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Fair Value Measurements and Disclosures
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Disclosures

Note 15. Fair Value Measurements and Disclosures

Fair value is defined as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date. Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, which are described below:

•
Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets
•
Level 2 – Observable inputs other than quoted prices that are either directly or indirectly observable for the asset or

liability

•
Level 3 – Unobservable inputs that are supported by little or no market activity

The carrying value of cash and cash equivalents (including investments with an original maturity of three months or less at the date of purchase), restricted cash, accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments.

The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of March 31, 2025 by level within the fair value hierarchy:

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

6,298

 

 

$

-

 

 

$

-

 

 

$

6,298

 

Short-term investments

 

 

-

 

 

 

4,526

 

 

 

-

 

 

 

4,526

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Public warrants

 

$

1,422

 

 

$

-

 

 

$

-

 

 

$

1,422

 

Private placement warrants

 

 

-

 

 

 

1,190

 

 

 

-

 

 

 

1,190

 

GPO Convertible Note

 

 

-

 

 

 

-

 

 

 

35,704

 

 

 

35,704

 

Dragonfly Seller Convertible Notes

 

 

-

 

 

 

-

 

 

 

8,765

 

 

 

8,765

 

Era Convertible Note

 

 

-

 

 

 

-

 

 

 

4,914

 

 

 

4,914

 

Guaranteed Return Liability

 

 

493

 

 

 

-

 

 

 

-

 

 

 

493

 

 

The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2024 by level within the fair value hierarchy:

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

4,836

 

 

$

-

 

 

$

-

 

 

$

4,836

 

Short-term investments

 

 

-

 

 

 

5,796

 

 

 

-

 

 

 

5,796

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Public warrants

 

$

1,338

 

 

$

-

 

 

$

-

 

 

$

1,338

 

Private placement warrants

 

 

-

 

 

 

1,120

 

 

 

-

 

 

 

1,120

 

GPO Convertible Note

 

 

-

 

 

 

-

 

 

 

36,524

 

 

 

36,524

 

Dragonfly Seller Convertible Notes

 

 

-

 

 

 

-

 

 

 

8,979

 

 

 

8,979

 

The following table summarizes changes in fair value of the Company’s level 3 liabilities during the periods presented:

 

 

GPO Convertible Note

 

 

Dragonfly Seller Convertible Notes

 

 

Era Convertible Note

 

Balance at December 31, 2024

 

$

36,524

 

 

$

8,979

 

 

$

-

 

Fair value at issuance date

 

 

-

 

 

 

-

 

 

 

4,728

 

Change in fair value included in the determination of net (income) loss

 

 

(820

)

 

 

(28

)

 

 

186

 

Paid in kind interest

 

 

946

 

 

 

251

 

 

 

-

 

Note and interest conversion

 

 

(946

)

 

 

(702

)

 

 

-

 

Foreign exchange

 

 

-

 

 

 

265

 

 

 

-

 

Balance at March 31, 2025

 

$

35,704

 

 

$

8,765

 

 

$

4,914

 

 

Short-Term Investments

The fair value of the short-term investments is based on the quoted market price of the securities on the valuation date. As of March 31, 2025, the estimated fair value of the short-term investments was $4,526. The Company recognized a non-cash loss of $52 and $49 for the three months ended March 31, 2025 and 2024, respectively, resulting from the change in fair value of the short-term investments. The change in fair value is recorded in the condensed consolidated statements of operations and comprehensive income (loss).

Public Warrants

The fair value of the public warrants is based on the quoted market price of such warrants on the valuation date. As of March 31, 2025 and December 31, 2024, the estimated fair value of the public warrants was $1,422 and $1,338, respectively. The Company recognized a non-cash loss of $84 and a non-cash gain of $501 during the three months ended March 31, 2025 and 2024, respectively, resulting from the change in fair value of the public warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

Private Placement Warrants

As of March 31, 2025 and December 31, 2024, the estimated fair value of the private warrants was $1,190 and $1,120, respectively. The Company recognized a non-cash loss of $70 and a non-cash gain of $420 during the three months ended March 31, 2025 and 2024, respectively, resulting from the change in fair value of the private warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

GPO Convertible Note

The GPO Convertible Note was recognized as a liability on its June 30, 2023 issuance date at its estimated fair value of $36,583. The estimated fair value of the GPO Convertible Note was determined based on a trinomial lattice model. The following table presents the assumptions used to determine the fair value of the GPO Convertible Note at March 31, 2025 and at December 31, 2024:

 

 

 

March 31, 2025

 

 

December 31, 2024

 

Common stock share price

 

$

0.81

 

 

$

1.07

 

Risk free rate

 

 

3.9

%

 

 

4.3

%

Yield

 

 

19.5

%

 

 

18.0

%

Expected volatility

 

 

50.0

%

 

 

50.0

%

Expected term (years)

 

 

3.3

 

 

 

3.5

 

Dragonfly Seller Convertible Notes

The Dragonfly Seller Convertible Notes were recognized as a liability in connection with the acquisition on January 27, 2023 at a fair value of $8,635. As of March 31, 2025 and December 31, 2024, the estimated fair value of the Dragonfly Seller Convertible Notes were $8,765 and $8,979. The unrealized change in the fair value of the Dragonfly Seller Convertible Note of $1,264 is recorded in accumulated other comprehensive income for the three months ended March 31, 2024 and the non-cash gain of $28 (excluding the non-cash gain recognized from the January 2025 conversion) and $47 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2025 and 2024,

respectively. The following table presents the assumptions used to determine the fair value of the Dragonfly Seller Convertible Notes at March 31, 2025 and December 31, 2024:

 

 

 

March 31, 2025

 

 

December 31, 2024

 

Common stock share price

 

$

0.81

 

 

$

1.07

 

Risk free rate

 

 

3.9

%

 

 

4.3

%

Yield

 

 

21.0

%

 

 

19.5

%

Expected volatility

 

 

50.0

%

 

 

50.0

%

Expected term (years)

 

 

2.8

 

 

 

3.1

 

Era Third Convertible Note

The Third Era Convertible Note was issued in aggregate principal amount of $5,769. The Company elected to account for the Third Era Convertible Notes using the fair value option. The fair market value of the Third Era Convertible Note at issuance was $4,728 and $4,914 at March 31, 2025. The non-cash loss of $186 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2025. The following table presents the assumptions used to determine the fair value of the Era Third Convertible Note at March 31, 2025 and the date of issuance of March 17, 2025:

 

 

 

March 31, 2025

 

 

March 17, 2025

 

Common stock share price

 

$

0.81

 

 

$

1.05

 

Risk free rate

 

 

3.80

%

 

 

3.94

%

Yield

 

 

23.00

%

 

 

23.00

%

Expected volatility

 

 

94.00

%

 

 

94.00

%

Expected term (years)

 

 

3.0

 

 

 

3.0

 

 

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company’s long-lived assets, including property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis when an impairment has occurred. The Company has not identified any additional impairments to be recorded during the three months ended March 31, 2025 and 2024. There were no transfers of assets or liabilities between levels during the three months ended March 31, 2025 and 2024. Changes to fair value are recognized as income or expense in the condensed consolidated statements of operations and comprehensive loss.