Derivative Liabilities |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Liabilities [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative liabilities |
On July 15, 2022, the Company issued 167 common stock purchase warrants with an exercise price of $2,817 as part of the conversion of promissory notes.
On November 21, 2023, the Company completed its Initial Public Offering (“IPO”) and issued 54 warrants (the “IPO warrants”). The IPO warrants are exercisable into one share of common stock of the Company at $5,600 per share and expire on November 21, 2028.
We analyzed the common stock purchase warrants issued as partial settlement of the promissory notes payable and the IPO warrants against the requirements of ASC 480, Distinguishing Liabilities from Equity, and determined that the warrants should be classified as financial liabilities.
ASC 815, Derivatives and Hedging, requires that the warrants be accounted for as derivative liabilities with initial and subsequent measurement at fair value with changes in fair value recorded as other income (expense).
A continuity of the Company’s common stock purchase derivative liability warrants is as follows:
We determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes Option Pricing Model to calculate the fair value as of initial recognition and at subsequent period ends through December 31, 2024. Given the exercise price of these warrants compared to the fair market value of the Company’s shares, the value is deemed to be $. As of June 30, 2025, the following warrants were outstanding:
As of June 30, 2025, and December 31, 2024, the weighted average life of derivative liability warrants outstanding was 2.21 and 2.71 years, respectively. |
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