Quarterly report [Sections 13 or 15(d)]

Fair Value Measurements

v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company measures the fair value of financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Each level of input has different levels of subjectivity and difficulty involved in determining fair value.
•Level 1 – Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. Therefore, determining fair value for Level 1 investments generally does not require significant judgment, and the estimation is not difficult.
•Level 2 – Pricing is provided by third-party sources of market information obtained through investment advisors. The Company does not adjust for or apply any additional assumptions or estimates to the pricing information received from its advisors.
•Level 3 – Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The determination of fair value for Level 3 instruments involves the most management judgment and subjectivity. The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 by level within the fair value hierarchy, are as follows:
(in thousands) March 31, 2026
Quoted prices
in active
markets		 Significant
other
observable
inputs		 Significant
unobservable
inputs
(Level 1) (Level 2) (Level 3)
Assets:
Equity investment - NYIAX $ —  $ —  $ 1,766 
Bitcoin $ 57,111  $ —  $ — 
Liabilities:
Convertible note payable $ —  $ —  $ — 
Warrant liabilities $ —  $ —  $ 9 
NYIAX Investment
The Company's investment in NYIAX consists of 2,150,000 shares of NYIAX common stock accounted for at cost less impairments. See Note 9 for further details. During the three months ended March 31, 2026, the Company recorded an impairment of the NYIAX investment of $2.5 million which is recorded in the Impairment of investment in nonmarketable security line on the condensed consolidated statement of operations for the three months ended March 31, 2026. The impairment was primarily driven by a decrease in NYIAX stock price.
(in thousands) December 31, 2025
Quoted prices
in active
markets		 Significant
other
observable
inputs		 Significant
unobservable
inputs
(Level 1) (Level 2) (Level 3)
Assets:
Equity investment - NYIAX
 $ —  $ —  $ 4,300 
Bitcoin
 $ 92,222  $ —  $ — 
Liabilities:
Convertible note payable $ —  $ —  $ 3,936 
Warrant liabilities $ —  $ —  $ 9 
There were no transfers between Level 1, 2 or 3 during the three months ended March 31, 2026 or 2025.
Convertible Notes
As described in Note 5, the Company elected the fair value option on the EOS Convertible Note issued on December 31, 2024. The Company uses level 3 inputs to measure the fair value in subsequent periods. The Company paid off the EOS Convertible Note during the three months ended March 31, 2026. See Note 4, Borrowings, for more details.
The following table includes a summary of changes in fair value of the EOS Convertible Notes.
For the three months ended March 31,
(in thousands) 2026 2025
Beginning balance $ 3,936  $ 10,000 
Accrued interest on DV note 3  — 
Payoff on DV note (3,939) — 
Ending balance $ —  $ 10,000 
Fair Value of Crypto Assets
The following table summarizes Crypto assets held for operations (in thousands, except units):
March 31, 2026
Units Cost Basis Fair Value
Bitcoin 837  $ 73,108  $ 57,111 
December 31, 2025
Units Cost Basis Fair Value
Bitcoin 1,054  $ 92,051  $ 92,222 
March 31, 2026
Units Cost Basis Fair Value
Beginning balance 1,054  $ 92,051  $ 92,222 
Additions —  —  — 
Disposals (217) (18,943) (18,978)
Fair value remeasurement —  —  (16,133)
Ending balance 837  $ 73,108  $ 57,111 

During the three months ended March 31, 2026, the Company sold 217 Bitcoin to Scilex Holding Company ("Scilex") for aggregate proceeds of $18.2 million. The Bitcoin sold had a cost basis of $18.9 million, resulting in a realized loss of $0.7 million. The sales were executed to fund the Company’s operations. Scilex is a related party.
For the three months ended March 31, 2026, the Company recognized a fair value remeasurement loss of $16.1 million related to changes in the fair value of its Bitcoin holdings. Realized gains and losses and fair value remeasurement gains and losses from crypto assets are recorded in Other expense, net in the consolidated statements of operations. The Company accounts for disposals of Bitcoin using the first-in, first-out (“FIFO”) method.