 private placement warrants were included in other (expense) income, net in the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023. The Company also has approximately 24.1 million additional outstanding warrants, including 15.8 million public warrants and 8.3 million private placement warrants, issued by Osprey, our predecessor company, in 2019 in connection with its initial public offering as a special purpose acquisition company. The 2019 warrants are each exercisable for one share of the Company's Class A common stock. Equity warrants that are classified as derivative liabilities must be measured at fair value upon issuance and re-valued at the end of each reporting period through expiration and are included in derivative liabilities in the Company's unaudited condensed consolidated balance sheets. Any change in fair value between the respective reporting dates is recognized as an unrealized gain or loss in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss (see Note 14). The Company's derivative liabilities were made up of only equity warrants and the Sponsor Shares as of March 31, 2023 and December 31, 2022. The following table is a summary of the number of shares of the Company’s Class A common stock issuable upon exercise of warrants at March 31, 2023: Number of Shares Exercise Price Redemption Price Expiration Date Classification (Gain) loss in value for the three months ended March 31, 2023 Fair Value at March 31, 2023 (in thousands) (in thousands) Public Warrants 15,813  $ 11.50  $ 18.00  9/9/2026 Liability $ (797) $ 2,894  Private Placement Warrants - Issued October 2019 4,163  11.50  18.00  9/9/2026 Liability (84) 958  Private Placement Warrants - Issued October 2019 4,163  20.00  18.00  9/9/2026 Liability (83) 541  Private Placement Warrants - Issued March 2023 16,404  2.20  N/A 9/8/2028 Liability 2,625  15,091  In addition, the Company has 1.8 million Class A common stock warrants outstanding which have an exercise price of $0.11 and expiration dates from June 27, 2028 to October 31, 2029. These warrants are equity classified and are included in additional paid-in capital in the Company’s unaudited condensed consolidated balance sheets.