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FAIR VALUE MEASUREMENTS | 6 Months Ended
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Jun. 30, 2025
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value accounting is applied for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis aggregated by the level in the fair value hierarchy at June 30, 2025 (in thousands):
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Liabilities: |  |  |  |  |  |  |
Public placement warrant liability | $ | — |  |  | $ | — |  |  | $ | 5 |  |  | $ | 5 |
Related party private placement warrant liability | — |  |  | — |  |  | 245 |  |  | 245 |
Long-term debt, non-current | $ | — |  |  | $ | 13,009 |  |  | $ | — |  |  | $ | 13,009 |
Total liabilities | $ | — |  |  | $ | 13,009 |  |  | $ | 250 |  |  | $ | 13,259 |
The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis aggregated by the level in the fair value hierarchy at December 31, 2024 (in thousands):
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Liabilities: |  |  |  |  |  |  |
Public placement warrant liability | $ | — |  |  | $ | — |  |  | $ | 267 |  |  | $ | 267 |
Related party private placement warrant liability | — |  |  | — |  |  | 133 |  |  | 133 |
Long-term debt, non-current | — |  |  | 13,186 |  |  | — |  |  | 13,186 |
Total liabilities | $ | — |  |  | $ | 13,186 |  |  | $ | 400 |  |  | $ | 13,586 |
Level 3 liability valuations are based on unobservable inputs, which reflect the Company’s own assumptions incorporated in valuation techniques used to determine fair value; further discussion of these assumptions is set forth below. There were no transfers into or out of Level 3 of the fair value hierarchy during the periods presented. Changes in the fair value measurement of Level 3 liabilities are related mainly to unrealized gains (losses) resulting from remeasurement each period and are reflected in the interim condensed consolidated statements of operations and comprehensive loss. Public Placement Warrant Liability In connection with the Merger, the Company assumed the Public Placement Warrants (see Note 7 – Warrants) to purchase the Company’s Common stock. The Company accounts for the Public Placement Warrants as a liability in accordance with ASC 815-40-15 since the Public Placement Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. This liability is subject to remeasurement at each balance sheet date until exercised. The fair value of the public placement liability at June 30, 2025 and December 31, 2024 was determined using the Monte Carlo simulation model. The public placement warrant liability represents a Level 3 measurement within the fair value hierarchy as it has been valued using some unobservable inputs. The key inputs for the Monte Carlo simulation model to value the Public Placement Warrants at June 30, 2025 and December 31, 2024 were as follows:
| June 30, 2025 |  | December 31, 2024
Stock price | $ | 2.82 |  |  | $ | 9.60 |
Exercise price | $ | 230.00 |  |  | $ | 230.00 |
Redemption Threshold | $ | 360.00 |  |  | $ | 360.00 |
Effective expiration date | August 13, 2029 |  | August 13, 2029
Term (years) | 4.1 |  | 4.6
Volatility | 75 % |  | 80 %
Risk-free rate | 3.67 % |  | 4.27 %
Related Party Private Placement Warrant Liability In connection with the Merger, the Company assumed the Private Placement Warrants (see Note 7 – Warrants) to purchase the Company’s Common stock, which were issued to the Sponsor, a related party. The Company accounts for the Private Placement Warrants as a liability in accordance with ASC 815-40-15 since the Private Placement Warrants do not meet the criteria for equity treatment and must be recorded as a liability. This liability is subject to remeasurement at each balance sheet date until exercised. On February 14, 2025, pursuant to a settlement agreement with the Sponsor (see Note 10 – Commitments and Contingencies), the Company exchanged the 250,000 Private Placement Warrants for a warrant to purchase 250,000 shares of Common stock (the “Sponsor Warrants”) at an exercise price of $10.00 per share. The warrants became exercisable immediately upon issuance and will terminate on the fifth anniversary of the issuance date. The related party private placement warrant liability represents a Level 3 measurement within the fair value hierarchy as it has been valued using unobservable inputs. The fair value of the Private Placement Warrants at February 14, 2025 and December 31, 2024 was determined using the Monte Carlo simulation model. The key inputs for the Monte Carlo simulation model to value the Private Placement Warrants at February 14, 2025 and December 31, 2024 were as follows:
| February 14, 2025 |  | December 31, 2024
Stock price | $ | 13.20 |  |  | $ | 9.60 |
Exercise price | $ | 230.00 |  |  | $ | 230.00 |
Redemption Threshold | $ | 360.00 |  |  | $ | 360.00 |
Effective expiration date | August 13, 2029 |  | August 13, 2029
Term (years) | 4.5 |  | 4.6
Volatility | 80 % |  | 80 %
Risk-free rate | 4.22 % |  | 4.27 %
The fair value of the Sponsor Warrants at June 30, 2025 and February 14, 2025 was determined using the Monte Carlo simulation model. The key inputs for the Monte Carlo simulation model to value the Sponsor Warrants at June 30, 2025 and February 14, 2025 were as follows:
| June 30, 2025 |  | February 14, 2025
Stock price | $ | 2.82 |  |  | $ | 13.20 |
Exercise price | $ | 10.00 |  |  | $ | 10.00 |
Effective expiration date | February 14, 2030 |  | February 14, 2030
Term (years) | 4.6 |  | 5.0
Volatility | 79 | % |  | 84 | %
Risk-free rate | 3.7 | % |  | 4.2 | %
Change in Fair Value of Level 3 Liabilities The following table presents a reconciliation of the public placement warrant liability measured at fair value on a recurring basis as of June 30, 2025:
| Public Placement Warrant Liability
Balance at January 1, 2025 | $ | 267 |
Change in estimated fair value | (184) |
Balance at March 31, 2025 | $ | 83 |
Change in estimated fair value | (78) |
Balance at June 30, 2025 | $ | 5 |
The change in fair value of the public placement warrant liability is recognized in the interim condensed consolidated statements of operations and comprehensive loss as the remeasurement of the public placement warrant liability. The following table presents a reconciliation of the related party private placement warrant liability measured at fair value on a recurring basis as of June 30, 2025:
| Related Party Private Placement Warrant Liability
Balance at January 1, 2025 | $ | 133 |
Change in estimated fair value before modification(1) | 71 |
Change in fair value for exchange of Sponsor Warrants on February 14, 2025(1) | 1,816 |
Change in estimated fair value after modification(1) | (1,276) |
Balance at March 31, 2025 | $ | 744 |
Change in estimated fair value | $ | (499) |
Balance at June 30, 2025 | $ | 245 |
(1) See Note 7 – Warrants for more information on the exchange of warrants with the Sponsor and modification of the related party private placement warrant liability. The net change in fair value of $0.1 million of the related party private placement warrant liability for the six months ended June 30, 2025 is recognized in the interim condensed consolidated statements of operations and comprehensive loss as the remeasurement of private placement warrant liability. The following table presents a reconciliation of the convertible notes liability measured at fair value on a recurring basis as of June 30, 2024:
| Convertible Notes
Balance at January 1, 2024 | $ | 15,604 |
Note issuance during the period | 3,457 |
Change in estimated fair value | 1,213 |
Balance at March 31, 2024 | $ | 20,274 |
Note issuance during the period | $ | 10,130 |
Loss on extinguishment | $ | 22,183 |
Change in estimated fair value | $ | 15,874 |
Balance at June 30, 2024 | $ | 68,461 |
The change in fair value of the convertible notes is recognized in the interim condensed consolidated statements of operations and comprehensive loss as the remeasurement of the convertible notes. There was no change in fair value attributable to the instrument-specific credit risk for the three and six months ended June 30, 2024. There were no convertible notes outstanding as of June 30, 2025 or December 31, 2024. See Part II, Item 8 “Financial Statements and Supplementary Data - Note 8 to the Consolidated Financial Statements - Borrowings and Other Financing Arrangements” in the 2024 Annual Report on Form 10-K for the year ended December 31, 2024 for more information. The following table presents a reconciliation of the related party convertible notes liability measured at fair value on a recurring basis as of June 30, 2024:
| Related Party Convertible Notes
Balance at January 1, 2024 | $ | 2,133 |
Note issuance during the period | 1,449 |
Change in estimated fair value | 248 |
Balance at March 31, 2024 | $ | 3,830 |
Note issuance during the period | $ | 3,635 |
Loss on extinguishment | $ | 4,176 |
Change in estimated fair value | $ | 5,300 |
Balance at June 30, 2024 | $ | 16,941 |
The change in fair value of the related party convertible notes is recognized in the interim condensed consolidated statements of operations and comprehensive loss as the remeasurement of related party convertible notes. There was no change in fair value attributable to the instrument-specific credit risk for the three and six months ended June 30, 2024. There were no related party convertible notes outstanding as of June 30, 2025 or December 31, 2024. See Part II, Item 8 “Financial Statements and Supplementary Data - Note 8 to the Consolidated Financial Statements - Borrowings and Other Financing Arrangements” in the 2024 Annual Report on Form 10-K for the year ended December 31, 2024 for more information. The following table presents a reconciliation of the share-based termination liability measured at fair value on a recurring basis as of June 30, 2024:
| Share-Based Termination Liability
Balance at January 1, 2024 | $ | 6,349 |
Change in estimated fair value | (186) |
Balance at March 31, 2024 | $ | 6,163 |
Change in estimated fair value | $ | 1,498 |
Balance at June 30, 2024 | $ | 7,661 |
The change in fair value of the share-based termination liability is recognized in the interim condensed consolidated statements of operations and comprehensive loss as the remeasurement of the share-based termination liability. There was no share-based termination liability outstanding as of June 30, 2025 or December 31, 2024. See Part II, Item 8 “Financial Statements and Supplementary Data - Note 7 to the Consolidated Financial Statements - Share-based Termination Liability” in the 2024 Annual Report on Form 10-K for the year ended December 31, 2024 for more information. The following table presents a reconciliation of the convertible preferred stock warrant liability measured at fair value on a recurring basis as of June 30, 2024:
| Convertible Preferred Stock Warrants Liability
Balance at January 1, 2024 | $ | 203 |
Change in estimated fair value | (24) |
Balance at March 31, 2024 | $ | 179 |
Change in estimated fair value | $ | (73) |
Balance at June 30, 2024 | $ | 106 |
The change in fair value of the convertible preferred stock warrants is recognized in the interim condensed consolidated statements of operations and comprehensive loss as the remeasurement of the convertible preferred stock warrant liability. There were no convertible preferred stock warrants outstanding as of June 30, 2025 or December 31, 2024. See Part II, Item 8 “Financial Statements and Supplementary Data - Note 9 to the Consolidated Financial Statements - Warrants” in the 2024 Annual Report on Form 10-K for the year ended December 31, 2024 for more information.

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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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