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FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Carrying amounts of certain financial instruments, including cash, cash equivalents, restricted cash, accounts payable, and accrued expenses approximate their fair value due to their relatively short maturities and market interest rates, if applicable.
The Company categorizes assets and liabilities recorded or disclosed at fair value on the consolidated balance sheet based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows:
•Level 1—Inputs which included quoted prices in active markets for identical assets and liabilities.
•Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; 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—Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The Company’s financial assets and liabilities measured at fair value on a recurring basis are as follows (amounts in thousands):
Fair Value at
Fair Value HierarchyJune 30, 2026December 31, 2025
Assets (Liabilities):
Convertible Debentures (1)
Level 3$(77,766)$(66,677)
Warrant liabilities (2)
Level 3(13,500)(15,050)
Derivative liability - Asset Vault (3)
Level 3(458)(458)
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(1) The Company has elected to measure the Convertible Debentures at fair value (see Note 9, Debt). The Company uses a Monte Carlo simulation to value the Convertible Debentures that models potential settlement outcomes under the contractual terms. The significant assumptions used in the model include the volatility of the Company’s common stock (85.0% to 105.0%) and discount rates of 25.3% to 28.5%, which were derived from market
yields for comparable CCC-rated debt. The model also incorporates the instruments’ contractual terms, redemption features, and conversion mechanics.
(2) The warrants are not publicly traded and the Company uses a Monte Carlo simulation or Black-Scholes model to determine the fair value of the warrants. See Note 13, Warrants, for additional information.
(3) The derivative liability relates to certain redemption and settlement features in the Contribution and Purchase Agreement with OIC. The Company utilized an income approach using a probability weighted expected present value method to value the derivative liability. Significant assumptions include a discount rate of 22.8% and estimated probabilities and timing associated with the occurrence of various mandatory redemption events.
The carrying amount and estimated fair value of the Company’s financial instruments not measured at fair value are as follows (amounts in thousands):
June 30, 2026December 31, 2025
Fair Value HierarchyCarrying AmountFair ValueCarrying AmountFair Value
Assets (Liabilities):
Senior Convertible Notes (1)
Level 2$(140,870)$(186,094)$— $— 
CRC and Cross Trails Credit Agreement (2)
Level 3(24,378)(25,875)(27,921)(29,758)
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(1) The estimated fair value of the Senior Convertible Notes was based on a broker-dealer market quote as of June 30, 2026. Because the quote represents an observable market input for the notes in a dealer market that is not considered active, the fair value measurement is classified as Level 2 within the fair value hierarchy.
(2) Includes short-term portion of long-term debt. The Company estimates the fair value using a discounted cash flow model which utilizes the Company’s incremental borrowing rate, which is estimated based on the Company’s assumptions.