PREFERRED STOCK AND WARRANTS |
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| PREFERRED STOCK AND WARRANTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PREFERRED STOCK AND WARRANTS | (11) PREFERRED STOCK AND WARRANTS In connection with a private placement completed in March 2023, the Company issued 4.9 million warrants to purchase shares of the Company’s common stock at an exercise price of $3.77 per share, 4.7 million of which remain outstanding following the June 2024 redemption of the related preferred stock. No warrant exercises occurred during the six months ended June 30, 2026. In the six months ended June 30, 2025, holders exercised 0.2 million warrants, and the remaining warrants continue to be outstanding without modification. The Company accounts for the warrants as liability‑classified instruments under ASC 480, Distinguishing Liabilities from Equity, and remeasures them to fair value at each reporting date using a Black‑Scholes option‑pricing model. Changes in fair value are recognized within Other income, net in the condensed consolidated statements of operations. The Company determined the fair value of the warrants using Level 3 inputs. The key assumptions into the model utilized were as follows as of June 30, 2026 and December 31, 2025:
The changes in the Company’s warrant liabilities for the six months ended June 30, 2026 and 2025 were as follows (in thousands):
The warrants are immediately exercisable and upon an event such as a merger, consolidation, asset sale or similar change of control, the warrants may be exercised and the holders may vote the underlying shares of common stock. In connection with the private placement, the Company provided the investors with certain registration rights relating to the preferred stock, the warrants and the shares of the Company’s common stock underlying the warrants, that required the Company to file a registration statement on Form S-3 with the SEC within 30 days following the closing date of the Private Placement. The registration requirement was completed on May 19, 2023. During the six months ended June 30, 2025, 176,658 of the warrants were exercised in cashless exercises, resulting in the issuance of 32,573 shares of the Company’s common stock at a weighted average fair value of $4.62 per share. There were 4,681,432 remaining warrants outstanding as of June 30, 2026. |
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