Stock Warrants, Earnout Shares and Contingent Consideration |
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| Warrants and Rights Note Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Warrants, Earnout Shares and Contingent Consideration | Stock Warrants, Earnout Shares and Contingent Consideration Private Placement and Public Warrants
In connection with the Merger, each of the 17,250,000 publicly-traded warrants (“Public Warrants”) and 11,533,333 private placement warrants (“Private Placement Warrants” and, together with the Public Warrants, the “Common Stock Warrants”) issued to Reinvent Sponsor, LLC (the “Sponsor”) in connection with RTP’s initial public offering and subsequent overallotment were converted into an equal number of warrants that entitled the holder to purchase one share of the Company’s common stock, par value $0.0001 (“Common Stock”) at an exercise price of $11.50 per share, subject to adjustments, and were scheduled to expire five years after the completion of the Merger or earlier upon redemption or the Company’s liquidation. The Company had the right to redeem the outstanding Common Stock Warrants subject to certain Common Stock price and other conditions as defined in the Warrant Agreement between RTP and Continental Stock
Transfer & Trust Company (“Warrant Agreement”) and the Sponsor Agreement by and among the Company, Sponsor and RTP (“Sponsor Agreement”).
The Private Placement Warrants were initially recognized as a liability on August 10, 2021, at a fair value of $21.9 million. On August 11, 2025, the Private Placement Warrants were fully exercised on a cashless basis and 4,128,197 shares of common stock were issued upon this cashless exercise of 11,533,333 private placement warrants. For the three and nine months ended September 30, 2025, the loss from change in the fair value of Private Placement Warrants was $42.8 million and $47.2 million, respectively, classified within the gain (loss) from change in the fair value of warrants, earnout shares and contingent consideration, net in the condensed consolidated statements of operations.
The Public Warrants were initially recognized as a liability on August 10, 2021 at a fair value of $32.8 million. The Public Warrant liability was remeasured to fair value using quoted market prices at each reporting date while outstanding and immediately prior to exercise. The liability associated with the remaining 14,234,861 Public Warrants was reduced to zero upon their expiration on August 10, 2026. For the three and nine months ended September 30, 2026, the resulting fair value changes were a gain of $5.1 million and $56.4 million, respectively, classified within the gain (loss) from change in the fair value of warrants, earnout shares and contingent consideration, net in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2025, the loss from change in the fair value of public warrants was $70.4 million and $77.0 million, respectively. During the three and nine months ended September 30, 2026, 2,625 and 6,096 Public Warrants were exercised, respectively. As of September 30, 2026, no Public Warrants were outstanding.
Earnout Shares Liability
Pursuant to the Sponsor Agreement, Sponsor agreed to certain terms of vesting, lock-up and transfer with respect to the 17,130,000 common shares held by it (“Earnout Shares”). The terms of the Sponsor Agreement specify that the Earnout Shares will vest upon achieving certain specified release events. In accordance with ASC 815 Derivatives and Hedging, the Earnout Shares are not indexed to the Common Stock and therefore are accounted for as a liability (“Earnout Shares Liability”) as of the Closing Date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of total other income (loss), net in the condensed consolidated statements of operations.
Under the vesting schedule, 20% of the Earnout Shares vest in tranches when the volume-weighted average price of the Company’s common stock quoted on the NYSE is greater than $12.00, $18.00, $24.00, $32.00 and $50.00 for any 20 trading days within a period of 30 trading days (each such occurrence a “Triggering Event”). After ten years following the consummation of the Merger (“Earnout Period”), any Earnout Shares which have not yet vested are forfeited. On July 17, 2025, the first Triggering Event occurred when the volume-weighted average price of the Company’s common stock quoted on the NYSE exceeded $12.00 for 20 trading days within a period of 30 consecutive trading days resulting in vesting of 3,426,000 Earnout Shares. No Earnout Shares vested during the three and nine months ended September 30, 2026.
Earnout Shares Liability at the closing of the Merger on August 10, 2021, was $149.9 million based on a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the Earnout Period using the most reliable information available.
During the three and nine months ended September 30, 2026, the Company recognized a gain related to the change in the fair value of the Earnout Shares Liability of $39.5 million and $100.6 million, respectively, included within the gain (loss) from change in fair value of warrants, earnout shares and contingent consideration, net in the condensed consolidated statement of operations. During the three and nine months ended September 30, 2025, the Company recognized a loss related to the change in the fair value of the Earnout Shares Liability of $102.4 million and $144.2 million, respectively.
Assumptions used in the valuation are as follows:
The significant unobservable inputs used in the fair value measurement of the Earnout Shares Liability are expected volatility and the probability of a change of control, upon which all unvested Earnout Shares would vest. Holding other inputs constant, an increase in expected volatility would result in a higher fair value, and a decrease would result in a lower fair value, because higher volatility increases the likelihood that the stock price thresholds will be achieved. An increase in
the probability of a change of control would result in a higher fair value. Because the value of the Earnout Shares in a change-of-control scenario is largely insensitive to volatility, a higher probability of a change of control would reduce the effect of changes in expected volatility on fair value. The fair value is also significantly affected by the market price of the Company’s common stock, an observable input; an increase in the stock price would result in a higher fair value.
Delta Warrant
In connection with the umbrella agreement that the Company entered with Delta Air Lines, Inc. (“Delta”) on October 7, 2022, the Company sold and issued to Delta, in a private placement, 11,044,232 shares of the Company’s Common Stock, at the per-share purchase price of $5.4327, for an aggregate cash consideration of $60.0 million. In addition, the Company issued a warrant for Delta to purchase up to 12,833,333 shares of the Company’s common stock in two tranches, subject to certain milestone achievement conditions (“Delta Warrant”).
The first and the second tranches of the warrant permit Delta to purchase up to 7,000,000 and 5,833,333 shares of Common Stock at exercise prices of $10 and $12, respectively, with each tranche becoming exercisable upon satisfaction of its applicable milestone and expiring on the ten-year anniversary of the warrant issuance date. The number of shares and exercise price for both tranches is subject to value cap adjustment if the 30-day volume-weighted average price per share of the Company’s stock exceeds 150% of each respective tranche’s exercise price, but disregarding any price increases occurring within 10 business days after a public announcement of the achievement of an applicable milestone, if any. On January 12, 2026, following satisfaction of the applicable milestone on November 10, 2025, Delta exercised the first tranche of the Delta Warrant for 7,000,000 shares.
The Company concluded that no assets or liabilities were transferred by either party beyond the Company’s issuance of common stock and warrants in exchange for the total cash consideration from Delta, that the umbrella agreement does not constitute a funded research and development agreement in the scope of ASC 730 Research and Development or a collaborative agreement in the scope of ASC 808 Collaborative Agreements, and that the Delta Warrant is a freestanding financial instrument not indexed to the Company’s own stock. Accordingly, the Company recognized the issuance of Common Stock as equity in additional paid-in capital on condensed consolidated balance sheets and the Delta Warrant as a liability on the condensed consolidated balance sheets at fair value.
The Delta Warrant issuance was initially recognized as a liability on October 7, 2022, at a fair value of $16.1 million based on a Monte Carlo simulation valuation model using the most reliable information available. During the three and nine months ended September 30, 2026, the Delta Warrant’s liability was remeasured to fair value as of September 30, 2026, resulting in a gain of $4.2 million and a loss of $1.5 million, respectively, which is included within the gain (loss) from change in the fair value of warrants, earnout shares and contingent consideration, net in the condensed consolidated statements of operations. During the three and nine months ended September 30, 2025, the Company recognized a loss related to the change in the fair value of the Delta Warrant liability of $13.6 million and $16.1 million, respectively.
Assumptions used in the valuation of the Delta Warrant are as follows:
The significant unobservable inputs used in the fair value measurement of the Delta Warrant are expected volatility, the probability and timing of achieving the second-tranche milestone, and the probability of a change of control, upon which a portion of the unvested warrants would vest. Holding other inputs constant, a higher probability of achieving the milestone or an earlier expected achievement date would result in a higher fair value. Because a delay in the expected achievement date would generally coincide with a lower probability of achievement, changes in these inputs would tend to compound, while the change-of-control provision would partially offset the effect of a lower probability of achievement. An increase in expected volatility would generally result in a higher fair value; however, because the value cap limits Delta’s economic gain, the fair value is relatively insensitive to changes in expected volatility within a reasonable range. The fair value is also significantly affected by the market price of the Company’s common stock, an observable input; an increase in the stock price would result in a higher fair value, although the value cap limits the extent of the increase.
EBITDA Earnout Liability
In connection with the Company’s acquisition of Blade (Note 4), the Company recorded contingent consideration related to the EBITDA Earnout. The EBITDA Earnout Liability at the closing of the acquisition on August 29, 2025 was $7.6 million
based on a Monte Carlo simulation valuation model using the most reliable information available. The earnout performance period ended on September 1, 2026, and achievement of the maximum EBITDA targets resolved the performance contingency. Upon resolution, the amount payable became fixed and was no longer subject to recurring fair value remeasurement. On September 8, 2026, the Company settled the EBITDA Earnout through the issuance of 2,419,801 shares of its common stock with a fair value of $16.6 million (Note 4). Accordingly, no EBITDA Earnout Liability remained outstanding as of September 30, 2026. During the three months ended September 30, 2026, the Company recognized a gain of $0.9 million related to the changes in the fair value of the EBITDA Earnout Liability. During the nine months ended September 30, 2026, the Company recognized a loss of $3.1 million related to the changes in the fair value of the EBITDA Earnout Liability. These amounts are included within the gain (loss) from change in fair value of warrants, earnout shares and contingent consideration, net, in the condensed consolidated statements of operations. During the three and nine months ended September 30, 2025, no gain or loss related to the changes in the fair value of the EBITDA Earnout Liability was recognized.
Assumptions used in the valuation are as follows:
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