Warrants |
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| Warrants | Note 10. Warrants
Public Warrants The Company’s equity-classified public warrants expire on October 2, 2029 or earlier upon redemption or liquidation and are exercisable for $11.50 per share. Private Placement Warrants The Company’s liability-classified private placement warrants are measured at fair value based on the price of the public warrants (Level 2 fair value measurement). The private placement warrants will expire on October 2, 2029 or earlier upon redemption or liquidation and are exercisable for $11.50 per share. The fair value of the private placement warrants was $9.9 million and $11.1 million as of June 30, 2026 and December 31, 2025, respectively, and is included in the warrant liability in the condensed consolidated balance sheets. The Company recognized gains of $1.7 million and $1.2 million for the three and six months ended June 30, 2026, respectively, in Change in fair value of financial liabilities on the condensed consolidated statements of operations and comprehensive income (loss). The change in fair value of the private placement warrants for the three and six months ended June 30, 2025, resulted in gains of $3.5 million and $9.6 million, respectively. WTI Warrants On October 22, 2024, in connection with the WTI Facility, the Company issued warrants (the "2024 WTI Warrants") to the WTI Holders. The 2024 WTI Warrants are considered freestanding financial instruments. The fair value of the 2024 WTI Warrants was $15.5 million and $13.1 million as of June 30, 2026 and December 31, 2025, respectively, and is recorded as a warrant liability on the condensed consolidated balance sheets. The Company recognized losses of $2.5 million and $2.4 million for the three and six months ended June 30, 2026, respectively, in Change in fair value of financial liabilities on the condensed consolidated statements of operations and comprehensive income (loss). The change in fair value of the 2024 WTI warrants for the three and six months ended June 30, 2025, resulted in gains of $0.9 million and $4.8 million, respectively. The 2024 WTI Warrants expire on March 31, 2035. See Note 4. Fair Value for details on the valuation. Each of the 2024 WTI Warrants is exercisable into one share of Common Stock. The number of shares of Common Stock deliverable under the 2024 WTI Warrants is not fixed; it is determined by dividing an aggregate coverage amount of $10.0 million by an exercise price that functions as a divisor rather than as the cash price payable per share. As further discussed in our annual financial statements, that exercise price was initially $10.00 per share; however, if the volume-weighted average price (“VWAP”) of the Common Stock over the five trading days preceding April 3, 2026, was less than $10.00 per share, then the exercise price would be reduced to such lower VWAP. As of April 3, 2026, the date which is the 18 months after the Company’s Common Stock began trading, the VWAP was $4.01. As such, the exercise price of the 2024 WTI Warrants was reduced from $10.00 to $4.01, and the aggregate number of shares of Common Stock deliverable upon exercise of the 2024 WTI Warrants increased from 1,000,000 to 2,493,765. On April 14, 2025, the Company issued the 2025 WTI Warrants to purchase up to $3 million of shares of Common Stock, as of the date of issuance and June 30, 2026 (subject to future adjustments to the number and type of shares pursuant to the 2025 WTI Warrants), to the WTI Holders. Each of the 2025 WTI Warrants is exercisable through March 31, 2035, with additional customary rights and protections. The 2025 WTI Warrants were issued to the WTI Holders in conjunction with the first issuance of the Convertible Debentures. The 2025 WTI Warrants serve as consideration for certain provisions under the Consent. The exercise price is initially equal to the VWAP over the 30 trading days ending on the trading day immediately preceding April 14, 2025; however, as of October 14, 2026, if the VWAP over the five trading days preceding October 14, 2026 is lower, the exercise price will be reduced to that lower VWAP. The fair value of the 2025 WTI Warrants was $3.2 million as of June 30, 2026 and December 31, 2025, and is recorded as a warrant liability on the condensed consolidated balance sheets. The Company recognized losses of $0.1 million and an immaterial amount for the three and six months ended June 30, 2026, respectively, in the change in fair value of financial liabilities on the condensed consolidated statements of operations and comprehensive income (loss). The change in fair value of the 2025 WTI warrants for the three and six months ended June 30, 2025 resulted in a loss of $0.3 million. The 2025 WTI Warrants expire on March 31, 2035. See Note 4. Fair Value for details on the valuation. Series A Warrants On October 3, 2025, the Company issued in a private placement Series A Warrants to purchase an aggregate of 1,625,235 shares of Common Stock. The Series A Warrants have an exercise price of $8.00 per share, became exercisable on April 6, 2026, and will expire on October 3, 2030. The Series A Warrants are equity-classified and recorded as a component of additional paid-in capital.
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