v3.26.1
Fair Value Measurement
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurement Fair Value Measurement
Accounting standards establish a hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.
The carrying value of cash and cash equivalents, restricted cash, accounts receivable, contract assets, contract liabilities, accounts payable and DOE Loan Facility are considered to be representative of their fair value.
The following tables set forth the Company's financial liabilities measured at fair values based on the fair value hierarchy, as described above. These should also be read with Note 2, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
March 31, 2026
December 31, 2025
Level 1Level 2Level 3Level 1Level 2Level 3
Liabilities
SPA Warrant (a)
$— $— $203,485 $— $— $470,715 
April, May and December 2023 Warrants— — 112,777 — — 313,253 
Delayed Draw Term Loan— — 113,120 — — 150,427 
Embedded derivatives(b)
— — 62,784 — — 228,719 
Total liabilities
$— $— $492,166 $— $— $1,163,114 
(a) Included in Warrants liability - Related party on the Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025.
(b) Included in Notes Payable - Related Party on the Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025.
April 2023 warrants, May 2023 warrants and December 2023 warrants
The April 2023 warrants, May 2023 warrants and December 2023 warrants all are valued using the Black-Scholes model at inception and on subsequent valuation dates. This model incorporates inputs such as the stock price of the Company, risk-free interest rate, volatility and time to expiration. The volatility is a significant unobservable input classified as Level 3 of the fair value hierarchy.
The inputs used to determine the fair value of the April 2023 warrants, May 2023 warrants, and the December 2023 warrants are as follows:
April 2023 warrants
March 31, 2026
December 31, 2025
Time to expiration2.54 years2.79 Years
Common stock price$4.96 $11.46 
Risk-free interest rate3.8 %3.5 %
Volatility115.0 %105.0 %
May 2023 warrants
March 31, 2026
December 31, 2025
Time to expiration2.29 Years2.54 Years
Common stock price$4.96 $11.46 
Risk-free interest rate3.8 %3.5 %
Volatility115.0 %105.0 %
December 2023 warrants
March 31, 2026
December 31, 2025
Time to expiration2.71 Years2.96 Years
Common stock price$4.96 $11.46 
Risk-free interest rate3.8 %3.5 %
Volatility115.0 %105.0 %
Embedded derivatives
The Company estimated the fair value of the embedded conversion features in the November 2025 Convertible Note using a binomial lattice model at inception and on subsequent valuation dates. This model incorporates inputs such as the stock price of the Company, dividend yield, risk-free interest rate, the effective debt yield and expected volatility. The effective debt yield and volatility involve unobservable inputs classified as Level 3 of the fair value hierarchy.
The inputs used to determine the fair value of the embedded derivative liabilities are as follows:
November 2025 Convertible NoteMarch 31, 2026December 31, 2025
Term5.67 Years5.92 Years
Dividend yield— %— %
Risk-free interest rate3.9 %3.8 %
Volatility60.0 %60.0 %
Effective debt yield16.9 %11.7 %
Quantitative information about all significant unobservable inputs used in the fair value measurement for recurring level 3 measurements:
The fair value of each draw of the Delayed Draw Term Loan was estimated using a discounted cash flow (“DCF”) method, based on the contractual cash flows discounted at a debt yield and considering the probability of achieving certain milestones.
The fair value for the SPA warrant is estimated based on its intrinsic value, using the Eos common stock closing price adjusted by a discount for lack of marketability (“DLOM”), less the exercise price of $0.01 for the SPA Warrant. A DLOM was applied considering the SPA Warrants are unregistered.

Delayed Draw Term Loan
March 31, 2026
December 31, 2025
Debt yield
17.1 %11.9 %
SPA Warrant
March 31, 2026
December 31, 2025
Discount for lack of marketability5.0 %5.0 %
Level 3 Rollforward for Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes the changes in the fair value of liabilities that are included within the Company’s accompanying Unaudited Condensed Consolidated Balance Sheets and are designated as Level 3:
Three Months Ended March 31,
2026
2025
Delayed Draw Term Loan
Balance at beginning of the period$150,427 $76,188 
Additions - January Draw
— 17,312 
Change in fair value of Term Loan(37,307)5,933 
Balance at end of the period$113,120 $99,433 
SPA Warrant and Contingent Warrants
Balance at beginning of the period$470,715 $266,630 
Conversion to preferred stock
— (102,185)
Change in fair value of warrants(267,230)(17,652)
Balance at end of the period$203,485 $146,793 
April, May, and December 2023 Warrants
Balance at beginning of the period$313,253 $189,322 
Exercised warrants
(31,751)(18,768)
Change in fair value of warrants(168,725)(45,788)
Balance at end of the period$112,777 $124,766 
Embedded derivatives
Balance at beginning of the period$228,719 $44,396 
Change in fair value of derivatives
(165,935)(16,934)
Balance at end of the period$62,784 $27,462 
The estimated fair value of financial instruments not carried at fair value in the Unaudited Condensed Consolidated Balance Sheets was as follows:
Level in fair value hierarchy
March 31, 2026
December 31, 2025
Carrying ValueFair ValueCarrying ValueFair Value
May 2025 Convertible Notes3$48,125 $66,686 $48,044 $123,000 
November 2025 Convertible Notes*
3372,215 352,300 530,096 586,237 
Equipment financing facility3— — 372 375 
Preferred Stock
3582,664 600,035 1,361,542 1,292,216 
DOE Loan Facility
386,059 95,760 84,327 95,427 
  Total$1,089,063 $1,114,781 $2,024,381 $2,097,255 
*Includes the embedded derivative liabilities.