| Fair Value Measurements |
4. Fair Value Measurements In accordance with ASC 820 (Fair Value Measurements and Disclosures), the Company uses various inputs to measure the fair value of liabilities related to certain embedded conversion feature associated with its warrant liability, convertible debt, share payable, and contingent payable to Cognate BioServices on a recurring basis to determine the fair value of these liabilities. The Company has also elected the FVO for certain financial instruments, such as convertible notes. The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2025 and December 31, 2024 (in thousands): | | | | | | | | | | | | | | | Fair value measured at December 31, 2025 | | | | | | Quoted prices in active | | Significant other | | Significant | | | Fair value at | | markets | | observable inputs | | unobservable inputs | | | December 31, 2025 | | (Level 1) | | (Level 2) | | (Level 3) | Contingent payable derivative liability | | $ | 9,416 | | | — | | | — | | $ | 9,416 | Convertible notes at fair value | | | 37,276 | | | — | | | — | | | 37,276 | Share payable | | | 373 | | | — | | | — | | | 373 | Total fair value | | $ | 47,065 | | $ | — | | $ | — | | $ | 47,065 |
| | | | | | | | | | | | | | | Fair value measured at December 31, 2024 | | | | | | Quoted prices in active | | Significant other | | Significant | | | Fair value at | | markets | | observable inputs | | unobservable inputs | | | December 31, 2024 | | (Level 1) | | (Level 2) | | (Level 3) | Warrant liability | | $ | 2,219 | | $ | — | | $ | — | | $ | 2,219 | Contingent payable derivative liability | | | 9,578 | | | — | | | — | | | 9,578 | Convertible notes at fair value | | | 34,224 | | | — | | | — | | | 34,224 | Share payable | | | 143 | | | — | | | — | | | 143 | Total fair value | | $ | 46,164 | | $ | — | | $ | — | | $ | 46,164 |
There were no transfers between Level 1, 2 or 3 during the years ended December 31, 2025 and 2024. The following table presents changes in Level 3 liabilities measured at fair value for the years ended December 31, 2025 and 2024. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands). | | | | | | | | | | | | | | | | | | | | | | | | | | | Convertible | | | | | | Warrant | | Contingent Payable | | Share | | Notes At | | | | | | Liability | | Derivative Liability | | Payable | | Fair Value | | Total | Balance - January 1, 2024 | | $ | 944 | | $ | 9,188 | | $ | 483 | | $ | 12,771 | | $ | 23,386 | Additional share payable | | | — | | | — | | | 688 | | | — | | | 688 | Additional warrant liabilities as a result of reclassification | | | 2,029 | | | — | | | — | | | — | | | 2,029 | Issuance of convertible notes at fair value | | | — | | | — | | | — | | | 19,900 | | | 19,900 | Redemption of share payable | | | — | | | — | | | (1,012) | | | — | | | (1,012) | Additions from debt extinguishment | | | — | | | — | | | — | | | 10,378 | | | 10,378 | Debt repayment | | | — | | | — | | | — | | | (1,110) | | | (1,110) | Change in fair value | | | (754) | | | 390 | | | (16) | | | (7,715) | | | (8,095) | Balance - December 31, 2024 | | | 2,219 | | | 9,578 | | | 143 | | | 34,224 | | | 46,164 | Additional share payable | | | — | | | — | | | 1,271 | | | — | | | 1,271 | Issuance of convertible notes at fair value | | | — | | | — | | | — | | | 27,726 | | | 27,726 | Redemption of share payable | | | — | | | — | | | (1,455) | | | — | | | (1,455) | Additions from debt extinguishment | | | — | | | — | | | — | | | 11,491 | | | 11,491 | Debt repayment | | | — | | | — | | | — | | | (1,000) | | | (1,000) | Debt conversion | | | — | | | — | | | — | | | (9,532) | | | (9,532) | Reclassification of liability classified warrants to equity | | | (5,175) | | | — | | | — | | | — | | | (5,175) | Reclassification of equity classified warrants to liabilities | | | 2,643 | | | — | | | — | | | — | | | 2,643 | Change in fair value | | | 313 | | | (162) | | | 414 | | | (25,633) | | | (25,068) | Balance - December 31, 2025 | | $ | — | | $ | 9,416 | | $ | 373 | | $ | 37,276 | | $ | 47,065 |
A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities, share payable, and contingent conversion feature that are categorized within Level 3 of the fair value hierarchy as of December 31, 2025 and December 31, 2024 is as follows. The contingent conversion option of the contingent payable expired during the year ended December 31, 2025. The liability relates to the remaining redemption feature which, like the convertible notes at fair value, includes discount factors that are unobservable inputs and proprietary in nature. | | | | | | | | | | Share Payable | | | | For the years ended December 31, | | | | | 2025 | | | 2024 | | Strike price | | $ | 0.23 | | $ | 0.33 | | Contractual term (years) | | | 0.09 | | | 0.09 | | Volatility (annual) | | | 63 | % | | 68 | % | Risk-free rate | | | 4.2 | % | | 5.1 | % | Dividend yield (per share) | | | 0 | % | | 0 | % |
| | | | | | | | | | | | | As of December 31, 2025 | | As of December 29, 2025 (1) | | As of July 26, 2025 (1) | | | | Share Payable | | Warrant Liability | | Warrant Liability | | Strike price | | $ | 0.22 | | $ | 0.35 | | $ | 0.25 | | Contractual term (years) | | | 0.05 | | | 1.05 | | | 1.40 | | Volatility (annual) | | | 64 | % | | 90 | % | | 85 | % | Risk-free rate | | | 3.7 | % | | 3.5 | % | | 4.1 | % | Dividend yield (per share) | | | 0 | % | | 0 | % | | 0 | % |
(1)Remeasurement as of reclassification date. | | | | | | | | | | As of December 31, 2024 | | | | Share Payable | | Warrant Liability | | Strike price | | $ | 0.25 | | $ | 0.25 | | Contractual term (years) | | | 0.08 | | | 0.58 | | Volatility (annual) | | | 60 | % | | 66 | % | Risk-free rate | | | 4.3 | % | | 4.2 | % | Dividend yield (per share) | | | 0 | % | | 0 | % |
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