FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2024

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 3 — FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The Company follows the accounting guidance in ASC Topic 820, Fair Value Measurements (ASC Topic 820) for its fair value measurements of financial assets and liabilities measured at fair value on a recurring basis. Fair value is defined as an exit price, representing the amount 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. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes when inputs should be used in measuring fair value, is comprised of: (Level I) observable inputs such as quoted prices in active markets; (Level II) inputs other than quoted prices in active markets that are observable either directly or indirectly and (Level III) unobservable inputs for which there is little or no market data. The fair value hierarchy requires the use of observable market data when available in determining fair value.

The Company has the following warrants outstanding as of June 30, 2023 (with exercise prices shown in pre-Reverse Stock Split amounts): (i) warrants (the “Private Warrants”) to purchase Class A common stock with an exercise price of $11.50 per share, and (ii) the Foxconn Warrants to purchase shares of Class A common stock with an exercise price of $10.50.

As of June 30, 2024, following the Reverse Stock Split, we had 0.113 million Foxconn Warrants with an exercise price of $157.50, and 0.153 million Private Warrants with a strike price of $172.50. The fair value of the Foxconn Warrants was $0.3 million at issuance. The Private Warrants and the Foxconn Warrants were classified as a liability with any changes in the fair value recognized immediately in our consolidated statements of operations. As a result of the Chapter 11 Cases, the fair value of the Company’s warrants was deemed to be zero and adjusted accordingly during the year-ended December 31, 2023. The following table summarizes the net loss

on changes in fair value related to the Private Warrants and the Foxconn Warrants for the three and six months ended June 30, 2023 (in thousands):

	Three months ended		Six months ended
	June 30, 2023			June 30, 2023
Private Warrants	$	(27)	$	254
Foxconn Warrants		(34)		170
Net gain on changes in fair value	$	(61)	$	424

Non-Recurring Fair Value Measurements

At June 30, 2023, the Company had assets held for sale that have been adjusted to their fair value as the carrying value exceeded the estimated fair value. The categorization of the framework used to value the assets is Level 3 given the significant unobservable inputs used to determine fair value. During the three and six months ended June 30, 2023, we recorded a loss on asset impairment of $23.7 million and $133.5 million related to the valuation of assets held for sale. Refer to Note 4 - Property, Plant and Equipment and Assets Held for Sale for further detail.

For the six months ended June 30, 2023, we recognized a property, plant and equipment impairment charge of $133.5 million based on the difference between the carrying value of the fixed assets and their fair value as of June 30, 2023. No fixed asset impairment charges were recognized for the six months ended June 30, 2024. The categorization of the framework used to value the assets is Level 3 given the significant unobservable inputs used to determine fair value. Refer to Note 4 – Property, Plant and Equipment and Assets Held for Sale for further detail.