v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 3. Fair Value Measurements

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):

 

 

 

June 30, 2026

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Restricted short-term investments

 

$

—

 

 

$

4,250

 

 

$

—

 

Total assets

 

$

—

 

 

$

4,250

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Term Loan Warrants

 

$

—

 

 

$

—

 

 

$

699

 

Common Stock Warrants

 

 

—

 

 

 

—

 

 

 

3,126

 

Total liabilities

 

$

—

 

 

$

—

 

 

$

3,825

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Restricted short-term investments

 

$

—

 

 

$

4,250

 

 

$

—

 

Total assets

 

$

—

 

 

$

4,250

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Term Loan Warrants

 

$

—

 

 

$

—

 

 

$

733

 

Common Stock Warrants

 

 

—

 

 

 

—

 

 

 

3,420

 

Total liabilities

 

$

—

 

 

$

—

 

 

$

4,153

 

 

Fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current liabilities approximate their recorded value due to the short period of time to maturity. Restricted short-term investments of $4.3 million at June 30, 2026 consist of a one-year certificate of deposit (“CD”) that matured on July 26, 2026 with an interest rate of 3.5%, which is restricted due to a contractual agreement. Upon the maturity of this CD on July 26, 2026, the Company entered into a $1.75 million 90 day CD at an interest rate of 3.0%. The remaining cash balance of $2.5 million will be available for general corporate purposes of the Company. The Company’s Term Loan Warrants (as defined below) and Common Stock Warrants (as defined below) are classified within Level 3 of the fair value hierarchy because their fair values are based on significant inputs that are unobservable in the market.

Private Placement Warrants

The Company's outstanding warrants for the purchase of 106,667 shares of the Company's Class A common stock at an exercise price of $575.00 per share (the "Private Placement Warrants") expired unexercised on June 25, 2026. These warrants had no outstanding warrant liability at the time of their expiration.

 

Public Warrants

The Company's outstanding warrants for the purchase of 200,000 shares of the Company's Class A common stock at an exercise price of $575.00 per share (the "Public Warrants") expired unexercised on June 25, 2026. These warrants had no outstanding warrant liability at the time of their expiration.

Term Loan Warrants

The Company determined the fair value of the Term Loan Warrants (as defined below) using a Black-Scholes option-pricing model and the quoted price of the Company’s Class A common stock. Volatility was based on the implied volatility derived from the Company's historical volatility. The expected life was based on the remaining contractual term of the Term Loan Warrants, and the risk-free interest rate was based on the implied yield available on U.S. treasury securities with a maturity equivalent to the Term Loan Warrants expected life. The significant unobservable input used in the fair value measurement of the Term Loan Warrants is the implied volatility. Significant changes in the implied volatility would result in a significantly higher or lower fair value measurement, respectively. See Note 9, Debt, for additional information regarding the Term Loan Warrants.

 

The following table presents significant assumptions utilized in the valuation of the Term Loan Warrants at June 30, 2026 and December 31, 2025:

 

 

 

June 30, 2026

 

 

December 31, 2025

 

 

 

 

 

 

 

 

Risk-free rate

 

 

4.1

%

 

 

3.6

%

Dividend yield rate

 

 

—

 

 

 

—

 

Volatility

 

 

91.6

%

 

 

91.1

%

Contractual term (in years)

 

 

3.11

 

 

 

3.60

 

Exercise price

 

$

6.26

 

 

$

6.26

 

 

The following table presents changes in the fair value of the Term Loan Warrants for the three and six months ended June 30, 2026 and 2025 (in thousands):

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Balance, beginning of period

 

$

767

 

 

$

504

 

 

$

733

 

 

$

390

 

Change in fair value

 

 

(68

)

 

 

(265

)

 

 

(34

)

 

 

(151

)

Balance, end of period

 

$

699

 

 

$

239

 

 

$

699

 

 

$

239

 

 

For the three and six months ended June 30, 2026 and 2025, the change in the fair value of the Term Loan Warrants was due to the change in price of the Company's Class A Common Stock, the remaining contractual term and the risk-free rate. The changes in fair value are included in the unaudited condensed consolidated statements of operations as a component of change in fair value of warrant liabilities and in the unaudited condensed consolidated balance sheets as other liabilities.

 

Common Stock Warrants

The Company issued warrants (the "Common Stock Warrants") on December 10, 2023, to certain institutional investors to purchase 543,590 shares of Class A common stock at an exercise price of $11.24 per share. The Common Stock Warrants may be exercised at any time beginning June 13, 2024, and will expire on June 13, 2029. The Company determined the fair value of the Common Stock Warrants using a Black-Scholes option-pricing model and the quoted price of the Company’s Class A common stock. Volatility was based on the implied volatility derived from the Company's historical volatility. The expected life was based on the remaining contractual term of the Common Stock Warrants, and the risk-free interest rate was based on the implied yield available on U.S. treasury securities with a maturity equivalent to the Common Stock Warrants expected life. The significant unobservable input used in the fair value measurement of the Common Stock Warrants is the implied volatility. Significant changes in the implied volatility would result in a significantly higher or lower fair value measurement, respectively.

The following table presents significant assumptions utilized in the valuation of the Common Stock Warrants on June 30, 2026 and December 31, 2025:

 

 

 

June 30, 2026

 

 

December 31, 2025

 

 

 

 

 

 

 

 

Risk-free rate

 

 

4.1

%

 

 

3.6

%

Dividend yield rate

 

 

—

 

 

 

—

 

Volatility

 

 

89.3

%

 

 

90.4

%

Contractual term (in years)

 

 

2.95

 

 

 

3.45

 

Exercise price

 

$

11.24

 

 

$

11.24

 

 

The following table presents changes in the fair value of the Common Stock Warrants for the three and six months ended June 30, 2026 and 2025 (in thousands):

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Balance, beginning of period

 

$

3,577

 

 

$

2,358

 

 

$

3,420

 

 

$

1,783

 

Change in fair value

 

 

(451

)

 

 

(1,293

)

 

 

(294

)

 

 

(718

)

Balance, end of period

 

$

3,126

 

 

$

1,065

 

 

$

3,126

 

 

$

1,065

 

 

For the three and six months ended June 30, 2026 and 2025, the change in the fair value of the Common Stock Warrants resulted from the change in price of the Company’s Class A common stock, remaining contractual term, and the risk-free rate. The changes in fair value are included in the unaudited condensed consolidated statements of operations as a component of change in fair value of warrant liabilities and in the unaudited condensed consolidated balance sheets as other liabilities.