Stock Warrants

6 Months Ended

Jun. 30, 2022

Warrants and Rights Note Disclosure [Abstract]

Stock Warrants

11.STOCK WARRANTS

Warrant liabilities consist of the following (in thousands):

	June 30,		December 31,
	2022		2021
Public Warrants	$	94	$	3,924
Private Placement Warrants		63		2,653
Total warrant liabilities	$	157	$	6,577

The Company recognized a $3.8 million gain for the three months ended June 30, 2022 and $6.4 million gain for the six months ended June 30, 2022 related to a change in fair value of warrant liabilities. The gain is recorded under other expense, net in the consolidated statements of operations and comprehensive loss.
 

Public Warrants and Private Placement Warrants— As of June 30, 2022, the Company has 9,343,750 public warrants and 6,316,667 private placement warrants outstanding.
 

The Company’s warrants have an exercise price of $11.50 per share, subject to adjustment, and will expire on October 15, 2026, five years after the completion of the Merger, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
 

Redemption of warrants when the price per share equals or exceeds $18.00.
 

•The Company may redeem the outstanding warrants (except with respect to the private placement warrants):
 

•in whole and not in part;
 

•at a price of $0.01 per warrant;
 

•upon a minimum of 30 days’ prior written notice of redemption; and
 

•if, and only if, the last reported sale price of our common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like).

The Company will not redeem the warrants as described above unless a registration statement under the Securities Act of 1933, as amended (the "Securities Act") covering the common stock issuable upon exercise of the warrants is effective and a current prospectus relating to that common stock is available throughout the 30-day redemption period. If and when the warrants become redeemable by the Company, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable

state securities laws.
 

Except as set forth below, none of the private placement warrants will be redeemable by the Company so long as they are held by Marquee Raine Acquisition Sponsor LP (the "Sponsor) or its permitted transferees.
 

Redemption of warrants when the price per share equals or exceeds $10.00.
 

The Company may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
 

•in whole and not in part;
 

•at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” of our common stock;
 

•if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like); and
 

•if the Reference Value is less than $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), the private placement warrants must also concurrently be called for redemption on the same terms (except as described herein with respect to a holders’ ability to cashless exercise its warrants) as the outstanding warrants, as described above.

The “fair market value” of our common stock for the above purpose shall mean the volume-weighted average price of our common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of common stock per warrant (subject to adjustment).