At times, the Company may hold (1) assets and liabilities that qualify as financial instruments under ASC 820, “Fair Value Measurement” (“ASC 820”) that are re-measured and reported at fair value at each reporting period, and (2) non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis.

Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors market participants would use in valuing the asset or liability.

The Company applies a three-level hierarchy to prioritize the inputs used in measuring fair value:

As of June 30, 2026 and December 31, 2025, the Company's financial instruments consisted of cash and cash equivalents, short-term investments, accounts payable, warrants, the Simple Agreements for Future Equity (“SAFE”) liability and related party debt. The carrying amount of cash and cash equivalents, excluding money market funds measured at fair value, and accounts payable approximates fair value due to the short-term nature of these instruments. The carrying amount of the short-term investments, money market funds, warrants and SAFE liability is fair value, as further described below.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

There were no assets or liabilities measured at fair value on a nonrecurring basis during the three and six months ended June 30, 2026 and 2025.

Warrant Liability

On July 22, 2025, the Company issued immediately exercisable and fully vested warrants to purchase shares of its common stock as part of the Foothills transaction. The warrants are freestanding financial instruments and do not meet the criteria for equity classification because the exercise price is denominated in a currency other than the Company's functional currency. As a result, the warrants are not considered indexed to the Company's own stock and are classified as a warrant liability.

The Company estimates the fair value of the warrant liability using the Black-Scholes option-pricing model. The significant unobservable inputs used in the fair value measurement of the warrant liability are the fair value of the underlying stock at the valuation date and the estimated term of the warrants. The warrant liability is categorized as Level 3 because it is valued based on unobservable inputs and management's judgment due to the absence of quoted market prices, inherent lack of liquidity, and the long-term nature of such financial instruments.

Changes to the expected term, expected volatility, or the price of the underlying stock could result in a change to the fair value measurement.

During the three and six months ended June 30, 2026, certain warrant holders exercised 46,610 warrants for shares of the Company's common stock, and as of June 30, 2026, 923,781 warrants remain outstanding. Upon exercise, the related portion of the warrant liability was reclassified to stockholders' equity.

SAFE Liability

In December 2025, the Company entered into SAFE agreements to raise $15,080, which are described in Note 10 – Debt. The SAFE agreements were issued to numerous investors, all of which had identical terms. $11,715 of the SAFE agreements were funded as of December 31, 2025. By January 21, 2026, the Company received the remaining proceeds of $3,365 related to the SAFE agreements issued in December 2025.

The fair value of the Company's SAFE liability was determined using a probability-weighted expected return methodology ("PWERM"), which considers multiple potential liquidity outcomes and their respective likelihoods. Under this framework, the valuation incorporates three primary scenarios: (i) an IPO, (ii) a corporate transaction, and (iii) dissolution. The expected economic outcome under each scenario was estimated and then probability-weighted based on management's assumptions to arrive at an overall

fair value as of the valuation date. The valuation also incorporates the impact of embedded optionality estimated using a Black-Scholes option pricing framework. The following table summarizes the assumptions used in the Black-Scholes option-pricing model to estimate the fair value of the SAFE Liability.

On May 7, 2026, the Company completed its IPO. In connection with the closing of the IPO, all outstanding SAFE agreements automatically converted into 1,037,100 shares of the Company’s common stock in accordance with their terms. As a result, the SAFE liability was remeasured to fair value immediately prior to conversion, with the change in fair value recognized in the condensed consolidated statements of operations, and the carrying value of the SAFE liability was reclassified to additional paid-in capital within stockholders’ equity.

The Company recognized an increase in the fair value of the SAFE Liability of $1,216 during the three months ended June 30, 2026, and a cumulative increase in fair value of $4,625 during the six months ended June 30, 2026, which is reported as change in fair value of SAFE in the condensed consolidated statement of operations. The increase in the SAFE liability of $1,216 represented the final fair value adjustment prior to conversion.

Accordingly, there was no SAFE liability outstanding as of June 30, 2026.