Note 9: Warrants

The following table summarizes warrants outstanding as of December 31, 2025 and September 30, 2025:

Liability Classified Warrants

On September 3, 2024, in connection with a registered public offering, we issued warrants to investors (the “Public Offering Warrants”) with an exercise price of $1.35 per share. In connection with the inducement transaction on February 10, 2025, we issued new common stock purchase warrants to certain holders that exercised outstanding warrants (the “Common Inducement Warrants”) with an exercise price of $4.00 per share. The Public Offering Warrants were issued to investors in exchange for capital, and the Common Inducement Warrants were issued in exchange for the exercise of previously outstanding warrants. The terms of the Public Offering Warrants and Common Inducement Warrants include settlement features that, under specified transactions involving a change in control or similar corporate events, could require the Company to settle the warrants for cash in circumstances outside the Company’s control. As a result, the warrants do not qualify for equity classification and are recorded as liabilities, measured initially and subsequently at fair value with changes in fair value recognized in earnings.

The following table presents the changes in the liability-classified warrants outstanding.

Both the Public Offering Warrants and the Common Inducement Warrants are included within Level III of the fair value hierarchy. We use a Black-Scholes option pricing model to determine the fair value of our liability-classified warrants. The valuation incorporates both observable inputs, including our stock price and risk-free interest rates, and significant unobservable inputs, including expected stock price volatility. The expected volatility is based on a combination of the implied volatility of our publicly traded common stock and the historical volatility of comparable publicly traded companies with similar expected terms, while the expected term is generally based on the contractual term of the warrants as they are immediately exercisable. The dividend yield is assumed to be zero, consistent with our historical practice on our Class B common stock. Changes in significant unobservable inputs, particularly expected volatility and expected term, could result in a significantly higher or lower fair value measurement.

Key assumptions utilized in the issuance-date valuation of the Public Offering Warrants and Common Inducement Warrants are summarized in the table below:

The following table presents the change in the liability balance associated with the liability-classified warrants. Changes in the fair value of the liability-classified warrants are included within other income (loss) on the consolidated statements of operations.

Key assumptions utilized in the valuation of the liability-classified warrants as of the balance sheet dates are summarized in the table below:

Mezzanine Equity Classified Warrants

In September 2024, in connection with a registered public offering, we issued warrants to placement agents (the “Placement Agent Warrants”) with an exercise price of $1.69 per share. In connection with the inducement transaction on February 10, 2025, we issued inducement warrants to certain placement agents with an exercise price of $5.00 (the “Placement Agent Inducement Warrants,” and together with the Placement Agent Warrants, the “Mezzanine Equity Warrants”). The Placement Agent Warrants were issued on September 3, 2024, and the Placement Agent Inducement Warrants were issued on March 12, 2025. Both were issued in exchange for placement agent services and are accounted for as share-based payment awards. Due to certain settlement features that are not solely within the Company’s control, including a change in control or similar corporate events, the Mezzanine Equity Warrants are classified within mezzanine equity. The warrants were recorded at their issuance-date fair value. As of December 31, 2025 and September 30, 2025, the warrants were not currently redeemable and, therefore, the Company did not adjust the carrying amounts to redemption value. The warrants are exercisable into shares of Class B common stock.

The following table presents the changes in the Mezzanine Equity Warrants.

Key assumptions utilized in the issuance-date valuation of the Placement Agent Warrants and Placement Agent Inducement Warrants are summarized in the table below:

The following table summarizes activity in mezzanine equity:

Because the Placement Agent Warrants and Placement Agent Inducement Warrants were not currently redeemable as of December 31, 2025 or September 30, 2025, no redemption value adjustment was recorded during the three months ended December 31, 2025 or the year ended September 30, 2025.

Equity Classified Warrants

In connection with our initial public offering in November 2023, we issued warrants with an exercise price of $6.00 per share to the representative of the offering to purchase shares of our common stock (the “Representative’s Warrants”). The Representative’s Warrants were issued as consideration for underwriting services and are accounted for as share-based payment awards. The Representative’s Warrants do not contain any cash settlement or redemption features outside the Company’s control, and are classified in permanent equity. The Representative’s Warrants issued at our initial public offering remained outstanding as of both December 31, 2025 and September 30, 2025, with no issuances, exercises, forfeitures, or expirations during the period from September 30, 2024 through December 31, 2025.