NOTES PAYABLE AND DERIVATIVE LIABILITY (Tables)
|
6 Months Ended |
Jun. 30, 2026 |
|---|
| Notes Payable And Derivative Liability |
|
| SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION |
Supplemental
balance sheet information is as follows:
SCHEDULE
OF SUPPLEMENTAL BALANCE SHEET INFORMATION
| | |
June 30, | | |
December 31, | |
| (in thousands) | |
2026 | | |
2025 | |
| Amount repayable at maturity | |
$ | 27,036 | | |
$ | 19,525 | |
| Unamortized debt discount | |
| (2,264 | ) | |
| (313 | ) |
| Unamortized issuance costs | |
| (213 | ) | |
| - | |
| Net carrying amount | |
$ | 24,559 | | |
$ | 19,212 | |
|
| SCHEDULE OF COMPONENTS INTEREST EXPENSE |
SCHEDULE OF COMPONENTS INTEREST EXPENSE
| (in
thousands) | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| | |
Three Months Ended June 30, | | |
Six Months Ended June 30, | |
| (in thousands) | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| Amortization of debt discount and issuance costs | |
$ | (5,476 | ) | |
$ | (2,164 | ) | |
$ | (8,219 | ) | |
$ | (5,666 | ) |
| Interest expense from modification of notes payable | |
| - | | |
| - | | |
| - | | |
| (2,057 | ) |
| Discount on warrants (see Note 7. Warrant Liability) | |
| - | | |
| - | | |
| - | | |
| (7,325 | ) |
| Other expense | |
| (4 | ) | |
| (6 | ) | |
| (14 | ) | |
| (25 | ) |
| Total interest expense | |
$ | (5,480 | ) | |
$ | (2,170 | ) | |
$ | (8,233 | ) | |
$ | (15,073 | ) |
|
| SCHEDULE OF MATURITIES LONG TERM DEBT |
Maturities
of partial repayments, if elected by the Holder, are as follows as of June 30, 2026:
SCHEDULE OF MATURITIES LONG TERM DEBT
| (in thousands) | |
| |
| Years Ended December 31, | |
Maturities | |
| 2026 (remainder) | |
$ | 19,800 | |
| 2027 | |
| 7,236 | |
| Total partial repayments | |
$ | 27,036 | |
|
| SCHEDULE OF FAIR VALUE OF DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS |
The
fair value of derivatives not designated as hedging instruments as of June 30, 2026 and December 31, 2025 are as follows:
SCHEDULE
OF FAIR VALUE OF DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
| | |
June 30, | | |
December 31, | |
| (in thousands) | |
2026 | | |
2025 | |
| Derivative liability | |
$ | 7,050 | | |
$ | - | |
| Total | |
$ | 7,050 | | |
$ | - | |
|
| SCHEDULE OF UNREALIZED GAIN AND LOSS INSTRUMENTS |
Unrealized
gains and losses associated with derivatives not designated as hedging instruments for the three and six months ended June 30, 2026 and
2025 are as follows:
SCHEDULE OF UNREALIZED GAIN AND LOSS INSTRUMENTS
| (in
thousands) | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| | |
Three Months Ended | | |
Six Months Ended | |
| | |
June 30, | | |
June 30, | |
| (in thousands) | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| Unrealized gain (loss) on derivative liability | |
$ | (8,035 | ) | |
$ | 1,952 | | |
$ | (4,655 | ) | |
$ | 2,794 | |
|
| SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS |
The
valuation inputs hierarchy classification for liabilities measured at fair value on a recurring basis are summarized below as of June
30, 2026 and December 31, 2025 (in thousands). See Note 6. Investment Securities, Available-For-Sale and Fair Value Measurements,
for discussion of the fair value level hierarchy.
SCHEDULE
OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
| As of June 30, 2026 | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| Derivative liability | |
$ | - | | |
$ | - | | |
$ | 7,050 | |
| Total | |
$ | - | | |
$ | - | | |
$ | 7,050 | |
| As of December 31, 2025 | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| Derivative liability | |
$ | - | | |
$ | - | | |
$ | - | |
| Total | |
$ | - | | |
$ | - | | |
$ | - | |
|
| SCHEDULE OF ACTIVITY RELATED TO DERIVATIVE LIABILITIES |
Activity
related to the derivative liability during the three and six months ended June 30, 2026 and 2025 is as follows:
SCHEDULE
OF ACTIVITY RELATED TO DERIVATIVE LIABILITIES
| (in
thousands) | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| | |
Three Months Ended June 30, | | |
Six Months Ended June 30, | |
| (in thousands) | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| Beginning balance | |
$ | 2,035 | | |
$ | 4,867 | | |
$ | - | | |
$ | 14,581 | |
| Initial valuation associated with new debt | |
| - | | |
| - | | |
| 6,315 | | |
| 7,214 | |
| Fair value associated with conversions during the period | |
| (3,020 | ) | |
| - | | |
| (3,920 | ) | |
| (1,701 | ) |
| Reclassification of derivative on debt modification | |
| - | | |
| - | | |
| - | | |
| (186 | ) |
| Extinguishment of derivative liability on debt modification | |
| - | | |
| - | | |
| - | | |
| (14,199 | ) |
| Change in fair value during the period | |
| 8,035 | | |
| (1,952 | ) | |
| 4,655 | | |
| (2,794 | ) |
| Ending balance | |
$ | 7,050 | | |
$ | 2,915 | | |
$ | 7,050 | | |
$ | 2,915 | |
|
| SCHEDULE OF REVALUATION DERIVATIVE LIABILITY |
The
table below lists the inputs and assumptions for the Company’s valuations of the 2026 Convertible Notes as of June 30, 2026 and
February 23, 2026 and of the Prior Note as of December 31, 2025:
SCHEDULE
OF REVALUATION DERIVATIVE LIABILITY
| | |
June 30, | | |
February 23, | | |
December 31, | |
| | |
2026 | | |
2026 | | |
2025 | |
| Expected term (years) | |
| 1.7 | | |
| 2.0 | | |
| 0.8 | |
| Risk-free interest rate | |
| 4.05 | % | |
| 3.40 | % | |
| 3.50 | % |
| Dividend yield | |
| 0 | % | |
| 0 | % | |
| 0 | % |
| Volatility | |
| 68.20 | % | |
| 55.93 | % | |
| 67.16 | % |
| Discount rate | |
| 59.1 | % | |
| 58.4 | % | |
| 50.0 | % |
| Contingent call threshold price | |
$ | 33.74 | | |
$ | 41.32 | | |
$ | 45.00 | |
|