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Anthropic, PBC
Notes to Consolidated Financial Statements
(Continued)

based  on  the  purchase  amount  divided  by  the  per-share  price  of  the  applicable  series  of  preferred  stock, 
multiplied by a stipulated discount rate, if applicable.

The  Company  determined  that  the  SAFEs  are  not  legal  form  debt  (i.e.,  no  creditors’  rights).  The  monetary 
settlement  amount  of  the  SAFEs  is  based  upon  a  fixed  or  determinable  amount  known  at  inception,  and  the 
number of equity shares received upon conversion is variable. In such circumstances, equity classification is not 
appropriate because such contracts that are settled based upon a fixed amount do not expose the holder to risks 
and rewards similar to those of an equity-holder, therefore, the SAFEs would have been classified as marked-to-
market liabilities pursuant to ASC 480. 

As  of December  31,  2024  and  2025,  as  well  as  June  30,  2026  (unaudited),  the  Company  had  no  outstanding 
SAFEs. 

Fair Value Option

The Company elected to account for the SAFEs and the convertible notes using the fair value option pursuant to 
ASC  825  and  changes  in  fair  value  related  to  the  SAFEs  and  convertible  notes  are  recorded  in  change  in  fair 
value  of  convertible  notes,  derivative  liabilities,  and  SAFEs  in  the  Company’s  consolidated  statements  of 
operations  (Note  4).  The  Company  elected  to  account  for  the  convertible  notes  using  the  fair  value  option 
pursuant  to  ASC  825  to  eliminate  the  accounting  complexity  that  would  otherwise  result  from  separately 
accounting  for  the  liability  and  equity  components  of  the  convertible  notes  under  the  traditional  bifurcation 
model.

The  estimated  fair  value  of  the  convertible  notes,  derivative  liabilities,  and  SAFEs  is  determined  by  using  a 
scenario-based analysis that estimated the fair value of the convertible notes, derivative liabilities, and SAFEs 
based  on  the  probability-weighted  present  value  of  expected  future  investment  returns,  considering  possible 
outcomes available to the SAFE and convertible note holder, including conversions to redeemable convertible 
preferred  stock,  Class  N  common  stock  and  maturity.  Issuance  costs  were  expensed  as  incurred  and  are 
reflected in other income (expense), net in the consolidated statements of operations. Changes in fair value of 
the SAFEs and convertible notes and accrued interest are recorded as change in fair value of convertible notes, 
derivative liabilities, and SAFEs in the consolidated statements of operations. 

There were no changes in fair value attributable to credit risk recognized as of December 31, 2023, 2024, and 
2025, as well as June 30, 2026 (unaudited).

Derivative Liability

As  of  December  31,  2024,  the  Company  had  a  derivative  liability  representing  the  subsequent  note  tranche 
rights  on Amazon  2024  NPA.  The  Company  applied  the  terms  of  the  subsequent  note  tranche  rights  for  a 
written call option and purchased put option scenarios and calculated a derivative liability. The changes in the 
fair  value  of  the  derivative  liability  were  recorded  as  change  in  fair  value  of  convertible  notes,  derivative 
liabilities, and SAFEs in the consolidated statements of operations. Upon the second closing and third closing of 
the Amazon 2024 NPA during 2025, the related tranche rights were exercised and thus the derivative liability 
was settled and derecognized in full through the issuance of the convertible notes, with no remaining tranche 
rights outstanding as of December 31, 2025.

Revolving Credit Agreement

On May 14, 2025, the Company entered into a credit agreement (the “Credit Agreement”), by and among the 
Company, the lenders from time to time party thereto (collectively the “Lenders”), and Morgan Stanley Senior 
Funding, Inc., as Administrative Agent and Collateral Agent for the Lenders. The Credit Agreement provides for 
a senior secured revolving credit facility in an aggregate principal amount of $2.5 billion,  with  a $400 million 
letter  of  credit  sublimit.  The  obligations  under  the  Credit  Agreement  mature  on  May  14,  2030,  subject  to  an 
earlier springing maturity date that is contingent upon the outstanding amount of convertible notes issued by 
the Company on the date that is 91 days prior to the maturity of such notes. The proceeds of the credit facility 
may  be  used  for  working  capital,  general  corporate  purposes,  and  other  lawful  purposes.  The  Company  may 
request  borrowings  in  U.S.  dollars  or  certain  other  agreed  currencies,  subject  to  the  terms  of  the  Credit 

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