GM Securities Purchase Agreement

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

GM Securities Purchase Agreement

GM Securities Purchase Agreement

On December 16, 2022, the Company entered into a Securities Purchase Agreement with GM under which it issued and sold to GM the SCN in the aggregate principal amount of $10.0 million, and the GM Warrants to acquire up to an aggregate amount of 1,190,476 common shares at an exercise price of $0.75112 per common share. The GM Warrants may be exercised at any time following the closing of the Offering until December 16, 2025. The Company received $9.5 million of proceeds from GM associated with the Offering. The SCN accrues compounding interest at the rate of 5.0% per annum in arrears semi-annually until maturity date of December 16, 2023, which date will automatically be extended for an additional 24 months to December 16, 2025 in the event that the Company engages in certain qualifying transactions. In the event that the maturity date of the SCN is extended to the SCN Extended Maturity Date, the principal under the SCN shall be payable in equal monthly installments beginning on December 16, 2023 and ending on the SCN Extended Maturity Date. The Company’s payment obligations pursuant to the SCN are guaranteed by all of its subsidiaries pursuant to a Guaranty dated December 16, 2022.

The Company’s obligations under the SCN are secured by a first lien on certain assets of its material subsidiaries, including certain assets of Wejo Limited and Wejo Data Services Inc. and the shares held by Wejo Bermuda in Wejo Limited (collectively, the “Collateral”); such security interest does not secure the assets that were previously encumbered in connection with the issuance of the Company’s Secured Loan Notes in April 2021.

At GM’s option, at any time during the 20-business day period (such period, the “Optional Redemption Period”) following certain qualifying transactions, GM may require the Company to redeem all or any part of the outstanding principal and accrued but unpaid interest of the SCN, in whole or in part, at a price of 120% of the then-outstanding principal amount plus all accrued and unpaid interest (the “Optional Redemption”). In addition, at GM’s option at any time after the issuance date, GM may require the Company to convert the SCN, in whole or in part, into common shares at a conversion price of $0.80323 per common share.

The SCN contains a beneficial ownership limitation that prohibits the Company from issuing shares to GM upon a conversion of the SCN if such conversion would result in GM beneficially owning over 19.99% of the number of the Company’s issued and outstanding common shares. Additionally, the SCN provides for customary events of default. If an event of default occurs, GM can provide notice to the Company that it is requiring the Company to repay the outstanding principal, any unpaid but accrued interest and any unpaid but accrued late charges within five business days of the delivery of receipt of such written notice.

Under the GM Securities Purchase Agreement, the Company is required to (i) file a resale registration statement with the SEC for resale of the common shares issuable upon conversion of the SCN and the GM Warrants granted to GM as part of the Offering no later than the later of (a) 30 days after the issuance date or (b) the date of filing by the Company with the SEC of the financial statements required to be included in the registration statement and (ii) use its commercially reasonable efforts to cause each the Registration

Statement to be declared effective as soon as practicable and in any event within 60 days of the filing thereof. On December 21, 2022, the Company filed the Shelf Registration Statement with the SEC.

The Company accounts for its GM Warrants in accordance with the guidance contained in ASC 815-40 and determined that the GM Warrants do not meet the criteria for equity treatment thereunder. As such, the GM Warrants must be recorded as a liability and is subject to re-measurement at each balance sheet date. Changes in fair value are recognized in gain on fair value of the GM Securities Purchase Agreement in Other expense, net on the Company’s audited Consolidated Statements of Operations and Comprehensive Loss.

The Company utilized the fair value option to determine the fair value of the SCN. The Company utilized the Black-Scholes option pricing model to determine the fair value of the GM Warrants. At issuance date, the Company recorded a $4.1 million loss on issuance of the GM Securities Purchase Agreement in Other expense, net on the audited Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2022, the fair value of the SCN and the GM Warrants was $11.4 million and $0.3 million, respectively, and are classified as a current liability and non-current liability, respectively, on the Company’s audited Consolidated Balance Sheets. For the year ended December 31, 2022, the Company recorded a $1.9 million gain on fair value of the GM Securities Purchase Agreement in Other expense, net on the audited Consolidated Statements of Operations and Comprehensive Loss.