Offerpad Solutions Inc. Fair Value Disclosure
Note 8. Fair Value Measurements
The fair values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and certain prepaid and other current assets and accrued expenses approximate carrying values because of their short-term nature. The Company’s credit facilities are carried at amortized cost and the carrying value approximates fair value because of their short-term nature.
During July 2025, the Company issued and sold shares of its Class A common stock and warrants to purchase shares of its Class A common stock. As the warrants issued and sold in the transaction met the criteria for equity classification, the Company allocated the aggregate proceeds from this transaction based on the relative fair values of the Class A common stock and warrants issued and sold in the transaction. The Company determined the fair value of the Class A common stock on a nonrecurring basis using Level 1 inputs and the fair value of the warrants on a nonrecurring basis using Level 3 inputs. Refer to Note 9. Stockholders’ Equity, for further details.
The Company’s liabilities that are measured at fair value on a recurring basis consist of the following (in thousands):
As of December 31, 2025 |
|
Quoted Prices in |
|
|
Significant Other |
|
|
Significant |
|
|||
Public warrant liabilities |
|
$ |
226 |
|
|
$ |
— |
|
|
$ |
— |
|
Private placement warrant liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
135 |
|
As of December 31, 2024 |
|
Quoted Prices in |
|
|
Significant Other |
|
|
Significant |
|
|||
Public warrant liabilities |
|
$ |
128 |
|
|
$ |
— |
|
|
$ |
— |
|
Private placement warrant liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
103 |
|
Public Warrants
The public warrants are traded on an over-the-counter market. The fair value of the public warrants is estimated based on the quoted market price of such warrants on the valuation date. The Company recorded changes in the fair value of the public warrants of $(0.1) million and less than $0.1 million during the years ended December 31, 2025 and 2024, respectively. These changes are recorded in Change in fair value of warrant liabilities in the consolidated statements of operations.
Private Placement Warrants
The following summarizes the changes in the Company’s private placement warrant liabilities, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the respective periods:
|
|
Year Ended December 31, |
|
|||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
||
Beginning balance |
|
$ |
103 |
|
|
$ |
166 |
|
of private placement warrants included in net loss |
|
|
32 |
|
|
|
(63 |
) |
Ending balance |
|
$ |
135 |
|
|
$ |
103 |
|
The Company generally uses the Black-Scholes-Merton option-pricing model to determine the fair value of the private placement warrants, with assumptions including expected volatility, expected life of the warrants, associated risk-free interest rate, and expected dividend yield.
There were no transfers between Levels 1, 2, and 3 during the years ended December 31, 2025, 2024, and 2023.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.