DERIVATIVE LIABILITIES |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE LIABILITIES | NOTE 7 – DERIVATIVE LIABILITIES
As discussed in Note 6 the Company issued convertible promissory notes to certain investors that are convertible at the option of the holder into shares of the Company’s common stock subject to variable conversion features and certain other adjustments. The Company evaluated the conversion feature embedded in the Notes in accordance with ASC 815-15, Derivatives and Hedging — Embedded Derivatives, to determine whether it requires bifurcation and separate accounting as a derivative liability. Bifurcation is required when all of the following criteria are met: (i) the economic characteristics and risks of the embedded feature are not clearly and closely related to those of the host contract (the debt instrument); (ii) a separate instrument with the same terms as the embedded feature would meet the definition of a derivative; and (iii) the hybrid instrument is not remeasured at fair value with changes recognized in earnings.
At issuance, the Company recorded the embedded derivative liability at its estimated fair value of $1,050 determined using an options pricing model.
The resulting debt discount of $1,050 is being amortized to interest expense using the effective interest method over the term of the Notes. As of June 30, 2026, the derivative liability was remeasured at fair value of $763, resulting in a gain of $287, recorded within other income in the accompanying condensed consolidated statements of operations. The following table summarizes the key assumptions at issuance date and at remeasurement date on June 30, 2026:
The changes in the Derivative liabilities are during the period are as follows: (in thousands)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||