Derivative Liabilities |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
| Derivative Liabilities | Derivative Liabilities Common Stock Warrants
On the consummation of the Merger, 12,218,750 publicly traded warrants for Class A common stock at an exercise price per share of $11.50 and 8,900,000 private placement warrants held by the Sponsor with an exercise price per share of $11.50 converted automatically into warrants of Aurora common stock.
Public warrants outstanding were 12,218,291 and 12,218,420 as of September 30, 2022 and December 31, 2021, respectively. During the nine months ended September 30, 2022, 129 public warrants were exercised for total cash proceeds of $1.
Private placement warrants outstanding were 8,900,000 and 8,900,000 as of September 30, 2022 and December 31, 2021, respectively.
The estimated fair value of the warrant liabilities was $9,925 and $65,678 at September 30, 2022 and December 31, 2021, respectively. For the three and nine months ended September 30, 2022, a $1,478 loss and $55,753 gain, respectively, was recognized in changes in fair value of derivative liabilities in the consolidated statements of operations.
Public Warrants
Public warrants were exercisable beginning on December 3, 2021. The Company may redeem the public warrants when the last reported sales price of Class A common stock for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) exceeds $10.00 or $18.00. Warrants are redeemable in whole and upon a minimum of 30 days’ prior written notice.
If the Reference Value exceeds $18.00, warrants are redeemable at $0.01 per warrant, in whole and upon a minimum of 30 days prior written notice that holders will be able to exercise their warrants.
If the Reference Value exceeds $10.00, warrants are redeemable at $0.10 per warrant, in whole and upon a minimum of 30 days prior written notice that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the fair market value of Class A ordinary shares. Fair market value of Class A common stock is the volume-weighted average price of Class A ordinary shares for the 10 trading days following the date on which the notice of redemption is sent. The number of ordinary shares received upon exercise is capped at 0.361 shares of Aurora Class A common stock per warrant.
Private Placement Warrants
Private placement warrants are not redeemable by the Company as long as they are held by a Sponsor or its permitted transferees. If the Reference value exceeds $18.00 per share and the Company elects to redeem the public warrants, the private placement warrants are exercised.
If the public warrants are redeemed by the Company when the Reference Value equals or exceeds $10.00, the private placement warrants are also concurrently called for redemption on the same terms as of the public warrants.
If the public warrants are redeemed by the Company when the Reference Value exceeds $18.00 per share, the Sponsor will exercise the private placement warrants for cash or on a cashless basis.
Earnout Shares Liability
In connection with the execution of the Merger Agreement, the Company, Legacy Aurora and the Sponsor entered into the Sponsor Agreement on July 14, 2021. Under the agreement, the Sponsor was issued 5,162,314 earnout shares which were recorded as liabilities due to lock-up and price-based vesting conditions as follows:
•1,720,772 shares vest when it has been at least 2 years since the Closing and the volume weighted average price (“VWAP”) of the Company’s class A common stock equals or exceeds $15.00 for 20 trading days of any consecutive 30 trading day period
•1,720,771 shares vest when it has been at least 3 years since the Closing and the VWAP equals or exceeds $17.50 for 20 trading days of any consecutive 30 trading day period; and,
•1,720,771 shares vest when it has been at least 4 years since the Closing and the VWAP equals or exceeds $20.00 for 20 trading days of any consecutive 30 trading day period.
The estimated fair value of the earnout shares liability was $5,076 and $52,380 at September 30, 2022 and December 31, 2021, respectively. For the three and nine months ended September 30, 2022, a $1,153 loss and $47,304 gain, respectively, was recognized in changes in fair value of derivative liabilities in the consolidated statements of operations. No earnout shares subject to lock-up and price-based vesting have vested as of September 30, 2022.
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