Note 9. Private Warrants

At March 31, 2021 and December 31, 2020, there were 5,481,153 and 6,000,000 outstanding warrants, respectively to purchase shares of our common stock at an exercise price of $11.50 per share, subject to adjustments, that had been privately placed prior to the Business Combination ("Private Warrants"). The warrants are exercisable at any time after May 7, 2021, and we do not have any right to compel the exercise or redemption of the Private Warrants. If the Private Warrants are transferred, assigned, or sold to anyone other than the Sponsor or its permitted transferee, they become Public Warrants (as defined in Note 11). On December 28, 2025, any remaining outstanding Private Warrants will expire.

During the quarter ended March 31, 2021, holders of 518,847 Private Warrants sold them, and those Private Warrants became Public Warrants. We valued these Private Warrants on each sale date using the Black Scholes model and reclassified the fair value of each Private Warrant to additional paid in capital.

These warrants meet the definition of a derivative instrument and are reported as liabilities in the Condensed Consolidated Balance Sheet at March 31, 2021 and December 31, 2020, with changes in the fair value of the Private Warrants recorded in earnings. The Private Warrants are Level 3 financial instruments. A rollforward of the private warrants liability is below.