WARRANTS

6 Months Ended

Jun. 30, 2025

Warrants and Rights Note Disclosure [Abstract]

The warrants issued in the March 2024 Public Offering are classified as a liability in accordance with ASC 815, since these warrants met the definition of a derivative instrument and did not qualify for equity classification. These warrant agreements include a fundamental transaction clause whereby, in the event that another person or entity becomes the beneficial owner of 50% of the outstanding shares of the Company’s common stock, and if other conditions are met, the Company may be required to purchase the warrants from the holders by paying cash in an amount equal to the Black-Scholes value of the remaining unexercised portion of the warrants on the date of such fundamental transaction. This liability is subject to remeasurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the Company’s condensed statements of operations.

The fair value adjustment for the three months ended June 30, 2025 was $0.8 million using the Black-Scholes option-pricing model. As of June 30, 2025 all of the 2,500,000 warrants are outstanding. The Company estimated the fair value of the warrant liability using the following assumptions as of June 30, 2025:


Estimated dividend yield	0.00		%
Weighted-average expected stock price volatility	83.08%
Weighted-average risk-free interest rate	3.72%
Expected term (in years)	3.67
Weighted-average fair value per option	$	1.14

The following table summarizes the Company’s warrant liability (in thousands):


Balance at December 31, 2024	$	2,796
Issuance of warrants	—
Change in fair value of warrant liability	804
Balance at March 31, 2025	$	3,600
Issuance of warrants	—
Change in fair value of warrant liability	(752)
Balance at June 30, 2025	$	2,848