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FAIR VALUE MEASUREMENTS | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | NOTE 6 – FAIR VALUE MEASUREMENTS Fair value measurements affect the Company’s accounting for certain of its financial assets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured according to a hierarchy that includes:
| Level 1: | Observable inputs, such as quoted prices in active markets.
| Level 2: | Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 2 assets and liabilities include debt securities with quoted market prices that are traded less frequently than exchange-traded instruments. This category includes U.S. government agency-backed debt securities and corporate-debt securities.
| Level 3: | Unobservable inputs in which there is little or no market data.
As of September 30, 2025, and December 31, 2024, the Company used Level 1 quoted prices in active markets to value cash equivalents of $97.6 million and $24,000, respectively. The Company did not have any Level 2 or Level 3 assets or liabilities as of September 30, 2025. The Company received stockholder approval to increase the number of authorized shares on January 25, 2024, at which time previous liability classified Series D Warrants and the Series C Warrants met all requirements for equity classification, and, as a result, the Company reclassified them to equity as of January 25, 2024. The Company used the Black-Scholes option pricing model to estimate the fair value of the Series D Warrants and the Series C Warrants using significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. For periods prior to the receipt of stockholder approval, the fair value was then adjusted by applying a discount for lack of marketability (“DLOM”) based on the expected timing of receipt of stockholder approval to increase the number of authorized shares and to allow the Warrants to become exercisable in accordance with Nasdaq Listing Rule 5635. Additionally, between April 1, 2024 and May 22, 2024, Level 3 liabilities included a portion of the Company’s outstanding August 2023 Warrants, Series A Warrants, Series B Warrants, Series C Warrants, and Series D Warrants (collectively, the “Existing Warrants”), as a result of certain Warrant Amendments entered into upon the closing of an equity financing on April 1, 2024, which provided for adjustments to the exercise prices of the Existing Warrants, contingent on approval by the Company’s stockholders of a proposal to allow the Existing Warrants to become exercisable in accordance with Nasdaq Listing Rule 5635. The Company determined that the exercise price adjustment provision that is contingent on stockholder approval precluded the Existing Warrants from being indexed to the Company’s own stock, and therefore were reclassified to liabilities at post-modification fair value on April 1, 2024. After the Company received stockholder approval on May 22, 2024, thereby reducing the exercise prices of each of the Existing Warrants to $10.56 per share, the Existing Warrants met all requirements for equity classification and the Company reclassified them to equity as of May 22, 2024. To estimate the fair value of the Existing Warrants on the reclassification dates, the Company used a Black-Scholes option pricing model, probability weighted for different scenarios as applicable. The following table summarizes the range of significant assumptions used in determining the fair value of liability-classified warrants on the respective reclassification dates for the nine months ended September 30, 2024:
|  |  |  | Nine months ended |
|  |  |  | September 30, 2024 |
Common stock price |  |  |  |  | $ | 6.080 - 9.888 |
Risk-free rate |  |  |  |  |  | 4.01% - 5.37% |
Expected term (in years) |  |  |  |  |  | 0.86 - 5.00 |
Expected volatility |  |  |  |  |  | 105.00% - 120.00% |
Discount for lack of marketability |  |  |  |  |  | N/A |
A reconciliation of the beginning and ending balances for the liability-classified warrants measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows for the three and nine months ended September 30, 2024:
|  | Warrant liabilities |
Balance at December 31, 2023 |  | $ | 22,855 |
Fair value - mark to market adjustment |  |  | (7,005 | )
Warrants reclassified from liabilities to equity |  |  | (15,850 | )
Balance at March 31, 2024 |  | $ | — |
Warrants reclassified from equity to liabilities |  |  | 9,977 |
Fair value - mark to market adjustment |  |  | 855 |
Warrants reclassified from liabilities to equity |  |  | (10,832 | )
Balance at June 30, 2024 |  | $ | — |
Warrants reclassified from equity to liabilities |  |  | — |
Fair value - mark to market adjustment |  |  | — |
Warrants reclassified from liabilities to equity |  |  | — |
Balance at September 30, 2024 |  | $ | — |
For the three and nine months ended September 30, 2024, the Company recognized a change in fair value resulting in a loss of $0 million and gain of $6.2 million, respectively, related to the liability-classified warrants prior to meeting the criteria for equity classification. There were no liability-classified warrants measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three or nine months ended September 30, 2025. Changes in the fair value of the liability-classified warrants are recognized as a separate component in the consolidated statement of operations.

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/820/tableOfContent + Details
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