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Fair Value Measurements
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements
NOTE 9 — Fair Value Measurements
The following table presents the assets and liabilities that the Company measures at fair value on a recurring basis included in the condensed consolidated balance sheets and indicates the level of the valuation inputs the Company utilized to determine the fair value:
LevelJune 30, 2024 (Successor)December 31, 2023 (Successor)
Assets
Available-for-sale investments 1
1$101,653 $— 
Short-term investments2100,000 100,000 
Total assets$201,653 $100,000 
Liabilities
Public Warrants1$19,743 $18,969 
Private Placement Warrants334,771 36,951 
Earnout Shares31,404 1,671 
Total liabilities$55,918 $57,591 
___________
(1) $27,433 of these investments are classified as long-term on our consolidated balance sheet.
The following table contains a reconciliation of the beginning and ending balances of recurring level 3 fair value measurements included in the condensed consolidated statements of operations and comprehensive loss:
Period FromPeriod from
April 1 – June 30, 2024 (Successor)June 8 – June 30, 2023 (Successor)April 1 – June 7, 2023 (Predecessor)January 1 - June 30, 2024 (Successor)June 8 – June 30, 2023 (Successor)January 1 – June 7, 2023 (Predecessor)
Balance of recurring level 3 liabilities at beginning of period$47,164 $63,851 $— $38,622 $63,851 $5,174 
Change in Earnout Shares liability and Warrant liability(10,989)(664)— (2,447)(664)— 
Payments— — — — — (5,174)
Balance of recurring level 3 liabilities at end of period$36,175 $63,187 $— $36,175 $63,187 $— 
Earnout Shares
The fair values for the Class A OpCo Units and corresponding shares of Class B Common Stock that, pursuant to an agreement with Sponsor and certain of its affiliates, are or were subject to forfeiture, with vesting occurring in three tranches based on the trading share price of the Class A Common Stock on the NYSE (the “Earnout Shares”) are estimated using a Monte Carlo simulation. The Monte Carlo simulation considers daily simulated stock prices as a proxy for the Company's daily volume-weighted average share price. The key inputs into the valuation of the Earnout Shares are an expected remaining term of 1.94 years, a risk-free rate of 4.6% and estimated equity volatility of 39.9%. The estimated equity volatility assumption is based on a blended average of asset and equity volatility measurements of publicly traded companies within the Company's peer group.
Warrants
The Public Warrants are valued using their quoted and publicly available market prices. Since their fair value is predicated on quoted prices in an active market for identical instruments, the Public Warrants are considered to be level 1 fair value instruments.
The Company uses a Black-Scholes Merton Model to value the Private Placement Warrants. Key inputs into the Black-Scholes Merton Model include the last Class A Common Stock closing price of $9.83 as of June 30, 2024 (Successor), a risk-free rate of 4.3%, volatility of 41.5%, a term of 3.94 years and a strike price of $11.50 per share. The volatility assumption is based on a blended average of operating and equity volatility of publicly traded companies within the Company's peer group, the Company's own historical volatility and the implied volatility of the Public Warrants. The Private Placement Warrants are considered to be level 3 fair value instruments.
Short-term Investments
Short-term investments are valued at cost, which approximates fair value. Short-term investments are considered level 2 fair value instruments because cost basis is not observable in a public market.
Investment Securities
Available-for-sale investments are classified as Level 1 because they are valued using using the most recent quoted prices for identical assets in active markets.
Option Liability
The Company's option liability was issued in conjunction with member loans on October 15, 2021. The loans were fully repaid on February 3, 2022; however, the members had one year to exercise their options subsequent to the repayment of the loans. The interest expense related to these loan options was $30 during the period from January 1, 2023 through June 7, 2023 (Predecessor). These measurements were reported in Interest income (expense) on the condensed consolidated statements of operations and comprehensive loss. In early 2023, two option holders exercised their options to purchase an aggregate of 34,588 membership units in NET Power, LLC for total proceeds of $5,836. There were no loan options outstanding at the time of the Business Combination.