v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements
5. Fair Value Measurements
The carrying amounts of the Company’s financial instruments, including accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities and the current portion of operating lease liabilities approximate their fair value due to the short-term nature of those instruments. The Company elected the fair value option for the second lien loans. The fair value of the Company’s other borrowings approximates their carrying value, or amortized cost, due to the short-term nature of the obligations or the relevant prevailing market rate of interest.
The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):
June 30, 2026
Level 1Level 2Level 3Total
Assets
Money market funds$32,527 $— $— $32,527 
U.S. Treasury securities
— 114,284 — 114,284 
Total assets measured at fair value$32,527 $114,284 $— $146,811 
Liabilities
Common stock warrants
2026 PIPE Warrants$— $— $35,818 $35,818 
2025 PIPE Warrants— — 42,912 42,912 
NRA Warrants— — 19,004 19,004 
Second lien loan— — 12,025 12,025 
Total liabilities measured at fair value$— $— $109,759 $109,759 
December 31, 2025
Level 1Level 2Level 3Total
Assets
Money market funds$33,320 $— $— $33,320 
U.S. Treasury securities— 69,908 — 69,908 
Total assets measured at fair value$33,320 $69,908 $— $103,228 
Liabilities
Common stock warrants
2025 PIPE Warrants$— $— $110,881 $110,881 
NRA Warrants— — 47,465 47,465 
Second lien loan— — 10,872 10,872 
Total liabilities measured at fair value$— $— $169,218 $169,218 
All of the Company’s money market funds and U.S. Treasury securities are highly liquid and actively traded marketable securities that generally transact at a stable $1.00 net asset value representing its estimated fair value.
The Company measures its warrant liabilities (see Note 10) and second lien loans (see Note 8) at fair value based on significant inputs not observable in the market and therefore represent Level 3 inputs.
The valuations of the warrant liabilities and second lien loans use assumptions and estimates the Company believes would be made by a market participant in making the same valuation. Changes in the fair value of these instruments were recognized in other income (expenses) in the Company’s condensed consolidated statements of operations and comprehensive (loss) income.
Warrant Liabilities
2026 PIPE Warrants
In connection with the private placement of common stock and warrants to purchase shares of the Company's common stock (the “2026 PIPE Transaction”), on May 8, 2026 the Company issued 15,384,609 shares of warrants to purchase common stock (the “2026 PIPE Warrants”) (see Note 12). The 2026 PIPE Warrants are classified as liabilities and measured at fair value on a recurring basis using the Black-Scholes option pricing model. Key assumptions used in the Black-Scholes model to estimate the fair value of the 2026 PIPE Warrants at issuance on May 8, 2026 and as of June 30, 2026 included: common stock price ranging from $7.25 and $5.08; exercise price of $6.00; expected remaining term of 5.00 years and 4.85 years; expected volatility of 54.0%; risk-free interest rate ranging from 4.0% and 4.2%; and an expected dividend yield of 0.0%.
2025 PIPE Warrants and NRA Warrants
Prior to the 2026 PIPE Transaction (see Note 12), the Company determined the fair value of its 2025 PIPE Warrants and NRA Warrants using a Monte Carlo simulation model due to exercise price reset features. In connection with the private placement, the exercise prices for the 2025 PIPE Warrants and the NRA Warrants were adjusted from $12.00 to $6.00 per
share. Because $6.00 represents the contractual floor exercise price and cannot be reduced further under the reset mechanism, the Company began using a Black-Scholes option pricing model as of June 30, 2026.
As of June 30, 2026, key assumptions used in the Black-Scholes model to estimate the fair value of the 2025 PIPE Warrants and NRA Warrants included a common stock price of $5.08, an exercise price of $6.00, a remaining contractual term of 5.24 years, expected volatility of 56.0%, a risk-free interest rate of 4.2%, and an expected dividend yield of 0.0%. As of December 31, 2025, key assumptions used in the Monte Carlo simulation model included a risk-free rate of 3.8% and volatility of 55.0%. Changes in the fair value were recorded under change in fair value of common stock warrants in the condensed consolidated statements of operations and comprehensive (loss) income.
Second Lien Loans
The Company determined the fair value of the outstanding second lien loans with a principal amount of $10.0 million using a pay-off-to-maturity method. The key valuation assumptions used to determine the fair value as of June 30, 2026 and December 31, 2025 included an implied discount rate of 26.3% and 23.7%, respectively.
Fair Value Remeasurement
The following table summarizes changes in the estimated fair values of these liabilities (in thousands):
2026 PIPE Warrants2025 PIPE WarrantsNRA WarrantsSecond Lien Loans
Balance as of December 31, 2025$— $110,881 $47,465 $10,872 
Issuance during the period62,326 — — — 
Fair value remeasurement(26,508)(67,969)(28,461)1,153 
Balance as of June 30, 2026$35,818 $42,912 $19,004 $12,025 
SAFE1
Legacy Kodiak Redeemable
Convertible Preferred Stock Warrants1
Second Lien Loans
Balance as of December 31, 2024$59,301 $1,619 $— 
Issuance during the period23,660 — 29,740 
Exchange of SAFE for second lien loan(10,000)— 10,000 
Fair value remeasurement192,548 1,298 2,154 
Balance as of June 30, 2025$265,509 $2,917 $41,894 
____________________
1 In connection with the Closing, these instruments were fully converted, exercised, or assumed and reclassified to equity (see Note 3). Accordingly, there were no outstanding balances as of June 30, 2026 and December 31, 2025.