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Earn-out Liabilities

9 Months Ended

Sep. 30, 2025

(8) Earn-out Liabilities

Upon the closing of the Business Combination on March 2, 2022, SNII, Supernova Partners II LLC (the “Sponsor”) and SNII’s directors and officers (collectively the “Sponsor Holders”) subjected certain shares of Common Stock that they own (the “Sponsor Vesting Shares”) to forfeiture for a five-year period following the closing of the Business Combination, with vesting occurring only if thresholds related to the weighted average price of Common Stock are met as described below (the “Earn-out Triggering Events”). Any such shares held by the Sponsor Holders that have not vested by the fifth anniversary of the closing of the Business Combination will be forfeited.

Sponsor Vesting Shares – Vesting Provisions:

(i)

2,479,000 shares of Common Stock held by the Sponsor Holders became unvested and subject to forfeiture as of the closing of the Business Combination and will only vest if, during the five year period following the closing of the Business Combination, the volume weighted average price of Common Stock equals or exceeds $12.50 for any twenty trading days within a period of thirty consecutive trading days (such shares, the “Promote Sponsor Vesting Shares”), and

(ii)

580,273 shares of Common Stock held by the Sponsor Holders became unvested and subject to forfeiture as of the closing of the Business Combination and will only vest if, during the five year period following the closing of the Business Combination, the volume weighted average price of Common Stock equals or exceeds $15.00 for any twenty trading days within a period of thirty consecutive trading days (such shares, the “Sponsor Redemption-Based Vesting Shares,” and, collectively with the Promote Sponsor Vesting Shares, the “Sponsor Vesting Shares”). Any such shares held by the Sponsor Holders that remain unvested after the fifth anniversary of the closing of the Business Combination will be forfeited.

During the three and nine months ended September 30, 2025, the vesting condition for each of the Sponsor Redemption-Based Vesting Shares and the Promote Sponsor Vesting Shares was satisfied, and the underlying earn-out liabilities were adjusted to fair value using the closing market price of the Company’s common stock on their respective vesting dates. The earn-out liability for the Sponsor Redemption-Based Vesting Shares as of their August 14, 2025 vesting date was $10.4 million. The earn-out liability for the Promote Sponsor Vesting Shares as of their February 6, 2025 vesting date was $32.9 million. The earn-out liabilities for the Sponsor Redemption-Based Vesting Shares and the Promote Sponsor Vesting Shares were recorded to additional paid-in capital on their respective vesting dates. As of September 30, 2025, all of the underlying earn-out liabilities related to the Sponsor Vesting Shares have been satisfied and the remaining liability balance was zero.

The calculated fair value of the Earn-out liabilities with respect to the unvested Sponsor Vesting Shares as of December 31, 2024 was $45.9 million. The change in the fair value of the Earn-out liabilities included in the condensed consolidated statements of operations during the three and nine months ended September 30, 2025 was a loss of $4.1 million and a gain of $2.5 million, respectively. The change in the fair value of the Earn-out liabilities included in the condensed consolidated statements of operations during the three and nine months ended September 30, 2024 was a gain of $0.8 million and $0.5 million, respectively.

Significant inputs into the Monte Carlo simulation models as of December 31, 2024 were as follows:


Valuation Assumptions	December 31, 2024
Stock price	$	15.26
Simulated trading days		542
Annual volatility (%)		140.00%
Risk-free rate (%)		4.21%
Estimated time to expiration (in years)		2.17