Note 6 - Fair Value Measurements |
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| Fair Value Disclosures [Text Block] |
Note 6. Fair Value Measurements
Fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels of inputs that may be used to measure fair value, as follows:
Level 1— Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.
Level 2— Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:
Level 3— Unobservable inputs that cannot be corroborated by observable market data and require the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.
Items Measured at Fair Value on a Recurring Basis Warrant Liabilities
The Penny Warrants (as defined in Note 9) are accounted for as a liability with the changes in fair value of the warrants are recognized in the statements of operations and comprehensive income (loss). The estimated fair value of the Penny Warrants liabilities represent Level 2 measurements because the fair value of the warrant is being implied based on market trades of the Company’s stock.
The following table shows the changes in fair value of the Penny Warrants:
Other Fair Value Disclosures
The Company’s open foreign currency forward contracts designated as cash flow hedges and balance sheet hedges are measured on a recurring basis using Level 2 based upon observable inputs. As of June 30, 2026, the fair value of the Company’s cash flow hedges was $1.6 million. The Company did not have open foreign currency forward contracts designated as cash flow hedges as of June 30, 2025. As of June 30, 2026 and June 30, 2025, the fair value of the Company's foreign currency forward contracts designated as balance sheet hedges were not material.
The following table summarizes the carrying value of the Company’s debt, net of debt financing costs, (in thousands):
The Company’s Term Loan Facility and Delayed Draw Facility (as defined in Note 7) reflect the bank quoted market rates, which the Company considers to be a Level 2 fair value measurement. The Company’s convertible debt is measured on a recurring basis using Level 2 based upon observable inputs. The carrying value and fair value of the Term Loan Facility and Delayed Draw Facility net of $22.4 million and $21.0 million as of June 30, 2026 and 2025, respectively, for the fair value of the warrants issued to the lenders to purchase the Company’s common stock.
The Premium Warrants and Super Premium Warrants (as defined in Note 9) met all of the criteria for equity classification and were recorded at their relative fair value in additional paid-in capital at the time of issuance. The aggregate issuance-date fair values of $17.2 million and $12.8 million at June 30, 2026 and June 30, 2025, respectively, are not subject to remeasurement and was estimated using a Black-Scholes method, which incorporates significant unobservable inputs, including expected volatility, risk-free interest rate and expected term. As these inputs are not observable in the market, the fair value measurement of the Premium Warrants and Super Premium Warrants represent a Level 3 measurement.
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