Company: STGW
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000876883-25-000017
Chunk: 130

Company: Stagwell Inc
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 2
Chunk 130
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,663 shares of the Company’s Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of approximately $24.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock, at the Company’s discretion. Due to the timing of the closing of the acquisition, there was insufficient time to incorporate additional disclosures related to the preliminary purchase price allocation and fair value of the assets acquired and liabilities assumed.

On April 2, 2025, the Company announced that it had received a Notice of Exercise of Exchange Right from Stagwell Media LP (“Stagwell Media”) pursuant to which Stagwell Media exercised in full its right to exchange all of its 151,648,741 

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Class C Common Stock, par value $0.00001 per share (“Class C Common Stock”) for an equal number of newly issued shares of Class A Common Stock. The Company completed such exchange (the “Class C Exchange”) on April 2, 2025. 

Following the Class C Exchange, the Company no longer has any shares of Class C Common Stock outstanding and Stagwell Media’s noncontrolling interest balance (approximately $424 million as of March 31, 2025) has been reclassified to the respective Stagwell Inc. Shareholders’ Equity accounts. In addition, in connection with the Class C Exchange, the Company will realize an increase in the tax basis of Stagwell Global LLC (“OpCo”)’s assets through a deferred tax asset and, under its Tax Receivables Agreement (“TRA”), an increase to the amounts due Stagwell Media equal to 85% of certain tax savings. The Company is evaluating the likelihood that it will realize the benefit represented by the deferred tax asset and, to the extent that the Company estimates that it is more likely than not that it will not realize the benefit, it will reduce the carrying amount of the deferred tax asset with a valuation allowance and a corresponding reduction to the TRA liability. The Company is currently evaluating the value of the deferred tax asset and TRA liability and will reflect such amounts in its financial statements within its Quarterly Report on Form 10-Q for the period ended June 30, 2025. 

On January 1, 2025, the Company entered into a stock purchase agreement to acquire ADK Group, an integrated marketing solutions