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Fair Value Measurement | 3 Months Ended
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Mar. 31, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurement | 9. Fair Value Measurement The Company follows the guidance in Accounting Standards Codification (“ASC”) 820, “Fair Value Measurement” for its assets and liabilities that are re-measured and reported at fair value at the end of each reporting period. The fair value of the Company’s common stock warrant liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: | Quoted prices in active markets for identical assets or liabilities.
Level 2: | Significant other observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3: | Unobservable inputs reflecting management’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.
The Company classifies financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable, either directly or indirectly. The Company’s assessment of a particular input to the fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The fair value hierarchy requires the use of observable market data when available in determining fair value. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each period. ## Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables present the Company’s fair value hierarchy for its financial instruments that are measured at fair value on a recurring basis.
|  | March 31, 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 10,016 |  |  | $ | — |  |  | $ | — |  |  | $ | 10,016 |
|  | $ | 10,016 |  |  | $ | — |  |  | $ | — |  |  | $ | 10,016 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Long-term liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Credit Agreement Warrants |  | $ | — |  |  | $ | 7,790 |  |  | $ | — |  |  | $ | 7,790 |
Securities Purchase Agreement Warrants |  |  |  |  |  | 1,264 |  |  |  |  |  |  | 1,264 |
Contingent earnout liability |  |  | — |  |  |  | — |  |  |  | 417 |  |  |  | 417 |
|  | $ | — |  |  | $ | 9,054 |  |  | $ | 417 |  |  | $ | 9,471 |
|  | December 31, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 3,157 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,157 |
|  | $ | 3,157 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,157 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Long-term liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Credit Agreement Warrants |  | $ | — |  |  | $ | 13,641 |  |  | $ | — |  |  | $ | 13,641 |
Contingent earnout liability |  |  | — |  |  |  | — |  |  |  | 1,455 |  |  |  | 1,455 |
|  | $ | — |  |  | $ | 13,641 |  |  | $ | 1,455 |  |  | $ | 15,096 |
## Financial Assets The Company values its Level 1 assets, consisting of money market funds using quoted prices in active markets for identical instruments. ## Credit Agreement Warrants On June 13, 2022, in connection with the Blue Torch Financing Agreement, the Company issued the 2022 Blue Torch Warrants to Blue Torch, which were exercisable for an aggregate of 437,024 shares of the Company’s Class A common stock with a per share exercise price of $16.08. Additionally, in connection with the closing of the financing, the Company issued the Urgent Warrants to Urgent Capital LLC, which is exercisable for an aggregate of 24,834 shares of the Company’s Class A common stock with a per share exercise price of $16.08. On September 27, 2023, in connection with the Waiver and Amendment, the Company and certain affiliates of Blue Torch amended and restated the 2022 Blue Torch Warrants to reduce the per share exercise price from $16.08 to $5.44. The Company also concurrently issued the 2023 Blue Torch Warrants to those affiliates that are exercisable for an additional 597,082 shares of the Company’s Class A common stock at a per share exercise price of $5.44. The fair value of the Credit Agreement Warrants is estimated using the Black-Scholes model with inputs that include the Company’s Class A common stock price in an actively traded market, making this fair value classified as a Level 2 financial instrument. The other significant assumptions used in the model are the exercise price, expected term, volatility, interest rate, and expected dividend yield. The table below quantifies the significant inputs used for the Credit Agreement Warrants:
|  | March 31, |  |  |  | December 31, |
|  | 2025 |  |  |  | 2024 |
Fair value of the Company’s Class A common stock | $ |  | 8.09 |  |  | $ |  | 14.07 |
Exercise price | $ | 5.44 - 16.08 |  |  | $ | 5.44 - 16.08 |
Risk-free interest rate |  |  | 4.09 | % |  |  |  | 4.48 | %
Expected volatility factor |  |  | 108.0 | % |  |  |  | 96.0 | %
Expected dividend yield |  |  | — | % |  |  |  | — | %
Remaining contractual term (in years) |  | 7.2 - 8.5 |  |  |  | 7.4 - 8.7 |
## Securities Purchase Agreement Warrants ## On March 12, 2025, the Company entered into the 2025 Securities Purchase Agreement with the purchasers named therein for the 2025 Private Placement of (i) 4,843,750 shares of Class A common stock at a purchase price of $8.00 per share and (ii) Pre-Funded Warrants to purchase 156,250 shares of Class A common stock at a purchase price of $7.9999 per Pre-Funded Warrant. The Pre-Funded Warrants have an exercise price of $0.0001 per share of Class A common stock, are exercisable immediately, and will terminate when exercised in full. The Pre-Funded Warrants are initially recorded at fair value on the date of issuance which is equal to the proceeds received on March 14, 2025. The Pre-Funded Warrants are classified as liabilities because they contain provisions that could require settlement in cash under certain circumstances, resulting in the instruments not being considered indexed to the Company’s own stock. These Pre-Funded Warrants are measured at fair value at each reporting date, with changes in fair value recognized in the condensed consolidated statements of operations. ## Contingent Earnout Liability In connection with the Merger, eligible Spire equity holders are entitled to receive additional shares of the Company’s Class A common stock upon the achievement of certain earnout triggering events. The estimated fair value of the contingent earnout liability is determined using a Monte Carlo simulation using a distribution of potential outcomes on a monthly basis over the earnout period, which is a period up to five years post-closing of the Merger, prioritizing the most reliable information available, making this fair value classified as a Level 3 liability. The assumptions utilized in the calculation are based on the achievement of certain stock price milestones, including the current price of the Company’s Class A common stock, expected volatility, risk-free interest rate, expected term and expected dividend yield. The table below quantifies the significant inputs used for the contingent earnout liability:
|  | March 31, |  |  |  | December 31, |
|  | 2025 |  |  |  | 2024 |
Fair value of the Company’s Class A common stock |  | $ | 8.09 |  |  |  | $ | 14.07 |
Risk-free interest rate |  |  | 3.98 | % |  |  |  | 4.22 | %
Expected volatility factor |  |  | 108.0 | % |  |  |  | 96.0 | %
Earnout expiration date |  | August 16, 2026 |  |  |  | August 16, 2026 |
The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis:
|  | Contingent Earnout Liability |  |
Fair value as of December 31, 2024 |  | $ | 1,455 |  |
Change in fair value of contingent earnout liability |  |  | (1,038 | ) |
Fair value as of March 31, 2025 |  | $ | 417 |  |
## Cash and Cash Equivalents The following tables summarize the Company’s cash and cash equivalents by significant category:
|  | March 31, 2025 |
|  | Amortized Cost |  |  | Unrealized Gains |  |  | Unrealized Losses |  |  | Fair Value |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 25,915 |  |  | $ | — |  |  | $ | — |  |  | $ | 25,915 |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  |  | 10,016 |  |  |  | — |  |  |  | — |  |  |  | 10,016 |
|  | $ | 35,931 |  |  | $ | — |  |  | $ | — |  |  | $ | 35,931 |
|  | December 31, 2024 |
|  | Amortized Cost |  |  | Unrealized Gains |  |  | Unrealized Losses |  |  | Fair Value |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 16,049 |  |  | $ | — |  |  | $ | — |  |  | $ | 16,049 |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  |  | 3,157 |  |  |  | — |  |  |  | — |  |  |  | 3,157 |
|  | $ | 19,206 |  |  | $ | — |  |  | $ | — |  |  | $ | 19,206 |

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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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