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Fair Value Measurement | 9 Months Ended | 12 Months Ended
--- | --- | ---
Sep. 30, 2024 | Dec. 31, 2023
Fair Value Measurement [Abstract] |  |
Fair value measurement | 16. Fair value measurement The following table provides information related to the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2024, and December 31, 2023:
|  | September 30, 2024
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Warrant liabilities |  | $ | 5,614 |  | $ | — |  | $ | — |  | $ | 5,614
Earnout liabilities |  |  |  |  |  | — |  |  | — |  |  |
|  | $ | 5,614 |  | $ | — |  | $ | — |  | $ | 5,614
|  | December 31, 2023
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Warrant liabilities |  | $ | 3,904 |  | $ | — |  | $ | — |  | $ | 3,904
Earnout liabilities |  |  | — |  |  | — |  |  | 488,641 |  |  | 488,641
|  | $ | 3,904 |  | $ | — |  | $ | 488,641 |  | $ | 492,545
The warrant liability fair value is based on quoted market prices in active markets, and therefore is classified within Level 1 of the fair value hierarchy. The earnouts based on revenue and EBITDA as well as the earnouts based on the Company’s stock price have been classified within Level 3 of the hierarchy as the fair value is derived using a Monte Carlo simulation analysis in a risk neutral framework, which uses a combination of observable (Level 2) and unobservable (Level 3) inputs. Key estimates and assumptions impacting the fair value measurement include the Company’s revenue and EBITDA forecasts as well as the assumptions listed in the tables below. The Company estimated the fair value per share of the underlying common stock based, in part, on the results of third-party valuations and additional factors deemed relevant. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the earnouts. The Company has not paid cash dividends and does not intend to do so in the foreseeable future The payment of any dividends is within the discretion of the Company’s board of directors and will be dependent upon the Company’s revenue and earnings, if any, capital requirements, and general financial condition. Further, the Company’s ability to declare dividends may be limited by the terms of financing or other agreements entered into by us or our subsidiaries from time to time, including certain consent rights in connection with the Strategic Investment. Prior to the Business Combination, the Company was a private company and lacked company-specific historical and implied volatility information of its stock, and as such, the expected stock volatility was based on the historical volatility of publicly traded peer companies for a term equal to the remaining expected term of the warrants. On September 30, 2024, following the earnout forfeiture, the Company adjusted the fair value of all earnout shares a final time, immediately before the modification and ignoring the effect of the modification. The total adjusted liability balance, including the amount associated with the forfeited earnout shares, was reclassified into equity as of September 30, 2024. After reclassification into equity, the earnout shares will not require subsequent fair value measurement. See Note 12 — Earnouts. The following table presents the unobservable inputs of the earnout liability for earnout shares based on revenue and EBITDA targets:
|  | September 30, 2024 |  | December 31, 2023
Current stock price |  | 8.26 |  |  | 10.25 |
Earnout period – beginning |  | 7/1/2023 |  |  | 7/1/2023 |
Earnout period – end |  | 12/31/2024 |  |  | 12/31/2024 |
Equity volatility, EBITDA volatility |  | 30.00 | % |  | 25.0 | %
Operational leverage ratio |  | 65.00 | % |  | 65.00 | %
Revenue volatility |  | 10.00 | % |  | 10.00 | %
Revenue/stock price correlation |  | 40.00 | % |  | 45.00 | %
EBITDA/stock price correlation |  | 30.00 | % |  | 25.00 | %
Revenue discount rate |  | 14.27 | % |  | 9.21 | %
Dividend yield |  | 0.00 | % |  | 0.00 | %
The following table presents the unobservable inputs of the earnout liability for earnout shares based on the Company’s stock price:
|  | September 30, 2024 |  | December 31, 2023
Term (years) |  | 5.0 |  |  | 5.8 |
Volatility |  | 40.00 | % |  | 40.00 | %
Risk-free rate |  | 3.55 | % |  | 3.80 | %
Dividend yield |  | 0.00 | % |  | 0.00 | %
Current stock price |  | 8.26 |  |  | 10.25 |
The following table summarizes the activity for the Company’s Level 3 instruments measured at fair value on a recurring basis (in thousands):
|  | Earnout Liabilities
Balance as of December 31, 2023 |  | $ | 488,641 |
Issuances |  |  | — |
Change in fair value |  |  | (118,615 | )
Balance as of March 31, 2024 |  | $ | 370,026 |
Release of earnout shares |  |  | (66,255 | )
Change in fair value |  |  | (13,006 | )
Balance as of June 30, 2024 |  | $ | 290,765 |
Change in fair value |  |  | (40,649 | )
Forfeiture of earnout shares |  |  | 69,280 |
Reclassification of stock price based earnout shares |  |  | 180,836 |
Balance as of September 30, 2024 |  | $ | — |
There were no transfers between Level 1 and Level 2, nor into and out of Level 3, during the periods presented. As of September 30, 2024, all earnouts were adjusted to fair value and reclassified into equity. | 17. Fair value measurement The Company did not have any assets or liabilities measured at fair value on a recurring basis as of December 31, 2022. The following table provides information related to the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2023:
|  | December 31, 2023
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Warrant liabilities |  |  | 3,904 |  |  |  |  |  |  |  |  | 3,904
Earnout liabilities |  |  |  |  |  |  |  |  | 488,641 |  |  | 488,641
|  | $ | 3,904 |  | $ |  |  | $ | 488,641 |  | $ | 492,545
The warrant liability fair value is based on quoted market prices in active markets, and therefore is classified within Level 1 of the fair value hierarchy. The earnouts based on revenue and earnings before interest, taxes, depreciation and amortization (“EBITDA”) as well as the earnouts based on the Company’s stock price have been classified within Level 3 of the hierarchy as the fair value is derived using a Monte Carlo simulation analysis in a risk neutral framework, which uses a combination of observable (Level 2) and unobservable (Level 3) inputs. Key estimates and assumptions impacting the fair value measurement include the Company’s revenue and EBITDA forecasts as well as the assumptions listed in tables below. The fair value measurement associated with the earnout liability is highly sensitive to changes in stock price and forecasted amounts for revenue through 2024. Any changes to stock price and forecasted revenues in 2024 will result in remeasurement of the earnout liability and could result in material gains or losses being recognized in the statement of operations. The Company estimated the fair value per share of the underlying common stock based, in part, on the results of third-party valuations and additional factors deemed relevant. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the earnouts. The Company estimated a 0% expected dividend yield as of December 31, 2023, based on the fact that prior to the Business Combination, the Company had never paid or declared dividends and does not intend to do so in the foreseeable future. Prior to the Business Combination, the Company was a private company and lacked company-specific historical and implied volatility information of its stock, and as such, the expected stock volatility was based on the historical volatility of publicly traded peer companies for a term equal to the remaining expected term of the warrants. The following table presents the unobservable inputs of the earnout liability for earnout shares based on revenue and EBITDA targets:
|  | Amount
Current stock price |  | 10.25 |
Earnout period – beginning |  | July 1, 2023 |
Earnout period – end |  | December 31, 2024 |
Equity volatility, EBITDA volatility |  | 25.0 | %
Operational leverage ratio |  | 65.0 | %
Revenue volatility |  | 10.0 | %
Revenue/stock price correlation |  | 45.0 | %
EBITDA/stock price correlation |  | 25.0 | %
Revenue discount rate |  | 9.21 | %
Dividend yield |  | 0.0 | %
The following table presents the unobservable inputs of the earnout liability for earnout shares based on the Company’s stock price:
|  | Amount
Term (years) |  | 5.8 |
Volatility |  | 40.0 | %
Risk-free rate |  | 3.8 | %
Dividend yield |  | 0.0 | %
Current stock price |  | 10.25 |
The following table summarizes the activity for the Company’s Level 3 instruments measured at fair value on a recurring basis (in thousands):
|  | Earnout Liabilities
Balance as of December 31, 2022 |  | $ | —
Issuances |  |  | 143,228
Change in fair value |  |  | 345,413
Balance as of December 31, 2023 |  |  | 488,641
There were no transfers between Level 1 and Level 2, nor into and out of Level 3, during the periods presented.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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