Company: DBRG
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001679688-25-000100
Chunk: 139

Company: DigitalBridge Group, Inc.
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 8
Chunk 139
---
 of the cash settlement feature resulted in a liability classification, which subjected the warrants to fair value remeasurement each period through earnings. In March 2024, three of the five warrants were sold by Wafra to a third party and in conjunction therewith, the terms of the warrants were amended which removed the cash settlement feature, resulting in a reclassification of the warrants from liability to equity. Under equity classification, the three warrants are no longer subject to fair value remeasurement. No warrants have been exercised to-date.At September 30, 2025, the two liability-classified warrants were carried at fair value, measured using a Black-Scholes option pricing model, applying the following inputs: (a) estimated volatility for DBRG's class A common stock of 44.8% (34.7% at December 31, 2024); (b) closing stock price of DBRG's class A common stock on the last trading day of the quarter; (c) the strike price for each warrant; (d) remaining term to expiration of the warrants; and (e) risk free rate of 3.74% per annum (4.21% per annum at December 31, 2024), derived from the daily U.S. Treasury yield curve rates to correspond to the remaining term to expiration of the warrants. Contingent Consideration—InfraBridgeIn connection with the Company's acquisition of InfraBridge in February 2023, contingent consideration may become payable by the Company if prescribed fundraising targets are met for follow-on InfraBridge flagship funds and co-investments. The contingent consideration was measured at September 30, 2025 and December 31, 2024 by applying a probability-weighted approach to the likelihood of meeting various fundraising targets and discounting the estimated future contingent consideration payment at 6.7% and 7.3%, respectively, to derive a present value amount, classified as Level 3 of the fair value hierarchy. Contingent Consideration—Consolidated Fund In connection with a consolidated fund's acquisition of equity interests in a portfolio company, contingent consideration may become payable by the fund if a prescribed earnings target is achieved by the portfolio company. The contingent consideration, inclusive of PIK interest accrued at 12% per annum through the first earnout period, was valued at September 30, 2025 using the average result from a probabilistic simulation model that applied a volatility of 22% and discount rate of 13% to the portfolio company