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

5. Fair Value Measurements

Cash, cash equivalents, investments, and restricted cash are presented at fair value as of June 30, 2026 and December 31, 2025. Other financial instruments, including accounts receivable, net, other current assets, other assets, accounts payable, and accrued expenses, are presented at amounts that approximate fair value as of June 30, 2026 and December 31, 2025 due to their short-term nature.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value and is not a measure of credit quality. The hierarchy defines three levels of valuation inputs:

Level 1 - Quoted prices in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 - Unobservable inputs that reflect the assumptions market participants would use in pricing the asset or liability

We estimate the fair value of our cash equivalents and investments by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. We validate the prices provided by our third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

The following tables present information about our financial assets that have been measured at fair value and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

 

 

 

As of June 30, 2026

 

 

Quoted
Prices
in Active
Markets for Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

24,335

 

 

$

24,335

 

 

$

—

 

 

$

—

 

U.S. government and agency securities

 

 

8,267

 

 

 

—

 

 

 

8,267

 

 

 

—

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency securities

 

 

10,125

 

 

 

—

 

 

 

10,125

 

 

 

—

 

 

$

42,727

 

 

$

24,335

 

 

$

18,392

 

 

$

—

 

 

 

 

As of December 31, 2025

 

 

Quoted
Prices
in Active
Markets for Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

37,224

 

 

$

37,224

 

 

$

—

 

 

$

—

 

U.S. government and agency securities

 

 

7,306

 

 

 

—

 

 

 

7,306

 

 

 

—

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

3,204

 

 

 

—

 

 

 

3,204

 

 

 

—

 

 

$

47,734

 

 

$

37,224

 

 

$

10,510

 

 

$

—

 

In certain cases where there is limited activity or less transparency around inputs to valuation, the related assets or liabilities are classified as Level 3. The following liabilities are measured at fair value at the end of each reporting period, with changes in fair value recognized as a component of other (expense) income, net on our condensed consolidated statements of operations. See Note 10, “Long-Term Obligations” to our condensed consolidated financial statements for further discussion of these liabilities:

(1)
The embedded derivative liabilities (the “Convertible Notes Derivatives”) associated with the 9.00% senior secured convertible notes due 2029 (the “New 2029 Notes”) and 9.00% senior secured convertible notes due 2028 (the “2028 Notes”) are included as components of these debt instruments on our condensed consolidated balance sheets. The valuation method for the Convertible Notes Derivatives incorporates certain unobservable Level 3 key inputs including: (i) the volatility of our common stock price and (ii) our estimated credit spread.
(2)
The warrants to purchase up to 3,068,417 shares of our common stock issued in May 2024 (the “2024 Warrants”) are classified as a long-term liability on our condensed consolidated balance sheets. The warrants to purchase up to 4,421,518 shares of our common stock issued in March 2026 (the “2026 Warrants”) are classified as a current liability on our condensed consolidated balance sheets. The 2024 Warrants and 2026 Warrants are collectively referred to as the “Liability Classified Warrants”. The valuation method for the Liability Classified Warrants incorporates certain unobservable Level 3 key inputs including: (i) the volatility of our common stock price and (ii) an estimate of when the 2024 Warrants will be exercised based on an option pricing model.

The following table sets forth a summary of the changes in the estimated fair value of these liabilities, which are all classified as Level 3 (in thousands):

 

 

 

Convertible Notes Derivatives

 

 

Liability Classified Warrants

 

Balance as of December 31, 2025

 

$

27,455

 

 

$

14,221

 

Initial recognition

 

 

—

 

 

 

1,601

 

Change in fair value

 

 

6,822

 

 

 

8,732

 

Balance as of June 30, 2026

 

$

34,277

 

 

$

24,554