Fair Value Measurements

12 Months Ended

Dec. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Financial instruments consist of cash, cash equivalents, restricted cash, term deposits, accounts receivable, accounts payable, accrued liabilities, payment-dependent notes receivable, payment-dependent notes payable, and warrant liabilities. Cash equivalents, term deposits, payment-dependent notes receivable, payment-dependent notes payable, and warrant liabilities are stated at fair value on a recurring basis. Cash, restricted cash, accounts receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time these financial instruments are held to the expected receipt or payment date.

The Company classifies cash equivalents, including money market funds and U.S. government treasury bills, within Level 1 of the fair value hierarchy because the Company values these instruments using quoted market prices. The Company classifies term deposits as Level 2 of the fair value hierarchy because these investments are valued using observable market inputs without quoted market prices. The Company classifies the December 2023 Warrants (as defined herein) within Level 2 of the fair value hierarchy as these warrants are valued using a Black-Scholes option-pricing model with observable market inputs. The Company classifies Payment-dependent notes receivable and payable and its Private Placement Warrants (as defined herein) as Level 3 of the fair value hierarchy as the fair value measurements are based on valuation techniques that use significant inputs that are unobservable which are described in more detail below.

The following tables present the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis (in thousands):

	As of December 31, 2024
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents:
Money market funds	$	56,300	$	—	$	—	$	56,300
U.S. government treasury bills	21,482		—		—		21,482
Term deposits (less than 90 days)	—		7,306		—		7,306
Payment-dependent notes receivable, non-current	—		—		7,412		7,412
Term deposits(1)(2)	—		1,068		—		1,068
Total financial assets	$	77,782	$	8,374	$	7,412	$	93,568
Payment-dependent notes payable, non-current	$	—	$	—	$	7,412	$	7,412
December 2023 Warrants(3)	—		45		—		45
Private Placement Warrants	—		—		147		147
Total financial liabilities	$	—	$	45	$	7,559	$	7,604

	As of December 31, 2023
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents:
Money market funds	$	130,132	$	—	$	—	$	130,132
Term deposits (less than 90 days)	—		2,221		—		2,221
Payment-dependent notes receivable, non-current	—		—		5,593		5,593
Term deposits(1)(2)	—		7,694		—		7,694
Total financial assets	$	130,132	$	2,221	$	5,593	$	145,640
Payment-dependent notes payable, non-current	—		—		5,593		5,593
December 2023 Warrants(3)	—		4,889		—		4,889
Private Placement Warrants	—		—		4,727		4,727
Total financial liabilities	$	—	$	4,889	$	10,320	$	15,209

(1) Included in prepaid expenses and other current assets on the consolidated balance sheets as of December 31, 2024 and December 31, 2023.

(2) Includes $0.9 million term deposits required to fulfill the Company's obligations in connection with real estate lease agreements as of December 31, 2024 and $1.0 million as of December 31, 2023.

(3) On December 18, 2023, the then outstanding Junior Preferred Stock Warrants were modified and replaced with the December 2023 Warrants. See Note 9, "Warrants" for additional information.

Payment-Dependent Notes Receivable and Payment-Dependent Notes Payable

The Company classifies payment-dependent notes receivable and payment-dependent notes payable within Level 3 of the fair value hierarchy if the underlying securities are equity of private companies whose regular financial and nonfinancial information is generally not available other than when it is publicly disclosed, or significant unobservable inputs are used to estimate fair value.

The Company estimates the fair value of payment-dependent notes receivable and payment-dependent notes payable utilizing market data and completed transactions made through the Company’s platform for the relevant private securities as well as mutual fund valuations of private companies as relevant data inputs.

Private Placement Warrants

The Company classifies the Private Placement Warrants within Level 3 due to the valuation technique used to estimate fair value. A Monte Carlo simulation model was used to estimate fair value as of December 31, 2024. The Company used a combination of a Monte Carlo simulation and a binomial lattice model to estimate fair value as of December 31, 2023.

The Company estimated the fair value of the Private Placement Warrant liabilities as of December 31, 2024 and 2023, respectively, using the following key assumptions:

	As of December 31,
	2024			2023
Fair value of underlying securities	$	0.93		$	3.43
Expected term (years)	2.2			3.2
Expected volatility	82.5		%	117.0		%
Risk-free interest rate	4.3		%	4.0		%
Expected dividend yield	—		%	—		%
Fair value per warrant	$	0.02		$	0.64

The Company recorded changes in the fair value of the Private Placement Warrants as follows (in thousands):

	For the years ended December 31,
	2024		2023
Balance, January 1	$	4,727	$	222
Change in fair value of warrant liability(1)	(4,580)		4,505
Balance, December 31	$	147	$	4,727

(1) The change in fair value of warrant liability is recorded in the consolidated statement of operations within Gain (loss) from change in fair value of warrant liabilities.

Transfers Into and Out of Level 3

The Company transfers financial instruments out of Level 3 on the date when underlying input parameters are readily observable from existing market quotes. On December 18, 2023, the Junior Preferred Stock Warrants (as defined herein) were modified and replaced with the December 2023 Warrants and transferred from Level 3 to Level 2 upon modification as these warrants are valued using a Black-Scholes Option pricing model using observable market inputs.

For Payment-dependent notes receivable and payable, transfers from Level 3 to Level 1 generally relate to a company going public and listing on a national securities exchange. During the years ended December 31, 2024 and 2023, there were no transfers of payment-dependent notes receivable and payable into or out of Level 3.

The following table provides a reconciliation for all financial assets and liabilities measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2024 and 2023 (in thousands):

	Total Level 3 Financial Assets		Total Level 3 Financial Liabilities
Balance as of December 31, 2022	$	7,371	$	7,977
Change in fair value of payment-dependent notes receivable	(1,778)		—
Change in fair value of Private Placement Warrants	—		4,505
Change in fair value of payment-dependent notes payable	—		(1,778)
Change in fair value of December 2023 Warrants(1)	—		721
Transfer of Private Placement Warrants out of Level 3 to Level 2(2)	—		(1,105)
Balance as of December 31, 2023	$	5,593	$	10,320
Change in fair value of payment-dependent notes receivable	1,819		—
Change in fair value of Private Placement Warrants	—		(4,580)
Change in fair value of payment-dependent notes payable	—		1,819
Balance as of December 31, 2024	$	7,412	$	7,559

(1) On December 18, 2023, the Junior Preferred Stock Warrants were modified and replaced with the December 2023 Warrants and transferred from Level 3 to Level 2 upon modification as these warrants are valued using a Black-Scholes option pricing model using observable market inputs. See Note 9 "Warrants," for additional information.

(2) Transfers into/out of the Level 3 classification are reflected at beginning-of-reporting period fair values in which the instrument transferred into or out of Level 3. The December 2023 Warrants transferred out of Level 3 classification on December 18, 2023.