v3.26.1
Fair Value Measurements
3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The following are the liabilities measured at fair value on the condensed consolidated balance sheet at March 31, 2026 and December 31, 2025 using quoted price in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):
Level 1:
Quoted Prices
in Active
Markets for Identical
Assets
Level 2:
Significant
Other
Observable
Inputs
Level 3:
Significant
Unobservable
Inputs
Total at March 31,
2026
Total Gains (Losses) For The Three Months Ended March 31, 2026
Recurring fair value measurements
2024 October Institutional/Accredited Investor Warrants$— $— $— $— $1,403 
2025 May Institutional/Accredited Investor Warrants$— $— $— $— $11,272 
2025 September Institutional/Accredited Investor Warrants$— $— $— $— $2,862 
Senior Convertible Notes - September 2025$— $— $117,070 $117,070 $— 
2025 November Institutional/Accredited Investor Warrants$— $— $— $— $12,311 
Senior Convertible Notes - November 2025$— $— $245,865 $245,865 $— 
2025 December 17 and 26 Institutional/Accredited Investor Warrants$— $— $— $— $9,848 
2025 December 30 Institutional/Accredited Investor Warrants and AIR$— $— $258,482 $258,482 $177,845 
2026 January Institutional/Accredited Investor Warrants $— $— $6,559 $6,559 $— 
2026 February Institutional/Accredited Investor Warrants$— $— $7,411 $7,411 $— 
2026 March 6 Institutional/Accredited Investor Warrants$— $— $9,306 $9,306 $— 
2026 March 27 Institutional/Accredited Investor Warrants$— $— $54,754 $54,754 $— 
Total recurring fair value measurements$— $— $699,447 $699,447 $215,541 

Level 1:
Quoted Prices
in Active
Markets for Identical
Assets
Level 2:
Significant
Other
Observable
Inputs
Level 3:
Significant
Unobservable
Inputs
Total at December 31,
2025
Total Gains (Losses) For The Three Months Ended March 31, 2025
Recurring fair value measurements
2024 February Institutional/Accredited Investor warrants$— $— $— $— $217,896 
2024 October Institutional/Accredited Investor Warrants$— $— $1,403 $1,403 $265,178 
Senior Convertible Notes - October 2024$— $— $— $— $(1,091,006)
Additional Investment Rights - October 2024$— $— $— $— $(676,717)
2024 December Institutional/Accredited Investor Warrants$— $— $— $— $69,025 
2025 May Institutional/Accredited Investor Warrants$— $— $11,272 $11,272 $— 
2025 September Institutional/Accredited Investor Warrants$— $— $2,862 $2,862 $— 
Senior Convertible Notes - September 2025$— $— $112,302 $112,302 $— 
2025 November Institutional/Accredited Investor Warrants$— $— $12,311 $12,311 $— 
Senior Convertible Notes - November 2025$— $— $281,185 $281,185 $— 
2025 December 17 and 26 Institutional/Accredited Investor Warrants$— $— $9,848 $9,848 $— 
Senior Convertible Notes - December 17 and 26 2025$— $— $222,691 $222,691 $— 
2025 December 30 Institutional/Accredited Investor Warrants and AIR$— $— $436,327 $436,327 $— 
Total recurring fair value measurements$— $— $1,090,202 $1,090,202 $(1,215,624)
The following is a reconciliation of the opening and closing balances for the liabilities related to the warrants (Note 11) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2026:
2024 October Institutional/Accredited Investor Warrants2025 May Institutional/Accredited Investor Warrants2025 September Institutional/Accredited Investor WarrantsSenior Convertible Notes - September 20252025 November Institutional/Accredited Investor WarrantsSenior Convertible Notes - November 20252025 December 17 and 26 Institutional/Accredited Investor WarrantsSenior Convertible Notes - December 17 and 26 2025 (1)2025 December 30 Institutional/Accredited Investor Warrants and AIR2026 January Institutional/Accredited Investor Warrants2026 February Institutional/Accredited Investor Warrants2026 March 6 Institutional/Accredited Investor Warrants2026 March 27 Institutional/Accredited Investor Warrants
Balance at December 31, 2025$1,403 $11,272 $2,862 $112,302 $12,311 $281,185 $9,848 $222,691 $436,327 $— $— $— $— 
Initial fair value— — — — — — — — — 6,559 7,411 9,306 54,754 
Interest Expense— — — 4,768 — 4,898 — 4,484 — — — — — 
Conversion of Convertible Notes— — — — — (40,218)— (222,222)— — — — — 
Total (gains) losses for period included in earnings(1,403)(11,272)(2,862)— (12,311)— (9,848)— (177,845)— — — — 
Balance at March 31, 2026$— $— $— $117,070 $— $245,865 $— $4,953 258,482 6,559 7,411 9,306 54,754 
__________________
(1) The three months ended March 31, 2025 ending balance amount consist of only interest amount.

The fair value of the level 3 2024 February Institutional/Accredited Investor warrants was estimated at December 31, 2025 using the Black-Scholes model which used the following inputs: term of 3.09 years, risk free rate of 3.56%, no dividends, volatility of 83.0%, common stock price of $45.72, and strike price of $800.00.

The fair value of the level 3 2024 October Institutional/Accredited Investor Warrants was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 3.80 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $2,721.60.

The fair value of the level 3 2024 October Institutional/Accredited Investor Warrants was estimated at December 31, 2025 using the Monte Carlo Simulation model which used the following inputs: term of 3.83 years, risk free rate of 3.50%, no dividends, volatility of 47.9%, common stock price of $45.72, and strike price of $2,721.60.

The fair value of the level 3 Senior Convertible Notes - October 2024 was estimated at December 31, 2025 using the Monte Carlo Simulation model which used the following inputs: term of 0.00 years, risk free rate of 3.50%, no dividends, volatility of 47.9%, common stock price of $45.72, and strike price of $2,449.44.

The fair value of the level 3 Additional Investment Rights - October 2024 was estimated at December 31, 2025 using the Monte Carlo Simulation model which used the following inputs: term of 0.00 years, risk free rate of 3.50%, no dividends, volatility of 47.9%, common stock price of $45.72, and strike price of $2,449.44.

The fair value of the level 3 2024 December Institutional/Accredited Investor Warrants was estimated at December 31, 2025 using the Black-Scholes model which used the following inputs: term of 0.00 years, risk free rate of 3.50%, no dividends, volatility of 47.9%, common stock price of $45.72, and strike price of $2,449.44.

The fair value of the level 3 2025 May Institutional/Accredited Investor Warrants was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 4.20 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $20.33.

The fair value of the level 3 2025 May Institutional/Accredited Investor Warrants was estimated at December 31, 2025 using the Monte Carlo Simulation model which used the following inputs: term of 4.42 years risk free rate of 3.50%, no dividends, volatility of 47.9%, common stock price of $45.72, and strike price of $532.80.

The fair value of the level 3 2025 September Institutional/Accredited Investor Warrants was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 4.61 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $20.33.

The fair value of the level 3 2025 September Institutional/Accredited Investor Warrants was estimated at December 31, 2025 using the Monte Carlo Simulation model which used the following inputs: term of 4.69 years, risk free rate of 3.50%, no dividends, volatility of 47.9%, common stock price of $45.72, and strike price of $122.40.

The fair value of the level 3 Senior Convertible Notes - September 2025 was estimated at March 31, 2026 using the Monte Black-Scholes model which used the following inputs: term of 0.60 years risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $45.72, and strike price of $122.40.
The fair value of the level 3 Senior Convertible Notes - September 2025 was estimated at December 31, 2025 using the Monte Carlo Simulation model which used the following inputs: term of 1.21 years risk free rate of 3.50%, no dividends, volatility of 47.9%, common stock price of $45.72, and strike price of $122.40.

The fair value of the level 3 2025 November Institutional/Accredited Investor Warrants was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 4.70 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $20.33.

The fair value of the level 3 2025 November Institutional/Accredited Investor Warrants was estimated at December 31, 2025 using the Monte Carlo Simulation model which used the following inputs: term of 4.83 years, risk free rate of 3.50%, no dividends, volatility of 46.4%, common stock price of $45.72, and strike price of $99.72.

The fair value of the level 3 Senior Convertible Notes - November 2025 was estimated at March 31, 2026 using the Monte Black-Scholes model which used the following inputs: term of 0.90 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $99.72.

The fair value of the level 3 Senior Convertible Notes - November 2025 was estimated at December 31, 2025 using the Monte Carlo Simulation model which used the following inputs: term of 1.52 years, risk free rate of 3.50%, no dividends, volatility of 46.4%, common stock price of $45.72, and strike price of $99.72.

The fair value of the level 3 2025 December 17 and 26 Institutional/Accredited Investor Warrants was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 4.80 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $20.33.

The fair value of the level 3 2025 December 17 and 26 Institutional/Accredited Investor Warrants was estimated at December 31, 2025 using the Monte Carlo Simulation model which used the following inputs: term of 4.85 years, risk free rate of 3.50%, no dividends, volatility of 46.4%, common stock price of $45.72, and strike price of $69.84.

The fair value of the level 3 Senior Convertible Notes - 2025 December 17 and 26 was estimated at December 31, 2025 using the Black-Scholes model which used the following inputs: term of 1.52 years risk free rate of 3.50%, no dividends, volatility of 46.4%, common stock price of $45.72, and strike price of $69.84.

The fair value of the level 3 2025 December 30 Institutional/Accredited Investor Warrants and AIR was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 4.75 years, risk free rate of 3.83%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $11.33.

The fair value of the level 3 2025 December 30 Institutional/Accredited Investor Warrants and AIR was estimated at December 31, 2025 using the Black-Scholes model which used the following inputs: term of 5.00 years, risk free rate of 4.20%, no dividends, volatility of 53.0%, common stock price of $45.72, and strike price of $63.92.

The fair value of the level 3 2026 January Institutional/Accredited Investor Warrants and AIR was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 4.84 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $31.32.

The fair value of the level 3 2026 February Institutional/Accredited Investor Warrants and AIR was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 4.87 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $20.34.

The fair value of the level 3 2026 March 6 Institutional/Accredited Investor Warrants and AIR was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 4.93 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $16.38.

The fair value of the level 3 2026 March 27 Institutional/Accredited Investor Warrants and AIR was estimated at March 31, 2026 using the Black-Scholes model which used the following inputs: term of 4.99 years, risk free rate of 3.84%, no dividends, volatility of 160.0%, common stock price of $11.88, and strike price of $11.34.

There were no transfers between Level 1 and Level 2 of the fair value hierarchy in 2026 and 2025.

Cash, accounts receivable, accounts payable, and accrued expenses are generally carried on the cost basis, which management believes approximates fair value due to the short-term maturity of these instruments.
Other Debt Obligations

The following outstanding debt obligations are reflected in the Company's condensed consolidated balance sheet at carrying value since the Company did not elect to remeasure the following debt obligations to fair value at the end of each reporting period. The carrying values of these debt obligations approximate fair value due to the short-term maturity of these debt obligations.
March 31, 2026December 31, 2025
Fair ValueCarrying ValueFair ValueCarrying Value
Promissory Notes - August 16, 2024 $— $— $564,446 $564,446 
Promissory Notes - Fermata Energy II LLC$597,969 $597,969 $584,292 $584,292