Warrants |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Equity [Abstract] | |
| Warrants |
Note 3—Warrants
Public Warrants and Private Warrants
The Company’s warrant liabilities as of March 31, 2023 include public warrants (the “Public Warrants”) and private placement warrants (the “Private Warrants,” and together with the Public Warrants, the “Public and Private Warrants”). The Public Warrants and Private Warrants permit warrant holders to purchase in the aggregate approximately 8.3 million shares and approximately 0.2 million shares, respectively, of the Company’s common stock at an exercise price of $11.50 per share. The Public and Private Warrants became exercisable on March 18, 2022 and expire on December 30, 2026, or earlier upon redemption or liquidation. The Public and Private Warrants are recorded as liabilities on the consolidated balance sheets and measured at fair value at each reporting date, with the change in fair value reported in gain (loss) on warrant remeasurement on the consolidated statements of operations.
Project Warrants
In connection with the concurrent execution of the CSDA with Woodside in March 2022, the Company issued warrants permitting Woodside to purchase approximately 0.9 million shares of the Company’s common stock at an exercise price of $0.01 per share (the “Project Warrants”). The Project Warrants expire upon the earlier of a change in control of the Company or March 28, 2027 and vest pro rata with certain payments required to be made by the customer under the CSDA. The fair value of the Project Warrants upon issuance was $4.96 per warrant based on the closing price of the Company’s common stock on March 28, 2022, less the exercise price.
The Project Warrants are recorded as equity on the consolidated balance sheets. During the three months ended March 31, 2022, the total consideration payable to the customer of $4.5 million for the Project Warrants reduced the transaction price associated with the customer’s contract and the Company recognized $0.2 million as an increase to additional paid-in capital to reflect the attribution of the Project Warrants’ fair value in a manner similar to revenue recognized under the customer’s contract.
During the three months ended March 31, 2023, approximately 0.1 million of Project Warrants vested with a value of $0.1 million, which was recognized as additional paid-in capital. No Project Warrants vested during the three months ended March 31, 2022. From the issuance date of the Project Warrants on March 28, 2022 to March 31, 2023, a total of approximately 0.4 million of Project Warrants vested with a total value of $0.8 million, which was recognized as additional paid-in capital.
Collaboration Warrants
In connection with the concurrent execution of a collaboration agreement (the “Collaboration Agreement”) with Woodside in March 2022, the Company issued warrants permitting Woodside to purchase approximately 3.6 million shares of the Company’s common stock at an exercise price of $0.01 per share (the “Collaboration Warrants”). Under the Collaboration Agreement, Woodside will assist us in defining product offerings that use our modular technology for potential customers in Australia. The Collaboration Warrants expire upon the earlier of a change in control of the Company or March 28, 2027. Of these warrants, (i) approximately 1.8 million warrants vested immediately upon execution of the Collaboration Agreement and (ii) approximately 1.8 million warrants will vest based on certain specified performance goals under the Collaboration Agreement. The fair value of the Collaboration Warrants upon issuance was $4.96 per warrant based on the closing price of the Company’s common stock on March 28, 2022, less the exercise price.
The Collaboration Warrants are recorded as equity on the consolidated balance sheets and the related expense is being recognized ratably as selling, general and administrative (“SG&A”) expense over the estimated service period. As of March 31, 2023, the Company has a prepaid expense of $6.8 million for the Collaboration Warrants, of which $2.0 million was classified as current and $4.8 million was classified as long-term. During the three months ended March 31, 2023, we recognized $0.5 million SG&A expense related to the vesting of the Collaboration Warrants. The Company did not recognize any SG&A expense during the three months ended March 31, 2022 for the Collaboration Warrants. As of March 31, 2023, the remaining estimated period is approximately 3.4 years.
Vendor Warrants
On April 19, 2022, the Company issued warrants to purchase approximately 0.1 million shares of the Company’s common stock, at an exercise price of $0.01 per share (“Vendor Warrants”), to a vendor as compensation for services to be performed by the vendor. The Vendor Warrants vest in twelve equal monthly installments. The Vendor Warrants are recorded as equity on the consolidated balance sheets and had a fair value upon issuance of $0.3 million, to be recognized ratably over one year as SG&A expense. During the three months ended March 31, 2023, the Company recognized $0.1 million of share-based compensation expense, included in SG&A, related to the portion of the Vendor Warrants that vested during the period. As of April 2023, the Vendor Warrants are fully vested.
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