FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2025

Note 8. FAIR VALUE MEASUREMENTS

The Company analyzes all financial instruments with features of both liabilities and equity under the FASB accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The three levels of the hierarchy and the related inputs are as follows:

Level		Inputs
1		Unadjusted quoted prices in active markets for identical assets and liabilities;
		Unadjusted quoted prices in active markets for similar assets and liabilities.
2		Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or
		inputs other than quoted prices that are observable for the asset or liability.
3		Unobservable inputs for the asset or liability.

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts and other receivables, prepaid and other current assets, accounts payable, accrued expenses, and note payable, are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

Warrants

The Company issued liability classified warrants in connection with the issuance of the May 2025 warrants. The warrants were liability classified as a result of certain terms in the May 2025 warrant agreement and is reflected as a liability in the condensed consolidated balance sheets. The Company uses a Black Scholes model to estimate the fair value of the warrants. Changes in the fair value of the warrants are recognized in “Change in fair value of warrants issued” for each reporting period in the condensed consolidated income statement. Refer to Note 14 for additional details of the warrants.

The following tables present liabilities measured and recorded at fair value on the Company’s consolidated balance sheet as of June 30, 2025, the Company notes there were no liabilities as of December 31, 2024.

	Total		Level 1		Level 2		Level 3
	June 30, 2025
	Total		Level 1		Level 2		Level 3
Liability classified warrants	$	3,974,911	$	—	$	—	$	3,974,911
Total	$	3,974,911	$	—	$	—	$	3,974,911

The Company initially recorded a warrant liability of $2.9 million as a result of the May 2025 public offering. The Company remeasured the warrants as of June 30, 2025 and recognized a $1.1 million change in the fair value of the warrants.