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Fair Value Measurements
 6 Months Ended
Mar. 31, 2024
Fair Value Measurements [Abstract]  
Fair Value Measurements

Note 12 — Fair Value Measurements

 

The carrying amounts of the Company’s cash, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these instruments. The Company believes the aggregate carrying value of debt approximates its fair value as of March 31, 2024 and September 30, 2023 because the notes payable, the 7% promissory notes - related parties, the notes payable - related parties and the convertible notes each mature or were converted within one year of the respective balance sheet dates.

 

Fair Value Hierarchy

 

Liabilities measured at fair value on a recurring basis as of March 31, 2024 are as follows:

 

   Level 1   Level 2   Level 3   Total 
                 
Earnout liability  $
—
   $
—
   $3,621   $3,621 
PIPE make-whole liability   
—
    
—
    1,639    1,639 
Private Warrants and other warrants   
—
    
—
    836    836 
                     
Total  $
—
   $
—
   $6,096   $6,096 

 

The Company classifies the earnout liability, the PIPE make-whole liability, the Private Warrants and other warrants and the SAFEs as Level 3 financial instruments due to the judgment required to develop the assumptions used and the significance of those assumptions to the fair value measurement. No financial instruments were transferred between levels of the fair value hierarchy during the six months ended March 31, 2024 or March 31, 2023. The following table provides a reconciliation of the balance of financial instruments measured at fair value on a recurring basis using Level 3 inputs:

 

Six months ended March 31, 2024: 

Earnout

Liability

  

PIPE Make-Whole

Liability

  

Private

Warrants
and Other
Warrants

   SAFEs 
                 
Balance, September 30, 2023  $
—
   $
—
   $
—
   $1,512 
Liabilities recognized   33,559    2,071    882    
—
 
Conversion to Class A Common Stock in the Merger   
—
    
—
    
—
    (1,522)
Change in fair value included in net loss   (29,938)   (432)   (46)   10 
                     
Balance, March 31, 2024  $3,621   $1,639   $836   $
—
 

 

 

Six months ended March 31, 2023:  SAFEs 
     
Balance, September 30, 2022  $1,983 
Change in fair value included in net loss   558 
      
Balance, March 31, 2023  $2,541 

 

Earnout Liability

 

The Company estimates the fair value of the earnout liability using a Monte Carlo simulation model that utilizes significant assumptions, including volatility, expected term and risk-free rate that determine the probability of achieving the earnout conditions. The following table summarizes the assumptions used in estimating the fair value of the earnout liability at the respective dates:

 

  

December 21,
2023

(Closing)

   March 31,
2024		 
         
Stock price  $10.66   $2.01 
Expected volatility   50%   60%
Risk-free rate   3.9%   4.1%
Contractual term   8 years    7.7 years 

 

PIPE Make-Whole Liability

 

The Company uses a Monte Carlo simulation model that utilizes significant assumptions, including volatility, expected term and risk-free rate, to estimate the fair value of the PIPE make-whole liability. The following table summarizes the assumptions used in estimating the fair value of the PIPE make-whole liability at the respective dates:

 

  

December 21,
2023

(Closing)

   March 31,
2024		 
         
Stock price  $10.17   $1.56 
Expected volatility   49%   51%
Risk-free rate   5.4%   5.4%
Contractual term   4 months     3 months