v3.26.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2025
Fair Value Measurements [Abstract]  
Fair Value Measurements

Note 9—Fair Value Measurements

 

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024, and indicate the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value:

 

September 30, 2025

 

Description   Quoted
Prices in
Active
Markets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Other
Unobservable
Inputs
(Level 3)		  
Liabilities:                  
Derivative warrant liabilities—Public warrants   $ —     $ 71,875     $ —  
Derivative warrant liabilities—Private placement warrants   $ —     $ 56,670     $ —  

 

December 31, 2024

 

Description   Quoted
Prices in
Active
Markets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Other
Unobservable
Inputs
(Level 3)		  
Liabilities:                  
Derivative warrant liabilities—Public warrants   $ 1,739,375     $ —     $ —  
Derivative warrant liabilities—Private placement warrants   $ —     $ 1,371,330     $ —  
Backstop agreement liability   $ —     $ —     $ 194,240  

 

Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. The estimated fair value of Public Warrants was transferred from a Level 3 fair value measurement to a Level 1 measurement when the Public Warrants were separately listed and traded in April 2021. Accordingly, the estimated fair value of the Private Placement Warrants was transferred from a Level 3 measurement to a Level 2 because the fair value of the Private Placement Warrants was equivalent to the Public Warrants, based on the terms of the Private Warrant agreement, and as such their value is principally derived by the value of the Public Warrants. During the nine months ended September 30, 2025, the estimated fair value of the Public Warrants was transferred from a Level 1 fair value measurement to a Level 2 measurement due to insufficient trading volume.

 

For periods where no observable traded price is available, the fair value of the Public and Private Placement Warrants has been estimated using a Black-Scholes option pricing model. For periods subsequent to the detachment of the Public Warrants from the Units, the fair value of the Public Warrants is based on the observable listed price for such warrants. As of September 30, 2025 and December 31, 2024, the fair value of the Private Placement Warrants was the equivalent to that of the Public Warrants as they had substantially the same terms and qualified as a similar security; however, they are not actively traded, as such were listed as a Level 2 in the hierarchy table above.

 

For the three and nine months ended September 30, 2025, the Company recognized a gain of approximately $0.5 million and $3.0 million presented as change in fair value of derivative warrant liabilities in the accompanying unaudited condensed statements of operations, respectively. For the three and nine months ended September 30, 2024, the Company recognized a gain of approximately $2.5 million and $1.0 million, respectively, presented as change in fair value of derivative warrant liabilities in the accompanying unaudited condensed statements of operations.

 

For the three and nine months ended September 30, 2025, the Company recognized $0 and a loss of approximately $39,000 presented as a change in fair value of backstop agreement in the accompanying unaudited condensed statements of operations, respectively. For the three and nine months ended September 30, 2024, the Company recognized a loss of approximately $2,000 and $34,000, respectively, presented as change in fair value of backstop agreement in the accompanying unaudited condensed statements of operations.

 

As a result of the termination of the Business Combination Agreement as of June 30, 2025, the Backstop Agreement was also terminated. Accordingly, the Company derecognized the related backstop liability and recognized a gain on extinguishment of the Backstop Agreement of $233,350.