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Warrants | 6 Months Ended
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Jun. 30, 2026
Warrants [Abstract] |
WARRANTS | NOTE 8 — WARRANTS IPO Warrants – Public Warrants In connection with Nubia’s initial public offering in 2022, 123,500 public warrants were issued, entitling holders to purchase one share of common stock at an exercise price of $575.00 per share, subject to adjustment. Only whole warrants may be exercised. The warrants expire five years after the completion of the Company’s initial business combination on February 2, 2029. The Company is not obligated to issue shares upon warrant exercise unless a registration statement covering the underlying shares is effective. If a registration statement is not effective, holders may exercise warrants on a cashless basis under certain conditions. The Company may redeem the warrants at $0.50 per warrant, with at least 30 days’ prior notice, if the common stock trades at or above $900.00 per share for 20 trading days within a 30-day period after the warrants become exercisable. Adjustments to the number of shares issuable upon exercise and the exercise price may occur in the event of stock splits, dividends, reorganizations, or similar events. Warrants do not provide voting rights or shareholder privileges until exercised. No fractional shares will be issued upon exercise. The Company evaluated the public warrants and determined that it is a freestanding equity-linked contract within the scope of ASC 815-40. Based on this guidance, the Company concluded that the IPO warrants qualify for equity classification. IPO Warrants – Private Warrants In connection with Nubia’s initial public offering in 2022, 108,100 Private Warrants were issued. Except as described below, the Private Warrants have terms and provisions that are identical to those of the public warrants, including as to exercise price, exercisability and exercise period. The Private Warrants will be exercisable on a cashless basis and will not be redeemable by us so long as they are held by the holders of the private warrants or their permitted transferees. The holders of the Private Warrants or their permitted transferees have the option to exercise the private warrants on a cashless basis. If the Private Warrants are held by holders other than the holders of the Private Warrants and their permitted transferees, the Private warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in the Company’s initial public offering. If exercised on a cashless basis, holders will receive shares of common stock based on the difference between the warrant exercise price and the fair market value of the stock. Fair market value is determined as the average last sale price of the common stock over the 10 trading days ending on the third trading day before the exercise notice date. The reason that The Company have agreed that these warrants will be exercisable on a cashless basis so long as they are held by the holders of the Private Warrants and their permitted transferees is because it is not known at this time whether they will be affiliated with us following an initial business combination. If they remain affiliated with us, their ability to sell the Company’s securities in the open market will be significantly limited. The Company has policies in place that prohibit insiders from selling the Company’s securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell the Company’s securities, an insider cannot trade in the Company’s securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who typically could sell the shares of common stock issuable upon exercise of the warrants freely in the open market, the insiders could be significantly restricted from doing so. As a result, The Company believes that allowing the holders to exercise such warrants on a cashless basis is appropriate. In addition, holders of the Company’s Private Warrants are entitled to certain registration rights. The Company evaluated the Private Warrants and determined that it is a freestanding equity-linked contract within the scope of ASC 815-40. Based on this guidance, the Company concluded that the Private Warrants qualify for equity classification. Series A and Series B Warrants The Series A and Series B Warrants issued in conjunction with the March Private Placement were determined to be liability classified in accordance with ASC 815 and have been recognized at fair value upon issuance, with remeasurement in each subsequent period. As such, on the date of issuance the Company allocated the proceeds between the common stock, Series A Warrants and Series B Warrants first to the fair value of the Series A Warrants and Series B Warrants, which were recorded as a liability. On May 12, 2025, the Company effected a 1-for-50 reverse stock split of its common stock. Following the reverse split, the 5-day reset period ended on May 19, 2025, with the lowest 5-day VWAP on May 14, 2025, being $3.0951. Consequently, the reset price was established at $3.0951, and the Series A Warrants held by investors were reset to 810,389 shares. The Series B Warrants were not subject to a post-split reset because no Series B Warrants were outstanding at the time the reverse stock split became effective. The fair value of the Series A and Series B Warrants as of June 30, 2025, was $2,787,750 and $0, respectively, resulting in a gain of $2,167,550 during the six months ended June 30, 2025. The $0 fair value for the Series B Warrants reflects that all Series B Warrants had been exercised by this date. As of June 30, 2025, 289,613 Series A Warrants and 114,992 Series B Warrants were exercised, resulting in the issuance of 404,605 common shares. As of June 30, 2025, 810,389 Series A Warrants and no Series B Warrants remained outstanding. The fair value of the Series A and Series B Warrants as of June 30, 2026, was $3,015,191 and $0, respectively. This resulted in a non-cash gain (loss) from the change in fair value of derivatives of $(375,180) and $11,570 for the three and six months ended June 30, 2026, respectively. As of June 30, 2026, investors had exercised 609,476 Series A Warrants and 114,992 Series B Warrants, resulting in the issuance of 687,225 common shares. As of June 30, 2026, 340,315 Series A Warrants and no Series B Warrants remained outstanding. Series C and Series D Warrants The Series C and Series D Warrants issued in connection with the August Private Placement were liability-classified in accordance with ASC 815 and remeasured to fair value at each reporting period while outstanding. On May 12, 2025, the Company effected a 1-for-50 reverse stock split of its common stock. Following the reverse split, the 5-day reset period ended on May 19, 2025, with the lowest 5-day VWAP on May 14, 2025, being the price floor of $3.25. Consequently, the reset price was established at $3.25, and the Series C Warrants held by investors were reset to 2,461,538 shares. The Series D warrants were not subject to a post-split reset based on the terms of the agreement. On October 8, 2025, Madison Bond LLC and Bayside Project LLC (together, the “New Holders”) purchased all of the outstanding Series C and Series D Warrants previously issued by the Company pursuant to the August Subscription Agreement. Immediately thereafter, the Company exercised its rights under the August Subscription Agreement to convert all remaining unexercised portions of the Series C and Series D Warrants into shares of common stock at a ratio of one share per warrant. On October 24, 2025, the New Holders received 3,447,957 shares of the Company’s common stock. On December 8, 2025, the Company entered into an agreement with Anson Investments Master Fund LP (“Anson”), pursuant to which it issued 240,400 shares of common stock to Anson in exchange for the termination of all warrants and other obligations of the Company under the Securities Purchase Agreement, dated as of August 30, 2024. The Company recorded a non-cash loss from changes in the fair value of derivative liabilities related to the Series C and Series D Warrants of $31,033,241 for the year ended December 31, 2025. As of December 31, 2025, investors had exercised 3,688,357 Series C and Series D Warrants, resulting in the issuance of 3,447,957 shares of common stock and the pending issuance of 240,400 shares of common stock and no warrants remained outstanding. Accordingly, no fair value remeasurement was required and no gain or loss from change in fair value was recognized during the three and six months ended June 30, 2026. The Company recognized non-cash gains from change in fair value of the Series C and Series D Warrants of $1,500,300 and $4,382,250 for the three and six months ended June 30, 2025, respectively. On February 5, 2026, the Company issued 240,400 shares of common stock to Anson, completing the settlement of all remaining obligations under the termination agreement. Pre-Funded Warrants In connection with the 2026 Private Placement (see Note 9), on June 9, 2026 the Company issued Pre-Funded Warrants to purchase up to 1,583,000 shares of common stock. The Pre-Funded Warrants are exercisable at any time after issuance at an exercise price of $0.0001 per share and do not expire until exercised in full. A holder (together with its affiliates) may not exercise any portion of a Pre-Funded Warrant to the extent that, after giving effect to such exercise, the holder would beneficially own in excess of 4.99% (or, at the holder’s election upon issuance, 9.99%) of the Company’s outstanding common stock. The Company evaluated the Pre-Funded Warrants under ASC 815-40 and concluded that they are indexed to the Company’s own stock and meet the conditions for equity classification. Accordingly, the Pre-Funded Warrants were recorded within additional paid-in capital at issuance and are not subject to subsequent remeasurement. As of June 30, 2026, no Pre-Funded Warrants had been exercised and Pre-Funded Warrants to purchase 1,583,000 shares of common stock remained outstanding. Placement Agent Warrants Also in connection with the 2026 Private Placement, the Company issued the Placement Agent Warrants to purchase up to 116,650 shares of common stock. The Placement Agent Warrants are immediately exercisable at an exercise price of $17.25 per share (115% of the purchase price per share in the 2026 Private Placement), expire on June 7, 2031, and are subject to a 180-day lock-up pursuant to FINRA Rule 5110(e)(1). The Placement Agent Warrants provide for customary adjustments in the event of stock dividends, stock splits, reorganizations or similar events. The Company evaluated the Placement Agent Warrants under ASC 815-40 and concluded that they meet the conditions for equity classification. The grant-date fair value of $1,938,014 was estimated using a Black-Scholes option pricing model with the following assumptions: stock price of $20.47, exercise price of $17.25, expected term of 5.0 years, expected volatility of 107.5%, risk-free rate of 4.26%, and expected dividend yield of 0%. The fair value was recognized as an offering cost of the 2026 Private Placement within additional paid-in capital, with no net effect on total stockholders’ equity. The valuation was considered a non-recurring Level 3 fair value measurement.

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