NOTE 7 — WARRANT LIABILITY

In conjunction with the issuance of Series A Preferred Stock and Preferred Tranche A and Tranche B Warrants (the “Warrants”) as described in Note 6, the Company established a warrant liability.

The Warrants meet the definition of freestanding instruments and are classified as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity. The Warrants were initially recognized at fair value and are subject to remeasurement at each balance sheet date after issuance. Any change in fair value is recognized as a component of other income (expense) in the statements of operations in the period of change. For the three and six months ended June 30, 2026, the Company recognized a $27.6 million gain and an $81.8 million loss, respectively, related to changes in the fair value of the warrant liability, which were included in other income (expense) in the statements of operations. No gain or loss was recognized for the three and six months ended June 30, 2025 related to changes in the fair value of the liability. In addition to the valuation inputs described below, there is an indirect relationship

between the Company’s share price and the fair value of the warrant liability, whereby changes in the share price influence the valuation model used to determine fair value.

The fair value of the warrants is estimated using a binomial 2-node model in combination with the Black-Scholes Option Pricing Model using unobservable (Level 3) inputs that reflect the Company’s own assumptions, as described in Note 2. The significant unobservable inputs include the expected timing of the Milestone Event, the probability of the Milestone Event being successfully achieved, and the value of the Series A Preferred Stock upon the success or failure of the Milestone Event. Significant increases (decreases) in any of the inputs in isolation would result in a significantly higher (lower) fair value measurement.

The Company estimated the fair value of the Tranche A Warrants and Tranche B Warrants to be approximately $144.8 million and $87.9 million, respectively, as of June 30, 2026, and $110.6 million and $60.9 million, respectively, as of December 31, 2025. The Preferred Tranche A warrants were remeasured to fair value immediately prior to exercise, and the resulting difference between the carrying amount and the fair value at the date of exercise was recognized as a change in fair value of the warrant liability. The Series

A Preferred Stock, and common shares that were issued upon conversion, were recorded at their fair value at the exercise date based upon the underlying price of the common stock at that date. These changes represent additional non-cash gains or expenses included in changes in fair value of the warrant liability in the Company’s consolidated statements of operations during the reporting period. Such amounts are presented in the tables below as “reduction of warrant liability upon exercise of warrants”.