Company: DBRG
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001679688-25-000043
Chunk: 88

Company: DigitalBridge Group, Inc.
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 8
Chunk 88
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ra's investment was subsequently redeemed in 2022, with the warrants remaining outstanding. Each warrant entitled Wafra to 

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purchase up to 1,338,000 shares of the Company's class A common stock at staggered strike prices between $9.72 and $24.00 each, exercisable through July 17, 2026.The terms of the warrant purchase agreement provided for net cash settlement upon exercise of the warrants, at election of either the Company or Wafra, if such exercise would result in Wafra beneficially owning in excess of 9.8% of the issued and outstanding shares of the Company's class A common stock. Inclusion of the cash settlement feature resulted in the warrants being classified as a liability. Accordingly, the warrants were carried at fair value with changes in fair value recorded in other gain (loss) on the consolidated statements of operations. In March 2024, three of the five warrants were reclassified to equity at their prevailing fair value following an amendment to the terms of the warrants in connection with a sale of the three warrants by Wafra to a third party. The three equity-classified warrants are no longer subject to fair value remeasurement. No warrants have been exercised to-date.At March 31, 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 35.2% (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 3.99% 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 ConsiderationIn connection with the acquisition of InfraBridge, contingent consideration is payable if prescribed fundraising targets are met. In measuring the contingent consideration at March 31, 2025 and December 31, 2024, the Company applied a probability-weighted approach to the likelihood of meeting various fundraising targets and discounted the estimated future contingent consideration payment at 6.9% and 7.3%, respectively, to derive a present value