Fair ValueFair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The three levels of the fair value hierarchy are described below:
•Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities;
•Level 2 - Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, quoted prices or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
•Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The financial instruments, including cash and cash equivalents, accounts and other receivables, restricted cash, accounts payable and accrued liabilities, are carried at cost, which approximates their fair values due to the immediate or short-term maturity.
The Company’s investments in equity securities are publicly traded stocks measured at fair value and classified within Level 1 in the fair value hierarchy. Level 1 equity securities use quoted prices for identical assets in active markets.
The Company’s investments include certain investments accounted for at fair value consisting of warrants that are valued using the Black-Scholes option model based on observable inputs and as such are classified within Level 2 of the hierarchy. The warrant asset is included in marketable securities, long-term on the consolidated balance sheets.
The Company’s Convertible Senior Notes due 2030 (the “Convertible Senior Notes”) debt component was fair valued utilizing a 6.6% discount rate, which is the Company’s estimate of the market discount rate for this arrangement. This is classified within Level 2 of the hierarchy.
| | | | | | | | | | | | | | | | | | | | | | | |
| Level 1 | | Level 2 | | Level 3 | | Total |
| December 31, 2025 | | | | | | | |
| Assets: | | | | | | | |
| Marketable securities, current and non-current | $ | 43,460 | | | $ | - | | | $ | - | | | $ | 43,460 | |
| Warrant asset | - | | | 131 | | | - | | | 131 | |
| | | | | | | |
| Total assets | $ | 43,460 | | | $ | 131 | | | $ | - | | | $ | 43,591 | |
| | | | | | | |
| Liabilities: | | | | | | | |
| Convertible debt, non-current | - | | | 109,986 | | | - | | | 109,986 | |
| Total liabilities | $ | - | | | $ | 109,986 | | | $ | - | | | $ | 109,986 | |
| | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Level 1 | | Level 2 | | Level 3 | | Total |
| December 31, 2024 | | | | | | | |
| Assets: | | | | | | | |
| Marketable securities, current and non-current | $ | 24,314 | | | $ | - | | | $ | - | | | $ | 24,314 | |
| | | | | | | |
| | | | | | | |
| Warrant asset | - | | | 569 | | | - | | | 569 | |
| Total assets | $ | 24,314 | | | $ | 569 | | | $ | - | | | $ | 24,883 | |