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Warrants | 9 Months Ended
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Sep. 30, 2025
Warrants and Rights Note Disclosure [Abstract] |
Warrants | Warrants Warrants that have not been tendered for exchange and outstanding at September 30, 2025, and December 31, 2024, are as follows:
| September 30, 2025 |  | December 31, 2024
Public Warrants | 1,751,825 |  |  | 1,751,825 |
Private Placement Warrants | 4,428,648 |  |  | 4,428,648 |
Working Capital Warrants | 1,000,000 |  |  | 1,000,000 |
OrbiMed Warrants | 222,068 |  |  | 130,805 |
Total warrants | 7,402,541 |  |  | 7,311,278 |
Public, Private Placement and Working Capital Warrant Liabilities In connection with consummation of the Business Combination, we assumed the warrant liabilities associated with 8,333,272 Public Warrants. Each Public Warrant is exercisable to purchase one share of common stock at a price of $11.50 per share, subject to adjustment. As of September 30, 2025 and December 31, 2024, there were 1,751,825 Public Warrants outstanding. The Public Warrants expire on August 10, 2028 or earlier upon redemption or liquidation. The Public Warrants expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. We may redeem for cash the outstanding Public Warrants: a.in whole and not in part; b.at a price of $0.01 per Public Warrant; c.upon not less than 30 days’ prior written notice of redemption to each warrant holder; and d.if, and only if, the reported closing price of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending three business days before we send the notice of redemption to the warrant holders. If and when the Public Warrants become redeemable, we may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If we call the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will we be required to net cash settle the warrants. Accordingly, the warrants may expire worthless. In addition to the Public Warrants, we assumed the warrant liabilities associated with 4,933,333 Private Placement Warrants and 1,000,000 Working Capital Warrants. The Private Placement Warrants and Working Capital Warrants are identical to the Public Warrants, except that the Private Placement Warrants and Working Capital Warrants and the common stock issuable upon the exercise of the Private Placement Warrants and Working Capital Warrants, were not transferable, assignable or saleable until 30 days after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants and Working Capital Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants and Working Capital Warrants are held by someone other than the initial purchasers or their permitted transferees, they will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As of September 30, 2025 and December 31, 2024, there were 4,428,648 Private Placement Warrants and 1,000,000 Working Capital Warrants outstanding. We determined that the Public Warrants, Private Placement Warrants, and Working Capital Warrants (collectively, the "Exchange Warrants") do not meet the criteria to be equity classified and should be recorded as liabilities. Our analysis concluded liability classification under ASC 815, Derivatives and Hedging, as these warrants include a provision that could allow cash settlement upon an event outside our control and such event may not result in a change in control of the Company. As a result, the Private and Public Warrants do not meet the criteria for equity classification. The fair value of the Public Warrants has been measured based on the quoted price of such warrants on the Nasdaq Global Market. The transfer of Private Placement Warrants or Working Capital Warrants to anyone outside of a small group of individuals who are permitted transferees would result in the Private Placement Warrants and Working Capital Warrants having substantially the same terms as the Public Warrants. Therefore, we determined that the fair value of each Private Warrant and Working Capital Warrant is equivalent to that of each Public Warrant. As of September 30, 2025, the fair values of the Public Warrants, Private Placement Warrants and Working Capital Warrants were $3.0 million, $7.5 million, and $1.7 million, respectively. As of December 31, 2024, the fair values of the Public Warrants, Private Placement Warrants and Working Capital Warrants were $1.9 million, $4.9 million, and $1.1 million. We recorded a loss adjustment of $2.9 million and $4.3 million three and nine months ended September 30, 2025, respectively, to the change in fair value of SEPA, warrant and revenue base redemption liabilities on the condensed consolidated statements of operations. On May 24, 2024, we commenced (i) the Offer and (ii) the solicitation of consent (the “Consent Solicitation”) from holders of the Exchange Warrants to amend the Warrant Agreement, dated as of December 17, 2020 (the “Warrant Agreement” and such amendment, the “Warrant Amendment”), by and between the Company and Continental Stock Transfer & Trust Company, which governs all of the Exchange Warrants. The Offer and Consent Solicitation expired at one minute after 11:59 p.m., Eastern Standard Time, on June 25, 2024. The Exchange Warrants tendered were comprised of 6,529,954 Public Warrants and 504,685 Private Placement Warrants, which represents approximately 78.8% and 10.2% of the outstanding warrants of each respective class. The Warrants were validly tendered and not validly withdrawn prior to the expiration of the Offer and Consent Solicitation. No Working Capital Warrants were tendered. We determined the Exchange Warrants met the criteria to be equity classified at June 26, 2024, and that their fair value was $11.9 million. Adjusting for issuance costs of $1.7 million, the net fair value of the Exchange Warrants was $10.2 million. Accordingly, we recorded that amount as a reduction of the warrant and SEPA liabilities and an increase to additional paid-in capital on the condensed consolidated balance sheets, partially offset by issuance costs of $1.7 million. On July 1, 2024, we issued 2,110,366 shares of common stock for the Exchange Warrants. In addition, the Warrant Amendment was entered into with respect to the Public Warrants. As a result all of the outstanding Public Warrants may be exchanged, at the Company's option, at any time while they are exercisable and prior to their expiration, at the office of the warrant agent, upon notice to the holders of the then outstanding Public Warrants, at the exchange ratio of 0.27 shares of Common Stock per Public Warrant (subject to equitable adjustment by us in the event of any stock splits, stock dividends, recapitalizations or similar transaction with respect to the Common Stock). The following table summarizes activity in the Public Warrants, Private Placement Warrants, and Working Capital Warrants in the nine months ended September 30, 2025 and 2024.
Series |  | Balance at December 31, 2024 |  | Exchanges |  | Issuances |  | Retirements / Conversions |  | Balance at September 30, 2025
Public Warrants |  | 1,751,825 |  | — |  | — |  | — |  | 1,751,825 |
Private Placement Warrants |  | 4,428,648 |  | — |  | — |  | — |  | 4,428,648 |
Working Capital Warrants |  | 1,000,000 |  | — |  | — |  | — |  | 1,000,000 |
Series |  | Balance at December 31, 2023 |  | Exchanges |  | Issuances |  | Retirements / Conversions |  | Balance at September 30, 2024
Public Warrants |  | 8,281,779 |  | — |  | — |  | (6,529,954) |  | 1,751,825 |
Private Placement Warrants |  | 4,933,333 |  | — |  | — |  | (504,685) |  | 4,428,648 |
Working Capital Warrants |  | 1,000,000 |  | — |  | — |  | — |  | 1,000,000 |
OrbiMed Warrants In connection with the closing of the OrbiMed Credit Agreement, we also issued OrbiMed (the "OrbiMed Warrant Holder") a warrant to purchase 130,805 shares of our common stock (the "Warrant Shares"), with the initial exercise price of $9.5562, (the "Exercise Price") per share, or approximately $1.3 million in the aggregate, assuming none of the Initial OrbiMed Warrant is exercised through a cashless exercise. As of September 30, 2025, the exercise price was $8.8398 per share pursuant to the terms of the Initial OrbiMed Warrant, or approximately $1.2 million in the aggregate. The Initial OrbiMed Warrant expires on April 30, 2031 (the "Expiration Date"). On each of the closings of the Delayed Draw Commitment Amounts (see Note 9), if any, we agreed to issue additional warrants to purchase a number of shares of our common stock determined by dividing 5.0% of the applicable Delayed Draw Commitment Amount by the 10-day volume weighted average sale price of our common stock as of the issue date (the “Subsequent OrbiMed Warrants” and collectively, with the Initial OrbiMed Warrant, the “OrbiMed Warrants” and together with the Exchange Warrants, the “Warrants”). The Subsequent OrbiMed Warrants will expire seven years from each applicable issuance date, if any. In connection with the OrbiMed Warrants, we entered into a Registration Rights Agreement with OrbiMed (the “OrbiMed Registration Rights Agreement”), whereby OrbiMed will have certain customary registration rights with respect to the shares of common stock underlying the OrbiMed Warrants. In connection with the First Delayed Draw Term Loan Commitment draw (see Note 9) on February 18, 2025, we issued the OrbiMed operating entities a warrant to purchase 64,748 and 26,515 shares of our common stock (the "Subsequent OrbiMed Warrants"), with the initial exercise price of $5.4787, or approximately $0.5 million. As of September 30, 2025, the Exercise Price was $5.3322 per share pursuant to the terms of the Subsequent OrbiMed Warrant, or approximately $0.5 million in the aggregate. The Subsequent OrbiMed Warrant expires on February 18, 2032 (the "Expiration Date"). The OrbiMed Warrants may be exercised in whole or in part, at any time prior to the Expiration Date (the "Exercise Period"), by either: a.making a payment to the Company, in an amount in immediately available funds equal to the aggregate Exercise Price to be paid upon the exercise of the OrbiMed Warrants; or b.instructing the Company to withhold a number of Warrant Shares then issuable upon exercise of the OrbiMed Warrants with an aggregate fair market value as of the exercise date equal to such aggregate Exercise Price to be paid upon the exercise of the OrbiMed Warrants (the “Cashless Exercise”). If either upon (i) the occurrence of the Expiration Date, or (ii) the date on which a Sale of the Company is consummated pursuant to which the sole consideration payable to the Company or its stockholders in respect of such sale transaction consists of cash, marketable securities or a combination thereof, and the per share fair market value of a Warrant Share is greater than the exercise price, any portion of the OrbiMed Warrants that remains unexercised on such date shall be deemed to have been exercised automatically pursuant to a Cashless Exercise (the “Automatic Cashless Exercise”). Ownership Cap The OrbiMed Warrant Holder in any circumstance cannot exercise the OrbiMed Warrants if such exercise would result in the holder and its affiliates to own more than 9.99% of the Company's common stock (the “Ownership Cap”). Adjustments The current Exercise Price and the number of Warrant Shares underlying the OrbiMed Warrants are subject to certain anti-dilutive adjustments. These are triggered by events such as stock splits, reclassification of shares, combinations or substitutions. Additionally, the Exercise Price will be adjusted if shares,which include options and convertible securities settled in common stock) are issued at a price per share less than the current Exercise Price. These adjustments are collectively referred to as "Warrant Adjustments.” If we declare or pay a dividend or distribution on our outstanding common shares payable in cash, capital securities or other property, the OrbiMed Warrant Holder shall be entitled to receive, at the time such dividend or distribution is paid, without additional cost to the OrbiMed Warrant Holder, the total number and kind of cash, capital securities or other property which the OrbiMed Warrant Holder would have received had the OrbiMed Warrant Holder owned the Warrant Shares of record as of the date such dividend or distribution was paid (the “Pro-Rata Distribution”). Additionally, the OrbiMed Warrants are subject to customary price-based anti-dilution protections, such that, in certain circumstances, if we issue shares of our common stock below the current exercise price of the Initial OrbiMed Warrant, the exercise price of the OrbiMed Warrants will be adjusted downward based on such issuance. As a result of any adjustments, the amount of proceeds we receive from the exercise of the OrbiMed Warrants would be less than the amount we would receive immediately prior to such adjustment. Transfers of OrbiMed Warrants The OrbiMed Warrants may be transferred or assigned in whole or in part, subject to compliance with applicable federal and state securities laws. Allocation of Proceeds and Issuance Costs The agreement explicitly permits the settlement of the OrbiMed Warrants in a cashless manner (i.e., net share settlement) and not indexed to the Company's own stock. Therefore, it is considered as a derivative instrument under ASC 815 and will be classified as a liability and is subsequently measured at fair value with changes reported within the change in fair value of SEPA, warrant, and revenue base redemption liabilities of the condensed consolidated statement of operations following the proceeds from the issuance of the Initial Term Loan. The fair value of the Initial OrbiMed Warrant was measured using the Black-Scholes option pricing model. The key inputs used in the valuations were as follows:
| September 30, 2025 |  | December 31, 2024
Expected term (years) | 5.6 |  | 6.3
Risk free interest rate | 3.8% |  | 4.5%
Expected volatility | 70.0% |  | 70.0%
Dividend yield | —% |  | —%
Exercise price | $8.8398 |  | $9.3722
Stock price | $4.65 |  | $5.01
The fair value of the Subsequent OrbiMed Warrant was measured using the Black-Scholes option pricing model. The key inputs used in the valuations were as follows:
| September 30, 2025 |  | February 18, 2025
Expected term (years) | 6.4 |  | 7.0
Risk free interest rate | 3.9% |  | 4.1%
Expected volatility | 70.0% |  | 70.0%
Dividend yield | —% |  | —%
Exercise price | $5.3322 |  | $5.4787
Stock price | $4.65 |  | $5.69

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