Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Note 5. Fair Value Measurements (As Restated)

Financial assets and liabilities are recorded at fair value.

The Company classifies fair value measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

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Level 1—Quoted market prices (unadjusted) in active markets for identical assets and liabilities.

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Level 2—Observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data.

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Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. These fair values are obtained from independent pricing services which utilize Level 1 and Level 2 inputs.

Financial Assets

The following table summarizes the Company's financial asset instruments measured at fair value on a recurring basis as of December 31, 2023 and 2022 (in thousands). Included within cash and cash equivalents on the consolidated balance sheets, but excluded from the fair value hierarchy table, are cash deposits held at financial institutions.


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	4,246	$	—	$	—	$	4,246
Total cash equivalents		4,246		—		—		4,246

Short-term investments:
U.S. government securities		—		33,213		—		33,213
U.S. government agency securities		—		13,277		—		13,277
Total short-term investments		—		46,490		—		46,490

Total financial assets	$	4,246	$	46,490	$	—	$	50,736


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	9,296	$	—	$	—	$	9,296
Total cash equivalents		9,296		—		—		9,296

Total financial assets	$	9,296	$	—	$	—	$	9,296

Warrant Liabilities

The following table summarizes the Company's warrant liabilities (see Note 10) measured at fair value on a recurring basis as of December 31, 2023 (in thousands) and was based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Warrant liabilities	$	—	$	—	$	76,211	$	76,211

The following table provides a roll-forward of the aggregate fair value of the warrant liabilities categorized with Level 3 inputs (in thousands):


	Warrants
Balance as of December 31, 2022	$	—
Issuance of warrants		104,486
Change in fair value of warrant liabilities		(28,275	)
Balance as of December 31, 2023	$	76,211

The issuance of warrants and the change in fair value of warrant liabilities of $104.5 million and ($28.3) million, respectively, netting to $76.2 million, were recorded in the consolidated statement of operations and comprehensive loss as change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds for the year ended December 31, 2023.

- 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.

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