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Fair Value Measurements
 12 Months Ended
Dec. 31, 2024
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]  
Fair Value Measurements
Note 4. Fair Value Measurements
The table below presents the Company’s financial assets and liabilities measured at fair value on a recurring basis aggregated by the level in the fair hierarchy (in thousands):
 
            December 31, 2024         
     Level 1      Level 2      Level 3      Total  
Assets:
            
U.S. Government treasury securities
    $ 30,580      $ —       $ —       $ 30,580  
U.S. Government money market funds
      9,247        —         —         9,247  
Mutual funds
      5,067        —         —         5,067  
  
 
 
     
 
 
     
 
 
     
 
 
  
Total assets, measured at fair value
    $ 44,894      $ —       $ —       $ 44,894  
  
 
 
     
 
 
     
 
 
     
 
 
  
Liabilities:
            
Pay-to-Play
convertible notes
    $ —       $ —       $ 15,942      $ 15,942  
2023 Convertible notes
      —         —         132,687        132,687  
Warrant liabilities
      —         —         14,711        14,711  
  
 
 
     
 
 
     
 
 
     
 
 
  
Total liabilities, measured at fair value
    $ —       $ —       $ 163,340      $ 163,340  
  
 
 
     
 
 
     
 
 
     
 
 
  
            December 31, 2023         
     Level 1      Level 2      Level 3      Total  
Liabilities:
            
Pay-to-Play
convertible notes
    $ —       $ —       $ 14,641      $ 14,641  
2023 Convertible notes
      —         —         18,064        18,064  
Warrant liabilities
      —         —         3,730        3,730  
  
 
 
     
 
 
     
 
 
     
 
 
  
Total liabilities, measured at fair value
    $ —       $ —       $ 36,435      $ 36,435  
  
 
 
     
 
 
     
 
 
     
 
 
  
Level 1 instruments consisted of U.S. Government treasury securities, U.S. Government money market funds, and mutual funds because they were valued using quoted prices in active markets and can be redeemed on any business days with an intermediary.
Level 3 instruments consisted of the Company’s
Pay-to-Play
Convertible Notes (“P2P Notes”), the 2023 Convertible Notes, and warrant liabilities comprised of the Company’s Series D Shadow preferred stock warrants, Series
D-2
Shadow preferred stock warrants, the warrants issued with the P2P Notes and the 2023 Convertible Notes, and the
pre-funded
common stock warrants (see Notes 7 and 8). The Company has elected to apply the fair value option to measure all convertible notes due to the nature of their embedded features.
Changes in the fair value measurement of Level 3 liabilities related to unrealized gains (losses) resulting from remeasurement of the Company’s outstanding convertible notes and warrant liabilities (see Notes 7 and 8) are reflected in the change in fair value of convertible notes and change in fair value of warrant liabilities in the consolidated statements of operations.
The change in the fair value of the Level 3 liabilities during the years ended December 31, 2024 and 2023 was as follows (in thousands):
 
    
Pay-to-Play

Convertible
notes		      2023
Convertible
notes		      Warrant
liabilities		      Total  
Balance at January 1, 2023
    $ 3,139      $ —       $ 529      $ 3,668  
Reinstatement of common stock warrants as preferred stock warrants
      —         —         61        61  
Issuance of
Pay-to-Play
convertible notes and related warrants
      8,717        —         565        9,282  
Common rights offering
      142        —         —         142  
Issuance of 2023 convertible notes and related warrants
      —         11,175        1,125        12,300  
Issuance of
Pre-funded
common stock warrants
      —         —         505        505  
Change in estimated fair value
      2,643        6,889        945        10,477  
  
 
 
     
 
 
     
 
 
     
 
 
  
Balance at December 31, 2023
    $ 14,641      $ 18,064      $ 3,730      $ 36,435  
Issuance of 2023 convertible note warrants and related warrants
      —         105,902        4,816        110,718  
Issuance of
Pre-funded
common stock warrants
      —         —         464        464  
Change in estimated fair value
      1,301        8,721        5,701        15,723  
  
 
 
     
 
 
     
 
 
     
 
 
  
Balance at December 31, 2024
    $ 15,942      $ 132,687      $ 14,711      $ 163,340  
  
 
 
     
 
 
     
 
 
     
 
 
  
 
The Company’s convertible notes and related warrants were classified within level 3 of the fair value hierarchy because there was no active market for the liabilities or similar instruments.
There were no transfers between Level 1, Level 2, or Level 3 of the fair value hierarchy during the years ended December 31, 2024 and 2023. Certain existing investors invested in P2P Notes during the year ended December 31, 2023, and accordingly, their common stock warrants were converted into Series D Shadow preferred stock warrants and reclassified as warrant liabilities (see Notes 7, 8 and 13).
Effective with the Merger on January 13, 2025, all outstanding convertible notes and outstanding warrant liabilities were converted (see Note 1).
BURTECH ACQUISITION CORP [Member]  
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]  
Fair Value Measurements
NOTE 9. FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2024 and 2023 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:
 
           
Quoted Prices
     
Significant Other
     
Significant Other
  
    
As of December 31,
     
in Active Markets
     
Observable Inputs
     
Unobservable Inputs
  
    
2024
     
(Level 1)
     
(Level 2)
     
(Level 3)
  
Assets:
            
U.S. Money Market Funds held in Trust Accounts
    $ 47,558,112      $ 47,558,112      $ —       $ —   
Liabilities:
            
Derivative liability -
Non-Redemption
Agreement
      1,084,963        —         —         1,084,963  
 
           
Quoted Prices
     
Significant Other
     
Significant Other
  
    
As of December 31,
     
in Active Markets
     
Observable Inputs
     
Unobservable Inputs
  
    
2023
     
(Level 1)
     
(Level 2)
     
(Level 3)
  
Assets:
            
U.S. Money Market Funds held in Trust Accounts
    $ 71,432,177      $ 71,432,177      $ —       $ —   
The Backstop Subscription Agreement was valued using a Probability Weighted Expected Return Model (“PWERM”). The PWERM is a multi-step process in which value is estimated based on the probability-weighted present value of various future outcomes. The estimated fair value of the Backstop Subscription Agreement liability was determined using Level 3 inputs. Inherent in the pricing models are assumptions related to expected share-price volatility, expected life and risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury
zero-coupon
yield curve on the grant date for a maturity similar to the expected remaining life of the Backstop Subscription Agreement. The expected life of the Backstop Subscription Agreement is assumed to be equivalent to its remaining contractual term. The initial fair value of the Backstop Subscription Agreement as of April 22, 2024, was $361,124. The Backstop Subscription Agreement was waived at the execution of the
Non-Redemption
Agreements on December 31, 2024, as such the fair value of the Backstop Subscription Agreement as of December 31, 2024 was nil. The two transactions netted together to result in a net change in fair value of the Backstop Subscription Agreement of nil for the year ended December 31, 2024.
The key inputs of the models used to value the Company’s Backstop Subscription Agreement were as follows:
 
    
Initial
  
    
Measurement(1)
  
Stock price
    $ 11.05  
Risk-free rate
      5.4 % 
Weighted-average expected life (in years)
      0.5  
Market implied likelihood of Initial Business Combination
      10.4 % 
 
(2)
The initial measurement date of the Back-Stop Agreement was April 22, 2024. As the Back-Stop Agreement was waived on December 31, 2024, no remeasurement was required as of December 31, 2024.
The
Non-Redemption
Agreement is valued using a Monte Carlo model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the
Non-Redemption
Agreement is equity volatility, and debt rate. The initial fair value of the
Non-Redemption
Agreement as of December 31, 2024, was $1,084,963.
The key inputs of the models used to value the Company’s
Non-Redemption
Agreement were as follows:
 
    
Initial
  
    
Measurement(1)
  
Stock price
    $ 15.00  
Volatility
      118.2 % 
Risk-free rate
      4.2 % 
Debt rate
      11.8 % 
Weighted-average expected life (in years)
      0.5  
 
(1)
The initial measurement date of the
Non-Redemption
Agreement was December 31, 2024, as such, no remeasurement was required as of December 31, 2024.
The following table provides a summary of the changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis for the year ended December 31, 2024:
 
    
Subscription Purchase
     
Non-Redemption
  
    
Agreement
     
Agreement
  
Balance as of December 31, 2023
    $ —       $ —   
Initial Measurement on April 22, 2024
      361,124        —   
Initial Measurement on December 31, 2024
      —         1,084,963  
Change in estimated fair value
      (361,124 )       —   
  
 
 
     
 
 
  
Balance as of December 31, 2024
   
$
— 
 
   
$
1,084,963