Fair Value Measurements |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | Fair Value Measurements The Company measures certain financial liabilities at fair value on a recurring basis, including contingent consideration and certain warrant liabilities.These liabilities are classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. Changes in the fair value of these liabilities are recognized in the condensed consolidated statements of operations. For the three months ended March 31, 2026 and 2025, the Company recognized changes in fair value of approximately $3.4 million and $0.8 million, respectively. Derivative Instruments The Company's derivative instruments pertain to the acquisition-related contingent consideration in the form of special warrants (the "Special Warrants") issued by the Company on May 29, 2024 (the "Issuance Date"). The Special Warrants were recorded as acquisition-related contingent consideration and relate to warrants that automatically converted into $38.0 million worth of the Company’s common shares upon completion by the Company of a liquidity event (as defined in the share purchase agreement). All unconverted warrants become null and void if not converted on or before December 31, 2026. The fair value of the acquisition-related contingent consideration was determined using the probability-weighted expected return method (“PWERM”) valuation model, with the following range of key assumptions used in the PWERM: the timing of a liquidity event of February 2026 and March 2026, a discount rate of 3.66% and 3.60%, the probability of timing of a liquidity event of 80% and 15%, and a discount for lack of marketability of 3.7% and 5.7%. Accordingly, the acquisition-related contingent consideration is measured at fair value on a recurring basis using unobservable inputs; therefore, this instrument represents a Level 3 measurement within the fair value hierarchy. The fair value of the special warrant liability at the time of initial recognition was $28.4 million. Because the valuation model uses unobservable inputs, there is inherent uncertainty in measuring the fair value of this contingent consideration, and actual results may differ from these estimates. In February 2026, the Company completed its merger with Blackbox, which constituted a liquidity event as defined under the share purchase agreement. Prior to conversion, the carrying value of the Special Warrant liability was adjusted from $34.6 million to the contractual conversion amount of $38.0 million, resulting in a fair value loss of $3.4 million recorded in earnings. The Special Warrants then automatically converted into 2,093,664 common shares of the Company on February 24, 2026, and the$38.0 million liability was derecognized with an offsetting credit to additional paid-in capital. As of March 31, 2026 and December 31, 2025, the fair value of the Special Warrant liability was $0 and $34.6 million, respectively. During the three months ended March 31, 2026 and 2025, the Company recorded a change in fair value of the contingent consideration of $3.4 million (loss) and $0.8 million (loss), respectively. The following table sets forth a summary of changes in fair value of the Company’s Level 3 liabilities for the three months ended March 31, 2026 (in thousands):
The following table sets forth a summary of changes in fair value of the Company’s Level 3 liabilities for the three months ended March 31, 2025 (in thousands):
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