v3.25.2
FAIR VALUE MEASUREMENTS
 6 Months Ended
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 1Level 2Level 3Total
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 $13,259 
The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis aggregated by the level in the fair value hierarchy at December 31, 2024 (in thousands):
 Level 1Level 2Level 3Total
Liabilities:  
Public placement warrant liability$— $— $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 dateAugust 13, 2029August 13, 2029
Term (years)4.14.6
Volatility75 %80 %
Risk-free rate3.67 %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 dateAugust 13, 2029August 13, 2029
Term (years)4.54.6
Volatility80 %80 %
Risk-free rate4.22 %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 dateFebruary 14, 2030February 14, 2030
Term (years)4.65.0
Volatility79 %84 %
Risk-free rate3.7 %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 period3,457 
Change in estimated fair value1,213 
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 period1,449 
Change in estimated fair value248 
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.