FAIR VALUE MEASURES (Tables)

6 Months Ended

Jun. 30, 2026

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The Company’s financial assets are subject to fair value measurements on a recurring basis. The following table presents information about the Company’s financial assets and liabilities measured at fair value and the level of input utilized to determine such fair values (in thousands):


	Fair value measurements as of June 30, 2026
	Total		Level 1		Level 2		Level 3
Assets:
Money market (included in cash and cash equivalents)	$	95,492	$	95,492	$	—	$	—
Money market (included in restricted cash)	886		886		—		—
Total Assets	$	96,378	$	96,378	$	—	$	—
Liabilities:
Warrant liability for Series A Common Stock	$	44,616	$	—	$	—	$	44,616
Accrued private issuance liability (included in accrued expenses)	1,109		1,109		—		—
Total Liabilities	$	45,725	$	1,109	$	—	$	44,616


	Fair value measurements as of December 31, 2025
	Total		Level 1		Level 2		Level 3
Assets:
Money market (included in cash and cash equivalents)	$	14,152	$	14,152	$	—	$	—
Money market (included in restricted cash)	881		881		—		—
Total Assets	$	15,033	$	15,033	$	—	$	—
Liabilities:
Warrant liability Series B-1	$	608	$	—	$	—	$	608
Warrant liability Series D	2,770		—		—		2,770
Convertible promissory notes – related parties	18,889		—		—		18,889
Total Liabilities	$	22,267	$	—	$	—	$	22,267

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

Accordingly, the gain or loss in the table below includes changes in fair value due in part to observable factors that are part of the Level 3 methodology recognized in the condensed consolidated statements of operations and comprehensive loss as a component of other income (expense), net as appropriate (in thousands):


	Warrant Liabilities						Convertible Promissory Notes
	Series B-1		Series D		Warrants for Series A		Related Party Notes		Notes
December 31, 2025	$	608	$	2,770	$	—	$	18,889	$	—
Reclassification of Warrant liability for Series A Common Stock from equity to liability	—		—		49,354		—		—
Issuance of convertible promissory notes	—		—		—		—		5,340
Change in fair value 1	137		262		(4,738)		3,791		1,264
Conversion to shares of Series A Common Stock	(745)		(3,032)		—		(22,680)		(6,604)
June 30, 2026	$	—	$	—	$	44,616	$	—	$	—

1 Upon the closing of the Merger, the conversion price and number of shares issuable for the Series B-1 Warrants, Series D Warrants, Convertible Promissory Notes – Related Parties, and Convertible Promissory Notes were determined based on the price per share paid in the Merger, an observable input, rather than the unobservable inputs used in the PWERM for the warrants and the SBM for the convertible promissory notes as of December 31, 2025. Accordingly, no further Level 3 fair value estimate was required at the conversion date; the final fair value was determined directly from the Merger's per-share price applied to the conversion formula set forth in in Note 7 – Convertible Promissory Notes – Related Parties.

The following table presents the changes in the fair value of warrant liability:


	June 30, 2026
Warrant liability for Private Placement as of December 31, 2025	$	—
Reclassification of Warrant liability for Series A Common Stock from equity to liability	49,354
Change in fair value	(4,738)
Warrant liability for Private Placement as of June 30, 2026	$	44,616

Fair Value Measurement Inputs and Valuation Techniques

The following are assumptions used in valuing the Series B-1 and D Warrant Agreements in the SPAC Exit scenario, as of December 31, 2025:


	Series B-1		Series D
Discount rate	25%		25%
Expected life	0.38		0.38
Future projected price per share	$	37.76	$	37.76
Strike price	$	0.08	$	27.21

The following are the assumptions used in valuing the Series B-1 and D Warrant Agreements in the OPM scenario, as of December 31, 2025:


	Series B-1		Series D
Share value	$	18.14	$	33.71
Assumed volatility	90%		37%
Assumed risk-free interest rate	3.5%		3.5%
Expected life	2		2
Expected dividends	—		—

As of the issuance date, the fair value of the Private Warrants was estimated using the following assumptions:


	June 5, 2026
Exercise price	$	11.50
Share price	$	11.90
Volatility	68.5		%
Remaining contractual term	4.99
Risk Free Rate	4.25		%
Dividend yield	—		%

As of June 30, 2026, the fair value of the Private Warrants was estimated using the following assumptions:


	June 30, 2026
Exercise price	$	11.50
Share price	$	11.09
Volatility	68.7		%
Remaining contractual term	4.93
Risk Free Rate	4.1		%
Dividend yield	—		%

The assumptions used in determining the fair value of the August 2025 Notes under the SBM as of December 31, 2025, were as follows:


	Series D December 31, 2025
SPAC Exit Scenario	75.0		%
Qualified Financing Scenario	15.0		%
Dissolution Scenario	10.0		%
Assumed volatility	40.0		%
Assumed risk-free interest rate	3.5		%
Expected life	0.75
Assumed discount rate	20.0		%
Share value	$	34.47

The assumptions used in determining the fair value of the January 2026 Notes under the SBM were as follows:


	January 26, 2026
SPAC Exit Scenario	80	%
Qualified Financing Scenario	10	%
Dissolution Scenario	10	%
Expected life	0.68
Assumed discount rate	20	%