Company: ALIT
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037820
Chunk: 71

Company: Alight, Inc. / Delaware
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 71
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2 contingent consideration instruments, is determined using Monte Carlo simulation and Option Pricing Methods (Level 3 inputs, see Note 16 "Fair Value Measurement"). Significant unobservable inputs are used in the assessment of fair value, including the following assumptions: volatility of 38.26%, risk-free interest rate of 3.65%, expected holding period of 3.01 years, dividend participation, and probability assessments based on the likelihood of reaching the performance targets defined in the Business Combination. A decrease in the risk-free interest rate or expected volatility would result in a decrease in the fair value measurement of the Seller Earnouts and vice versa.As discussed in Note 9 “Stockholders’ Equity”, in connection with the ultimate forfeiture of the shares of unvested Class A, unvested Class B-1, and unvested Class B-2 common stock issued to participating management holders on July 2, 2024, all Class Z instruments were ultimately settled resulting in the re-allocation of the forfeited compensatory Class A, Class B-1 and Class B-2 instruments. The Class Z instruments are also accounted for as a contingent consideration liability at fair value within Financial instruments on the Condensed Consolidated Balance Sheets because these instruments do not meet the criteria for classification within equity. The fair value of the Class Z-A contingent consideration was determined using the ending share price as of the last day of each quarter until settlement on July 2, 2024, resulting in the issuance of 1.5 million shares of Class A common stock and units at the $7.09 stock price on that date. At June 30, 2025 and December 31, 2024, the Class Z-A contingent consideration was no longer outstanding. For the three months ended June 30, 2025 and 2024, the Company recorded no loss and a gain of $4 million, respectively, and for the six months ended June 30, 2025 and 2024, the Company recorded no loss and a gain of $2 million, respectively, in (Gain) Loss from change in fair value of financial instruments in the Condensed Consolidated Statements of Comprehensive Income (Loss) as a result of the forfeiture of unvested management equity that was ultimately re-allocated to the holders of Class Z instruments on 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