Note 14. Fair Value Measurements and Disclosures

Fair value is defined as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date. Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, which are described below:

liability

The carrying value of cash and cash equivalents (including investments with an original maturity of three months or less at the date of purchase), restricted cash, accounts receivable, accounts payable, and other accruals readily convertible into cash approximates fair value because of the short-term nature of the instruments.

Short-Term Investments

The fair value of the short-term investments is based on the quoted market price of the securities on the valuation date. As of March 31, 2026, the estimated fair value of the short-term investments was $2,004. The Company recognized a non-cash gain of $1 and a non-cash loss of $52 for the three months ended March 31, 2026 and 2025, respectively, resulting from the change in fair value of the short-term investments. The change in fair value is recorded in the condensed consolidated statements of operations and comprehensive income (loss).

Public Warrants

The fair value of the public warrants is based on the quoted market price of such warrants on the valuation date. As of March 31, 2026 and December 31, 2025, the estimated fair value of the public warrants was $0 and $260, respectively. The Company recognized a non-cash gain of $260 and a non-cash loss of $84 during the three months ended March 31, 2026 and 2025, respectively, resulting from the change in fair value of the public warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

Private Placement Warrants

As of March 31, 2026 and December 31, 2025, the estimated fair value of the private warrants was $0 and $217, respectively. The Company recognized a non-cash gain of $217 and a non-cash loss of $70 during the three months ended March 31, 2026 and 2025, respectively, resulting from the change in fair value of the private warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

2025 GPO Note / Prior GPO Convertible Note

The Prior GPO Convertible Note was recognized as a liability on its June 30, 2023 issuance date at its estimated fair value of $36,583. The Prior GPO Convertible Note estimated fair value at March 31, 2025 was $35,704 and was determined based on lattice models. The non-cash loss of $820 for the three months ended March 31, 2025 was recorded in the change in the fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss). On August 12, 2025, the Company extinguished $30,000 of the Prior GPO Convertible Note with a $27,000 cash payment and issued the 2025 GPO Note. The 2025 GPO Note was recognized as a liability at its estimated fair value of $18,865 at its issuance date of August 12, 2025, $19,235 at December 31, 2025, and $19,649 at March 31, 2026, respectively. The non-cash gain of $414 for the three months ended March 31, 2026 was recorded in the change in the fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

The estimated fair value of the 2025 GPO Convertible Note was determined based on a trinomial lattice model. The following table presents the assumptions used to determine the fair value of the 2025 GPO Convertible Note at March 31, 2026 and at December 31, 2025:

Dragonfly Seller Convertible Notes

The Dragonfly Seller Convertible Notes were recognized as a liability in connection with the acquisition on January 27, 2023 at a fair value of $8,635. As of March 31, 2026 and December 31, 2025, the estimated fair value of the Dragonfly Seller Convertible Notes were $11,540 and $11,982. The non-cash gain of $519 and $28 (excluding the non-cash gain recognized from the January 2025 conversion) was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2026 and 2025, respectively. The following table presents the assumptions used to determine the fair value of the Dragonfly Seller Convertible Notes at March 31, 2026 and December 31, 2025:

Convertible Debentures

The initial tranche of the Convertible Debentures was recognized as a liability on the August 12, 2025 issuance date at its estimated fair value of $18,900 using a Monte Carlo simulation. The second tranche of the Convertible Debentures was recognized as a liability on September 11, 2025 at its estimated fair value of $11,000, using a Monte Carlo simulation. At March 31, 2026 and December 31, 2025, the estimated fair value of the Convertible Debentures were $23,005 and $26,663, respectively. The non-cash loss of $1,352 was recorded in the change in the fair value of financial instruments in the condensed consolidated statement of operations for the three months ended

March 31, 2026. The following table presents the assumptions used to determine the fair value of the Convertible Debentures at March 31, 2026 and December 31, 2025:

(a) - Includes both the First and Second Convertible Debenture

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company’s long-lived assets, including property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis when an impairment has occurred. Excluding the impairment of goodwill as disclosed in Note 6, Goodwill, no other impairment charges were recorded during the three months ended March 31, 2026 and 2025. There were no transfers of assets or liabilities between levels during the three months ended March 31, 2026 and 2025. Changes to fair value are recognized as income or expense in the condensed consolidated statements of operations and comprehensive loss.