Transfers of Financial Assets

6 Months Ended

Jun. 30, 2025

Transfers and Servicing [Abstract]

Transfers of Financial Assets

11. Transfers of Financial Assets

On April 30, 2025 and May 7, 2025, the Company entered into multiple merchant cash advance (“MCA”) agreements with Genesis Equity Group Funding LLC (“GEG”) under which it transferred the rights to specified future receivables of an aggregate $1,485 (the “Purchased Amount”) in exchange for aggregate upfront cash proceeds of $891 (the “Purchase Price”), until the Purchased Amount is fully collected. On August 15, 2025, the Company entered into an additional MCA. Refer to Note 20 for additional information.

Upon evaluation under ASC 860, Transfers and Servicing, the Company determined that the transaction does not meet the criteria for sale accounting. Although legal title was transferred, the Company retains significant continuing involvement in the form of collection responsibilities and operational dependencies that affect the cash flows of the transferred receivables.

Specifically, the Company retains effective control over the receivables, as payment to GEG is dependent on the Company’s future settlement proceeds; retains significant risks and rewards, as it continues to manage and collect the receivables; granted a security interest to GEG under Article 9 of the UCC, which indicates that the receivables have not been isolated from the Company in bankruptcy; and did not sufficiently demonstrate that GEG has the unilateral ability to pledge or exchange the receivables without restriction.

Accordingly, the transferred receivables continue to be recognized on the Company’s balance sheet, and the proceeds received from GEG are recorded as a secured borrowing. The liability is presented within “accrued expenses and other current liabilities” and as of June 30, 2025, the related secured borrowing liability was approximately $670.