SK ecoplant Strategic Investment

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

SK ecoplant Strategic Investment

SK ecoplant Strategic Investment

In October 2021, we expanded our existing relationship with SK ecoplant. Simultaneous with the execution of our expanded relationship, we entered into a SPA pursuant to which we agreed to sell and issue to SK ecoplant 10,000,000 shares of Series A redeemable convertible preferred stock ("RCPS"), par value $0.0001 per share, at a purchase price of $25.50 per share for an aggregate purchase price of $255.0 million ("Initial Investment").

In addition to the Initial Investment, the SPA provided SK ecoplant with the Option, as defined in Note 8. The number of shares SK ecoplant may acquire under the Option (the “Option Shares”) is calculated as the lesser of (i) 11,000,000 shares of Class A Common Stock plus the number of shares of Class A Common Stock that SK ecoplant must hold to become our largest shareholder by no less than 1% of our issued and outstanding capital stock as of the issuance date of the Option Shares; and (ii) 15% of our issued and outstanding capital stock as of the issuance date of the Option Shares. The exercise price of the Option is calculated as the higher of (i) $23.00 per share and (ii) 115% of the volume-weighted average closing price of the 20 consecutive trading day period immediately preceding the exercise of the Option. SK ecoplant may exercise the Option through August 31, 2023, and the transaction must be completed as of November 30, 2023.

For additional information, see our Annual Report on Form 10-K for the year ended December 31, 2021.

We revalued the Option to its fair value as of March 31, 2022, and which is included in other income (expense), net in our condensed consolidated statements of operations. The fair value of the Option is reflected in accrued expenses and other current liabilities in our condensed consolidated balance sheet. The RCPS has been presented outside of permanent equity in the mezzanine section of the condensed consolidated balance sheets because there are certain redemption provisions upon liquidation, dissolution, or deemed liquidation events (which include a change in control and the sale or other disposition of all or substantially all of our assets), which are considered contingent redemption provisions that are not solely within our control.