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

The Company’s financial instruments consist primarily of accounts receivable, notes payable, warrants and derivative liabilities.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company records its financial assets and liabilities at fair value, in accordance with the framework for measuring fair value in GAAP.

At June 30, 2026, there are no derivative liabilities included in the unaudited condensed consolidated balance sheets.

The Company’s derivative liability related to the December 2024 Convertible Notes, the Additional 2024 Convertible Notes, and the 2025 Convertible Notes (collectively, the “Notes”) (see Note 11 — Debt — 2024 Note Purchase Agreement, A&R Note Purchase Agreement and Convertible Notes), measured at fair value on a recurring basis is as follows:

 

 

 

December 31, 2025

 

(in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

Current Liabilities

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

—

 

 

$

—

 

 

$

10

 

Total

 

$

—

 

 

$

—

 

 

$

10

 

 

 

 

 

 

 

 

 

 

 

Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

—

 

 

$

—

 

 

$

3,363

 

Total

 

$

—

 

 

$

—

 

 

$

3,363

 

 

The estimated fair value of the derivative liability included in other noncurrent liabilities in the unaudited condensed consolidated balance sheets was determined using the with and without method, taking the fair value of the Notes with the conversion option, less the fair value without the conversion option. The estimated fair value of the Notes was determined using the discounted cash flow method, assuming a discount rate of 17.50%.

Changes in Level 3 liabilities measured at fair value on a recurring basis are as follows:

 

 

 

Contingent Warrant

 

 

Warrant

 

 

Derivative

 

(in thousands)

 

Liability

 

 

Liability

 

 

Liability

 

Balance at December 31, 2025

 

$

—

 

 

$

—

 

 

$

3,373

 

Changes in fair value included in earnings

 

 

—

 

 

 

—

 

 

 

(2,359

)

Balance at March 31, 2026

 

$

—

 

 

$

—

 

 

$

1,014

 

Extinguishment

 

 

—

 

 

 

—

 

 

 

(1,014

)

Balance at June 30, 2026

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

Contingent Warrant

 

 

Warrant

 

 

Derivative

 

(in thousands)

 

Liability

 

 

Liability

 

 

Liability

 

Balance at December 31, 2024

 

$

2,727

 

 

$

13,979

 

 

$

1,492

 

Issuances

 

 

—

 

 

 

—

 

 

 

9,049

 

Changes in fair value included in earnings

 

 

(1,752

)

 

 

(12,939

)

 

 

(3,390

)

Extinguishment

 

 

(975

)

 

 

(1,040

)

 

 

(3,778

)

Balance at December 31, 2025

 

$

—

 

 

$

—

 

 

$

3,373

 

 

Changes in fair value are included in Interest expense on the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025.

At June 30, 2026, there are no equity-classified warrants included in common units in the unaudited condensed consolidated balance sheets.

Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis

The term loans and convertible notes are based on rates currently offered for instruments with similar maturities and terms (Level 2).

The following table presents the estimated fair values and carrying values of debt instruments (see Note 11 — Debt):

 

 

 

June 30, 2026

 

 

December 31, 2025

 

(in thousands)

 

Carrying Amount

 

 

Estimated Fair Value

 

 

Carrying Amount

 

 

Estimated Fair Value

 

2025 Credit Agreement

 

$

—

 

 

$

—

 

 

$

28,944

 

 

$

30,000

 

December 2024 Convertible Note

 

 

—

 

 

 

—

 

 

 

9,132

 

 

 

14,758

 

Additional 2024 Convertible Notes

 

 

—

 

 

 

—

 

 

 

8,974

 

 

 

14,560

 

2025 Convertible Notes

 

 

—

 

 

 

—

 

 

 

12,934

 

 

 

21,769

 

Rights offering convertible notes

 

 

—

 

 

 

—

 

 

 

44

 

 

 

44

 

Total Outstanding Debt

 

$

—

 

 

$

—

 

 

$

60,028

 

 

$

81,131