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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 4. Fair Value Measurements Fair value measurements are market-based measurements, not entity-specific measurements. Therefore, fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. The Company follows a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below: • Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. • Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable in active markets. Assets recorded at fair value The Company has investments in money market accounts and U.S. treasury securities, which are included in cash and cash equivalents and investments, respectively, on the condensed consolidated balance sheets. Money market accounts are considered Level 1 measurements within the fair value hierarchy since money market account fair values are known and observable through daily published floating net asset values. As of June 30, 2025, the Company had total investments of $4.6 million of treasury bills with total amortized cost and fair value of $4.6 million. These investments are collateralized marketable securities. As of June 30, 2025, the Company classified available-for-sales as short-term investments in the condensed consolidated balance sheet because the maturity dates were less than one year from the date of the purchase. As of December 31, 2024, the Company had total investments of $3.5 million of money market accounts, treasury bills, and government agency bonds, with total amortized cost and fair value of $3.5 million. These investments are collateralized marketable securities. As of December 31, 2024, the Company classified available-for-sales as short-term investments in the condensed consolidated balance sheet because the maturity dates were less than one year from the date of the purchase. The following table summarizes the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024, respectively (in thousands):
| Fair Value Measurements Using |
June 30, 2025 | Fair Value |  | Level 1 |  | Level 2 |  | Level 3 |
Investments |  |  |  |  |  |  |  |
Treasury bills and treasury note | $ | 4,646 |  | $ | — |  | $ | 4,646 |  | $ | — |
Total Investments | $ | 4,646 |  | $ | — |  | $ | 4,646 |  | $ | — |
| Fair Value Measurements Using |
December 31, 2024 | Fair Value |  | Level 1 |  | Level 2 |  | Level 3 |
Cash equivalents |  |  |  |  |  |  |  |
Money market | $ | 74 |  | $ | 74 |  | $ | — |  | $ | — |
Investments |  |  |  |  |  |  |  |
Treasury bills |  | 2,062 |  |  | — |  |  | 2,062 |  |  | — |
Government agency bonds |  | 772 |  |  | 772 |  |  | — |  |  | — |
Money market |  | 696 |  |  | 696 |  |  | — |  |  | — |
Total Investments | $ | 3,530 |  | $ | 1,468 |  | $ | 2,062 |  | $ | — |
Liabilities recorded at fair value As detailed in Note 12 below, the Company elected to account for convertible notes (consisting of funding notes and exchange notes) issued on February 13, 2025 at fair value as of the issuance date and immediately before their settlement date of March 4, 2025. The convertible notes are valued using the binomial lattice model with the following key level 3 inputs:
|  | At issuance |  |  | At settlement |
Interest rate |  | 4.18% - 4.28% |  |  |  | 3.99 | %
Remaining term |  |  | 1.0 |  |  |  | 0.94 |
Volatility |  |  | 77.5 | % |  |  | 119.2 | %
Fair value of common stock |  | $ | 1.20 |  |  | $ | 0.30 |
The following table provides a roll forward of the fair value of the convertible notes (in thousands):
|  | Funding Notes |  |  | Exchange Notes |
Beginning balance as of January 1, 2025 |  | $ | — |  |  | $ | — |
Issuance |  |  | 3,968 |  |  |  | 3,763 |
Change in fair value |  |  | (265 | ) |  |  | (251 | )
Settlement |  |  | (3,703 | ) |  |  | (3,512 | )
Ending balance as of June 30, 2025 |  | $ | — |  |  | $ | — |
As detailed in Note 12 below, the Company issued March 2025 Series A and March 2025 Series B common stock warrants in connection with the March 2025 Private Placement. The March 2025 Series A and March 2025 Series B common stock warrants are accounted for as liabilities at fair value at issuance date, and immediately prior to their extinguishment and modification, respectively, on June 17, 2025. The March 2025 Series A and March 2025 Series B common stock warrants were valued using the Monte Carlo simulation, with the following key level 3 inputs:
|  | At issuance |  |  | At modification and extinguishment |
Interest rate |  |  | 3.98 | % |  |  | 3.91 | %
Remaining term (years) |  |  | 6.1 |  |  |  | 4.90 |
Volatility |  |  | 123.7 | % |  |  | 135.6 | %
The March 2025 Series B Warrants were valued immediately prior to exercise, using the Monte Carlo simulation with the following inputs for the exercises that occurred before the modification on June 17, 2025:
|  | At exercise
Interest rate |  | 3.85% - 4.06%
Remaining term (years) |  | 4.9 - 5.0
Volatility |  | 133.9% - 135.8%
In addition, the February 2025 Warrants issued in connection with the Funding Notes were required to be classified as liabilities and recorded at fair value. The Company estimated the fair value of the February 2025 Warrants using the Black Scholes model at issuance as of February 13, 2025 and as of their redemption date of March 4, 2025, using the following level 3 inputs:
|  | At issuance |  |  | At settlement |
Interest rate |  |  | 4.30 | % |  |  | 4.30 | %
Remaining term (years) |  |  | 5.0 |  |  |  | 4.95 |
Volatility |  |  | 98.5 | % |  |  | 102.1 | %
Fair value of common stock |  | $ | 1.20 |  |  | $ | 0.30 |
The following table provides a roll forward of the fair value of liability classified common stock warrants during the six months ended June 30, 2025 (in thousands):
| February 2025 Warrants |  |  | March 2025 Series A Warrants |  |  | March 2025 Series B Warrants |  |  | Total |
Beginning balance as of January 1, 2025 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Issuance |  | 2,762 |  |  |  | 2,005 |  |  |  | 11,243 |  |  |  | 16,010 |
Change in fair value |  | (2,231 | ) |  |  | 335 |  |  |  | 5,043 |  |  |  | 3,147 |
Settlement |  | (531 | ) |  |  | — |  |  |  | (858 | ) |  |  | (1,389 | )
Modification and extinguishment |  | — |  |  |  | (2,340 | ) |  |  | (4,461 | ) |  |  | (6,801 | )
Reclassified to equity |  | — |  |  |  | — |  |  |  | (10,967 | ) |  |  | (10,967 | )
Ending balance as of June 30, 2025 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |

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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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