Company: LPSN
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001102993-25-000053
Chunk: 41

Company: LIVEPERSON INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 41
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 Management determined the fair value of 2026 Notes by using Level 2 inputs based on observable market prices for similar instruments. Management determined the fair value of the 2029 Notes and Delayed Draw Notes as of March 31, 2025 by using Level 3 inputs, including the yield of 17.00%, risk-free rate of 3.93%, and credit spread of 13.24%. A change in those inputs to a different amount might result in a significantly higher or lower fair value measurement.WarrantsThe Company recorded the fair value of the Warrants upon issuance using the Black-Scholes valuation model and is required to revalue these Warrants at each reporting date with any changes in fair value recorded on the Company’s condensed consolidated statements of operations. The valuation of the Warrants was classified as Level 3 within the fair value hierarchy and is influenced by the fair value of the underlying, or notional amount of, common stock of the Company. A summary of the Black-Scholes pricing model assumptions used to record the fair value of the Warrants as of March 31, 2025 is as follows:Stock price$0.80Risk free rate4.19%Expected life (in years)9.18Expected volatility78.00%Any significant changes in the inputs may result in significantly higher or lower fair value measurements. Refer to Note 8 – Convertible Senior Notes, Capped Call Transactions and Warrants for additional information.The changes in fair value of the Level 3 Warrants of the dates presented are as follows:March 31,2025December 31,2024Balance, beginning of year$17,498 $— Issuance of Warrants— 5,266 Change in the fair value of Warrants(8,824)12,232 Balance, end of period$8,674 $17,498 

25

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

Note 10. Commitments and Contingencies

Employee Benefit PlansThe Company has a 401(k) defined contribution plan covering all eligible employees. The Company’s 401(k) policy is a Safe Harbor Plan, whereby the Company matches 100% of the first 3% of eligible compensation and 50% of the next 2% of eligible compensation. The match is immediately vested. Salaries and related expenses include $0.7 million and $1.1 million of employer matching contributions for