Note 15. Fair Value Measurements and Disclosures

Fair value is defined as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date. Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, which are described below:

liability

The carrying value of cash and cash equivalents (including investments with an original maturity of three months or less at the date of purchase), restricted cash, accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments.

Short-Term Investments

The fair value of the short-term investments is based on the quoted market price of the securities on the valuation date. As of September 30, 2025, the estimated fair value of the short-term investments was $4,511. The Company recognized non-cash gain of $4 and a non-cash loss of $15 and a non-cash loss of $67 and $94 for the three and nine months ended September 30, 2025 and 2024, respectively, resulting from the change in fair value of the short-term investments. The change in fair value is recorded in the condensed consolidated statements of operations and comprehensive income (loss).

Public Warrants

The fair value of the public warrants is based on the quoted market price of such warrants on the valuation date. As of September 30, 2025 and December 31, 2024, the estimated fair value of the public warrants was $553 and $1,338, respectively. The Company recognized a non-cash gain of $276 and a non-cash gain of $251 during the three months ended September 30, 2025 and 2024, respectively, and a non-cash gain of $785 and $1,337 during the nine months ended September 30, 2025 and 2024 resulting from the change in fair value of the public warrants, respectively. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

Private Placement Warrants

As of September 30, 2025 and December 31, 2024, the estimated fair value of the private warrants was $462 and $1,120, respectively. The Company recognized a non-cash gain of $231 and a non-cash gain of $210 during the three months ended September 30, 2025 and 2024, respectively, and a non-cash gain of $658 and $1,120 during the nine months ended September 30, 2025 and 2024, respectively,

resulting from the change in fair value of the private warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

2025 GPO Note / Prior GPO Convertible Note

The Prior GPO Convertible Note was recognized as a liability on June 30, 2023 issuance date at its estimated fair value of $36,583. The estimated fair value of the Prior GPO Convertible Note was determined based on a trinomial lattice model. On August 12, 2025, the Company extinguished $30,000 of the Prior GPO Convertible Note with a $27,000 cash payment and issued the 2025 GPO Note. The 2025 GPO Note was recognized as a liability at its estimated fair value of $18,865 at its issuance date of August 12, 2025. The non-cash loss of $358 for the 2025 GPO Note was recorded in the change of in the fair value of financial instruments in the condensed consolidated statement of operations for the three and nine months ended September 30, 2025, respectively. The following table presents the assumptions used to determine the fair value of the 2025 GPO Note and the Prior GPO Convertible Note at September 30, 2025 and at December 31, 2024:

Dragonfly Seller Convertible Notes

The Dragonfly Seller Convertible Notes were recognized as a liability in connection with the acquisition on January 27, 2023 at a fair value of $8,635. As of September 30, 2025 and December 31, 2024, the estimated fair value of the Dragonfly Seller Convertible Notes were $11,752 and $8,979, respectively. The unrealized change in the fair value of the Dragonfly Seller Convertible Note of $1,113 and the non-cash loss of $707 and $770 (excluding the non-cash gain recognized from the January 2025 conversion) was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three and nine months ended September 30, 2025. The unrealized change in the fair value of the Dragonfly Seller Convertible Note of $1,264 is recorded in accumulated other comprehensive income for the nine months ended September 30, 2024 and the non-cash loss of $743 and $339 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2024, respectively. The following table presents the assumptions used to determine the fair value of the Dragonfly Seller Convertible Notes at September 30, 2025 and December 31, 2024:

Convertible Debentures

The initial tranche of the Convertible Debentures were recognized as a liability on the August 12, 2025 issuance date at its estimated fair value of $18,900 using a Monte Carlo simulation. The second tranche of the Convertible Debentures were recognized as a liability on September 11, 2025 at its estimated fair value of $11,000. The non-cash loss of $1,403 was recorded in the change of in the fair value of financial instruments in the condensed consolidated statement of operations for the three and nine months ended September 30, 2025, respectively. The following table presents the assumptions used to determine the fair value of the Convertible Debentures at September 30, 2025, September 11, 2025 and August 12, 2025:

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company’s long-lived assets, including property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis when an impairment has occurred. The Company has not identified any impairments to be recorded during the three and nine months ended September 30, 2025 and 2024.

There were no transfers of assets or liabilities between levels during the nine months ended September 30, 2025 and 2024.