Reclassification of Private Warrants to Public Warrants	6 Months Ended
Dec. 31, 2024
Reclassification Of Private Warrants To Public Warrants
Reclassification of Private Warrants to Public Warrants	Note 19: Reclassification of Private Warrants to Public Warrants Reclassification from Liability to Equity During the six months ended December 31, 2024, certain shareholders of the company sold private warrants to third parties who were not deemed “permitted transferees” under the terms of the Warrant Agreement. As stipulated in the Warrant Agreement, upon such a sale, the private warrants became subject to the same redemption provisions applicable to public warrants. This change in terms impacted the accounting treatment of the private warrants as follows: As a result of this reclassification, the private warrants, which were previously accounted for as a liability, were reclassified to equity. Under U.S. GAAP, private warrants are generally classified as liabilities due to certain settlement provisions, including redemption features and variations in transferability. However, upon their reclassification to public warrants, these instruments became subject to the terms applicable to public warrants, which meet the criteria for equity classification. The reclassification resulted in the following accounting impacts: Derecognition of Liability: The liability associated with the private warrants was derecognized at its fair value as of December 31, 2024, the reclassification date, totaling $0.4 million. The corresponding amount was recognized within additional paid-in capital in the equity section of the condensed consolidated balance sheets. There was no impact to the condensed consolidated statements of income. This reclassification has had no impact on the Company’s previously reported cash flows or operations but resulted in a shift from liabilities to equity on the balance sheet. Future changes in the value of the public warrants will no longer affect the consolidated statements of income after December 31, 2024, as they are no longer subject to mark-to-market adjustments.

Reclassification of Private Warrants to Public Warrants

6 Months Ended

Dec. 31, 2024

Reclassification Of Private Warrants To Public Warrants

Reclassification of Private Warrants to Public Warrants

Note 19: Reclassification of Private Warrants to Public Warrants

Reclassification from Liability to Equity

During the six months ended December 31, 2024, certain shareholders of the company sold private warrants to third parties who were not deemed “permitted transferees” under the terms of the Warrant Agreement. As stipulated in the Warrant Agreement, upon such a sale, the private warrants became subject to the same redemption provisions applicable to public warrants. This change in terms impacted the accounting treatment of the private warrants as follows:

As a result of this reclassification, the private warrants, which were previously accounted for as a liability, were reclassified to equity.

Under U.S. GAAP, private warrants are generally classified as liabilities due to certain settlement provisions, including redemption features and variations in transferability. However, upon their reclassification to public warrants, these instruments became subject to the terms applicable to public warrants, which meet the criteria for equity classification.

The reclassification resulted in the following accounting impacts:

Derecognition of Liability: The liability associated with the private warrants was derecognized at its fair value as of December 31, 2024, the reclassification date, totaling $0.4 million. The corresponding amount was recognized within additional paid-in capital in the equity section of the condensed consolidated balance sheets. There was no impact to the condensed consolidated statements of income.

This reclassification has had no impact on the Company’s previously reported cash flows or operations but resulted in a shift from liabilities to equity on the balance sheet. Future changes in the value of the public warrants will no longer affect the consolidated statements of income after December 31, 2024, as they are no longer subject to mark-to-market adjustments.