7. Warrants

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Common stock warrants are accounted for in accordance with applicable accounting guidance provided in ASC Topic 815, Derivatives and Hedging - Contracts in Entity’s Own Equity (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. The conditions within ASC 815-40 are not subject to a probability assessment. The equity classified warrants do not fall under the liability criteria within ASC 480 Distinguishing Liabilities from Equity, as they are not puttable and do not represent an instrument that has a redeemable underlying security. The equity classified warrants do meet the definition of a derivative instrument under ASC 815, but are eligible for the scope exception as they are indexed to the Company’s own stock and would be classified in permanent equity if freestanding. The Series A Warrants and pre-funded warrants issued in connection with the December 2024 Purchase Agreement did not meet the scope exception under ASC 815 and, therefore, were classified as liabilities as of December 31, 2024. As a result of the Series A Amendment and PFW Amendment, 3,375,457 outstanding Series A Warrants and outstanding 1,928,493 pre-funded warrants met the scope exception under ASC 815 and, therefore, were reclassified to permanent equity during the six months ended June 30, 2025.

Warrants outstanding and warrant activity (reflects the number of common shares as if the warrants were converted to common stock) for the six months ended June 30, 2025 is as follows:

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