Share warrant obligation

3 Months Ended

12 Months Ended

Mar. 31, 2022

Dec. 31, 2021

21.

Share warrant obligations

Upon completion of the Transaction on August 26, 2021, each outstanding warrant to purchase Kismet’s ordinary shares was converted into a warrant to acquire one ordinary share of the Company, at a price of US$ 11.50 per share. A total of 20,250,000 Kismet warrants were converted into 20,250,000 warrants of the Company, 13,500,000 of which are public and 6,750,000 of which are private.

The fair value of Private and Public Warrants is determined using Level 3 inputs within the fair value hierarchy and is measured using Monte-Carlo simulation method along with Deferred Exchange Shares because of their potential dilution effect. The fair value of Public Warrants as at December 31, 2021 is determined using quoted market prices as they were traded in active market.

Key assumptions of the model:


	December 31, 2021	March 31, 2022
Risk free rate	forward USD overnight index swap (OIS) rates (curve 42)	forward USD overnight index swap (OIS) rates (curve 42)
Volatility	forward implied volatility rates based on volatilities of publicly traded peers	forward implied volatility rates based on volatilities of publicly traded peers
Starting share price¹	8.06	5.01
Expected warrant life (years)	4.7	4.4

1	Starting share price was the market price taken from Bloomberg for valuation as at December 31, 2021. As at March 31, 2022 is based on the methods disclosed above.

Key input parameter of the model is starting share price. As the trading of the Company’s shares was halted, the following approach was used to estimate the starting share price:

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Method 1. Last quoted Company’s share price adjusted for the discount for lack of marketability (DLOM) and impact of expected loss from decrease in bookings in FSU countries (Russia, Ukraine and Belarus) and one-off costs. The following adjustments were applied to the last traded quote of shares from Nasdaq of US$ 6.38 as at February 24, 2022:

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Estimated effect of losses to be incurred as a result of changed operating environment, which is incorporated as a 5.1% downward adjustment to share price;

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DLOM, which is estimated as 12.1%.

Based on the above adjustments to the last quoted share price, estimated starting share price per Method 1 is US$ 5.01.

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Method 2. Multiples of the equity value (EV) to Bookings and EV to EBITDA based on valuation of publicly traded peers.

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A list of peer companies was used and the appropriate multiples were applied to estimate the value of the company: EV/EBITDA and EV/Bookings as averages across the peers.

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Implied stock price was calculated and DLOM was applied.

Method 2 provided the range of the starting share price from US$ 4.97 based on EV/EBITDA multiple to US$ 6.18 based on EV/Bookings multiple, which support the starting share price determined by Method 1.

The Company has recognized the following warrant obligations:


	Public Warrants	Private Warrants	Total
Balance at December 31, 2021	10,372	11,657	22,029
Fair value adjustment	(1,814)	(5,595)	(7,409)
Balance at March 31, 2022	8,558	6,062	14,620

The change in fair value of share warrant obligation is disclosed separately in the interim condensed consolidated statement of profit or loss and other comprehensive income.

24. Share warrant obligations

Upon completion of the Transaction on August 26, 2021, each outstanding warrant to purchase Kismet’s ordinary shares was converted into a warrant to acquire one ordinary share of the Company, at a price of US$11.50 per share. A total of 20,250,000 Kismet warrants were converted into 20,250,000 warrants of the Company, 13,500,000 of which are public and 6,750,000 of which are private.

As disclosed in Note 4, the fair value of Public Warrants, which are traded in active market is measured based on the quoted market prices.


	August 27,	December 31,
	2021	2021
Warrant price (US$)⁽²⁾	0.93	0.77

(2)	Volume-weighted average price as at August 27, 2021, source: Bloomberg. The fair value of the warrant determined using Monte-Carlo simulation as at December 31, 2021.

The fair value of Private Warrants is determined using Level 3 inputs within the fair value hierarchy and is measured using Monte-Carlo simulation method along with Deferred Exchange Shares because of their potential dilution effect.

Key assumptions of the model:


	August 27, 2021	December 31, 2021
	forward USD overnight index swap (OIS) rates (curve 42)	forward USD overnight index swap (OIS) rates (curve 42)
Risk free rate Volatility	forward implied volatility rates based on volatilities of publicly traded peers	forward implied volatility rates based on volatilities of publicly traded peers
Starting share price	10.67	8.06
Expected warrant life (years)	5.0	4.7

The Company has recognized the following warrant obligations:


		Private
	Public Warrants	Warrants	Total
Balance at August 27, 2021	12,606	19,503	32,109
Fair value adjustment	(2,234)	(7,846)	(10,080)
Balance at December 31, 2021	10,372	11,657	22,029

The change in fair value of share warrant obligation is disclosed as a part of Net finance income in the statement of profit or loss and other comprehensive income.