Quarterly report [Sections 13 or 15(d)]

Fair Value Measurements and Hierarchy

v3.25.2
Fair Value Measurements and Hierarchy
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Hierarchy
Note 5: Fair Value Measurements and Hierarchy
Information about the Company’s financial liabilities measured at fair value on a recurring basis is presented below:
Level 1 Level 2 Level 3 Total
(in thousands)
Warrant liability as of June 30, 2025 $ 118  $ —  $ 4,870  $ 4,988 
Warrant liability as of December 31, 2024 $ 127  $ —  $ 10,185  $ 10,312 
The key Level 3 weighted average inputs into the option pricing model related to the private placement warrants to purchase Class A common stock were as follows:
June 30, 2025 December 31, 2024
Volatility 94.9  % 91.7  %
Risk-free interest rate 3.8  % 4.4  %
Exercise price $ 25.45  $ 25.00 
Expected term 5.8 Years 6.2 years
The exercise price for December 31, 2024 presented in the table above has been retroactively adjusted to reflect the 1-for-50 reverse stock split effected on April 11, 2025. See Note 3 “Significant Accounting Policies” for further information.
Generally, an increase in the market price of the Company’s shares of common stock, an increase in the volatility of the Company’s shares of common stock, and an increase in the remaining term of the warrants would each result in a directionally similar change in the estimated fair value of the Company’s warrant liabilities. Such changes would increase the associated liability while decreases in these assumptions would decrease the associated liability. An increase in the risk-free interest rate would result in a decrease in the estimated fair value measurement and thus a decrease in the associated liability. The Company has not declared, and does not plan to declare, dividends on its common stock and, as such, there is no change in the estimated fair value of the warrant liabilities due to the dividend assumption.
The following table sets forth a summary of changes in the fair value of the Company’s private placement warrants to purchase Class A common stock, which are considered to be Level 3 fair value measurements:
Six Months Ended June 30,
2025 2024
(in thousands)
Beginning balance $ 10,185  $ 29 
Issuance of common warrants
 —  33,259 
Mark-to-market adjustment of stock warrants (5,315) (8,783)
Ending balance $ 4,870  $ 24,505 
The Company recorded gains of $2.0 million and $8.7 million from changes in the fair value of stock warrants for the three months ended June 30, 2025 and 2024, respectively, and gains of $5.3 million and $8.9 million from changes in the fair value of stock warrants for the six months ended June 30, 2025 and 2024, respectively.
The book value of cash; clinic fees, insurance receivables, and other receivables; accounts payable; and accrued expenses and other current liabilities approximate fair value because of the short maturity and high liquidity of these instruments.