SAFEs represent financing instruments with characteristics of both debt and equity. The Company accounts for its SAFEs in accordance with ASC 480, Distinguishing Liabilities from Equity. Through September 22, 2025, the Company had outstanding SAFEs that met the definition of a liability, as the instruments included terms that affected conversion based on the next round of financing and provided for potential cash settlement upon the occurrence of certain liquidity events. Accordingly, the SAFEs were recorded as liabilities at fair value.

The SAFE liability was remeasured at each balance sheet date until the occurrence of a triggering event, including an equity financing, change in control, or dissolution, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss. The fair value estimate incorporated significant unobservable inputs and was classified as a Level 3 measurement within the fair value hierarchy. The valuation considered probability-weighted outcomes under various scenarios, including: (i) an equity financing in which the SAFEs would convert into convertible preferred stock; (ii) a liquidity event in which SAFE holders would receive the greater of the cash-out amount or the amount payable based on the number of shares of common stock equal to the purchase amount divided by the liquidity price; and (iii) a dissolution event in which SAFE holders would receive a portion of the remaining cash.

The Company recognized the change in fair value of the SAFE liability in earnings; for the three and six months ended June 30, 2025, this resulted in a net loss of approximately $0.9 million, presented within other income (expense) as change in fair value of SAFE liability. The fair value of the SAFEs was estimated using a Probability-Weighted Expected Return Method using the following inputs at June 30, 2025:

On September 22, 2025, in connection with the issuance of Series A-1 convertible preferred stock, all outstanding SAFEs automatically converted into shares of Series A preferred stock in accordance with their terms. No SAFEs were outstanding as of June 30, 2026.

The Company did not incur any issuance costs related to SAFEs during the three and six months ended June 30, 2026 or the year ended December 31, 2025.