Company: NKLR
Filing Date: 2025-05-14
Form Type: S-4
Source: 0001213900-25-043376
Chunk: 280

Company: Terra Innovatum Global N.V.
Filing Date: 2025-05-14
Form: S-4
Chunk 280
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 815. Therefore, the freestanding equity -linkedinstrument has been recorded as a liability at its estimated fair value. The value of the Share -settledcontingent liability was calculated using a probability weighted -averageanalysis of the achievement of each of the milestones and a Monte Carlo simulation model. The simulation incorporated (i) an underlying share price of $10.00 per share, (ii) a 4.5% risk free rate, and (iii) an estimated volatility of 125% based on historical data of comparable public companies. (n)To reflect the recognition of (i) the issuance of PubCo Preferred Shares to the Terra Innovatum Quotaholders upon the Closing and (ii) the associated conversion feature which will be automatically triggered if contingent milestones are met subsequent to the Closing. Refer to the Introduction section above for description of the various milestones. The PubCo Preferred Shares will be forfeited by the holder if they are not converted within 20 years from the issuance date, the Closing. As the PubCo Preferred Shares may be forfeited, management has concluded that they should be evaluated, accounted for, and classified, as a freestanding equity -linkedinstrument, rather than as outstanding shares. Management has concluded that the change of control provision and the permit -drivenperformance target milestones described in the Introduction section above cause the freestanding equity -linkedinstrument to not be considered indexed to PubCo’s own stock as these represent potential settlement adjustments that are not permissible within the guidance of ASC 815. Therefore, the freestanding equity -linkedinstrument has been recorded as a liability at its estimated fair value. The value of the Share -settledcontingent liability was calculated using a probability weighted -averageanalysis of the achievement of each of the milestones and a Monte Carlo simulation model. The simulation incorporated (i) an underlying share price of $10.00 per share, (ii) a 4.5% risk free rate, and (iii) an estimated volatility of 125% based on historical data of comparable public companies. As the $797.2 million fair value of the resulting Share -settledcontingent liability exceeded the pro forma balance of Additional paid -in-capital, the excess of the fair value over the pro forma balance of Additional paid -in-capitalwas recorded as an increase to Accumulated deficit of $490.4 million. (o)Terra Innovatum expects to enter into a bridge loan agreement. Any related adjustments will be included once the agreement has been