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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2026
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The Company follows accounting guidance that emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value measurements are defined on a three-level hierarchy: •Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets; •Level 2 inputs: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, whether directly or indirectly, for substantially the full term of the asset or liability; and •Level 3 inputs: Unobservable inputs in which there is little or no market data available, which requires management to develop its own assumptions in pricing the asset or liability. As of June 30, 2026 and December 31, 2025, the fair values of cash and cash equivalents, accounts receivable, contract assets and unbilled receivables, prepaid and other assets, accounts payable and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The value of the long-term funding agreement, related party line item was determined on an amortized cost basis, based on an effective rate of interest. The fair value of the financial liabilities associated with the March 2025 Warrants and March 2025 Private Placement Warrants (as defined below) are based on cash flow models discounted at current implied market rates representing expected returns by market participants for similar instruments and are based on Level 3 inputs as well the Company’s underlying stock price and associated volatility, expected term and market interest rates (see Note 9 – Financings). The fair value of the financial liabilities associated with the Notes pursuant to the Note Purchase Agreement represents the present value of estimated future payments, including interest, principal, and Repayment Amount (as defined in the Note Purchase Agreement (see Note 7 – Debt). The fair value measurement is based on significant Level 3 unobservable inputs such as the probability and timing of the Repayment Amount and the discount rate. The Company determined the fair value of the Notes utilizing a discounted cash flow model of estimated future payments including interest, principal, and Repayment Amount utilizing a discount rate calculated as the term matched risk-free rate plus credit spread. At April 21, 2026, the Notes issuance date, the Company utilized a discount rate of 8.9% and determined the fair value of the Notes to be $35.0 million. At June 30, 2026, the Company utilized a discount rate of 9.1%. The fair value of the Notes at June 30, 2026 were $34.9 million which differed from the contractual principal amount of $35.3 million, inclusive of paid-in-kind interest, by $(0.3) million. Significant increases or decreases in any of these inputs in isolation could result in a significantly lower or higher fair value measurement. There were no transfers between fair value hierarchy levels during the three and six months ended June 30, 2026 and 2025. The fair value of financial instruments measured on a recurring basis is as follows (in thousands):
|  | As of June 30, 2026
Description |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Financial liabilities: |  |  |  |  |  |  |  |
Warrant liabilities |  | $ | 62,145 |  |  | $ | — |  |  | $ | — |  |  | $ | 62,145 |
Notes |  | $ | 34,932 |  |  | $ | — |  |  | $ | — |  |  | $ | 34,932 |
Total financial liabilities at fair value |  | $ | 97,077 |  |  | $ | — |  |  | $ | — |  |  | $ | 97,077 |
|  | As of December 31, 2025
Description |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Financial liabilities: |  |  |  |  |  |  |  |
Warrant liabilities |  | $ | 25,985 |  |  | $ | — |  |  | $ | — |  |  | $ | 25,985 |
Notes |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Total financial liabilities at fair value |  | $ | 25,985 |  |  | $ | — |  |  | $ | — |  |  | $ | 25,985 |
The following table provides a roll-forward of the warrant financial liability measured at fair value on a recurring basis using unobservable level 3 inputs for the six months ended June 30, 2026 and 2025 (in thousands):
| Six Months Ended June 30,
| 2026 |  | 2025
Warrant liabilities |  |  |
Balance as of beginning of period | $ | 25,985 |  |  | $ | — |
Issuance of March 2025 Warrants and March 2025 Private Placement Warrants | — |  |  | 15,520 |
Warrant exercises | (7,817) |  |  | — |
Change in fair value | 43,977 |  |  | (3,720) |
Balance as of end of period | $ | 62,145 |  |  | $ | 11,800 |
The following table provides a roll-forward of the Notes financial liability measured at fair value on a recurring basis using unobservable level 3 inputs for the period from April 21, 2026 through June 30, 2026 (in thousands):
Fair value at April 21, 2026 (issuance) |  | $ | 35,000 |
Fair value change reported in statements of operations |  | 213 |
Change in fair value reported in other comprehensive loss |  | — |
Interest payments |  | (281) |
Fair value at June 30, 2026 |  | $ | 34,932 |
There were no financial instruments measured on a non-recurring basis for any of 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/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: 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 3: 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 4: 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 5: 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 6: 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 7: 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 8: 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 9: 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 10: 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 11: 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 12: 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 13: 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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