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Anthropic, PBC
Notes to Consolidated Financial Statements
(Continued)

In  March  2026 (unaudited),  the  Company  entered  into  a  note  purchase  agreement  (the  “Google  2026  NPA”) 
with Google LLC (“Google”), which included a commitment to sell 38.6 million shares of the Company’s Series 
G-2  redeemable  convertible  preferred  stock  at $259.1364  per  share.  In  April  2026  (unaudited),  the  Company 
entered  into  a  note  purchase  agreement  (the  “Amazon  2026  NPA”)  with  Amazon  Web  Services,  Inc. 
(“Amazon”), which included a commitment to sell 19.3 million shares of the Company’s Series G-2 redeemable 
convertible preferred stock at $259.1364 per share. Refer to Note 9 and Note 16 for further information. These 
agreements are marked-to-market each period. Changes in fair value are recognized in other income (expense), 
net on the consolidated statements of operations. Assets under these note purchase agreements are recorded at 
fair value within other assets, noncurrent on the consolidated balance sheet. 

The  estimated  fair  value  of  the  note  purchase  agreements  was  determined  by  using  a  probability-weighted 
expected  return  method.  The  fair  value  of  the Series  G-2  redeemable  convertible  preferred  stock was 
determined by using a hybrid approach comprising a contingent claims analysis (“CCA”) and a common stock 
equivalent (“CSE”) method. Assumptions included assumed future liquidity and financing events, the terms and 
features of the agreement, weights applied to each scenario, discount rates, applicable risk free rates, the fair 
value of the Series G-2 redeemable convertible preferred stock, and a discount for lack of marketability.

Level 3 liabilities consist of the SAFE liabilities (Note 9), convertible notes (Note 9), derivative liabilities (Note 
9), donation matching program liability (Note 10), and a holdback liability for a portion of shares issuable in the 
acquisition  of  Codeblog  Corp.  (“Bun”)  (Note  15).  There  is  no  current  market  for  these  liabilities  such  that 
determination  of  fair  value  requires  significant  judgment  or  estimation.  Changes  in  fair  value  measurements 
categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or 
assumptions  and  recorded  as  appropriate.  The  Company  recorded  a $3  million  change  in  fair  value  of  the 
holdback liability during the year ended December 31, 2025 in other income (expense), net in the consolidated 
statements of operations.

The SAFE liabilities are recorded at fair value, which is determined based on a third-party valuation utilizing a 
scenario-based  analysis  and a  CCA,  that  considers  specific  scenarios  that  factor  in  timing,  probability,  and 
financing  size.  This  model  takes  into  account  the  contract  terms  as  well  as  multiple  inputs,  such  as  the 
Company’s redeemable convertible preferred stock price, risk free interest rates, and expected volatility, some 
of which the Company could not corroborate with observable market data. The assumptions used in valuing the 
SAFE  liability  upon  conversion  on  December  31,  2023  and  on  January  30,  2024,  include  volatility,  risk  free 
interest rate, and term to liquidity. Changes in the fair value measurement of the SAFE liabilities relate to the 
conversion  scenarios  and  are  recorded  as  change  in  fair  value  of  convertible  notes,  derivative  liabilities,  and 
SAFEs in the consolidated statements of operations. All SAFEs have been converted as of December 31, 2024.

The estimated fair value of the convertible notes is determined by using a hybrid approach comprising a CCA 
and  a  CSE  method.  The  analysis  estimates  the  fair  value  of  the  convertible  notes  based  on  the  probability-
weighted  expected  future  investment  returns,  considering  possible  outcomes  available  to  the  note  holder, 
including  conversions  to redeemable  convertible  preferred  stock,  Class  N  common  stock,  and  maturity. 
Assumptions include weight applied to the CCA and CSE methods, assumed volatility, time to a liquidity event, 
need for and terms of financings or expected financings, and the risk free interest rate. Changes in fair value of 
the convertible notes are recorded as change in fair value of convertible notes, derivative liabilities, and SAFEs 
in the consolidated statements of operations.

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