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Warrants

6 Months Ended

Jun. 30, 2025

Note 9. Warrants

Warrant Inducement Offering and Amendment to Series C Warrants

On August 6, 2024, the Company extended the expiration date of the Series B warrants issued in the Offering to October 7, 2024, by entering into an amendment to the Warrant Agency Agreement dated as of February 8, 2024 by and between the Company and the warrant agent, Equiniti Trust Company, LLC. On October 3, 2024, the Company extended the expiration date of the Series B warrants to November 8, 2024, by entering into a further amendment to the Warrant Agency Agreement.

On November 5, 2024, the Company entered into inducement offer letter agreements (the Inducement Letters) with certain holders (the Holders) of existing Series B warrants (the Existing Warrants) to purchase up to an aggregate of 2,246,030 shares of the Company’s common stock. Pursuant to the Inducement Letters, the Holders agreed to exercise for cash their Existing Warrants at a reduced exercise price of $1.30 per share in consideration for the Company’s agreement to issue in a private placement (i) new Series C common stock purchase warrants (the Series C Warrants) to purchase an aggregate of 2,246,030 shares of common stock and (ii) new Series D common stock purchase warrants (the Series D Warrants) to purchase an aggregate of 2,246,030 shares of common stock. The Series C Warrants have an exercise price of $1.61 per share, were exercisable upon issuance and originally expired on the six-month anniversary of the date of issuance. On May 2, 2025, the Company extended the expiration date of its Series C Warrants to purchase an aggregate of 2,246,030 shares of common stock from May 6, 2025 to August 4, 2025, by entering into an amendment with each holder of the Series C Warrants. The Series D Warrants have an exercise price of $1.61 per share, were exercisable upon issuance and expire on the five-year anniversary of the date of issuance.

Upon exercise of the Existing Warrants, the Company issued 1,328,650 shares of its common stock while the remaining 917,380 shares (Issuable Shares) remained under abeyance, pending issuance instructions from the Holders, pursuant to the terms of the Inducement Letters. The Company accounted for the issuance of the: i) 1,328,650 shares of its common stock, ii) the Series C Warrants to purchase 2,246,030 shares of the Company’s common stock, iii) the Series D Warrants to purchase 2,246,030 shares of the Company’s common stock, and iv) the remaining 917,380 Issuable Shares as a single equity transaction for gross proceeds of approximately $2.92 million at the reduced exercise price of $1.30 per share. The fair value of the unissued Issuable Shares at each balance sheet date has been presented separately as issuable shares on the condensed consolidated balance sheets and statements of stockholders’ equity.

In relation to the above warrant inducement offering, the Company engaged Ladenburg as placement agent and paid cash compensation of 9% of the gross proceeds. In addition, the Company issued warrants to Ladenburg to purchase up to 157,223 shares of common stock at an exercise price of $1.625, which were exercisable upon issuance, expire on the five-year anniversary of the date of issuance, and have substantially similar terms to the Series C Warrants.

Warrants Classified as Liabilities

The securities purchase agreements governing warrants issued in registered direct offerings completed in November 2022 and June 2023 (collectively, the Purchase Warrants) provide for a value calculation for such warrants using the Black Scholes model in the event of certain fundamental transactions. The fair value calculation provides for a floor on the volatility amount utilized in the value calculation at 100% or greater. The Company has determined this provision introduces leverage to the holders of the Purchase Warrants that could result in a value that would be greater than the settlement amount of a fixed-for-fixed option on the Company’s own equity shares. Therefore, pursuant to ASC 815, the Company has classified the Purchase Warrants as liabilities in its consolidated balance sheet. The classification of the Purchase Warrants, including whether the Purchase Warrants should be recorded as liabilities or as equity, is evaluated at the end of each reporting period with changes in the fair value reported in other income (expense) in the consolidated statements of operations.

As of June 30, 2025, the Company had the following Purchase Warrants outstanding (share amounts in thousands):

	Number of Shares		Exercise Price		Expiration Date
Warrants issued - November 2022		92	$	40.00		May 28, 2028
Warrants issued - June 2023		143	$	28.00		June 2, 2028
		235

The following table sets forth changes in the fair value of the Purchase Warrants outstanding (amounts in thousands):

	Number of Warrants
	on Common Shares		Amount
Balance as of December 31, 2024		235	$	55
Change in fair value of warrants		—		(35	)
Balance as of March 31, 2025		235	$	20
Change in fair value of warrants		—		29
Balance as of June 30, 2025		235	$	49

The outstanding Purchase Warrants had no intrinsic value at June 30, 2025.

The fair value of the Purchase Warrants at June 30, 2025 was determined using the Black Scholes model with the assumptions in the following table.

	2022 Purchase Warrant			2023 Purchase Warrant
Expected term based on contractual term		2.9 years			2.9 years
Interest rate (risk-free rate):		3.83	%		3.83	%
Expected volatility		126	%		125	%
Expected dividend		—			—
Fair value of warrants (in thousands)	$	22		$	27

The fair value of the Purchase Warrants at December 31, 2024 was determined using the Black Scholes model with the assumptions in the following table.

	2022 Purchase Warrant			2023 Purchase Warrant
Expected term based on contractual term		3.4 years			3.4 years
Interest rate (risk-free rate):		4.38	%		4.38	%
Expected volatility		115	%		117	%
Expected dividend		—			—
Fair value of warrants (in thousands)	$	25		$	30

Warrants Classified as Equity

As of June 30, 2025, the Company had the following equity-classified common stock purchase warrants outstanding (share amounts in thousands):

Warrant Type	Number of Shares		Exercise Price		Expiration
Common Stock Warrant		7	$	28.00		June 2, 2028
Series A warrants		3,975	$	2.250		February 8, 2029
Series A warrants		139	$	2.625		February 8, 2029
Series C warrants		2,246	$	1.610		August 4, 2025
Series C warrants		157	$	1.625		November 6, 2029
Series D warrants		2,246	$	1.610		November 6, 2029
Balance as of June 30, 2025		8,770

The outstanding equity-classified warrants had no intrinsic value at June 30, 2025.