Note 12. Stock Warrants

Private Placement Warrants and Public Warrants

The Private Placement Warrants were initially recognized as a liability on July 14, 2021 at a fair value of $5.7 million. The Private Placement Warrants were remeasured to a fair value of $0.3 million as of June 30, 2023. The Company recorded a gain of $0.1 million and $1.0 million for the three months ended June 30, 2023 and 2022, respectively, and gains of $0.3 million and $1.7 million

for the six months ended June 30, 2023 and 2022, respectively. The changes in fair value are included in change in fair value of derivative liabilities on the condensed consolidated statements of operations.

The Company benchmarks the change in fair value of the Private Placement Warrants against the market price of the publicly traded warrants at each quarter end, the closing price of which was $0.10/warrant as of June 30, 2023. The Private Placement Warrants were valued using the following assumptions under the Binomial Lattice Model:

The Public Warrants were recognized in stockholder’s equity at a fair value of $9.7 million on July 14, 2021.