The following tables present information about the Company’s financial liabilities that are measured at fair value on a recurring basis and the fair value hierarchy of the valuation (in thousands).

The fair value of the Senior Secured Note at issuance and as of March 31, 2026, has been determined using a discounted cash flow model. The fair value of the Warrant (as defined below in Footnote 8) liabilities at issuance and as of March 31, 2026, was measured using a Monte Carlo simulation model.

The significant unobservable inputs that are included in the valuation model of the Senior Secured Note and Warrants liability at issuance and as of  March 31, 2026, are as follows:

The following table provides a rollforward of the aggregate fair values of the Senior Secured Note and Warrant liability for the three months ended March 31, 2026 (in thousands):

The decrease in the fair value of the Senior Secured Note and Warrant liability during the three months ended March 31, 2026, was primarily driven by changes in valuation assumptions, including the Company’s stock price and volatility. During the period, the Company made $7.4 million cash payments on the Senior Secured Note, which reduced the outstanding principal balance. Additionally, $2.1 million of the Senior Secured Note was settled through the issuance of 1,380,359 common shares, further decreasing the carrying amount of the Senior Secured Note liability. These transactions are reflected in the overall change in fair value presented above. The Warrant liability is remeasured at fair value at each reporting date, with changes in fair value recognized in the condensed consolidated statements of operations and comprehensive loss.

The Company has certain non-financial assets, primarily intangible assets, and goodwill, which are measured at fair value on a nonrecurring basis and are adjusted to fair value only to the extent that an impairment charge is recognized. The Company estimates the fair value of these assets using primarily unobservable inputs; therefore, these are considered Level 3 fair value measurements.

The following fair value measurement table presents information about the Company’s financial liabilities that are measured at fair value on a recurring basis and the fair value hierarchy of the valuation (in thousands):

The December 31, 2024, derivative liabilities relate to the embedded redemption features in connection with the convertible promissory notes. The fair value of the embedded redemption features at issuance of the convertible promissory notes and each reporting period was estimated based on significant inputs not observable in the market, which represent Level 3 measurements within the fair value hierarchy. The Company used a scenario-based model (“SBM”) and a discounted cash flow method to incorporate estimates and assumptions concerning its prospects and market indications into a model to estimate the value of the derivative liability. An SBM considers a range of various potential scenario outcomes assumed to occur with associated probabilities. Cash flow outcomes are then discounted to present value to estimate fair value. The most significant estimates and assumptions used as inputs in the SBM valuation technique impacting the fair value of the embedded redemption features are the timing and probability of a successful financing or IPO, maturity, qualified financing or change of control scenario outcomes. The calculated payments due to the holders of the convertible promissory notes were calculated with and without the embedded redemption feature and discounted to present value. The discounted cash flows were calculated using a discount rate at the issuance dates and at the reporting date, based on an assessment of the Company’s credit position and market yields of companies with similar credit risk at the date of each valuation.

The significant unobservable inputs that are included in the valuation of derivative liabilities at issuance and as of December 31, 2025 and 2024, are as follows:

The following table provides a rollforward of the aggregate fair values of the derivative liability (in thousands):

The fair value of the Senior Secured Note at issuance and as of December 31, 2025, has been determined using a discounted cash flow model. The fair value of the warrant liabilities at issuance and as of  December 31, 2025, was measured using a Monte Carlo simulation model.

The significant unobservable inputs that are included in the valuation model of the Senior Secured Note and warrants at issuance and at December 31, 2025, are as follows:

The following table provides a rollforward of the aggregate fair values of the senior secured note and warrant liabilities (in thousands):

The Company has certain non-financial assets, primarily intangible assets and goodwill, which are measured at fair value on a nonrecurring basis and are adjusted to fair value only to the extent that an impairment charge is recognized. The Company estimates the fair value of these assets using primarily unobservable inputs; therefore, these are considered Level 3 fair value measurements.