Company: ALIT
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037820
Chunk: 72

Company: Alight, Inc. / Delaware
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 72
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 Business”, on July 12, 2024, the Company closed on the Divestiture. As part of the sale, the Company received a note with an aggregate principal amount of up to $150 million (the “Additional Seller Note”) with an initial fair value of $43 million as of July 12, 2024 to be issued by the Note Issuer. See Note 4 “Discontinued Operations” for additional information. The Additional Seller Note is considered a level 3 recurring fair value measurement. In June 2025, the Company determined the fair value of the Additional Seller Note was zero. As a result, for the three months ended June 30, 2025, the Company recorded a loss of $36 million from the fair value remeasurement of the Additional Seller Note. For the six months ended June 30, 2025, the Company recorded a loss of $50 million from the fair value remeasurement of the Additional Seller Note. For the three and six months ended June 30, 2024, no gains or losses were recorded as the closing date of the Transaction was July 12, 2024. Gains or losses related to the recurring fair value remeasurement of the Additional Seller Note are recorded in (Gain) Loss from change in fair value of financial instruments within the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).The fair value of the Additional Seller Note is determined using a variation of the income approach (Level 3 inputs, see Note 16 "Fair Value Measurement"). Significant unobservable inputs are used in the assessment of fair value, including the following assumptions: expected Adjusted EBITDA, expected maturity of 5.03 years for the Additional Seller Note, the Divested Business's estimated cost of debt, and based on the likelihood of reaching the performance targets defined in the Purchase Agreement.

15. Tax Receivable AgreementIn connection with the Business Combination, Alight entered into the TRA with certain owners of Alight Holdings prior to the Business Combination. Pursuant to the TRA, the Company will pay certain sellers, as applicable, 85% of any savings that we realize, calculated using certain assumptions, as a result of (i) tax basis adjustments from sales and exchanges of Alight Holdings equity interests in connection with or following the Business Combination and certain distributions with respect to Alight Holdings equity interests, (ii) our utilization of certain tax attributes, and (iii) certain other tax benefits related to entering into the TRA.Actual tax