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FAIR VALUE MEASUREMENTS | 3 Months Ended
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Mar. 31, 2025
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | NOTE 4. FAIR VALUE MEASUREMENTS Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: Level 1: Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2: Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3: Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. An asset's or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments that are carried at fair value consist of Level 1 and Level 3 assets and liabilities: • Level 1: o Level 1 assets include highly liquid bank deposits and money market funds, which were not material in either period as of March 31, 2025 and December 31, 2024. o Level 1 liabilities include the Public Warrants, which are classified as Level 1 due to the use of an observable market quote in an active market, however, were determined to have no value as of March 31, 2025 and December 31, 2024 due to a notification from the New York Stock Exchange American (“NYSE American”) in December 2023 that the NYSE American had determined to (a) commence proceedings to delist the Company’s Public Warrants, each whole warrant exercisable to purchase one share of the Company’s common stock, par value $0.0001 per share, at a price of $11.50 per share, and listed to trade on the NYSE American under the symbol “BURU.WS”, and (b) immediately suspend trading in the Public Warrants due to “abnormally low” trading price levels. • Level 3: o Level 3 assets include the Convertible Loan Receivable (as defined and described in Note 5, Convertible Loan Receivable), which is classified as Level 3 due to the use of unobservable inputs in the valuation of the asset. There were no transfers between Level 1, Level 2, and Level 3 in any periods presented. o Level 3 liabilities include (i) the Junior Note Warrants (as defined and described in Note 8, Notes and Convertible Notes Payable, and Note 10, Warrants), (ii) the Indigo Capital Convertible Notes (as defined and described in Note 8, Notes and Convertible Notes Payable), and (iii) through early March 2025, the August 2024 Convertible Note Derivative Liability (as defined and described in Note 8, Notes and Convertible Notes Payable), each of which is classified as Level 3 due to the use of unobservable inputs in the valuation of the liability. Gains or losses from the remeasurement of (i) the Junior Note Warrants are recorded as part of change in fair value of warrant liabilities, (ii) the Indigo Capital Convertible Notes are recorded as part of change in fair value of debt and (iii) the August 2024 Convertible Note Derivative Liability are recorded as part of change in fair value of derivative liability in the condensed consolidated statements of operations. There were no transfers between Level 1, Level 2, and Level 3 in any periods presented. The following tables set forth the fair value of the Company’s financial assets and liabilities by level within the fair value hierarchy as of March 31, 2025 and December 31, 2024:
|  | At March 31, 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Convertible Note Receivable |  | $ | — |  |  | $ | — |  |  | $ | 260,000 |  |  | $ | 260,000 |
Total assets |  | $ | — |  |  | $ | — |  |  | $ | 260,000 |  |  | $ | 260,000 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Junior Note Warrants |  | $ | — |  |  | $ | — |  |  | $ | 1,315 |  |  | $ | 1,315 |
Indigo Capital Convertible Notes |  |  | — |  |  |  | — |  |  |  | 4,047,000 |  |  |  | 4,047,000 |
Total liabilities |  | $ | — |  |  | $ | — |  |  | $ | 4,048,315 |  |  | $ | 4,048,315 |
|  | At December 31, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Junior Note Warrants |  | $ | — |  |  | $ | — |  |  | $ | 128,615 |  |  | $ | 128,615 |
Convertible note derivative liability (1) |  | $ | — |  |  | $ | — |  |  | $ | 37,900 |  |  | $ | 37,900 |
(1) Represents the August 2024 Convertible Note Derivative Liability, as defined and described in Note 8, Notes and Convertible Notes Payable. In March 2025, the remaining August 2024 Convertible Notes were purchased by Indigo Capital and subsequently extinguished. For additional information, see Note 8. Level 3 Financial Assets Convertible Loan Receivable The following table sets forth a summary of the changes in fair value of the Company's Convertible Loan Receivable:
|  | Three Months Ended March 31, |
|  | 2025 |
Fair value, beginning balance |  | $ | — |
Fair value at issuance |  |  | 260,000 |
Change in fair value |  |  | — |
Fair value, ending balance |  | $ | 260,000 |
The aggregate fair value of the Convertible Loan Receivable was estimated using a Monte Carlo simulation based approach, a Lev el 3 valuation. The significant inputs to the calculation of the fair value of the Convertible Loan Receivable were as follows:
|  | Three Months Ended March 31,
|  | 2025
Convertible Note Receivable |  |
Stock price | £ | 0.000035
Expected term (in years) |  | 1.25
Expected volatility |  | 157.7%
Risk-free interest rate |  | 4.2%
Expected dividend yield |  | 0.0%
Level 3 Financial Liabilities Junior Note Warrants The following table sets forth a summary of the changes in fair value of the Company's Junior Note Warrants issued in November 2023:
|  | Three Months Ended March 31, |
|  | 2025 |  |  | 2024 |
Fair value, beginning balance |  | $ | 128,615 |  |  | $ | 2,238,519 |
Change in fair value |  |  | (127,300 | ) |  |  | (3,311 | )
Fair value, ending balance |  | $ | 1,315 |  |  | $ | 2,235,208 |
The aggregate fair value of the Junior Note Warrants was estimated using a Monte Carlo simulation based approach, a Level 3 valuation. The significant inputs to the calculation of the fair value of the Junior Note Warrant liability were as follows:
|  |  | Three Months Ended March 31,
|  |  | 2025 |  |  | 2024
Junior Note Warrants: |  |  |  |  |  |
Stock price |  | $ | 0.19 |  | $ | 0.14
Expected term (in years) |  |  | 3.7 - 4.4 |  |  | 4.7
Expected volatility |  |  | 62.4% - 65.2% |  |  | 69.8%
Risk-free interest rate |  |  | 3.9% |  |  | 4.2%
Expected dividend yield |  |  | 0.0% |  |  | 0.0%
Indigo Capital Convertible Notes The following table sets forth a summary of the changes in fair value of the Company's Indigo Capital Convertible Notes:
|  | Three Months Ended March 31, |
|  | 2025 |
|  | (As Restated) |
Fair value, beginning balance |  | $ | — |
Fair value at issuance |  |  | 5,211,100 |
Fair value of debt converted |  |  | (907,578 | )
Change in fair value |  |  | (256,522 | )
Fair value, ending balance |  | $ | 4,047,000 |
The aggregate fair value of the Indigo Capital Convertible Notes was estimated using a Monte Carlo simulation based approach, a Level 3 valuation. The significant inputs to the calculation of the fair value of the Indigo Capital Convertible Notes during the three months ended March 31, 2025 were as follows:
|  | Three Months Ended March 31,
|  | 2025
Indigo Capital Convertible Notes: |  |
Stock price | $ | 0.19 - 0.26
Expected term (in years) |  | 0.92 - 0.99
August 2024 Convertible Note Derivative Liability In March 2025, the remaining August 2024 Convertible Notes were purchased by Indigo Capital and subsequently extinguished. For additional information, see Note 8. The following table sets forth a summary of the changes in fair value of the Company's August 2024 Convertible Note Derivative Liability:
|  | Three Months Ended March 31, |
|  | 2025 |  |  | 2024 |
Fair value, beginning balance |  | $ | 37,900 |  |  | $ | — |
Extinguishment of August 2024 Convertible Notes |  |  | (37,900 | ) |  |  | — |
Fair value, ending balance |  | $ | — |  |  | $ | — |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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