Company: ALIT
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001809104-25-000175
Chunk: 115

Company: Alight, Inc. / Delaware
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 115
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 July 2, 2024. See Note 9 “Stockholders’ Equity” for additional information regarding these instruments. Additional Seller NoteAs disclosed above in Note 1 “Basis of Presentation and Nature of 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. At March 31, 2025 and December 31, 2024, the Additional Seller Note had a fair value of $36 million and $50 million, respectively. For the three months ended March 31, 2025, the Company recorded a loss of $14 million from the fair value remeasurement of the Additional Seller Note. For the three months ended March 31, 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 5.28 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,